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Franchise Contract Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that establishes and regulates the relationship between a franchisor and franchisee. This document complies with the Franchising Code of Conduct and outlines the terms and conditions under which the franchisee is granted the right to operate under the franchisor's business system and brand. It covers essential elements including licensing rights, operational requirements, financial obligations, training requirements, quality standards, territory rights, and termination conditions, while ensuring compliance with Australian federal and state regulations.

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What is a Franchise Contract Agreement?

The Franchise Contract Agreement is a crucial legal document used in the Australian business landscape when a business (franchisor) grants another party (franchisee) the right to operate under their established business system and brand. This agreement must comply with the Australian Franchising Code of Conduct and relevant federal and state legislation. It is essential when establishing new franchise relationships, documenting the rights and obligations of both parties, protecting intellectual property, and ensuring operational consistency across the franchise network. The document typically includes comprehensive details about operational requirements, financial obligations, territory rights, training requirements, and quality standards, making it fundamental for both new franchise grants and renewal of existing franchise relationships in Australia.

What sections should be included in a Franchise Contract Agreement?

1. Parties: Identification of the franchisor and franchisee with full legal details

2. Background: Context of the agreement, description of the franchise system and business model

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Grant of Franchise: Terms of the franchise license, territory rights, and exclusivity provisions

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

6. Franchise Fees: Initial fees, ongoing royalties, marketing contributions, and payment terms

7. Franchisor Obligations: Support, training, and services provided by the franchisor

8. Franchisee Obligations: Operating standards, compliance requirements, and performance obligations

9. Training Requirements: Initial and ongoing training requirements for the franchisee and staff

10. Intellectual Property: Use of trademarks, patents, copyright, and trade secrets

11. Marketing and Advertising: Marketing obligations, advertising fund contributions, and local marketing requirements

12. Operations Manual: Reference to and compliance with the operations manual

13. Records and Reporting: Financial record-keeping requirements and reporting obligations

14. Insurance: Required insurance coverage and minimum limits

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

16. Termination: Grounds for termination and procedures

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

18. Dispute Resolution: Procedures for handling disputes as per the Franchising Code

19. Governing Law: Applicable law and jurisdiction

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

1. Multi-Unit Rights: Include when franchisee has rights to operate multiple units or develop territory

2. International Operations: Include for franchises operating across international borders

3. Online Sales: Include provisions for e-commerce and online sales channels

4. Equipment Leasing: Include if franchisor provides or requires specific equipment leasing arrangements

5. Property Lease Requirements: Include specific requirements for premises if location-dependent

6. Supply Chain Requirements: Include if specific supplier relationships or requirements exist

7. Security Provisions: Include if additional security or guarantees are required

8. Social Media Policy: Include detailed social media usage and management requirements

9. Covid-19 or Force Majeure Provisions: Include specific provisions for pandemic or other major disruptions

What schedules should be included in a Franchise Contract Agreement?

1. Schedule 1 - Franchise Details: Specific details of the franchise including territory, premises, fees, and key dates

2. Schedule 2 - Initial Fee Structure: Detailed breakdown of all initial fees and payments

3. Schedule 3 - Ongoing Fees and Charges: Complete list of ongoing fees, royalties, and payment schedules

4. Schedule 4 - Territory Map and Description: Detailed description and/or map of the franchised territory

5. Schedule 5 - Initial Training Program: Details of required initial training programs and schedules

6. Schedule 6 - Approved Products and Services: List of approved products and services for the franchise

7. Schedule 7 - Equipment and Fitout Requirements: Specifications for required equipment and premises fitout

8. Schedule 8 - Key Performance Indicators: Specific performance metrics and targets

9. Schedule 9 - Trademark Schedule: List of registered trademarks and usage guidelines

10. Appendix A - Disclosure Document: Current franchise disclosure document as required by the Franchising Code

11. Appendix B - Operations Manual Table of Contents: Index of the operations manual (full manual provided separately)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Franchise Agreement

Cost

Free to use

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