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Franchise Deposit Agreement

Franchise Deposit Agreement Template for Philippines

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Key Requirements PROMPT example:

Franchise Deposit Agreement

"I need a Franchise Deposit Agreement for my retail clothing business in Manila, with a ₱500,000 refundable deposit to be held in escrow until March 2025, including specific provisions for interest accrual and early withdrawal penalties."

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Document background
The Franchise Deposit Agreement is a critical document used in Philippine franchise arrangements when a prospective franchisee expresses serious interest in acquiring a franchise and needs to secure their intention with a deposit. This agreement is typically used during the initial stages of franchise negotiations, before the main franchise agreement is executed. It outlines the deposit amount, purpose, handling procedures, and conditions for refund or forfeiture, ensuring compliance with Philippine franchise regulations and banking laws. The document protects both parties' interests by clearly defining the status and treatment of the deposit funds during the franchise evaluation period. It's particularly important in the Philippine context where franchise businesses must comply with specific regulatory requirements under DTI oversight and banking regulations.
Suggested Sections

1. Parties: Identifies the Franchisor and prospective Franchisee, including complete legal names and addresses

2. Background: Explains the context of the agreement, including the franchise opportunity and purpose of the deposit

3. Definitions: Defines key terms used throughout the agreement

4. Deposit Amount and Payment Terms: Specifies the deposit amount, payment method, and deadline

5. Purpose of Deposit: Clearly states what the deposit is for and how it will be applied

6. Deposit Handling: Details how the deposit will be held and managed

7. Conditions for Franchise Grant: Outlines the requirements that must be met for the franchise to be granted

8. Refund Conditions: Specifies circumstances under which the deposit will be refunded

9. Forfeiture Conditions: Details conditions under which the deposit may be forfeited

10. Representations and Warranties: States the promises and guarantees made by both parties

11. Governing Law and Jurisdiction: Confirms Philippine law governs the agreement and specifies jurisdiction for disputes

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Due Diligence Period: Includes when parties want to specify a period for the prospective franchisee to conduct due diligence

2. Interest on Deposit: Required when the deposit will earn interest while held in escrow

3. Escrow Arrangements: Used when the deposit will be held by a third-party escrow agent

4. Confidentiality Provisions: Added when specific confidentiality requirements need to be addressed during the deposit period

5. Development Timeline: Include when the deposit agreement is tied to specific franchise development milestones

6. Force Majeure: Added to address unforeseen circumstances that might affect the agreement

7. Assignment Rights: Include when either party may need to transfer their rights under the agreement

Suggested Schedules

1. Schedule A - Deposit Payment Details: Detailed breakdown of deposit amount, payment schedule, and banking information

2. Schedule B - Franchise Package Summary: Overview of the franchise package being considered

3. Schedule C - Required Forms and Documentation: List of forms and documents required for franchise application

4. Schedule D - Timeline and Milestones: Key dates and milestones in the franchise application process

5. Appendix 1 - Bank Account Details: Specific account information for deposit payment

6. Appendix 2 - Compliance Checklist: Checklist of regulatory requirements and necessary permits

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Retail

Food and Beverage

Hospitality

Education and Training

Healthcare Services

Automotive Services

Real Estate

Personal Services

Professional Services

Entertainment and Recreation

Relevant Teams

Legal

Finance

Business Development

Compliance

Operations

Risk Management

Treasury

Commercial

Franchise Development

Corporate Affairs

Relevant Roles

Franchise Development Manager

Legal Counsel

Business Development Director

Compliance Officer

Finance Manager

Operations Director

Chief Executive Officer

Contract Administrator

Franchise Relations Manager

Risk Management Officer

Treasury Manager

Commercial Director

Industries
Republic Act No. 8799 (Securities Regulation Code): Governs financial transactions and deposits, including requirements for securing investments and financial arrangements in business agreements
Republic Act No. 8293 (Intellectual Property Code of the Philippines): Regulates intellectual property rights and their transfer, which is fundamental in franchise agreements
Republic Act No. 386 (Civil Code of the Philippines): Provides the fundamental principles of contract law, obligations, and responsibilities between parties
DTI Administrative Order No. 08-2019: Implements rules and regulations for franchise businesses, including disclosure requirements and operational guidelines
Republic Act No. 7394 (Consumer Act of the Philippines): Protects consumer interests and regulates business practices, including franchising operations
National Internal Revenue Code: Governs tax obligations and implications for franchise deposits and related financial transactions
Republic Act No. 11765 (Financial Products and Services Consumer Protection Act): Ensures protection of consumers in financial transactions and deposits
BSP Circular No. 1048: Provides guidelines on deposit operations and financial transactions in the Philippine banking system
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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