The Franchise Lease Agreement is a specialized contract used in the Philippine business environment when a franchisor wishes to both grant franchise rights and lease premises to a franchisee in a single integrated agreement. This document is particularly relevant in situations where the franchisor owns or controls the property from which the franchise will operate, common in retail and food service operations. The agreement must comply with Philippine franchise regulations, including DTI Administrative Order No. 8, Series of 2002, as well as property leasing laws under the Civil Code of the Philippines. It combines standard franchise elements such as intellectual property rights, operational standards, and royalty payments with traditional lease provisions including rent, maintenance obligations, and property use restrictions. This type of agreement is increasingly common in the Philippine market as businesses seek to maintain brand consistency through control of both operations and premises.
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1. Parties: Identification of the Franchisor/Lessor and Franchisee/Lessee, including complete legal names, addresses, and registration details
2. Background: Context of the agreement, brief description of the franchise business, and property to be leased
3. Definitions: Detailed definitions of key terms used throughout the agreement
4. Grant of Franchise: Specific rights granted to the franchisee, including territory rights and exclusivity provisions
5. Lease Terms: Details of the property lease including premises description, duration, and permitted use
6. Term and Renewal: Duration of both franchise and lease agreements, conditions and procedures for renewal
7. Fees and Payments: Comprehensive financial terms including franchise fees, royalties, rent, security deposits, and payment schedules
8. Intellectual Property Rights: Terms governing the use of trademarks, trade secrets, and other intellectual property
9. Operating Standards: Required operational procedures, quality standards, and compliance requirements
10. Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements
11. Training and Support: Franchisor's obligations regarding initial and ongoing training and support
12. Insurance and Indemnification: Required insurance coverage and indemnification obligations
13. Default and Termination: Grounds for default, remedies, and termination procedures
14. Post-Termination Obligations: Obligations of both parties after agreement termination
15. Governing Law and Dispute Resolution: Applicable law and procedures for resolving disputes
1. Assignment and Transfer: Terms for transferring franchise or lease rights, used when transfers are permitted
2. Non-Competition: Restrictions on competitive activities, included when required by business model
3. Force Majeure: Provisions for unforeseeable circumstances, particularly relevant in light of recent global events
4. Guarantees: Personal or corporate guarantees, included when additional security is required
5. Right of First Refusal: Terms giving franchisee priority rights to adjacent properties or additional territories
6. Building Modifications: Specific terms for property modifications, included for properties requiring significant alterations
7. Environmental Compliance: Environmental obligations and compliance requirements, necessary for certain business types
8. Co-Tenancy: Terms relating to other tenants in the same property, relevant for mall or shopping center locations
1. Property Details: Detailed description of leased premises including floor plans and measurements
2. Equipment and Fixtures: List of provided equipment, fixtures, and furniture
3. Operating Manual Summary: Key points from the franchise operating manual
4. Brand Standards: Detailed specifications for brand compliance including signage and design elements
5. Financial Terms: Detailed breakdown of all financial obligations including calculation methods
6. Training Program: Overview of required training programs and schedules
7. Approved Suppliers: List of approved suppliers and products
8. Service Area Map: Detailed mapping of territory or service area
9. Form of Guarantee: Template for personal or corporate guarantee if required
10. Insurance Requirements: Detailed specifications for required insurance coverage
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