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The Direct Franchise Agreement is a fundamental document used when a business (franchisor) grants another party (franchisee) the right to operate under its business model and brand in India. This agreement is essential for businesses expanding through franchising in the Indian market, whether domestic or international brands. The document comprehensively covers all aspects of the franchise relationship, including intellectual property rights, operational standards, financial terms, and compliance requirements under Indian law. It's structured to comply with various Indian regulations including the Indian Contract Act, competition laws, and intellectual property protection laws, while also addressing practical business considerations. The Direct Franchise Agreement is particularly important as India lacks specific franchise legislation, making it crucial for the agreement to be thorough and self-contained in defining the parties' rights and obligations.

1. Parties: Identification and details of the franchisor and franchisee, including registered addresses and company registration numbers

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

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Grant of Franchise: Scope of franchise rights, territory details, and exclusivity provisions

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

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

7. Franchisor's Obligations: Support, training, operations manual, marketing support, and other obligations of the franchisor

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

9. Intellectual Property Rights: Usage of trademarks, trade secrets, and other IP, including protection obligations

10. Training and Support: Initial and ongoing training requirements, support services, and assistance provisions

11. Quality Control: Standards maintenance, inspection rights, and quality assurance requirements

12. Marketing and Advertising: Marketing obligations, advertising guidelines, and brand standards

13. Records and Audit Rights: Record-keeping requirements and franchisor's audit rights

14. Confidentiality: Protection of confidential information and trade secrets

15. Non-Competition: Restrictions during and after the term of the agreement

16. Termination: Grounds for termination, procedures, and consequences

17. Post-Termination Obligations: Obligations and restrictions after agreement end

18. Dispute Resolution: Procedure for resolving disputes, including jurisdiction and arbitration provisions

19. Governing Law: Applicable law and jurisdiction

20. General Provisions: Standard boilerplate clauses including notices, assignment, force majeure