The Franchise Contract Agreement is a fundamental legal document used when establishing a franchise business relationship in New Zealand. This agreement is essential when a business (franchisor) grants another party (franchisee) the right to operate under their established business model and brand. The document comprehensively covers all aspects of the franchise relationship, including intellectual property rights, operational standards, financial obligations, territory rights, and compliance requirements. While New Zealand doesn't have specific franchise legislation, this agreement is structured to comply with various relevant laws including the Fair Trading Act 1986, Contract and Commercial Law Act 2017, and Commerce Act 1986. The agreement serves as the primary reference point for the entire franchise relationship, establishing clear rights, obligations, and expectations for all parties involved.
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1. Parties: Identification of the franchisor and franchisee, including full legal names and registered addresses
2. Background: Context of the agreement, brief description of the franchise system, and purpose of the agreement
3. Definitions: Comprehensive list of defined terms used throughout the agreement
4. Grant of Franchise: Explicit grant of franchise rights, territory definition, and terms of exclusivity
5. Term and Renewal: Initial term of the agreement and conditions for renewal
6. Franchise Fees: Initial franchise fee, ongoing royalties, marketing contributions, and payment terms
7. Franchisor Obligations: Support, training, and assistance to be provided by the franchisor
8. Franchisee Obligations: Operating standards, compliance requirements, and performance obligations
9. Intellectual Property: Usage rights and restrictions for trademarks, trade secrets, and other IP
10. Operating Standards: Required business procedures, quality standards, and compliance with operations manual
11. Training Requirements: Initial and ongoing training obligations for franchisee and staff
12. Marketing and Advertising: Marketing obligations, cooperative advertising, and use of marketing funds
13. Records and Reporting: Financial record-keeping requirements and reporting obligations
14. Insurance: Required insurance coverage and minimum limits
15. Transfer and Assignment: Conditions and procedures for transferring the franchise
16. Termination: Grounds for termination, notice requirements, and consequences
17. Post-Termination Obligations: Obligations and restrictions after agreement ends
18. Dispute Resolution: Procedures for resolving disputes, including mediation and arbitration
19. Governing Law: Specification of New Zealand law as governing law and jurisdiction
1. Development Rights: For agreements where franchisee has rights to develop multiple units
2. E-commerce Rights: For franchises with online sales components
3. Equipment Leasing: When franchisor provides equipment to franchisee
4. Premises Requirements: For location-specific businesses requiring detailed premises specifications
5. Non-Competition Agreement: Additional restrictions on competitive activities
6. Supply Chain Requirements: For systems with specific supplier relationships or requirements
7. Sub-Franchising Rights: When franchisee is granted rights to sub-franchise
8. International Operations: For franchises operating across international borders
1. Schedule 1: Territory Description: Detailed description of granted territory including maps and boundaries
2. Schedule 2: Initial Fees and Charges: Comprehensive breakdown of all initial fees and charges
3. Schedule 3: Ongoing Fees and Charges: Details of recurring fees, royalties, and payment schedules
4. Schedule 4: Initial Training Program: Details of required initial training program and curriculum
5. Schedule 5: Approved Products and Services: List of authorized products and services
6. Schedule 6: Approved Suppliers: List of approved suppliers and purchasing requirements
7. Schedule 7: Brand Standards: Detailed brand guidelines and usage requirements
8. Schedule 8: KPIs and Performance Standards: Specific performance metrics and minimum standards
9. Schedule 9: Required Equipment and Fixtures: Specifications for required business equipment and setup
10. Schedule 10: Insurance Requirements: Detailed insurance requirements and minimum coverage levels
11. Appendix A: Operations Manual Table of Contents: Overview of operations manual contents
12. Appendix B: Confidentiality Agreement: Detailed confidentiality terms and requirements
13. Appendix C: Personal Guarantee: Form of personal guarantee if required
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