INTERNATIONAL FRANCHISE AGREEMENT TEMPLATE

INTERNATIONAL FRANCHISE Agreement
1. Definition
2. Parties to the Agreement
3. Main clauses and sample
3.1 Object of the agreement
3.2 Territorial exclusivity
3.3 Duties of the Franchisor
3.4 Duties of the Franchisee
3.5 Franchise fees
4. Applicable Law
5. Model Agreement
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This is a agreement for cooperation between two legally independent
parties (Franchisor and Franchisee) based in different countries.
The Franchisor confers to the Franchisee the exclusive right to distribute
its products (or services) in establishments which are uniformly equipped
and furnished, as well as the right to use industrial property rights (brands,
commercial signs, trade marks), while also providing the whole Know-
How (Franchise Handbook), and the technical and commercial support for
distribution to be carried out correctly.
The Franchisee must follow the instructions given by the Franchisor as regards
the presentation, commercialization and corporate image on the authorized
premises. In recognition of the services provided, the Franchisee pays the
Franchisor a series of different fees (Front-end fee, sales fee, advertising fee).
1. DEFINITION

The Franchisor is always a company but the Franchisee can be a
company or a person with experience in the business of the Franchisor.
For each party, the following has to be included:
• Name of company, full address and nationality.
• Company type: public limited company, limited liability company, etc.
• Name and position of company representative who signs the
agreement as Franchisor.
• Name, profession, full address and nationality of person who acts as
Franchisee.
• Tax ID number of both parties.
2. PARTIES TO THE Agreement

Some of the most important clauses in the
International Franchise Agreement are as follows:
• Object of the Agreement
• Territorial exclusivity
• Duties of the Franchisor
• Duties of the Franchisee
• Franchise fees
3. MAIN CLAUSES AND SAMPLE
See sample of International Franchise Agreement

“By means of the present Agreement, the Franchisor grants the
Franchisee, who correspondingly accepts, the right to form part of the
………………..[name of Franchisor], as a franchise, using under licence
the Property Deeds stipulated in the Preamble of the present Agreement
as well as the Know-How of the Franchisor, according to the terms and
conditions laid out in the following articles.”
“Franchisor and Franchisee are legally and financially independent
Parties. The present Agreement does not confer any sort of relationship
between them other than that which is the object of the franchise.”
3.1 OBJECT OF THE Agreement

3.2 TERRITORIAL EXCLUSIVITY
“The Franchisor grants the Franchisee territorial exclusivity within
the area described in Annex 3 of the present Agreement.”
“The Franchisor undertakes not to set up any establishment
belonging to the ………………..[name of Franchisor] network,
either on his/her own account or through third parties by means
of franchising or any other type of contractual arrangement which
involves the use by a third party of the Franchisor’s Know-How or
the Industrial and Intellectual Property Deeds described in Section
IV of the Recitals of the present Agreement.”

“The Franchisor shall provide the Franchisee with the authorized products
[or services] and shall ensure that such products [or services] are delivered to the
Franchisee in a maximum period of ….. days of receipt of the order.”
“Any supply of the authorized products [or services] effected by the Franchisor
shall be subject to the general sales conditions as described in Annex of the
present Agreement, which may be modified by the Franchisor at any time
during the term of the Agreement.”
“The determination of the range of products [or services] to be supplied to the
................. [name of Franchisor] network shall be the sole responsibility of the
Franchisor in every instance.”
3.3 DUTIES OF THE FRANCHISOR

“The Franchisee shall offer an appropriate organization of product sales, and an after-
sales service where necessary, including all the resources and staff required to ensure the
fulfilment of the obligations arising from the present Agreement.”
“The Franchisee must provide the Franchisor, at least ..... [days or months] in advance,
with an estimate of the product orders (s)he is to place during the following …..
months. The Franchisor is under no obligation to supply products [or services] to the
Franchisee when the order exceeds the estimate for the same month by more than 5%.”
“The Franchisee may not acquire the products [or services] from any other source than
the Franchisor or the supplier(s) that (s)he appoints, and consequently may not sell any
products on the premises which the Franchisor has not authorized.”
3.4 DUTIES OF THE FRANCHISEE

“The Franchisee shall pay the Franchisor a non-redeemable Front-end Fee to
the.......…[nameof Franchisor]networkthesumof ………………........................
[written in words]. The Front-end Fee is to be paid at the time of conferral of this
Agreement, and the appropriate invoice shall be supplied.”
“The Franchisee shall pay the Franchisor …......……. [every month, every quarter] a
Franchise Fee equivalent to ….. % of the gross sales for the same period.”
“TheFranchiseeshallpaytheFranchisoreach…....[month,quarter]anadvertising
fee equivalent to ….. % of his/her gross sales for the same period.”
3.5 FRANCHISE FEES

International Law standards are not applied to this type
of Agreement.
The parties are free to submit any conflicts regarding the
agreement to International Arbitration or to the Laws of
the country of one of the parties. They will normally be
subject to the Laws of the Franchisor´s country.
4. Applicable Law

In order to obtain the model agreement in
Word format and the user guide, click on:
International Franchise Agreement
5. MODEL Agreement

INTERNATIONAL FRANCHISE AGREEMENT TEMPLATE

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INTERNATIONAL FRANCHISE AGREEMENT TEMPLATE