The Individual Franchise Agreement serves as the primary legal instrument for establishing and governing franchise relationships in the Philippines. This document is essential when a business (franchisor) wishes to grant an individual (franchisee) the right to operate under their business system and brand. The agreement must comply with Philippine franchise regulations, particularly DTI Administrative Order No. 8, the Consumer Act of the Philippines, and relevant intellectual property laws. It typically includes comprehensive provisions covering operational standards, territory rights, fee structures, training requirements, quality control measures, and termination conditions. The document is designed to protect both parties' interests while ensuring brand consistency and compliance with local business practices. It's particularly important in the Philippine context where franchise businesses are a significant driver of economic growth and require careful regulation to protect both franchisors and franchisees.
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1. Parties: Identification of the Franchisor and Franchisee with complete legal names and addresses
2. Background: Introduction to the franchise system, brand history, and context of the agreement
3. Definitions: Detailed definitions of terms used throughout the agreement
4. Grant of Franchise: Specific rights being granted, territory definitions, and exclusivity provisions
5. Term and Renewal: Duration of the franchise agreement and conditions for renewal
6. Franchise Fees and Payments: Initial franchise fee, ongoing royalties, advertising contributions, and payment terms
7. Franchisor's Obligations: Support, training, operations manual, advertising, and other services provided by the franchisor
8. Franchisee's Obligations: Operational standards, compliance requirements, and performance obligations
9. Intellectual Property Rights: Usage of trademarks, patents, copyright materials, and trade secrets
10. Training and Support: Initial and ongoing training requirements and support services
11. Quality Control: Standards, inspections, and compliance requirements
12. Marketing and Advertising: Marketing obligations, advertising fund contributions, and local marketing requirements
13. Records and Reporting: Financial record-keeping requirements and reporting obligations
14. Insurance and Indemnification: Required insurance coverage and indemnification provisions
15. Transfer and Assignment: Conditions for transfer of franchise rights and assignment procedures
16. Termination: Grounds for termination, procedures, and consequences
17. Post-Termination Obligations: Obligations and restrictions after agreement termination
18. Dispute Resolution: Procedures for handling disputes, including mediation and arbitration
19. Governing Law: Specification of Philippine law as governing law and jurisdiction
20. General Provisions: Standard contractual provisions including force majeure, notices, and amendments
1. Multi-Unit Development: Used when franchisee has rights to develop multiple units within a territory
2. E-commerce Rights: Include when online sales channels are part of the franchise system
3. Equipment Leasing: Required if franchisor provides equipment leasing arrangements
4. Property Lease Requirements: Include if franchisor has specific requirements for property leasing
5. International Trade Regulations: Necessary if franchise involves import/export activities
6. Data Protection and Privacy: Include detailed privacy provisions if franchise involves significant customer data handling
7. Social Media Policy: Include when franchise system has specific social media requirements
8. Covid-19 or Health Emergency Provisions: Include specific provisions for operating during health emergencies
1. Schedule 1 - Products and Services: Detailed list of approved products and services
2. Schedule 2 - Territory Description: Detailed description and/or maps of franchise territory
3. Schedule 3 - Initial Fee Structure: Breakdown of initial franchise fees and payment schedule
4. Schedule 4 - Equipment and Inventory Requirements: Detailed list of required equipment and initial inventory
5. Schedule 5 - Training Program: Details of initial and ongoing training programs
6. Schedule 6 - Operating Manual Table of Contents: Overview of operations manual content
7. Schedule 7 - Brand Standards: Detailed brand standards and usage guidelines
8. Schedule 8 - Insurance Requirements: Specific insurance types and coverage amounts required
9. Schedule 9 - Initial Investment Summary: Detailed breakdown of required initial investment
10. Appendix A - Confidentiality Agreement: Detailed confidentiality terms and requirements
11. Appendix B - Personal Guarantee: Form of personal guarantee if required
12. Appendix C - Trademark Usage Guidelines: Detailed guidelines for trademark usage
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