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Sub Franchise Agreement Template for New Zealand

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Key Requirements PROMPT example:

Sub Franchise Agreement

"I need a Sub Franchise Agreement for my New Zealand-based retail clothing business, where I'll be the master franchisee granting rights to a sub-franchisee to operate three stores in the Wellington region, with the first store opening planned for March 2025."

Document background
The Sub Franchise Agreement is utilized in situations where a master franchisee, having obtained rights from a franchisor to develop a territory or region in New Zealand, grants operating rights to individual sub-franchisees. This document is essential for maintaining consistency and quality across the franchise network while establishing clear hierarchical relationships and responsibilities. The agreement typically includes detailed provisions for operational standards, financial obligations, territory rights, intellectual property usage, and compliance requirements specific to New Zealand law. It serves as a crucial tool for expanding franchise networks through a multi-tiered structure, ensuring proper control and support mechanisms are in place. The Sub Franchise Agreement must align with both the master franchise agreement and New Zealand's regulatory framework, including fair trading, competition, and consumer protection laws.
Suggested Sections

1. Parties: Identification of the master franchisee and sub-franchisee, including full legal names and addresses

2. Background: Context of the agreement, including reference to the master franchise agreement and authority to grant sub-franchises

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Grant of Sub-Franchise: Specific rights granted to the sub-franchisee, including territory and scope of operations

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

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

7. Training and Support: Training requirements and ongoing support provisions from the master franchisee

8. Intellectual Property: Use of trademarks, copyright materials, and other IP owned by the franchisor

9. Operations Manual: Reference to and compliance with the franchise system's operations manual

10. Quality Control: Standards and requirements for maintaining quality and consistency

11. Marketing and Advertising: Marketing obligations and restrictions, including local area marketing

12. Reporting Requirements: Financial and operational reporting obligations

13. Sub-Franchisee Obligations: Detailed responsibilities and commitments of the sub-franchisee

14. Master Franchisee Obligations: Ongoing support and obligations of the master franchisee

15. Insurance: Required insurance coverage and minimum limits

16. Default and Termination: Events of default, remedies, and termination procedures

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

18. Dispute Resolution: Process for resolving disputes, including mediation and arbitration

19. Confidentiality: Protection of confidential information and trade secrets

20. Assignment: Restrictions and conditions for transferring the sub-franchise

21. General Provisions: Standard legal provisions including notices, governing law, and entire agreement

Optional Sections

1. Multi-Unit Rights: Used when granting rights to operate multiple units or territories

2. Development Schedule: Include when there are specific timeline requirements for opening multiple units

3. Equipment and Suppliers: Required when specific equipment or approved suppliers are mandatory

4. Employee Requirements: Include when there are specific staffing or training requirements

5. Computer Systems: Used when specific POS or management systems are required

6. E-commerce Rights: Include when online sales or digital presence needs regulation

7. Guarantee: Used when personal guarantees from directors/shareholders are required

8. Right of First Refusal: Include when granting rights to acquire additional territories

9. Change of Control: Used when specific provisions for ownership changes are needed

10. Covid-19 or Force Majeure Provisions: Include specific provisions for managing operations during extraordinary circumstances

Suggested Schedules

1. Territory Description: Detailed description and/or maps of the granted territory

2. Initial Fee Schedule: Breakdown of initial fees and payment structure

3. Ongoing Fees Schedule: Details of recurring fees, royalties, and marketing contributions

4. Initial Training Program: Overview of required initial training and support

5. Approved Products and Services: List of authorized products/services for the sub-franchise

6. Equipment and Fit-out Specifications: Required equipment, furniture, and premises specifications

7. KPIs and Performance Criteria: Measurable performance standards and targets

8. Insurance Requirements: Detailed insurance requirements and minimum coverage

9. Form of Guarantee: Standard form of personal/corporate guarantee if required

10. Intellectual Property Schedule: List of trademarks, copyrights, and other IP included in the grant

11. Required Reports and Forms: Templates for required operational and financial reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 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

Retail

Food and Beverage

Hospitality

Professional Services

Education and Training

Health and Fitness

Automotive

Real Estate

Home Services

Technology

Personal Care Services

Business Services

Child Care

Pet Care

Cleaning Services

Relevant Teams

Legal

Operations

Finance

Commercial

Compliance

Business Development

Training and Development

Quality Assurance

Brand Management

Risk Management

Franchise Support

Executive Leadership

Relevant Roles

Franchise Development Manager

Legal Counsel

Operations Director

Chief Executive Officer

Chief Financial Officer

Commercial Director

Business Development Manager

Compliance Officer

Territory Manager

Training Manager

Quality Assurance Manager

Brand Manager

Financial Controller

Risk Manager

Franchise Support 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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