Master Franchise Agreement – Essential for Franchisors & Legal Professionals
A Master Franchise Agreement is a legally structured document that establishes the terms between a franchisor and a master franchisee, who is granted the rights to sub-franchise within a defined territory. ensuring clear guidelines on brand usage, operational expectations, financial commitments, and legal obligations. This agreement protects both parties by defining roles, responsibilities, and rights, enabling business expansion while maintaining brand integrity. It is an essential tool for franchisors, franchisees, and legal professionals who require a structured and enforceable agreement.
Master Franchise Agreement
A master franchise agreement is typically used when a business owner wants to sell franchises in their company. The agreement will outline the rights and responsibilities of both parties.
This type of agreement allows one party to sell products or services under another’s brand name.
In order to protect themselves against fraud, some businesses require prospective franchisees to sign a master franchise agreement before entering into negotiations with them.
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Why and When to Use a Master Franchise Agreement
A well-drafted Master Franchise Agreement allows franchisors to expand their brand through sub-franchising while maintaining quality control and brand integrity. provides clarity and legal protection, reducing risks and ensuring smooth business operations. This document is beneficial when:
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A business owner is granting rights to a franchisee to operate under their brand.
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A franchisee is purchasing the rights to use a brand’s intellectual property and business model.
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Both parties need to establish clear operational and financial expectations.
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Legal professionals require a standardised agreement for franchise arrangements.
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There is a need to protect trademarks, trade secrets, and brand reputation.
A Franchise Agreement is a crucial document for defining franchise relationships, ensuring both parties understand their obligations, and reducing the risk of legal disputes. It is particularly valuable for lawyers, franchisors, business owners, and franchise consultants who need a structured and enforceable contract.
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Master Franchise Agreement Includes
Master Franchise Agreement Includes:
Information Statement
Legal Drafting Bookelt
Schedule
Franchise Checklist
Disclosure Document
Full Commentary with Update
Contents
1 DEFINITIONS
2 ACKNOWLEDGEMENTS
3 COVENANTS
4 GRANT OF MASTER
5 CONDITIONS PRECEDENT
6 TERM & TERMINATION
7 DUTIES OF THE FRANCHISOR
8 DUTIES OF THE MASTER
9 RECRUITMENT
10 AUTHORITY TO GRANT
11 MEETINGS
12 REPORTING
13 FRANCHISE FEES
14 SUPPLY OF STOCK
15 PRODUCT WARRANTIES
16 DUTIES OF THE MASTER
17 ADVERTISING, MARKETING
18 DEFAULT
19 INSURANCE & INDEMNITY
20 FINANCIAL REPORTING
21 INSPECTION AND AUDIT
22 CONFIDENTIALITY
23 OPERATIONS MANUAL
24 ASSIGNMENT
25 TERMINATION
26 EFFECT OF TERMINATION
27 NON-COMPETE
28 FRANCHISING CODE
29 RELATIONSHIP OF PARTIES
30 ENTIRE AGREEMENT
31 GOVERNING LAW
32 FORCE MAJEURE
33 INTERPRETATION
34 DISPUTE RESOLUTION
35 SERVICE OF NOTICES
36 WAIVER
37 SEVERABILITY
38 COST AND (STAMP) DUTY
39 FURTHER ASSURANCE
40 INJUNCTION
41 WARRANTIES
42 DIRECTORS GUARANTEE
1. General Law Governing Franchising
The term ‘franchising’ is normally used in connection with either a business format
form of franchise or in connection with a product and trade mark franchise. Under a
business format form of franchise, the Franchisor grants to the franchisee not only
the right to use the franchisor’s trade marks but also the right to use an entire
business format in accordance with which the franchisee must carry on their
business.
Franchising in Australia is governed by the Franchising Code of Conduct. The
Franchising Code of Conduct is a mandatory industry code of conduct that has the
force of law under the Competition and Consumer Act 2010 (Cth).
The definition of ‘franchise agreement’ in the Franchising Code of Conduct is
wide. An agreement exhibiting the features specified in Clause 4(1) of the Code, will
be a franchise agreement for the purposes of the Code.
2. The Code
The Franchising Code of Conduct is contained in a Schedule to the Trade Practices
(Industry Codes — Franchising) Regulations 1998 (the Code). A Franchising Code
of Conduct compliance manual for franchisors and master franchisees is available
free of charge from the Australian Competition and Consumer
Commission website www.accc.gov.au.
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This does not represent legal advice by Precedents Online or its authors.
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