Sub Franchise Agreement Template for India

The Sub Franchise Agreement is utilized when a Master Franchisee, holding rights from a Franchisor, wishes to grant sub-franchising rights to a third party (Sub-Franchisee) within the Indian market. This document is essential for businesses expanding through a multi-tiered franchise model in India, particularly in sectors like retail, food & beverage, and services. The agreement must comply with Indian contract law, competition regulations, and intellectual property statutes while maintaining consistency with the master franchise agreement. It typically includes comprehensive provisions covering operational standards, territory rights, royalty structures, training requirements, and brand protection measures. The document serves as the foundational framework for the sub-franchise relationship, ensuring proper implementation of the franchise system while protecting the interests of all parties involved.

1. Parties: Identification of the Master Franchisee and Sub-Franchisee with complete legal details

2. Background: Context of the master franchise relationship, authorization to sub-franchise, and business concept

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Grant of Sub-Franchise: Scope of rights granted, territory definition, and any exclusivity provisions

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Fees and Payments: Initial fees, recurring royalties, advertising contributions, and payment terms

7. Training and Support: Training requirements, ongoing support obligations, and operational assistance

8. Operating Standards: Required operating procedures, quality standards, and compliance with franchise system

9. Intellectual Property: Usage rights and restrictions for trademarks, trade secrets, and other IP

10. Marketing and Advertising: Marketing obligations, advertising requirements, and brand standards

11. Reporting and Inspection: Financial reporting requirements, audit rights, and inspection provisions

12. Confidentiality: Protection of confidential information and trade secrets

13. Non-Competition: Restrictions during and after the agreement term

14. Termination: Grounds for termination, procedures, and consequences

15. Post-Termination Obligations: Obligations and restrictions after agreement end

16. Governing Law and Dispute Resolution: Applicable law and dispute resolution mechanisms

17. General Provisions: Standard boilerplate clauses including notices, assignment, and amendments