FRANCHISE AGREEMENT

This AGREEMENT entered into on the ............ day of 20….

BETWEEN
...........................;
AND
....................................... (hereinafter referred to, for the sake of brevity, as the ‘Agent’) of the OTHER PART:

WHEREBY IT IS AGREED as follows:

THIS AGREEMENT will have effect as from the ............ day of ............ , 20…. until further notice (subject to determination as hereinafter provided).

The Company will supply to the Agent, boots, shoes and other articles and goods usually manufactured, sold or dealt in by the Company (hereinafter collectively referred to as ‘Stock’) and the Agent will take Stock on consignment and sell the same only in retail at prices fixed from time to time by the company. The Agent will only sell such stock at the address of the Agency as aforesaid and nowhere else.

The Company at its discretion will supply to the Agent such furniture and other display material as in the opinion of the Company will help proper display of its stock. The furniture and other material shall remain the absolute property of the company.

The agent shall not sell, display or otherwise deal in any goods in any way similar to those manufactured, sold or dealt in by the Company except such as shall be supplied to him by the company.

The Agent shall not use the company’s trade name and/or trademark in stationery or otherwise, except in the form approved by the Company in writing. The agent shall only use such signboard depicting the word ‘Reebok’ as may be supplied by the Company or approved in writing.

All instructions issued by the Company from time to time either directly or through their representatives during their inspection visit in connection with the agency under this Agreement shall be strictly followed.

(i) During the continuance of this Agreement, the Agent shall, for the sale of Stock, be entitled to commission at the rate of 14% on the net sale price received by him in respect thereof.
(ii) All sale of Stock effected by the Agent shall be strictly for cash only.

The Agent shall be solely responsible for and shall discharge all recurring charges and expenses whatsoever incurred or to be incurred in carrying on the said Agency including (but without prejudice to the generality of the foregoing):

(a) All taxes and other outgoings payable in respect of the premises from time to time occupies by the said Agency.

All wages, salaries, office expenses including telephones, postages, wrapping, bank charges for remitting sale proceeds and charges for lighting and cleaning the said premises;

All charges for local advertising by way of poster, handbills or brochures and for advertising such accessories as may from time to time be supplied to the said Agency by the company;

All charges to be incurred for the carriage of stock from wharf, railway station, bus terminus to the premises of the said Agency;

All charges and expenses to be incurred in connection with the decoration and trimming of the windows of the said premises and the preparation and maintenance of a proper inventory of the Stock, fixtures and fittings therein;

All rent of the premises occupied by the said Agency.

(i) On the closing day of every fortnight the Agent shall deliver to and on forms to be supplied by the company, full and correct account of all Stock consigned to him, of all sales thereof, and of the balance of stock in hand and of all receipts, payments, transactions and dealings in connection therewith and on the same day or on such day as may otherwise be directed by the company shall remit to the company the full sale price of all stock sold less ...................... thereof.

The said 14% shall be retained by the Agent on account of the commission
payable to him under clause 7(ii) hereof.

(ii) The Agent shall remit the sale proceeds to the company through the collection account of the State Bank of India in places where there are branches of the State Bank of India. In other places it shall be sent in the form of a crossed Demand Draft in favor of the company through one of the Scheduled Banks as may be approved by the company or crossed Indian Postal Order or crossed draft of the Reserve Bank of India, and in no other manner. The Agent’s liability in this respect will be discharged by actual receipt of the money by the company.

The Agent shall not draw, accept or endorse any bill on behalf of the Company or in any way pledge the credit of the company except in so far as he may have been expressly authorized by the company in writing either generally or in any particular case.

(i) All stock, sale proceeds, furniture, signboards and other materials shall remain as exclusive properties of the company and the Agent shall have no right and shall not be entitled to deduct out of the sale products any amount except his commission and shall also not be entitled to retain the sale proceeds in his hands for any reason whatsoever. In case of retention of the sale proceeds or deduction of any amount therefrom except the commission as aforesaid, the Agent will be treated as having committed criminal misappropriation and/or breach of trust and will be liable as such.

(ii) During the continuance of this Agreement the Agent shall be responsible to the company for all damages, whatsoever occasioned to Stock which shall in the opinion of the company be due to improper or negligent conduct on the part of the Agent or any of his servants or agents (or for any loss or losses sustained by reason of delay in the disposal thereof) and the decision of the company as to whether any such damage or loss be final and binding upon the Agent and any sum or sums due to respect thereof shall be immediately debited by the company against the Agent in the Security Account.

(iii) The Agent will remain responsible to properly reserve and look after the stock, furniture and other materials as well as any advertisement accessories furnished by the company.

Stocks, which become ‘dead stock’ while with the Agent, due to unpopularity of designs or improper fittings will be cleared at the instructions and cost of the company. In case of articles retained by the Agent in spite of manufacturing defects and not returned within two weeks of delivery, such stock will be cleared by the Agent and no claim will be acceptable by the company later on.

The Agent shall forthwith furnish to the company a cash deposit of Rs. . (Amount) to be credited in the name of the Agent (hereinafter referred to as the ‘Security Account’) and be held by the Company as security for the due performance and observance by the Agent of the Agreements, conditions, stipulations binding upon him hereunder; the Security Account shall be credited by the company with interest at the rate of 10% per annum and the amount thereof and the said interest thereon shall be and remain the property of the Agent but shall be retained by the company until the expiration of a period of two months after the termination of this Agreement (Whether by efflux of time or otherwise) and shall at the expiration of such period be paid to the Agent less any deductions in respect of any moneys owing by the Agent to the company on any account or accounts whatsoever. The security amount deposited by the Agent will be utilized by the company for its purpose at its discretion. The amount of the security may at the discretion of the company be increased from time to time and the Agent shall be bound to deposit such increased amount as security on the same terms as herein.

The Agent shall at all times keep or cause to be kept proper accounts and shall every week or fortnight (as may be required from time to time) deliver to the company full and correct accounts on the forms supplied by the company of all stocks, receipts, number of pairs sold and other details specified in the forms, payments, transactions and dealings of all in relation to the business to this Agreement. Such weekly or fortnightly Statements of account will be binding on the Agent unless he points out any error or omission therein within a month from the date of submission thereof to the company and the Agent shall not either himself or by servants remove any of the said books of accounts, cash memos, vouchers, etc. from the place of business of the Agent without the authority in writing of the company. The said books of account shall at all times be open to inspection of any of the officers of the company authorized in this behalf.

Any sum or sums of money whatsoever at any time owing by the Agent to the company whether as a liquidated sum or by way of damages of otherwise howsoever may be paid and discharged by the company without reference to the Agent from the Security Account provided that if at any time the company, repay to the company the amount or amounts so paid or discharged as aforesaid.

Retail Manager, Senior District Manager, District Managers and other authorized officers of the company will from time to time inspect, check and make inventories of the stock and sale proceeds, and the Agent and his assistant shall be bound to give all facilities to them in carrying out such inspection and checking and making inventories. If upon inspection, checking and making inventories as aforesaid, a shortage is found in the stock, the Agent will be treated as having committed criminal breach of trust in respect thereof and he will also be liable for the full selling price of the said stock without any deduction whatsoever.
In the event of any fire, burglary, theft, loss or damage in any way affecting the stock or any part thereof, the Agent shall forthwith:

*inform the company thereof by telegram within three hours after the discovery of the same;
*investigate the occurrence and establish or cause to be established the amount of loss or damage sustained;
furnish the company with full particulars of such occurrence including the exact amount of the loss or damage sustained and a full description of the Stock, so burnt, stolen, lost or damaged;
*ensure that the premises occupied by the said Agency remain in the condition in which they were at the time when the fire was extinguished, the burglary or theft committed or the loss of damage sustained until the arrival of a representative of the company;
*report the occurrence to the proper local authority or authorities and preserve all such proofs as may be available until a complete investigation of the occurrence shall have been made by such authorities.

The Agent shall have no authority to, and shall not, enter into any agreement on behalf of the company.

The Agents shall not be entitled to accept any process of law in the name of, or on behalf of the Company, or represent the company without the written permission in that behalf in any matter legal or otherwise. The Agent shall however remain responsible to inform the company in proper time for ascertaining and keeping the company informed from time to time regarding any local action, rules or laws in force in connection with the trade in the locality or transport, or any taxes, or duty, and also for performing or observing them correctly and properly according to the intents and purposes of the rules and law so far as they related to the business under this Agreement.

The Agent shall be responsible for and shall discharge the whole loss or damage sustained in any manner or for reason whatsoever in connection with Stock consigned by the company to the Agent and the Stock shall be at the sole risk of the Agent from the time it leaves the godown or factory of the Company on consignment of the Agent.

Such stock as the Agent shall from time to time require for the determination (whether by efflux of time or otherwise). The Company shall be entitled to take possession of all Stock, furniture or other property consigned or supplied by the company to the Agent and to make an inventory thereof and any sum found due to such inventory from the Agent to the company shall be paid and discharged by the Agent immediately and in default may be retained by the Company from the Security Account.

On the day preceding that upon which this agreement shall be determination (whether by efflux of time or otherwise). The Company shall be entitled to take possession of all Stock, furniture or other property consigned or supplied by the company to the Agent and to make an inventory thereof and any sum found be paid and discharged by the agent immediately and in default may be retained by the Company from the Security Account.

This Agreement may be terminated:
*by either party at any time giving to the other thirty days’ notice in writing;
*summarily by the company without assigning any reason if the Agent;
(i) be guilty of gross misconduct, or
(ii) commits a breach of any of the provisions hereof, or
(iii) sells any goods from the said Agency or credit or at higher or lower prices than those from time to time prescribed by the company, or (iv) refuses to comply with any lawful order given to him by the Company or its authorized officers, or (v) allows any execution or distress to be levied upon any premises belonging to or occupied by the Agent, or (vi) commits any act of bankruptcy or has any receiving or adjudication order made against him, or in the case of the company going to liquidation.

Any notice requiring to be given hereunder shall be in writing and shall be deemed to be sufficiently served in the case of notice to the Company, if delivered at or sent by Registered Post addressed to Company’s Registered Office at ............

And in case of the agent if delivered at or sent by registered Post addressed to him at his usual or last known place or residence in India and every notice so sent by registered post shall be deemed to have been received on the day and at the time when in the ordinary course of post it would be delivered.

If the Agent shall consist of a firm, all the terms and conditions of this Agreement in so far as they are to be observed or performed by the Agent shall be deemed to have been made by all the partners thereof jointly and severally with the Company and any act of neglect or default of any partner thereof shall for all purposes of this Agreement be deemed to be the act of neglect or default of every partner thereof.

In case of termination of this Agreement, the balance of the Security of the agent will be refundable to him only after two months of such termination, and the Company will be at liberty to adjust and recover all moneys payable by the Agent to the Company.

The Agent shall render all accounts and pay all dues to the Company and meet all the claims and demands of the Company at the Company Sales Office at ............

This Agreement is deemed to be entered at ............ (name of the place) within the jurisdiction of the courts at ............ (name of the place).

IN WITNESS WHEREOF the parties above named have executed these presents in the presence of the Witnesses attesting hereunder on the dates and place mentioned herein below:

Place............
Dated............

WITNESSES
For …………………
Agent………………………