The transaction requires that a master international franchise contract be used in several countries.
While every country has its own set of franchise laws, there are certain material terms that simply cannot be excluded from an international franchise agreement.
As with any international business contract, the purpose of the material terms are to define expectations, responsibilities and obligations.
The McDonald’s franchise, for example operates in most major markets of the world.
It’s master international franchise agreement factors in the nuances of local franchise law but largely remains the same.
Maintaining uniformity in its contracts ensures that franchise operators around the world follow the same set of standards and operating provisions.
With careful attention to detail and knowledge of local laws, you too can develop a master international franchise agreement to build your global franchise empire.
Of all the terms in a standard international franchise agreement, the following are particularly important.
- Territorial exclusivity: Defines the exclusive territory in which the franchise will operate.
- License to Intellectual Property Rights: Details industrial property rights (brands, trademarks, signs) that will be licensed to the franchisor.
- Franchise Fees: Itemizes the associated fees (Front-end fee, sales fee, advertising fee) that the franchisee will pay for the licensing rights of the franchise.
- Assistance and training: Sets forth the fanchisor’s obligations in transfering technical and commercial know-how to the franchisor.
- Post-contractual non competition: Lays out the temporal and geographic scope restricting a competing franchise.
To help you along in the drafting process, I’ve included several pages of a sample international franchise agreement below.
The sample can be used for products franchises (foodstuffs, cosmetics, decoration, fashion, textiles, etc.), but with a few slight modifications it may also be used for services franchises (real estate, consultancies, financial services, internet, cleaning services, catering, etc.).