General information required to draft a Franchise Agreement:
Details of Franchise:
1. The legal and trading name of the Franchisor
Legal Name:
Trading name:
2. The above mentioned entity’s registration number
3. The principal place of business, postal address and email address of the
Franchisor
Principal place of business:
Postal address:
Email address:
4. Full details of the executive directors of the entity including their names, ID
numbers, Cell phone numbers, e-mail addresses, town of residence, job title
and qualifications
Executive directors name:
ID number:
Cell number:
Email address:
Town of residence:
Job title:
Qualifications:
Details of licence granted:
5. A description of what the Franchise Business would entail.
6. Details of the trademarks of the Franchisor.
7. How long the initial period for years a Franchisee signs on for.
8. Whether the agreement is renewable after the term the agreement expires?
9. Determination of franchise areas and how it would be determined. What will
the “territory” be for the licence?
10. What is the Franchise fee? When and how is it payable?
11. Will the Franchise fee also cover a “start up kit” or any stock or equipment?
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12. Whether a deposit on the franchise fee is payable and when (separate bank
account for any deposits)?
13. What is the total set-up cost indication for franchisees?
14. Will royalty fees will be payable, whether it will be payable monthly, the amount
thereof, and whether it will be based on the turn over the specific franchisee
premises, alternatively how it would be calculated.
Other costs and stock:
15. Will a management fee will be charged, and what the fee will cover (if
applicable), as well as whether this fee will be charged on a monthly basis.
16. Will a marketing fee be payable and if so when such payment falls due (national
fund, with separate bank account). Will the Franchisor run a national fund?
17. Who will be responsible for marketing, and what marketing obligations will rest
on whom?
18. Will the Franchisor receives a rebate from any of its suppliers? If so, indicate
form who, why and how much.
19. List different approved suppliers that Franchisee’s may obtain branding from or
will Franchisor provide branded stationery etc.?
20. Whether / what interest would be charged on late payments?
21. Who would provide the stock to the franchisees, the delivery, warranty and
return policy on the stock.
22. Who determines the pricing of stock and on what basis?
23. What the establishment costs such as setting up the shops, decor, shelving,
initial stock payments will be (an indication)?
Training and assistance:
24. What training would be provided to the franchisee and their staff and costs
thereto? Also indicate where, when and how will travel cost be dealt with?
25. What the Franchisor will undertake to provide to assist the franchisee at the
commencement of the agreement (if any)?
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26. Whether the franchisee shops will be subject to the inspection by the franchisor.
27. Who will be testing the products, if applicable?
Premises:
28. What assistance (if any) will the Franchisor provide Franchisee with
choosing/securing premises?
29. Will a lease agreement be applicable?
Who will be the Lessor and Lessee?
Will the Franchisor be a party to the Lease Agreement?
30. Whether the franchisee must be obliged to refurbish the franchise shop, and
after how many years this refurbishment takes place.
31. Whether the franchisee is obliged to take out insurance on the shops and the
stock therein.
32. An indication what the employees’ salaries and working hours would be, if
applicable.
Legal nature and Surety:
33. What type of entity must the Franchisor be? (company/ natural person/trust?)
34. Whether the franchisor requires that a pre selected person should sign surety
on behalf of franchisee.
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