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8/2/2019 Singapore Franchise Agreement
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Document Information
Document Name
Franchise Agreement
Chapter
Agency & Distribution
Document Description
This agreement may be used by the owner (or franchisor) of proprietary rights andoperating know-how relating to a particular business, for example retail outlets sellingwell-known branded goods, to grant rights to a third party (or franchisee) to establishand operate a business on its own account using the franchisors rights and know-how.The agreement addresses such matters as payment of franchise fees, licence to occupyand fitting out of premises, consultancy and other assistance, intellectual propertyrights, sale of the franchisees business and termination.
Please also note that a number of highlighted areas in the agreement will need to becompleted after the relevant issues have been properly considered. Also, do not forgetto delete the guidance notes appearing in various parts of the agreement.
Editor
Edward S Tay, Nanyang Law LLCTel: +65 63240040, Email: edward@nanyanglaw.com
Update Notes
Please consult the update notes and commentary at www.legalstudio.com/. You willneed your username and password to access the notes. Please check to ensure that you
are using the most up-to-date version of this document.
Disclaimer
While reasonable care is taken to ensure the accuracy and completeness of thepublication, neither LegalStudio.com Ltd. (or any of its subsidiaries) nor the abovenamed Editor makes any representations or warranties, express or implied, that the
publication is free from errors or omissions. This document is based upon the Editorsexperience only, and should be used for general reference purposes only and inconjunction with the other relevant documents in the General Commercial ContractsService. Specific and detailed professional advice should always be obtained in relationto any proposed legal agreement. This document should not be relied upon as asubstitute for legal or other professional advice.
Document NumberSA03
Version Date
15 November 2002
Copyright
LegalStudio.com Ltd. 2004. Please consult your product licence agreement.
http://www.legalstudio.com/http://www.legalstudio.com/http://www.legalstudio.com/8/2/2019 Singapore Franchise Agreement
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TABLE OF CONTENTS
1. INTERPRETATION ..................................................................................1
2. GRANT OF FRANCHISE .........................................................................5
3. CONDITIONS PRECEDENT ...................................................................5
4. LICENCE AGREEMENT .........................................................................6
5. OBLIGATIONS OF FRANCHISOR .........................................................6
6. OBLIGATIONS OF FRANCHISEE .........................................................7
7. MAINTENANCE .....................................................................................8
8. ROYALTIES ............................................................................................9
9. FINANCIAL RECORDS AND RECEIPTS ..............................................9
10. OPEN ACCOUNT .................................................................................10
11. AUDITS .................................................................................................10
12. INSURANCE ........................................................................................11
13. TAXES ..................................................................................................11
14. ADVERTISING .....................................................................................11
15. INDEPENDENT CONTRACTOR ........................................................11
16. SALE OF BUSINESS ............................................................................12
17. EARLY TERMINATION AND RENEWAL ........................................14
18. CONSEQUENCES OF EXPIRATION OR TERMINATION ...............16
19. RESTRICTIONS ...................................................................................16
20. GENERAL .............................................................................................17
21. FORCE MAJEURE ...............................................................................18
22. NOTICES ..............................................................................................1923. AMENDMENTS ...................................................................................20
24. HEADINGS ...........................................................................................20
25. APPLICABLE LAW AND JURISDICTION ........................................20
26. COSTS ...................................................................................................21
SCHEDULE A............................................................................................22
SCHEDULE B............................................................................................23
SCHEDULE C............................................................................................24
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FRANCHISE AGREEMENT
THIS AGREEMENT is made on the[ ] day of [ ], 20 [ ]
BETWEEN:
[Name of Franchisor], [(a company incorporated in and existing under the laws of[Insert
Jurisdiction])] [of] [whose [registered office] [principal place of business in Singapore] is at]
[Insert Address] (the Franchisor);
and
[Name of Franchisee], [(a company incorporated in and existing under the laws of [Insert
Jurisdiction])] [of] [whose [registered office] [principal place of business in Singapore] is at][Insert Address] (the Franchisee).
WHEREAS:
A. The Franchisor is engaged in the business of[Insert Details], which is carried on by
it or other franchisees through retail outlets using certain proprietary information,
quality standards and specifications, materials, brand names, insignia, management
methods and operating procedures (collectively the business know-how) and has
devoted substantial time and resources to the development, promotion and use
thereof.
B. The Franchisee wishes to utilise the Franchisors business know-how to carry on such
business upon the terms and conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:
Audit means a physical count of the Franchisees Inventory, Receipts and other
assets carried out in accordance with the Franchisors standard procedures as varied
from time to time;
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Business means the business of[Insert Details] to be carried on at the Premises
using the Service Mark, the Proprietary Rights and the System as more particularly
described in the Operating Manual;
Effective Date means the commencement date of the Tenancy Agreement as
specified therein;
Equipment means the apparatus, equipment and machinery to be supplied to the
Franchisee by suppliers nominated by the Franchisor at the sole cost of the Franchisee
for carrying on the Business from time to time;
Financial Statements means the financial records and reports to be provided by
the Franchisee to the Franchisor from time to time in accordance with Clause 9;
Franchise Fee means the initial franchise fee of S$[Insert Amount] payable by
the Franchisee to the Franchisor pursuant to Clause 2;
Gross Turnover means the gross receipts of the Business before deduction of any
outgoings and expenses incurred directly or indirectly in furtherance of the Business
and gross receipts shall include, without limitation, all cash or credit transactions of
whatever nature and the amounts receivable in respect of all Inventory sold and
delivered or other services performed by the Franchisee in the course of the Business;
Inventory means all merchandise intended for sale by the Franchisee in the course
of the Business;
Licence Agreement means the licence agreement in agreed terms to be executed
between the Licensor and the Franchisee in accordance with Clause 4, whereby the
Franchisee shall be permitted to occupy the Premises for the purpose of carrying on
the Business;
Licensor means[Insert Name];
Material Breach means any one or more of the following:
(a) the failure by the Franchisee properly to record, deposit or report
Receipts or to render invoices;
(b) any attempt by the Franchisee to encumber, transfer, or assign any of
its rights or benefits or duties or obligations under this Agreement;
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(c) the abandonment by the Franchisee of all or any substantial part of
the Business for more than twenty-four (24) hours (whether or not the
Franchisee intends to abandon the same);
(d) the failure by the Franchisee to permit any Audit or to allow the
Franchisor access to the Business, the Premises or any part thereof;
(e) any conviction of the Franchisee of a criminal offence punishable by
imprisonment;
(f) any act, omission or improper conduct on the part of the Franchisee
which jeopardises the reputation or goodwill attaching to the Proprietary
Rights, the Business or the System;
(g) any failure by the Franchisee to conduct the Business strictly in
accordance with the Operating Manual or the System;
(h) any failure by the Franchisee to pay any taxes or debts incurred in the
conduct of the Business when due;
(i) any failure by the Franchisee to maintain adequate employees
compensation insurance coverage in accordance with the requirements of
law;
(j) any failure by the Franchisee to indemnify the Franchisor in
accordance with the terms of this Agreement; or
(k) any breach of, or failure by the Franchisee to comply with, any other
provision of this Agreement.
Notional Profit means the surplus (if any) of the consideration received by the
Franchisee upon the sale of the Business over its notional value which shall mean the
aggregate of the Franchise Fee of S$[Insert Amount] and the setting-up costs
specified in Schedule C;
Operating Manual means the written manual prepared by the Franchisor to be
used by the Franchisee in carrying on the Business and any amendment or
replacement thereof which the Franchisor may at any time, and from time to time,
notify to the Franchisee;
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Payment Date means the [Insert Date] day of each calendar month during the
continuance in force of this Agreement provided that, if such date shall fall on a day
which is not a business day (meaning a day (excluding Saturdays) on which licensed
banks are open for business in Singapore) such payment date shall be the next
following business day;
Premises means the premises in the Territory from time to time approved by the
Franchisor at which the Franchisee may carry on the Business;
Proprietary Rights means the trade and service marks, names and logos details of
which are set out in Schedule A and all other trade and service marks, names, logos,
designs, copyright, know-how, patents and designs used in the conduct of, or in any
way relating to, the Business whether or not registered or capable of registration and
all other proprietary rights whatsoever owned or used by the Franchisor now or at any
time hereafter for use in connection with the System;
Receipts means all proceeds of sale (whether cash, cheque, bank draft, credit
instrument or otherwise) received by the Franchisee, whether by way of sale of
Inventory or otherwise, from the Franchisees conduct of the Business;
Robbery means the theft of any Receipts, Inventory, Equipment or other goods
from the Franchisee or its agents or employees by acts or threats of violence or while
Receipts are being transported directly between the Premises and the bank designated
by the Franchisor and in the presence of the Franchisee or its agents or employees;
Services means the services provided in the course of the Business identified by the
Proprietary Rights;
Service Mark means[Insert Details];
System means the distinctive know-how and method developed, promoted andused by the Franchisor in connection with the Business utilising the Proprietary
Rights, Equipment and certain operating procedures and methods, management and
advertising techniques and other information, all as may from time to time be set out
or more fully described in the Operating Manual;
Tenancy Agreement means the tenancy agreement to be executed between the
landlord of the Premises of the one part and the Licensor as the tenant of the other
part in respect of the Premises; and
Territory means the territory described in Schedule B .
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1.2 In this Agreement, references to Clause or Schedules are references to clauses of, or
schedules to, this Agreement. Each Schedule shall have effect as if set out in this
Agreement.
2. GRANT OF FRANCHISE
2.1 In consideration of the payment of the Franchise Fee by the Franchisee to the
Franchisor (receipt whereof the Franchisor hereby acknowledges), the Franchisor
hereby grants to the Franchisee a non-exclusive franchise to carry on the Business,
and use the Proprietary Rights and the System only in connection therewith, for a
term of[Insert Number] years from the Effective Date, subject always to the
provisions of this Agreement.
3. CONDITIONS PRECEDENT
3.1 The Franchisor shall use its best endeavours to make available the Premises within a
reasonable time after the date of this Agreement. The franchise granted to the
Franchisee under Clause 2 shall not take effect unless all of the following conditions
precedent are satisfied, or waived in writing by the Franchisor, on or prior to the
Effective Date:
(a) satisfactory completion of initial training of key employees of the
Franchisee (the Key Employees), being such persons as shall be agreed in
writing by the Franchisor and the Franchisee;
(b) the grant of all leases, licences and permits necessary for establishing
and carrying on the Business;
(c) there having been no breach of this Agreement by the Franchisee ;
and
(d) payment to the Licensor and the Franchisor of the respective setting-
up costs set out in Schedule C.
3.2 If the Premises are not available within one hundred and eighty (180) days after the
date of this Agreement, the Franchisor may, or upon written request of the Franchisee
shall, refund the Franchise Fee without interest, less the amount of S$[Insert
Amount] as a contribution towards the costs and expenses incurred by the Franchisor
in connection with the subject matter of this Agreement and this Agreement shallautomatically terminate and the Franchisor shall have no further liability hereunder.
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4. LICENCE AGREEMENT
4.1 The right of the Franchisee to occupy the Premises shall immediately cease upon
expiry or sooner termination of this Agreement or upon termination of the Tenancy
Agreement (whichever is earlier).
4.2 Upon agreement between the parties hereto as to the location of the Premises, the
Franchisee shall execute the Licence Agreement .
5. OBLIGATIONS OF FRANCHISOR
5.1 The Franchisor undertakes to the Franchisee that, to enable the Franchisee to
commence and carry on the Business:
(a) within three (3) months from the date of this Agreement, it will
provide the Key Employees with initial training in the System as referred to
in Clause 3.1 (a) at such time and at such place as shall be agreed by the
Franchisor and the Franchisee in writing, all costs of travel, accommodation
and subsistence incurred by the Key Employees in connection therewith to be
borne by the Franchisee;
(b) it will deliver to the Franchisee at the time of such initial training one(1) copy of the Operating Manual and such other materials as the Franchisor
may in its discretion consider appropriate;
(c) it will provide the Franchisee with reasonable consultation and
advice concerning the location and suitability of the Premises;
(d) it will make available to the Franchisee technical specifications for
the internal layout of the Premises and advice relating to the Franchisees
plans for construction, conversion and refurbishment of the Premises to
ensure compliance with the System;
(e) it will supervise the construction, conversion and refurbishment of
the Premises to such extent and at such times as the Franchisor shall in its
discretion consider appropriate; and
(f) it will provide such general assistance as the Franchisor shall in its
discretion consider appropriate in connection with the opening of the
Premises and pre-opening and launch of the Business.
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5.2 The Franchisor agrees with the Franchisee that, at all times during the continuance of
this Agreement, it shall
(a) permit the Franchisee to carry on the Business utilizing the Service
Mark and otherwise in accordance with the terms of this Agreement;
(b) provide the Franchisee with reasonable advice and consultation
relating to the System and any questions from time to time arising in
connection therewith;
(c) provide advice to the Franchisee regarding recruitment of suitable
staff to carry on the Business;
(d) make available to the Key Employees such further training as may
from time to time be necessary in consequence of any improvements or
developments of the System, all costs of travel, accommodation and
subsistence incurred by the Key Employees in connection therewith to be
borne by the Franchisee; and
(e) assist the Franchisee in obtaining inventory, products, services and
equipment from suppliers nominated by the Franchisor from time to time all
costs incurred in connection therewith to be borne by the Franchisee.
6. OBLIGATIONS OF FRANCHISEE
6.1 The Franchisee agrees and undertakes to the Franchisor as follows:
(a) not to commence the Business until the Key Employees have
undergone initial training in accordance with Clause 5.1(a) and have been
approved as competent by the Franchisor, nor at any time thereafter to
employ any such person as a key member of staff who has not undergone
such initial training or been so approved;
(b) not to commence any construction, conversion or refurbishment work
at the Premises unless and until and Franchisor has approved the identity of
the contractor(s) to be engaged to carry out such works and approved the
Franchisees construction, conversion or refurbishment plans;
(c) to enter into, and to perform with due diligence its obligations under,
the Licence Agreement and to ensure that the Premises are without delay and
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at the Franchisees expense constructed, converted and refurbished in
accordance with this Agreement;
(d) to ensure that the Franchisee has sufficient working capital and other
resources to fulfil all its obligations under this Agreement;
(e) to carry on the Business strictly in accordance with the Operating
Manual and all quality, service and other standards set out therein and to
conform in all respects with the System as the same may be modified,
improved or developed from time to time;
(f) to comply promptly with all advice and instructions given by the
Franchisor with regard to the System;
(g) to procure that any one or more of the Key Employees shall attend
such further periods of training as may from time to time be required by the
Franchisor, all costs of travel, accommodation and subsistence in connection
therewith incurred by the Key Employees to be borne by the Franchisee;
(h) to use only such stationery, materials, promotional literature and
other items in connection with the Business as shall be permitted by the
Operating Manual or otherwise from time to time approved in writing by the
Franchisor; and
(i) to use its best endeavours to promote the Business and to cooperate
generally with the Franchisor and the other franchisees of the Franchisor in
connection therewith.
7. MAINTENANCE
7.1 Except as otherwise provided in this Agreement, the Franchisee shall be responsible
for, and shall observe and perform, all of the Licensors obligations as tenant under
the Tenancy Agreement pursuant to which the Licensor holds the Premises and for all
expenses relating to the Business, including, without limitation, maintenance of the
Equipment and other items used in the Business in a clean, attractive, orderly, safe
and sanitary condition and in good repair and operating condition.
7.2 The Franchisee shall at its expense, when the Franchisor deems necessary, arrange for
the interior and exterior of the Premises to be repainted or repaired, including,
without limitation, any broken or damaged glass, windows, doors and floor covering.
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7.3 The Franchisee shall pay to the Licensor a licence fee equal to the rental of the
Premises from time to time payable under the Tenancy Agreement, and shall bear the
cost of all telephone, electricity, water, gas and any other utilities and outgoings
required to carry on the Business.
8. ROYALTIES
8.1 In addition to the Franchise Fee, the Franchisee shall pay to the Franchisor (or such
other person as the Franchisor may in writing direct) during the continuance of this
Agreement, royalties equivalent to [Insert Number] per cent of the Gross Turnover
in each calendar month.
8.2 All such royalties shall be paid by the Franchisee free and clear of any deduction,withholding, set off or counterclaim of any nature whatsoever, except any deduction
or withholding which may be required by law in relation to any tax, in which case the
Franchisee shall ensure that the amount by which the payment is reduced (the
Relevant Amount) does not exceed the amount legally required, shall account in full
for the Relevant Amount to the competent taxation authority on or before the due date
and shall furnish to the Franchisor on or before the due date an official receipt issued
by the competent taxation authority for the Relevant Amount or, if it is not the
practice of such authority to issue such receipts, equivalent evidence of payment of
the Relevant Amount.
9. FINANCIAL RECORDS AND RECEIPTS
9.1 The Franchisee shall maintain adequate financial and other records in respect of the
Business. The Franchisor shall have the right to inspect and take copies of such
records at any time during normal business hours.
9.2 The Franchisee shall deposit all Receipts in the Open Account (as defined and
referred to in Clause 10) and shall, whenever so requested by the Franchisor, provide
written verification from the bank at which the Open Account is held of the deposit of
any Receipts or, if so requested, deliver the Receipts directly to the Franchisor.
9.3 The Franchisee shall prepare and furnish to the Franchisor (in such manner and at
such times as may be acceptable to the Franchisor) summaries of Inventory, reports
of Receipts and such additional reports as to financial and other matters as the
Franchisor may require from time to time.
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9.4 The Franchisee shall deliver or furnish to the Franchisor copies of (i) receipts and
invoices for all purchases made by the Franchisee and (ii) receipts and bills for
operating expenses incurred by the Franchisee and keep the Franchisor regularly
advised in writing of the Franchisees retail sales prices and of any discounts or
allowances given by the Franchisee.
10. OPEN ACCOUNT
10.1 The Franchisor shall establish and maintain an open bank account (the Open
Account) in the name of the Franchisor (or such other party or parties as the
Franchisor may in writing direct).
10.2 All Receipts (which may be withdrawn by, or otherwise used for the benefit of, theFranchisor at any time without payment by the Franchisor of interest or other
compensation to the Franchisee) shall be credited to the Open Account.
10.3 The Franchisor shall have the exclusive right to operate and control the Open
Account and shall manage and maintain the same and make deductions therefrom for
all Inventory, costs and expenses for which the Franchisee is responsible, and
payments due from the Franchisee to the Franchisor under this Agreement or to the
Licensor under the Licence Agreement. The remaining balance shall be deposited in
the Franchisees own bank account on each Payment Date. In the case of any deficit,the Franchisee shall make up the difference in the Open Account on each Payment
Date.
11. AUDITS
11.1 The Franchisor shall cause at least one Audit to be carried out in each calendar
quarter and, upon the Franchisees request, shall carry out additional Audits at the
cost of the Franchisee.
11.2 The Franchisor shall have the right to carry out an Audit or cause an Audit to be
carried out at any time without prior notice to the Franchisee.
11.3 The Franchisor may cause any Audit to be carried out by any third party whom it
appoints for such purpose.
11.4 Both the Franchisor and the Franchisee shall receive copies of each Audit report.
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12. INSURANCE
12.1 The Franchisor shall arrange insurance at the Franchisees expense in respect of all
normal risks relating to the Business including, without limitation, any loss of or
damage to the Premises, Inventory and such other items as the Franchisor may in its
discretion deem necessary from time to time.
13. TAXES
13.1 The Franchisee shall be responsible for payment of all taxes, rates, duties, fees and
other imposts levied by any government authority in respect of the conduct of theBusiness and for making or filing all returns required in connection therewith.
13.2 The Franchisor shall be responsible for its own profits tax liability in respect of
amounts paid to it by the Franchisee in accordance with this Agreement.
14. ADVERTISING
14.1 The Franchisor shall provide the Franchisee with advertising materials in accordance
with the Operating Manual and may, in addition, arrange such advertising of the
Business, the Service Mark or the System as the Franchisor may in its discretion
consider appropriate.
14.2 Subject to the prior written approval of the Franchisor, the Franchisee may engage in
advertising activities provided that it complies with all applicable laws and
regulations.
15. INDEPENDENT CONTRACTOR
15.1 The Franchisee shall, in the conduct of the Business, act as an independent contractor
and shall assume complete control over, and bear full responsibility for all acts or
omissions of, the Franchisees agents and employees. The Franchisee agrees to
indemnify and keep indemnified the Franchisor from and against any cost, loss,
liability, claim or damage which the Franchisor incurs or suffers as a result of any act
or omission on the part of any of the Franchisees agents or employees.
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15.2 The Franchisee undertakes to the Franchisor that its agents and employees shall not
be, or held out to be, agents or employees of the Franchisor and shall not, as the
Franchisee shall procure, negotiate or enter into any agreement or incur any liability
(whether legally binding or not) in the name of or on behalf of, or that purports to
bind, the Franchisor.
16. SALE OF BUSINESS
16.1 All the rights granted to the Franchisee hereunder are personal to the Franchisee and,
without limitation, the following acts and events shall, unless approved in writing by
the Franchisor, be deemed to be Material Breaches:
(a) if the Franchisee is a partnership, the taking in of one or more new partners whether on the death or retirement of an existing partner or
otherwise;
(b) if the Franchisee is an individual (including a sole surviving partner
of a partnership franchisee), the death, insanity or other legal disability of
such individual in which event no right to carry on the Business or use the
Proprietary Rights or the System or any part thereof shall vest in the
executors, administrators, personal representatives, next-of-kin, trustee,
receiver or guardian of such individual;
(c) if the Franchisee is a body corporate, any amalgamation or
restructuring (unless approved by the Franchisor, such approval not to be
unreasonably withheld), or change in the person or persons who owns or own
a majority of its voting shares or who otherwise has or have effective control
thereof; and
(d) the giving by the Franchisee of a power of attorney or similar
authority whereby the donee of such power or authority obtains the right to
conduct the Business or use the Proprietary Rights or the System or any part
thereof or does in fact use the same.
16.2 If the Franchisee intends to sell the Business to a proposed purchaser, the following
provisions shall apply:
(a) The Franchisee shall forthwith on receipt of a written offer from a
proposed purchaser submit to the Franchisor a copy thereof together with (if
available):
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(i) a business history and details of the financial status of the
proposed purchaser; and
(ii) full written details of any other terms agreed between the
Franchisee and the proposed purchaser.
(b) Upon receipt of the information specified in Clause 16.2(a) the
Franchisor shall have an option to purchase the Business at the same price
and upon the same terms as have been offered by the proposed purchaser by
giving notice in writing to the Franchisee within fourteen (14) days after the
Franchisors receipt of such information. The Franchisee shall forthwith
notify the Franchisor in writing of any variation in the price or terms which
have been offered by the proposed purchaser and such period of fourteen (14)
days shall recommence as from the date of notification to the Franchisor of
such variation.
(c) If the Franchisor gives notice to the Franchisee exercising its option,
the sale and purchase of the Business shall be completed within twenty-eight
(28) days following the giving of such notice.
(d) If the Franchisor does not give such notice exercising its option
within such period, the Franchisors option to purchase the Business shall
lapse and thereafter, subject to the following conditions and with the prior
written consent of the Franchisor, the Franchisee shall have the right to sell
the Business to the proposed purchaser. The proposed purchaser shall have
the same rights as are conferred on the Franchisee hereunder, subject to such
variation as the Franchisor in its absolute discretion thinks fit, and such rights
shall terminate [Insert Number] years after the Effective Date, subject to
Clause 17 . Such conditions are:
(i) the proposed purchaser shall satisfy all the standards andcriteria deemed necessary by the Franchisor in relation to, inter alia,
experience, qualifications, expertise and financial status and it or its
key employee(s) shall undergo and complete a programme of initial
training to the satisfaction of the Franchisor;
(ii) the Franchisee shall pay to the Franchisor the sum of
S$[Insert Amount] or ten per cent. (10%) of the Notional Profit
(whichever is greater) to compensate the Franchisor for dealing with
the application for the above-mentioned consent and the training of
the proposed purchaser or its key employee(s);
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(iii) the Franchisee shall not at the time of the application for
such consent be in breach of this Agreement;
(iv) if the proposed purchaser is a company, the shareholders and
directors of such company shall be acceptable to the Franchisor
according to the criteria set out in (i) above and shall undertake to the
Franchisor in writing in such form as the Franchisor shall in its
absolute discretion require to observe and perform all the obligations
on the part of the Franchisee contained in the form of franchise
agreement then used by the Franchisor for franchisees which are
companies; and
(v) the payment by the Franchisee of all outstanding monies due
to the Franchisor under this Agreement and to the Licensor under the
Licence Agreement and the discharge by the Franchisee of all other
outstanding obligations owed by the Franchisee to any third party
(including, but not limited to, its employees) relating to the Business.
16.3 The Franchisee agrees not to disclose any of the contents of the Operating Manual to
any proposed purchaser and shall procure that no such proposed purchaser shall use
any of the Proprietary Rights nor operate the System or any part thereof without the
prior written consent of the Franchisor.
16.4 Upon the sale by the Franchisee of the Business, the rights of the Franchisee in
respect thereof shall terminate but without prejudice to any obligations of the
Franchisee arising prior to the date of sale or thereafter.
17. EARLY TERMINATION AND RENEWAL
17.1 This Agreement may be terminated by the Franchisor by notice to the Franchisee at
any time upon the occurrence of any of the following events:
(a) a Material Breach;
(b) compulsory acquisition of the Business by the Government of the
Republic of Singapore or any other competent authority;
(c) loss of or damage to the Equipment, the Premises or other assets used
in the Business which cannot in the reasonable opinion of the Franchisor be
repaired or replaced within thirty (30) days;
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(d) closure of the Business as required by law; or
(e) the Franchisee, being an individual, is adjudicated bankrupt or enters
into any voluntary arrangement with his or her creditors or , being a body
corporate, enters into voluntary or compulsory liquidation (other than
pursuant to an amalgamation or restructuring approved by the Franchisor
(such approval not to be unreasonably withheld) or has a receiver appointed
in respect of all or any of its assets or undertaking or makes a composition
with any of its creditors.
17.2 In the event that the Franchisee is, in the sole discretion of the Franchisor incapable
of carrying on the Business in a good and efficient manner or at all, the Franchisor
may take possession of all or any of the Premises, the Equipment, Inventory, Receipts
or other assets or items used in the Business and continue to carry on the Business in
the Premises for the benefit and account of the Franchisee (or its heirs or legal
representatives). In such event, the Franchisor shall be entitled to charge such
management fee as in the Franchisors discretion it shall think fit.
17.3 In the event that the Tenancy Agreement (as renewed if applicable) expires or is
otherwise terminated on a date later than the expiration date of the rights granted
hereunder, the term of this Agreement shall automatically be extended and expire on
the date of expiry or sooner termination of the Tenancy Agreement and the
Franchisee shall forthwith on the commencement date of the extension of such term
pay to the Franchisor a due proportion of the franchise fee for such period of
extension at the rate then charged by the Franchisor to new franchisees.
17.4 In the event that the Franchisee wishes to renew this Agreement upon the expiration
hereof, and conditional upon there being no outstanding breach of this Agreement by
the Franchisee, the Franchisee may by written notice given to the Franchisor not later
than [Insert Number] months prior to the date of expiry of the initial term referred
to in Clause 2 exercise the right to renew this Agreement for a further term of[Insert Number] years whereupon the Franchisor shall be granted a new franchise
and the Franchisor and the Franchisee shall execute a new franchise agreement in the
Franchisors then current form save and except for any clause regarding renewal and
that the franchise fee payable for the renewal term shall be equal to [Insert
Number] per cent.( %) of the amount then charged to new franchisees by the
Franchisor.
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18. CONSEQUENCES OF EXPIRATION OR TERMINATION
18.1 On expiration or sooner termination of this Agreement, the Franchisee shall:
(a) peaceably and quietly vacate the Premises and surrender such of the
Equipment as has not been sold to the Franchisee in good clean and tidy
condition, fair wear and tear excepted;
(b) transfer all remaining Inventory to the Franchisor at cost value to the
Franchisee less, at the Franchisors option, merchandise of a type, quality,
quantity or variety which is inconsistent with the reputation or image
associated with the Service Mark;
(c) transfer to the Franchisor all Receipts and other items or assets used
in the conduct of the Business;
(d) cease using the Service Mark and any part of the System;
(e) return to the Franchisor all copies of the Operating Manual then in its
possession; and
(f) deliver to the Franchisor all materials relating to the System then in
its possession.
18.2 Within thirty (30) days after expiration or sooner termination of this Agreement, the
Franchisor shall deliver to the Franchisee a final statement of account.
18.3 Within three (3) days after delivery of such final statement of account, the Franchisor
shall pay to the Franchisee any credit balance in the Open Account or, if there is any
amount due from the Franchisee to the Franchisor, the Franchisee shall immediately
pay the same to the Open Account. Any property belonging to the Franchisee andleft in the Premises after such expiration or sooner termination of this Agreement
shall belong to the Franchisor.
19. RESTRICTIONS
19.1 The Franchisee covenants with the Franchisor that, during the term of this Agreement
and for a period of[Insert Period] after the expiration or sooner termination (for
any reason) of this Agreement, it shall not, whether by itself or together with, or on
behalf of, any other person, firm or company in any capacity whatsoever:
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(a) engage, or be interested or concerned, in any other business which is
similar to or competitive with the Business; or
(b) employ or seek to employ in any business similar to or competitive
with the Business any person who, according to the Franchisees actual
knowledge, is at that time or has at any time in the previous two (2) years
been employed by the Franchisor or any other franchisee of the Franchisor or
otherwise, directly or indirectly, induce or seek to induce any such person to
leave his or her employment whether or not in breach of his or her contract of
employment; or
(c) solicit customers or former customers of the Business or divert or
seek to divert any customer from the Franchisor or any other franchisee of the
Franchisor.
19.2 The Franchisee hereby acknowledges that the contents of this Agreement, the
Operating Manual and all other information and knowledge relating to the System are
of a strictly confidential nature and, accordingly, the Franchisee covenants that it will
not, and it will procure that no other person over whom it has any control shall, at any
time without the prior written consent of the Franchisor, whether before or after
expiration or sooner termination of this Agreement, divulge or use any of such
information or knowledge relating to the System which may be communicated to or
otherwise acquired by the Franchisee, its directors, agents or employees except (i) to
the employees of the Franchisee or (ii) unless required by law or by the order of a
court or tribunal of competent jurisdiction or by a regulatory or governmental
authority acting in accordance with its powers to divulge the same.
19.3 The restrictions contained in this Clause 19 are considered reasonable by the
Franchisee, but if any such restriction shall be found to be void or voidable but would
be valid and effective if some part or parts thereof were deleted, such restriction shall
apply with such modification as may be necessary to make it valid and effective.
20. GENERAL
20.1 The parties hereto acknowledge that this Agreement, together with any documents
referred to herein, constitutes the entire agreement between them relating to its
subject matter and that this Agreement replaces and supersedes any previous oral or
written arrangements, agreements, drafts, warranties, representations or
understandings made or existing between them with respect to such subject matter.
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20.2 The Franchisee acknowledges to the Franchisor that it has not been induced to enter
into this Agreement by any warranty, representation or statement other than as set out
herein and agrees that it shall not be entitled to any remedy against the Franchisor in
relation to any such other warranty, representation or statement except in the case of
any fraud or similar misconduct.
20.3 No failure by either the Franchisor or the Franchisee to exercise nor any delay on
their part in exercising any right, power, privilege or remedy under this Agreement
shall impair or operate as a waiver thereof . No single or partial exercise of any right,
power, privilege or remedy hereunder shall prevent any further or other exercise
thereof or the exercise of any other right, power, privilege or remedy.
20.4 The Franchisee consents to the disclosure by the Franchisor of any information
relating to this Agreement or the Business.
20.5 The Franchisee warrants and represents to the Franchisor that the Franchisee has the
full and unrestricted right to enter into this Agreement and that it is not party to any
agreement or subject to any obligation of any nature whatsoever which prevents or
restricts its entry into this Agreement or the exercise, discharge or performance of its
rights, duties and obligations hereunder.
21. FORCE MAJEURE
21.1 Neither party to this Agreement (hereinafter in this Clause 15 referred to as the
affected party) shall be deemed to be in breach of this Agreement or otherwise
liable to the other as a result of any delay or failure in the performance of its
obligations hereunder if and to the extent that such delay or failure is caused by any
force majeure and the time for performance of the relevant obligation(s) shall be
extended accordingly. For the purposes of this clause, force majeure shall mean any
event or circumstances which is or are beyond the reasonable control of the affected
party including, without limitation, any flood, earthquake, storm, typhoon,
subsidence, epidemic or other natural disaster or calamity, any war or threat thereof,
terrorist action, riot, invasion, civil disorder, insurrection, any action or failure to act
on the part of any governmental authority in any jurisdiction, any trade embargo,
industrial action, strike or lockout, any shortage or absence of raw materials, labour
or components, any destruction, damage or malfunction of or to any factory,
equipment, plant or materials and any breach of contract , default or insolvency by or
of any third party (including, without limitation, any sub-contractor), not being a third
party which is a member of the same group of companies as the affected party, or an
employee or officer of such third party.
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21.2 The affected party shall forthwith notify the other party of the nature, extent and
possible duration of the event or circumstances constituting the force majeure, use all
reasonable endeavours to reduce the effect of such event or circumstances on the
performance of its obligations hereunder and, forthwith after cessation of such event
or circumstances, notify the other party thereof and resume full performance of its
obligations under this Agreement.
21.3 If any event or circumstances constituting the force majeure delays the performance
by the affected party of its obligations hereunder for a continuous period of not less
than [six (6)] months, the other party hereto shall be entitled to give notice to the
affected party to terminate this Agreement. Any such notice, which shall be
irrevocable, shall specify the date on which such termination is to have effect, not
being less than[fourteen (14)] days after the date on which such notice is deemed
to be given. The provisions of this Agreement as to the consequences of termination
shall apply to any termination pursuant to this Clause 15.3.
22. NOTICES
22.1 Any notice required or authorised to be given under, or in connection with, this
Agreement by either party to the other shall be in writing in the English language.
22.2 Any such notice shall be sent to the recipient at the address set out in Clause 19.4 , oras otherwise directed by the recipient pursuant to Clause 19.5 . Notices may be
delivered by hand or sent by registered post, courier or by facsimile.
22.3 If delivered by hand or sent by courier, notice will be deemed to have been given on
the date of delivery at the recipients address. If sent by facsimile, notice will be
deemed to have been given on the date of despatch, subject to confirmation of
uninterrupted transmission by a transmission report provided that any notice sent by
facsimile after 5:30 p.m. (local time at the recipients address) on any business day or
at any time on a Saturday, Sunday or public holiday (in the jurisdiction where the
recipient has its address) shall be deemed to have been given at 9:00 a.m. on the next
following business day. If sent by registered post, notice will be deemed to have been
given two (2) business days after posting if sent from Singapore to an address within
Singapore or seven (7) business days after posting if sent from overseas to an address
within Singapore or vice versa.
22.4 The parties addresses and other details for the purposes of this Clause 19 are,
subject to Clause 19.5, as follows:
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DISTRIBUTOR:
[Insert Address]
Fax Number:[Insert Fax Number]
For the attention of
SUPPLIER:
[Insert Address]
Fax Number:[Insert Fax Number]
For the attention of
22.5 Either party hereto may notify the other of any change of its address, facsimile
number or the person for whose attention any notice should be marked, provided that
such notification shall not have effect earlier than two (2) business days after the date
on which it is deemed given pursuant to this Clause 19.
23. AMENDMENTS
23.1 No amendment or variation of this Agreement shall be effective unless made in
writing and signed by the parties hereto.
24. HEADINGS
24.1 The headings set out in this Agreement are included for convenience only and shall
not in any way affect the construction or interpretation hereof.
25. APPLICABLE LAW AND JURISDICTION
25.1 This Agreement shall be governed by, and construed in all respects in accordance
with, the laws of the Republic of Singapore.
In relation to any proceedings to enforce, or arising out of or in respect of, thisAgreement, both parties irrevocably and unconditionally agree to submit to the
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exclusive jurisdiction of the courts of the Republic of Singapore and waive any
objection to proceedings in the courts of the Republic of Singapore on the grounds of
forum non conveniens or venue.
26. COSTS
26.1 Subject to any express provisions to the contrary, each of the Franchisor and
Franchisee shall pay its own costs and disbursements of or incidental to the
negotiation, preparation, execution and implementation of this Agreement.
AS WITNESS the hands of[duly authorised representatives of] the Franchisor and the
Franchisee the day and year first above written
SIGNED by )
[Insert Name] )
for and on behalf of )
[Insert Name] in the presence of: )
SIGNED by )
[Insert Name] )
for and on behalf of )
[Insert Name] in the presence of: )
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SCHEDULE A
Proprietary Rights : Trade and Service Marks, Names and Logos
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SCHEDULE B
Territory
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(Clause 3.1(d))
SCHEDULE C
Setting-Up Costs
Amount payable by Franchisee to the Franchisor: [specify]
Amount payable by Franchisee to Licensor: [specify]
Recommended