The Multi Unit Franchise Agreement is a sophisticated legal instrument used in the Canadian franchise industry when a franchisor wishes to expand their network through an experienced developer capable of opening multiple units. This document is essential for businesses planning rapid expansion in specific territories while maintaining brand consistency and regulatory compliance. It addresses the unique aspects of multi-unit development, including development schedules, territory rights, and the relationship between the master agreement and individual unit franchise agreements. The agreement must comply with provincial franchise laws, particularly in Ontario (Arthur Wishart Act), Alberta (Franchises Act), and British Columbia (Franchises Act), which mandate specific disclosure requirements and govern franchise relationships. This document is typically more complex than single-unit franchise agreements as it must balance the franchisor's system-wide standards with the developer's need for operational flexibility in managing multiple units.
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1. Parties: Identification of franchisor and multi-unit franchisee/developer
2. Background: Context of the agreement, business concept, and franchise system overview
3. Definitions: Key terms used throughout the agreement
4. Grant of Development Rights: Territorial rights and development schedule for multiple units
5. Development Schedule and Obligations: Timeline and requirements for opening each franchise unit
6. Fees and Payments: Development fees, franchise fees, and ongoing payment obligations
7. Individual Franchise Agreements: Requirements for executing separate franchise agreements for each unit
8. Site Selection and Approval: Process for selecting and approving locations for each unit
9. Training and Support: Franchisor's obligations for training and supporting multi-unit development
10. Intellectual Property Rights: Use of trademarks, systems, and proprietary information
11. Confidentiality: Protection of confidential information and trade secrets
12. Non-Competition: Restrictions on competing businesses during and after the agreement
13. Default and Termination: Grounds for default, remedies, and termination provisions
14. Post-Termination Obligations: Obligations of parties after agreement termination
15. Transfer and Assignment: Rights and restrictions on transferring the agreement
16. Dispute Resolution: Process for resolving disputes between parties
17. General Provisions: Standard legal provisions including notices, governing law, etc.
1. Financing Arrangements: Include when franchisor provides or arranges financing for development
2. International Development: Include for cross-border development rights within Canada
3. Sub-Franchising Rights: Include if developer has rights to sub-franchise units
4. Alternative Venues: Include for development rights in non-traditional locations
5. Co-Branding: Include if multiple brands will be operated in single locations
6. Area Representative Duties: Include if developer will have supervisory duties over other franchisees
7. Marketing Fund Contributions: Include if special marketing arrangements apply to multi-unit developers
1. Schedule A - Development Territory: Maps and description of exclusive or non-exclusive territory
2. Schedule B - Development Schedule: Detailed timeline for opening each unit
3. Schedule C - Initial Franchise Agreement Form: Template franchise agreement for individual units
4. Schedule D - Financial Requirements: Capital requirements and financial obligations per unit
5. Schedule E - Training Programs: Details of required training programs
6. Schedule F - Approved Suppliers: List of approved suppliers and terms
7. Schedule G - Confidential Operations Manual Table of Contents: Overview of operations manual content
8. Schedule H - Design and Construction Requirements: Specifications for unit build-out
9. Appendix 1 - Personal Guarantees: Required personal guarantees from principals
10. Appendix 2 - Compliance Certificates: Forms for confirming compliance with development obligations
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