Direct Franchise Agreement Template for Philippines

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Key Requirements PROMPT example:

Direct Franchise Agreement

"I need a Direct Franchise Agreement for my Filipino fast-food restaurant chain, allowing franchisees to operate multiple locations within Metro Manila, with specific provisions for halal certification and local sourcing requirements, planned to commence operations in March 2025."

Document background
The Direct Franchise Agreement serves as the primary legal instrument for establishing franchise relationships in the Philippines, subject to oversight by the Department of Trade and Industry. This document is essential when a business owner (franchisor) wishes to expand their business through franchising by granting rights to another party (franchisee) to operate under their business system and brand. The agreement must comply with Philippine franchise regulations, including the Intellectual Property Code and Consumer Protection Act, while addressing specific requirements for disclosure, registration, and operational standards. It typically includes comprehensive provisions for trademark usage, quality control, territory rights, fees, and dispute resolution mechanisms specific to the Philippine jurisdiction. The Direct Franchise Agreement is particularly crucial as it forms the foundation of the business relationship and must be structured to protect both parties while ensuring compliance with local laws and regulations.
Suggested Sections

1. Parties: Identification of the franchisor and franchisee with complete legal names and addresses

2. Background: Context of the franchise business, history, and purpose of the agreement

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

4. Grant of Franchise: Specific rights being granted, territory, and exclusivity terms

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

6. Franchise Fees and Payments: Initial franchise fee, ongoing royalties, and payment terms

7. Intellectual Property Rights: Usage of trademarks, patents, and other IP owned by franchisor

8. Training and Support: Franchisor's obligations for initial and ongoing training

9. Operating Standards: Required operational procedures and quality standards

10. Marketing and Advertising: Marketing obligations and advertising fund contributions

11. Records and Reporting: Required financial records, reports, and audit rights

12. Confidentiality: Protection of trade secrets and confidential information

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

14. Default and Termination: Grounds for termination and consequences

15. Post-Termination Obligations: Duties and restrictions after agreement ends

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

Optional Sections

1. Multi-Unit Development Rights: Used when franchisee has rights to develop multiple units

2. E-commerce Rights: For franchises involving online operations or digital platforms

3. International Operations: When franchise involves cross-border operations

4. Equipment Leasing: If franchisor provides equipment to franchisee

5. Property Lease Requirements: When specific location requirements exist

6. Sub-Franchising Rights: If franchisee is granted right to sub-franchise

7. Co-Branding Provisions: When multiple brands may operate in same location

8. Halal Certification: For food franchises requiring religious compliance

9. Force Majeure: Extended provisions for business interruption scenarios

Suggested Schedules

1. Schedule 1 - Business System Manual: Detailed operational procedures and standards

2. Schedule 2 - Initial Fee and Recurring Payments: Comprehensive fee structure and payment terms

3. Schedule 3 - Trademark and IP Details: List of protected marks and proper usage guidelines

4. Schedule 4 - Territory Map: Defined geographical boundaries of franchise territory

5. Schedule 5 - Initial Training Program: Training requirements and curriculum

6. Schedule 6 - Required Equipment and Supplies: Specifications for required equipment and approved suppliers

7. Schedule 7 - Marketing Guidelines: Approved marketing materials and procedures

8. Schedule 8 - Store Design and Layout: Required store design specifications

9. Schedule 9 - Insurance Requirements: Required insurance coverage and limits

10. Appendix A - Disclosure Statement: Required DTI franchise disclosure documents

11. Appendix B - Financial Projections: Sample financial projections and assumptions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Food and Beverage

Retail

Education and Training

Healthcare Services

Personal Services

Automotive Services

Hospitality

Real Estate Services

Business Services

Technology and Electronics

Fashion and Apparel

Beauty and Wellness

Relevant Teams

Legal

Operations

Finance

Business Development

Compliance

Marketing

Brand Management

Training and Development

Quality Assurance

Commercial

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Franchise Development Manager

Business Development Director

Legal Counsel

Operations Director

Compliance Officer

Brand Manager

Finance Director

Commercial Director

Franchise Relations Manager

Training Manager

Quality Assurance Manager

Marketing Director

Regional Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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