Franchise Agreement - Template, Sample Form to Fill out Pro · NG-law
✓ Valid in Nigeria · drafted to comply with local law
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FRANCHISE AGREEMENT
This Franchise Agreement (the "Agreement") is made this ________ (the "Effective Date").
BETWEEN
________, a company incorporated under the Companies and Allied Matters Act 2020 of the Federal Republic of Nigeria with Registration Number (RC) ________, having its registered office at:
________
hereinafter referred to as (the "Franchisor" which expression shall where the context so admits include its successors-in-title and assigns) of the one part.
AND
________, of the following address:
________
bearing Means of Identification Number ________, hereinafter referred to as (the "Franchisee" which expression shall where the context so admits include its successors-in-title and permitted assigns) of the other part.
The Franchisor and the Franchisee may each be referred to as a "Party" and together as the "Parties".
BACKGROUND
A. The Franchisor has developed and is the proprietor of the Proprietary Marks and the Operating Methods which the Franchisor utilises in carrying on the following business (the "Business"):
________
B. Subject to the terms and conditions of this Agreement, the Franchisor grants to the Franchisee a licence to operate the Franchise Business under the Franchisor's brand: ________.
C. The Franchisor is willing to supply to the Franchisee the Products particularly described in this Agreement.
D. The Franchisee has agreed to use the Franchisor's Proprietary Marks and Operating Methods to operate the Franchise Business in accordance with the terms of this Agreement.
E. The Parties acknowledge that, where applicable, any transfer of technology, registrable industrial property or technical know-how contemplated under this Agreement may be subject to registration with the National Office for Technology Acquisition and Promotion (NOTAP) pursuant to the National Office for Technology Acquisition and Promotion Act (Cap. N62, LFN 2004).
NOW, in consideration of the payment of the Franchise Fee and royalties payable under this Agreement and the mutual covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
§1. DEFINITIONS
(1) "Franchise Business" means the business which the Franchisee operates under the licence granted by the Franchisor to use the Franchisor's Operating Methods and Proprietary Marks.
(2) "Location" means the particular place where the Franchisee is licensed to operate the Franchise Business.
(3) "Operating Methods" means the Franchisor's proprietary system, methods, techniques, processes, style, format, mechanisms and processes of doing business, including without limitation the Franchisor's designs, specifications, marketing techniques, advertising materials, business operations and other processes involved in the Business.
(4) "Products" means the following branded products which the Franchisor shall supply to the Franchisee and which the Franchisee is required to sell in the Franchise Business:
________
(5) "Proprietary Marks" means the trade marks, trade names, logos, symbols, service marks, marks, patterns, signs, designs and other commercial marks and symbols relating to the Business, whether or not registered under the Trade Marks Act (Cap. T13, LFN 2004).
(6) "Operating Manual" means the manual delivered by the Franchisor to the Franchisee specifying the Operating Methods and standards of business operation, as amended from time to time.
(7) "Confidential Information" has the meaning ascribed to it in §19.
§2. GRANT OF FRANCHISE
The Franchisor grants and the Franchisee accepts an exclusive and non-transferable licence to use the Franchisor's Proprietary Marks and Operating Methods in connection with the establishment and operation of the ________ franchise within the Location described in this Agreement. The Franchisee shall use the Proprietary Marks and the Operating Methods only in accordance with the terms and conditions of this Agreement.
§3. LOCATION OF OPERATION
(1) The Franchisee shall operate the Franchise Business within the following territory:
________
(2) The Franchise Business shall not be relocated to a new territory without the prior written consent of the Franchisor. Where the Franchisee wishes to relocate, the following conditions shall apply:
________
§4. FRANCHISE FEE AND ROYALTIES
(1) The Franchisee shall pay an initial fee of ₦________ (________) (the "Initial Franchise Fee") as consideration for the grant of the Franchise Business. Payment shall be made on ________.
(2) The Franchisee shall pay royalties to the Franchisor in the sum of ₦________ (________), payable ________.
§5. ADVERTISING
(1) The Franchisee shall obtain the prior written consent of the Franchisor for any advertising, marketing or promotional programme or material to be published by any method, including without limitation print, media and broadcast, to advertise the Franchise Business.
(2) The Franchisee shall comply with the following advertising rules and guidelines in relation to the Franchise Business, and shall ensure that all advertising complies with the Federal Competition and Consumer Protection Act 2018 and the regulations of the Advertising Regulatory Council of Nigeria:
________
§6. COMMENCEMENT OF OPERATIONS
The commencement date for the Franchise Business shall be ________ (the "Opening Date"). Notwithstanding the foregoing, the Franchise Business shall not open on the Opening Date unless the Franchisor confirms that the blueprints and premises comply with the terms of this Agreement.
If the Franchisee fails to commence operations on the Opening Date, the Franchisor may, at its sole discretion, extend the time for opening, or the Parties may execute a new agreement stating the revised opening and expiration dates.
§7. PRODUCTS
§8. COMPLIANCE WITH OPERATING METHODS
(1) The Franchisor shall provide the Operating Manual to the Franchisee specifying the Operating Methods and standards of business operation. The Franchisee agrees to use the Operating Methods and Products as specified in the Operating Manual.
(2) The Franchisee acknowledges that the Franchisor retains all rights and ownership in the Operating Methods and agrees to operate the Franchise Business in strict compliance therewith.
(3) Failure to adhere to the operating standards shall constitute a ground for termination of this Agreement.
§9. QUALITY CONTROL
The Franchisee shall operate and maintain the Franchise Business in compliance with the Operating Manual and the Operating Methods. The Franchisor may, by itself or through its representatives or agents, inspect the Franchise Business to ensure compliance and may deliver inspection reports to the Franchisee. The Franchisee shall promptly correct any default identified in such report.
§10. BUILD-OUT COSTS AND SCHEDULE
(1) The Franchisee shall be responsible for all build-out costs for the Franchise Business, including without limitation furniture, design, equipment, fixtures and fittings.
(2) The Parties agree to the following build-out schedule:
Date of submission of plan or design: ________
Date of commencement of build-out: ________
Date of completion of build-out: ________
§11. PROPRIETARY MARKS
(1) The Franchisee acknowledges that the Franchisor is the owner and originator of the Proprietary Marks. Subject to the terms of this Agreement, the Franchisor grants to the Franchisee an exclusive and non-transferable licence to use, display and reproduce the Proprietary Marks in accordance with this Agreement.
(2) The Franchisee shall use the Proprietary Marks solely for the following purpose (the "Purpose"):
________
(3) The Franchisee shall not use the Proprietary Marks for any purpose other than the Purpose without the prior written consent of the Franchisor, and shall not modify, alter or otherwise change any part of the Proprietary Marks.
(4) The Franchisee acknowledges that it has no ownership or title in the Proprietary Marks or any other intellectual property of the Franchisor. The Franchisee shall not sublease, license, transfer or assign the Proprietary Marks to any party, and shall not at any time, during or after the term of this Agreement, do anything to challenge, contest or invalidate the Franchisor's rights to the Proprietary Marks.
(5) The Franchisor retains the right to modify, alter, delete or otherwise change the Proprietary Marks, and where the Franchisor does so, the Franchisee shall adopt the new Proprietary Marks and bear any cost arising from such change.
§12. OBLIGATIONS OF THE FRANCHISEE
The Franchisee shall have the following obligations:
(I) to pay the Initial Franchise Fee, royalties and all other fees payable under this Agreement promptly when due;
(II) to utilise the Franchisor's Proprietary Marks and Operating Methods and operate the Franchise Business in accordance with the methods developed from time to time by the Franchisor;
(III) to use the Proprietary Marks only in accordance with the Purpose;
(IV) to comply with the provisions of this Agreement and all applicable laws and regulations of the Federal Republic of Nigeria relating to the Franchise Business, including all relevant licences, permits and registrations.
§13. OBLIGATIONS OF THE FRANCHISOR
In addition to its other obligations under this Agreement, the Franchisor shall:
(I) before the Opening Date, deliver a copy of the Operating Manual to the Franchisee;
(II) provide pre-opening and opening guidance, support and advisory assistance to the Franchisee as the Franchisor deems necessary;
(III) provide guidance, additional support and advisory assistance, including manuals, techniques and materials for the smooth operation of the Franchise Business;
(IV) train, at its sole discretion, the staff of the Franchise Business on the operating standards of the Business;
(V) inspect the Franchise Business to ensure compliance with the Franchisor's standards and the terms of this Agreement;
(VI) continue to supply the Products to the Franchisee to ensure the proper operation of the Franchise Business;
(VII) before the Opening Date, provide the standard guidelines for the layout of the Franchise Business, including the interior and exterior of the premises, fixtures, fittings, equipment and furniture.
§14. INSURANCE
The Franchisee shall obtain and maintain, with a reputable insurer registered under the Insurance Act 2003 and acceptable to the Franchisor, insurance coverage as follows:
________
§15. TERM AND TERMINATION
(1) This Agreement shall commence on the Effective Date and, unless terminated earlier in accordance with its terms, shall terminate on ________ (the "Expiration Date").
(2) The Franchisor may terminate this Agreement before the Expiration Date upon the occurrence of any of the following:
(I) if the Franchisee abandons the Franchise Business or fails to operate it for a period of: ________;
(II) if the Franchisee misuses or fails to use the Proprietary Marks or Operating Methods in accordance with the prescribed standards and guidelines;
(III) if the Franchisor discovers any fraud or misrepresentation in relation to the Franchise Business;
(IV) if the Franchisee becomes insolvent, is adjudged bankrupt, or (being a company) enters into liquidation or has a receiver appointed over its assets;
(V) if the Franchisee conducts its business in a manner that damages the Franchisor's reputation and goodwill;
(VI) if any fees, costs or dues payable under this Agreement remain unpaid;
(VII) if the Franchisee fails to fulfil its obligations under this Agreement;
(VIII) if the Franchisee discloses the Franchisor's trade secrets, Operating Methods or other Confidential Information to unauthorised persons;
(IX) if the Franchisee does any act or omission that damages the Proprietary Marks or the Franchisor's business reputation;
(X) if the Franchisee breaches any fundamental term of this Agreement.
(3) The Franchisor shall give the Franchisee written notice of ________ prior to termination, stating the reasons therefor.
(4) Immediately upon termination of this Agreement, the Franchisee shall:
(I) cease to use all Proprietary Marks and Operating Methods of the Franchisor;
(II) pay all outstanding fees and sums accrued as at the date of termination;
(III) return to the Franchisor all manuals, documents, procedures, Products, guides, guidelines, training materials and other materials bearing the Proprietary Marks;
(IV) remove any symbol, sign, advertisement or other material associating the Franchisor with the Franchisee or the Franchise Business.
(5) The Franchisor shall retain all rights and remedies following termination and may elect to purchase the Franchise Business upon termination at fair market value.
(6) Termination shall not discharge the Franchisee from any outstanding obligations, including the payment of all outstanding fees and taxes as at the date of termination and all surviving obligations under this Agreement.
§16. RENEWAL OF AGREEMENT
The Parties may agree to renew this Agreement for a further term. Where the Franchisee intends to renew, it shall deliver a written request for renewal to the Franchisor, who may, at its sole discretion, grant an additional term on terms that may differ fundamentally from this Agreement. The following conditions shall apply to any renewal:
________
The Parties agree that the Franchisor is under no obligation to renew and may, at its sole discretion, refuse any request for renewal.
§17. INDEMNITY
The Franchisee shall indemnify and hold the Franchisor harmless against all actions, claims, liabilities, expenses, damages, settlements, legal fees and losses reasonably incurred by the Franchisor as a result of:
(I) the Franchisee's use, operation or construction of the Franchise Business;
(II) the Franchisee's use of the Operating Methods and Proprietary Marks;
(III) any breach by the Franchisee or its directors, officers, partners, employees or agents of any law or regulation relating to the use of the Operating Methods and Proprietary Marks;
(IV) any harm or injury suffered by any third party due to the Franchisee's fault;
(V) any cost incurred by the Franchisor in enforcing its rights under this Agreement, including all reasonable legal fees.
§18. NON-COMPETITION AND NON-SOLICITATION
(1) The Franchisee agrees that during the term of this Agreement and for ________ thereafter, neither the Franchisee nor any of its directors, partners, officers, shareholders, members or affiliates shall, directly or indirectly, hold a controlling interest in or engage in any business in competition with the Business, including marketing, sale, distribution or investment. In particular, the Franchisee shall not:
(I) engage in a competing business as an owner, partner or agent;
(II) become an employee, director, adviser or independent contractor of, or work directly or indirectly for, any third party engaged in a business similar to the Business;
(III) use any business information, Confidential Information or trade secret of the Franchisor to obtain a competitive advantage over the Business.
(2) The Franchisee shall not solicit or attempt to solicit any client or customer of the Franchisor, nor hire any person engaged by the Franchisor as an employee, independent contractor or service provider.
(3) The Parties acknowledge that the restrictions in this clause are reasonable and necessary to protect the legitimate business interests and goodwill of the Franchisor.
§19. CONFIDENTIALITY AND DATA PROTECTION
(1) The Franchisee acknowledges that, in the course of operating the Franchise Business, it will have access to the Franchisor's confidential information, including without limitation the Operating Methods, Operating Manual, trade secrets, business processes, customer lists, marketing strategies, financial information and other proprietary information (the "Confidential Information").
(2) The Franchisee shall keep all Confidential Information strictly confidential and shall not disclose, reveal, publish or otherwise make it available to any third party without the prior written consent of the Franchisor.
(I) The Franchisee shall use the Confidential Information solely for the purpose of operating the Franchise Business in accordance with this Agreement.
(II) The Franchisee shall ensure that its directors, officers, partners, employees and agents who have access to the Confidential Information are bound by confidentiality obligations no less restrictive than those contained herein.
(III) The obligations of confidentiality shall survive the termination or expiration of this Agreement.
(IV) Upon termination or expiration, the Franchisee shall immediately return to the Franchisor all documents, materials and records containing the Confidential Information in its possession or control.
(3) The following shall not constitute Confidential Information:
(I) information which is or becomes publicly available other than through breach of this Agreement by the Franchisee;
(II) information lawfully in the possession of the Franchisee before disclosure by the Franchisor;
(III) information lawfully received from a third party not under any obligation of confidentiality to the Franchisor; or
(IV) information required to be disclosed by law, regulation or order of a court of competent jurisdiction or any regulatory authority.
(4) The Franchisee acknowledges that any breach of this clause may cause irreparable harm for which monetary damages may be inadequate, and accordingly the Franchisor shall be entitled to seek injunctive or other equitable relief in addition to any other remedies available at law. The Franchisee shall indemnify the Franchisor for any loss, damage, cost or expense arising from any breach of this clause.
(5) Where the operation of the Franchise Business involves the processing of personal data, each Party shall comply with the Nigeria Data Protection Act 2023 and any applicable regulations issued by the Nigeria Data Protection Commission, and shall implement appropriate technical and organisational measures to safeguard such personal data.
§20. FORCE MAJEURE
(1) Neither Party shall be liable for any failure or delay in performing its obligations under this Agreement where such failure or delay is caused by an event of force majeure, being any circumstance which:
(I) is beyond that Party's reasonable control;
(II) could not reasonably have been avoided or overcome by that Party; and
(III) is not attributable to the other Party.
(2) Without prejudice to the foregoing, force majeure shall include:
(I) war, hostilities or invasion;
(II) rebellion, terrorism, revolution, insurrection, or military or usurped power;
(III) riot, civil disorder, epidemic, pandemic, governmental action, or other acts which may reasonably affect a Party's ability to fulfil its obligations under this Agreement.
(3) The Party affected shall notify the other Party in writing as soon as reasonably practicable. Where the event of force majeure continues for a period exceeding ________, either Party may terminate this Agreement by written notice.
§21. GENERAL PROVISIONS
(a) Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Federal Republic of Nigeria.
(b) Settlement of Disputes: The Parties shall use their best endeavours to amicably negotiate and settle any dispute arising out of or in connection with this Agreement. Any dispute which cannot be amicably resolved shall be referred to and finally resolved by arbitration in accordance with the Arbitration and Mediation Act 2023 or any statutory re-enactment or modification thereof. The tribunal shall consist of ________ arbitrator(s) appointed in the following manner:
________
The seat and venue of the arbitration shall be ________ and the proceedings shall be conducted in the English language. Each Party shall bear its own costs save where the tribunal awards costs against a particular Party. The award shall be final and binding on the Parties and may be enforced by any court of competent jurisdiction.
(c) Jurisdiction: Subject to the arbitration provisions above, the courts of the Federal Republic of Nigeria shall have exclusive jurisdiction to settle any dispute or claim in connection with this Agreement.
(d) Notices: All notices under this Agreement shall be in writing and delivered personally, by courier, by registered post or by electronic mail to the address of the relevant Party. A notice shall be deemed given: (I) if delivered personally, upon delivery; (II) if sent by courier, upon confirmation of delivery; (III) if sent by electronic mail, upon confirmation of transmission. A Party may change its address by written notice to the other Party. The contact details for notices are: Franchisor — ________; Franchisee — ________.
(e) Entire Agreement: This Agreement constitutes the entire agreement between the Parties and supersedes all prior written or oral agreements relating to its subject matter.
(f) Variation: No variation of this Agreement shall be effective unless it is in writing and signed by or on behalf of both Parties.
(g) Waiver: Any provision may be waived in writing by the Party entitled to its benefit. No delay, omission or failure to exercise any right shall constitute a waiver thereof.
(h) Severability: If any provision of this Agreement is held invalid or unenforceable, such invalidity shall not affect the remaining provisions, which shall continue in full force and effect.
(i) Assignment: This Agreement shall be binding on the successors and permitted assigns of the Parties. The rights granted under this Agreement shall not be transferred, sold, assigned or sub-leased without the prior written consent of the other Party.
(j) Cumulative Rights: The rights of the Parties under this Agreement are cumulative and not exclusive save as otherwise provided by law.
(k) Further Assurance: Each Party shall execute and deliver such documents and take such steps as may be necessary to give full effect to the provisions of this Agreement.
(l) Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original and together shall constitute one and the same agreement.
IN WITNESS WHEREOF the Parties have executed this Agreement the day and year first above written.
The Common Seal of the within-named Franchisor ________ is hereunto affixed in the presence of:
__________________________
DIRECTOR
Name: ________
__________________________
DIRECTOR/SECRETARY
Name: ________
SIGNED by the within-named Franchisee:
____________________
________
In the presence of:
Witness Name: ________
Witness Address: ________
Witness Occupation: ________
Witness Signature: ____________________
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