Absentee Franchise Agreement Template for Philippines

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Key Requirements PROMPT example:

Absentee Franchise Agreement

"I need an Absentee Franchise Agreement for a Philippine coffee shop chain where I'll be the overseas investor based in Singapore, with plans to open 3 locations in Manila by March 2025, including specific provisions for a local operations manager with at least 5 years of F&B experience."

What is a Absentee Franchise Agreement?

The Absentee Franchise Agreement is a specialized legal document used in the Philippine franchise industry when a franchisee wishes to own a franchise business without being involved in its daily operations. This arrangement is particularly common among investors or business owners who want to diversify their portfolio while maintaining their existing business or professional commitments. The agreement complies with Philippine franchise laws, particularly the Franchise Investment Act (RA 8799) and related regulations, while incorporating specific provisions for professional management, operational oversight, and protection of both parties' interests. It includes detailed sections on the appointment and supervision of an Operations Manager, reporting requirements, quality control measures, and specific protocols for absentee ownership situations. The document is structured to ensure clear communication channels, defined responsibilities, and proper oversight mechanisms while maintaining the franchise system's integrity.

What sections should be included in a Absentee Franchise Agreement?

1. Parties: Identification of the Franchisor and Franchisee, including complete legal names and addresses

2. Background: Context of the agreement, brief description of the franchise system, and acknowledgment of absentee ownership structure

3. Definitions: Detailed definitions of key terms used throughout the agreement, including specific terms related to absentee ownership

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

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

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

7. Franchisor's Obligations: Support, training, and ongoing assistance provided by the franchisor

8. Franchisee's Obligations: Operational requirements, compliance standards, and reporting obligations

9. Operations Manager Requirements: Qualifications, responsibilities, and authority of the designated operations manager running the franchise

10. Training and Support: Initial and ongoing training requirements for operations manager and staff

11. Quality Control: Standards, inspections, and compliance requirements

12. Intellectual Property: Use of trademarks, trade secrets, and other intellectual property

13. Reporting and Audit Rights: Financial reporting requirements and franchisor's audit rights

14. Insurance and Indemnification: Required insurance coverage and mutual indemnification provisions

15. Default and Termination: Events of default, cure periods, and termination procedures

16. Post-Termination Obligations: Obligations and restrictions after agreement termination

17. Assignment and Transfer: Conditions for transferring or selling the franchise

18. Governing Law and Dispute Resolution: Choice of law, jurisdiction, and dispute resolution procedures

19. General Provisions: Standard boilerplate clauses including notices, severability, and entire agreement

What sections are optional to include in a Absentee Franchise Agreement?

1. Multiple Unit Rights: Used when franchisee has rights or options to develop additional units

2. International Operations: Include when franchise operates across international borders

3. E-commerce Rights: Include when online sales or digital operations are part of the franchise

4. Development Schedule: Used when agreement includes timeline for developing multiple units

5. Co-Branding Rights: Include when franchisee has rights to operate other brands in the same location

6. Special Territory Rights: Used for unique territorial arrangements or protected territories

7. Financing Terms: Include when franchisor provides or arranges financing

8. Master Franchise Provisions: Used when franchisee has rights to sub-franchise

What schedules should be included in a Absentee Franchise Agreement?

1. Schedule A - Franchise Location and Territory: Detailed description of approved location and territorial rights

2. Schedule B - Initial Franchise Fee and Royalty Structure: Comprehensive breakdown of all fees and payment schedules

3. Schedule C - Operations Manual Table of Contents: Overview of operations manual contents without disclosing confidential details

4. Schedule D - Initial Equipment and Inventory Requirements: List of required equipment, supplies, and initial inventory

5. Schedule E - Approved Suppliers: List of approved suppliers and proprietary products

6. Schedule F - Training Program: Detailed description of initial and ongoing training programs

7. Schedule G - Standard Operating Procedures: Key operational requirements and standards

8. Schedule H - Advertising Guidelines: Approved advertising formats and requirements

9. Schedule I - Insurance Requirements: Detailed insurance coverage requirements

10. Appendix 1 - Form of Operations Manager Agreement: Standard agreement for hiring and managing operations manager

11. Appendix 2 - Confidentiality Agreement: Required confidentiality terms for all key personnel

12. Appendix 3 - Personal Guaranty: Required personal guarantees from franchisee principals

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

Healthcare Services

Education and Training

Hospitality

Personal Services

Automotive Services

Real Estate Services

Professional Services

Technology Services

Fitness and Wellness

Entertainment

Convenience Stores

Quick Service Restaurants

Relevant Teams

Legal

Operations

Franchise Development

Business Development

Compliance

Executive Leadership

Commercial

Risk Management

Quality Assurance

Finance

Training and Development

Relevant Roles

Franchise Development Manager

Legal Counsel

Operations Director

Business Development Manager

Compliance Officer

Chief Executive Officer

Chief Operating Officer

Franchise Operations Manager

Regional Manager

Investment Manager

Business Owner

Franchise Consultant

Commercial Director

Risk Manager

Quality Assurance 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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