FRANCHISE AGREEMENT-ODETTE Draft
FRANCHISE AGREEMENT-ODETTE Draft
FRANCHISE AGREEMENT
This Franchise Agreement, hereinafter referred to as "Agreement," is entered into and made
effective on Date by and between the following parties:
ODETTE E- RETAIL PVT LTD, a company incorporated under the laws of INDIA, having its
registered office at VV TOWERS 2&3'RD FLOOR OPP SHOBHA JASMINE APARTMENT,
#164, GREEN GLEN LAYOUT, BELLANDUR BANGALORE - 560103 Karnataka,
(hereinafter referred to as the "Franchisor" which expression shall unless excluded by or
repugnant to the subject or context be deemed to include its successors-in-interest and permitted
assigns) of the ONE PART
AND
Franchisor and Franchisee may be referred to individually as "Party" and collectively as the
"Parties."
WHEREAS:
(A) The Franchisor is engaged in the business of:
Menswear, Womenswear, Childrenswear and Accessories
(hereinafter referred to as "Business")
(B) The franchisor has developed systems and methods for operating and the Business using
proprietary service and trademarks (hereinafter referred to as "Proprietary Marks" and defined
hereunder) designed to run the Business:
(C) Franchisor accepts and will operate the Store on behalf of the Franchisee/Co-Franchisees
according to certain terms and conditions under Franchisor's branded Trademark of the
following: ODETTE;
(D) Franchisor sells certain products, as defined below ("Products") in connection with the
Business;
WHEREAS, the System includes elements unique to the Franchisor and the Business, including,
but not limited to, specifications, techniques, training methods, products, production methods,
operating methods, designs, colour schemes, furnishings, marketing materials and business
requirements to continually increase the customer trust and goodwill in Franchisor's Business;
WHEREAS, the Franchisee/Co-Franchisee desires to establish and operate a business and wishes
to obtain a license to use Franchisor's System and Proprietary Marks in order to run the business
under Franchisor's guidelines;
WHEREAS, relying on the representations and warranties and the undertaking of the
Franchisee/Co-Franchisee, the Franchisor has agreed to grant the Franchisee the right to establish
the business on the terms and conditions as set out herein;
NOW, THEREFORE, in consideration of the promises and covenants contained herein, as well
as other good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the Parties do hereby agree as follows:
Clause 1 - DEFINITIONS:
a) Approved Location: The approved Location is the physical location in the following
address: _______________ where it has been approved by Franchisor to open the
operation.
b) Proprietary Marks: The Proprietary Marks are the marks owned by Franchisor, including but
not limited to, Franchisor's branded mark, ODETTE, as well as any and all other names,
trademarks, service marks, logos, trade dress, or other commercial symbols or copyrighted
materials belonging to Franchisor.
d) New Franchisee Business: New Franchisee Business shall be defined as the new business to
be owned by the Franchisee, that utilizes Franchisor's System and Proprietary Marks, opened
pursuant to this Agreement.
e) Term: The Term of the Agreement shall be defined as the period for which this Agreement
will run, discussed more specifically elsewhere in this Agreement
.
f) Gross Sales: Gross Sales shall be defined as all revenue derived from the New Franchisee
Business, at regular prices before any discounts or other allowance, as well as all income of any
and every other kind related to the New Franchisee Business, System, or Proprietary Marks, the
fair value of any non-monetary consideration received by Franchisee for any items or sales from
the New Franchisee Business, and all proceeds of business interruption insurance policies for the
New Franchisee Business. Gross Sales shall not include sales or excise taxes, or other taxes,
added to the selling price of any item or service collected from customers and given to state or
Federal governments. Any tax rebates received by Franchisee shall be included in Gross Sales,
however. Gross Sales also specifically include any charged sales.
g) Franchisor Marketing Materials: Franchisor Marketing Materials are all the advertising and
promotional materials, including press releases, signs, copy, concepts, brochures or other
information used to advertise or market Franchisor's Business and given to franchisees for the
purposes of advertising, as well.
h) Operating Procedures: the minimum operating procedures as set out in Annexure 1 as may be
amended or updated from time to time, by the Franchisor in conjunction and with agreement of
Franchisee;
i) Products: The Products shall be defined as the following products which Franchisor sells
through the business or sells through franchised businesses:
b) Forthwith upon the completion of all Conditions Precedent, the Franchisee shall notify the
Franchisor/Co-franchisee of the same and shall furnish all information and documents as may be
required by the Franchisor evidencing such completion. In the event the Franchisor is satisfied
that the Conditions Precedent have been duly completed, it shall so inform the Franchisee within
7 days of the date of the receipt of the last of the documents/information from the Franchisor.
c) In the event the Conditions Precedent are not fully complied with to the satisfaction of the
Franchisor by or within such extended period as may be agreed to by the Franchisor
in writing, the Franchisor shall be entitled (but not obligated) to forthwith terminate this
Agreement without any liability whatsoever.
Clause 5 - FEES:
a) Commitment Fee: Franchisee shall pay the following initial franchise fee ("Commitment Fee")
to Franchisor for the right to enter this Agreement and in consideration of the New Franchisee
Business: Rs. 8,26,000 within the following period:
24 Hours
b) The Franchisee agrees and acknowledges that the Commitment Fee is a one-time and
non-refundable fee and shall not be refunded to the Franchisee under any circumstances,
including but not limited to termination of this Agreement.
c) Should Franchisee fail to pay the Initial Fee or any portion of it, Franchisor shall have the
absolute right to declare this Agreement null and void and retain any portion of the Initial Fee
that Franchisee may have already paid. Franchisor shall then have no additional obligations to
Franchisee under this Agreement.
d) Franchise Fees: Franchisee shall pay franchise fees ("Franchise Fees") to the Franchisor as
follows:
The franchiser shall pay minimum guarantee of Rs. 1,25,000/- or 12% on monthly gross sales
whichever is higher. On monthly basis which will be on or before 5th of each month .
e) Franchisee shall report its Gross Sales to Franchisor accurately, on a Monthly basis, or any
other periodic time period specified by the Franchisor, in any way that Franchisor requires.
f) Royalties: Franchisee shall pay Franchisor a royalty for use of the Proprietary Marks which
shall be as follows:
Clause 6 - ADVERTISING:
a) Franchisee hereby agrees to use and prominently display the Franchisor Marketing Materials
and Proprietary Marks solely in connection with the New Franchisee Business.
b) Franchisee agrees not to advertise or market the New Franchisee Business in any way which
may disparage or detract from the reputation of Franchisor. If Franchisee has not received prior
approval for any marketing materials, Franchisee agrees to submit such materials to Franchisor
for approval, which Franchisor will approve or deny in a reasonable time period.
The Expiration Date shall be as follows: The Expiration Date shall be as follows:
a) Franchisee shall allow Franchisor additional time to open the New Franchisee Business,
leaving the Expiration Date as is; or
b) Franchisor shall require Franchisee to enter into a new Franchise Agreement with a new
Opening Date and possible new Expiration Date at the sole and exclusive discretion of
Franchisor.
Franchisor shall have the ability to terminate this Agreement for good cause, defined as any
material breach of this Agreement. Specifically, Franchisee acknowledges and agrees that the
following acts (considered a non-exhaustive list, not including each specific material breach of
this Agreement) shall be cause for immediate termination:
a) Abandonment of the New Franchisee Business for a period of ten (10) consecutive days or any
shorter period of time if Franchisor has determined that Franchisee does not intend to continue
operation of the New Franchisee Business;
b) Franchisee's bankruptcy or insolvency;
c) Any levy made upon the New Franchisee Business;
d) The right to occupy the physical space of the New Franchisee Business is lost or terminated in
any way;
e) The franchisee is convicted of a felony or any criminal misconduct related to the operation of
the New Franchisee Business;
f) Franchisor discovers a material misrepresentation made by Franchisee in connection with this
Agreement;
g) Franchisee engages in any behaviour which would impair the Franchisor's trademark, trade
name, or any other commercially-valuable intellectual property;
h) Franchisee behaves in any manner which would reflect poorly on the reputation and goodwill
of Franchisor or fails to act in a commercially reasonable manner; or
i) Franchisee fails to pay any fees, costs, charges or other amounts due under this Agreement.
The franchisee must be given written notice of termination in advance of such termination and
the notice must state the reasons for termination clearly. The franchisee may also be given an
opportunity to cure if the termination is not being undertaken as a result of one of the good cause
reasons listed above.
Clause 11 - RENEWAL:
If Franchisee should like to renew the Parties' relationship at the end of its 5 Year Term,
Franchisee shall provide a written request for renewal to Franchisor at least 6 months prior to the
expiration date.the following period prior to the Expiration Date: 6 month. Such written
document shall describe that the particular request is for one additional Term as defined in this
Agreement.
Franchisee hereby acknowledges and agrees that the terms of any agreement to renewal
("Renewal Agreement") may be substantially different, including any royalty or franchise fees
and any other terms at Franchisor's sole and exclusive discretion.
In order to be considered for renewal, Franchisee shall have met each of the following
condition(s):
If Franchisor and the Franchisee mutually agree to a Renewal Agreement, Both Franchisor and
Franchisee shall execute such agreement within 30 days.
The Parties acknowledge and agree that this Agreement confers no automatic right or other rights
to renewal, continuation, or a subsequent franchise agreement on or after the Expiration Date and
that Franchisor shall have no obligation to continue any relationship with Franchisee after the
Expiration Date. If Franchisor elects not to renew, written notice must be provided to the
Franchisee at least 180 (one hundred and eighty) days in advance.
If Franchisee enters into any new lease or extends any lease for tenancy of the New Franchisee
Business extending beyond the Term, Franchisee acknowledges that Franchisee shall be doing so
at its own risk. (Who are the parties in the Rental agreement)
Clause 15 - NO WAIVER:
None of the terms of this Agreement shall be deemed to have been waived by any act or
acquiescence of Franchisor. Only an additional written agreement can constitute waiver of any of
the terms of this Agreement between the Parties. No waiver of any term or provision of this
Agreement shall constitute a waiver of any other term or provision or of the same provision on a
future date. Failure of Franchisor to enforce any term of this Agreement shall not constitute
waiver of such term or any other term.
Clause 17 - INDEMNITY:
Each Party ("Indemnifying Party") hereby agrees to indemnify and hold the other Party harmless
from all damages, costs, attorney's fees or other losses arising out of or relating to the breach of
this Franchise Agreement by the Indemnifying Party.
Clause 18 - SEVERABILITY:
If any provision of this Franchise Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any
other provision thereof, and this Franchise Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. Any invalid or unenforceable
provision of this Franchise Agreement shall be replaced with a provision that is valid and
enforceable and most nearly gives effect to the original intent of the invalid/unenforceable
provision.
Clause 21 - AMENDMENTS:
Any change, alteration, amendment, or modification to this Franchise Agreement must be in
writing and signed by authorized representatives of both Parties.
Clause 24 - EXCLUSIVITY:
For a period of 5 Years, the Parties shall not enter into discussions with third parties for
transactions which are similar to the Proposed Transaction.
Clause 25 - ASSIGNMENT:
Franchisor shall have the right to assign or transfer any of its rights or delegate any of its
obligations under this Agreement in whole or in part to any person, firm or corporation. As to
Franchisee, however, this Agreement, or the rights granted hereunder, may not be assigned, sold,
leased or otherwise transferred in whole or part by Franchisee, without prior express written
consent of Franchisor, which consent must not be unreasonably withheld if the proposed
transferee meets Franchisor's then-existing requirements for franchisees. If Franchisor agrees to
any assignment, Franchisor and Franchisee shall then discuss the terms of the assignment, which
shall be through an additional executed agreement. If Franchisee attempts to assign or otherwise
transfer this Agreement without Franchisor's approval, Franchisor may terminate the Agreement
in Franchisor's sole and exclusive discretion.
Notices sent as above shall be deemed to have been received 3 working days after the day of
posting (in the case of inland first class mail), or 7 working days after the date of posting (in the
case of air mail), or next working day after sending (in the case of e-mail).
In proving the giving of notice, it shall be sufficient to prove that the notice was left, or that the
envelope containing the notice was properly addressed and posted, or that the applicable means
of telecommunication was addressed and dispatched and dispatch of the transmission was
confirmed and/or acknowledged as the case may be.
Clause 26 – NON-SOLICITATION:
A Party shall not for a period of NA from the Effective Date solicit the clients or customers of
the other Party ("Existing Party") to supply goods or services to them of the same or similar
type as provided by the Existing Party. Without limitation to the above, the Franchisee shall not:
a) Solicit the clients or customers of Franchisor to provide services or supply goods to them of
the same or a similar type to those provided by Franchisor during the course of this Agreement
and for a period of NA following the termination of this Agreement;
b) Endeavour to entice away from Franchisor or employ or offer to employ any person who is
employed by Franchisor during the term of this Agreement and for NA following the termination
of this Agreement, whether or not the person would commit a breach of his or her contract of
employment by being enticed or accepting employment with them.