The Franchise Broker Agreement is a crucial document for businesses expanding their franchise operations in the Philippines. It is typically used when a franchisor wishes to engage professional intermediaries to facilitate franchise network growth. The agreement must comply with Philippine franchise regulations, particularly DTI Administrative Order No. 8, Series of 2002, and related commercial laws. This document establishes the broker's authority to represent the franchisor, defines territorial rights, outlines commission structures, and sets performance expectations. It includes essential provisions for protecting the franchisor's intellectual property and maintaining brand standards while ensuring the broker can effectively market franchise opportunities. The agreement is particularly important in the Philippine market, where local knowledge and business relationships are crucial for franchise development.
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1. Parties: Identification of the franchisor and the broker, including complete business details and registration information
2. Background: Context of the agreement, including the franchisor's business and desire to engage a broker to expand their franchise network
3. Definitions: Key terms used throughout the agreement, including 'Franchise Agreement', 'Prospective Franchisee', 'Territory', and 'Commission'
4. Appointment and Scope: Terms of the broker's appointment, whether exclusive or non-exclusive, and detailed scope of authorized services
5. Territory: Geographic area where the broker is authorized to operate and any territorial restrictions
6. Broker's Rights and Obligations: Detailed responsibilities including lead generation, franchisee screening, and compliance with franchise laws
7. Franchisor's Rights and Obligations: Franchisor's commitments including training, support, and information provision to the broker
8. Commission Structure: Detailed compensation terms, commission rates, payment timing, and any performance bonuses
9. Confidentiality: Protection of proprietary information and trade secrets
10. Compliance with Laws: Obligations to comply with Philippine franchise regulations and other applicable laws
11. Term and Termination: Duration of the agreement and circumstances for termination
12. Post-Termination Obligations: Duties and restrictions after the agreement ends
13. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution
1. Performance Targets: Include when specific sales or recruitment targets are required for the broker
2. Training Requirements: Include when the broker must complete specific training programs
3. Marketing and Advertising: Include when the broker has specific marketing responsibilities or restrictions
4. Insurance Requirements: Include when specific insurance coverage is required for the broker
5. Non-Competition: Include when restricting the broker from representing competing franchises
6. Data Protection: Include when handling significant personal or customer data
7. International Operations: Include when the broker may operate across international borders
1. Schedule A - Commission Structure: Detailed breakdown of commission rates, payment terms, and bonus structures
2. Schedule B - Territory Map: Detailed map and description of the broker's authorized territory
3. Schedule C - Required Documentation: Forms, checklists, and templates the broker must use
4. Schedule D - Compliance Guidelines: Detailed procedures for ensuring compliance with franchise laws
5. Schedule E - Reporting Requirements: Templates and timing for required periodic reports
6. Appendix 1 - Broker Qualification Criteria: Required qualifications and certifications for the broker and their staff
7. Appendix 2 - Standard Operating Procedures: Step-by-step procedures for lead handling and franchisee recruitment
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