Franchise Agreement II
Marketing
The franchisor may establish a marketing fund and require all franchisees and sub-franchisees to contribute.
Franchisor’s Methods
The franchisee is usually obliged to remain faithful to the franchisor’s mode of operation and methods. There may be an obligation to offer products and services designated by the franchisor from time to time and as approved.
Premises
In some cases, the franchisor may have to purchase or lease premises and let or sub-let it to the franchisee. This may be done to control the location or to give the landlord the requisite strength of covenant.
General Provisions
In some cases, the franchise may be obliged to act in good faith in performing its obligations. In other cases, the franchisor or both parties may disclaim agency or fiduciary duties, between them, for the removal of any doubt.
Intellectual Property
The franchisee may acknowledge the franchisor’s intellectual property rights and rights to sell and distribute the products, use the intellectual property within and outside the territory or development area, at all times, including before and after the relevant term. There will be ongoing obligations in relation to the use of intellectual property.
Confidentiality
The franchisee must itself keep (and must procure that sub-franchisees keep) confidential, all information relating to the franchise.
Restrictions on Competition
In order to protect confidential information and intellectual property, franchise agreements will usually provide for non-competition clauses obliging the franchisee, developer, sub-franchisees and others, not to compete with the franchise businesses for a certain period, within a certain area or territory.