FRANCHISE AGREEMENT BETWEEN INDIAN PARTIES
THIS AGREEMENT made at ..................(Name of Place)on this ... day of... 20…. between ………..Ltd.. a Public Company registered under the Companies Act, 1956 and having its registered office at .... hereinafter called the "Company" (which expression shall unless it be repugnant to the context include its successors and permitted assigns); And……………….Ltd., a Private Company incorporated under the Companies Act.and having its registered office at .... hereinafter called the "Corporate Agent" (which expression shall unless it be repugnant to the context include its successors and permitted assigns);
WHEREAS, the Company is a public incorporated Company under the Companies Act.and is carrying on the business of manufacturing the products hereinafter mentioned.
(1) the Corporate Agent is a Company limited by shares incorporated under the Companies Act of in India whose main object is to act as Franchisee or agent to sell different products manufactured by Indian and Foreign manufactures.
(2) the Company has expressed its desire to appoint the Corporate Agent for soliciting and procuring business for the Company for the various products it would be introducing from time to time in the market.
(3) the Corporate Agent has expressed its willingness to act as a corporate agent of the Company to procure business in consonance with the corporate image and objectives of the Company.
(4) this Agreement is being entered into between the Company and the Corporate Agent in compliance to the mandates of the Companies Act; and
(5) this Agreement shall primarily decide and govern the appointment and the relationship between the parlies for procuring and marketing business of the Company.
(6) Now in consideration of the mutual promises made in this Agreement and other good and valuable considerations the Parties hereto agree as follows;
(1) Area of operation of the Corporate Agent ;-The Corporate Agent is free to solicit, canvass and perform all the functions hereby mandated and shall perform in the capacity of the Agent of the Company all such functions which shall render benefit to the Company to procure business for the Company anywhere in India. The Company may allot a code number to the Corporate Agent for identification and for regulation of the business.
(2) Bar to act as a Corporate Agent for other Companies: - The Corporate Agent shall not solicit, canvass or procure similar business on behalf of any company other than the Company.
(3) Scope of Operation of the Corporate Agent: - The Company retains the right to determine the type and form of products ("Products"] for which the Corporate Agent may solicit customers. The Company reserves the right to change, add or discontinue any type or form of Product at any time. The Company will advise the Corporate Agent in writing of the Products to be solicited by it.
(4) Corporate Agent's Compensation/Commission:-
The Company agrees to pay to the Corporate Agent commission for the business completed by the Corporate Agent for the Company during the currency of this Agreement at rates specified in the Annexure hereto, subject to the provisions of this Agreement.
The commission will be payable on the money received by the Company for the products issued by the Company on the proposals of products solicited and procured by the Corporate Agent. In this context the money would mean the money collected as a result of sale of products, deposited and encashed into the bank accounts of the Company and such money shall be deemed to be received by the Company and shall accrue as commission.
The Company shall pay commission to the Corporate Agent in Indian rupees, regardless of the currency collected from the customer.
The Company may from time to time, by 30 days' written notice to the Corporate Agent, alter, amend or supplement the commission rates set out in the Annexure, provided that the revised or amended rates shall be made applicable with prospective effect and shall not apply to products in force or to orders received by the Company prior to the date of revision and amendment. In the aforesaid context the Company acknowledges that the Company shall communicate promptly the changes in the commission rates from time to time. Notwithstanding this, the Corporate Agent shall ascertain the commission rates applicable at any given point of time and the Company and the Corporate Agent shall reconcile any loss that may have accrued due to non-communication or non-availability of any changes in the rates of commission to the Corporate Agent.
It is expressly agreed by the parties that the rates of commission, compensation, bonus etc. specified in the Annexure shall always be subject to such changes as the Company may direct based on market driven requirements.
The commission shall be payable to the Corporate Agent forthwith on a monthly basis after the sales of products are verified and confirmed by the Company, which the Company agrees to do expeditiously after the deposit of money relating to each product.
Whenever the Corporate Agent receives any commission wrongly in excess of what is due to it, it shall refund the commission so received within seven days from date of receipt of notification of such excess payment of commission.
The Corporate Agent shall repay to the Company on demand any indebtedness to the Company which arises in connection with this Agreement, either before or after its termination, and more particularly : (i) any remuneration credited to the Corporate Agent on sales later on cancelled by the Company for any reason, (ii) any remuneration credited to the Corporate Agent based on the expected sale or contract to be brought by the Corporate Agent and if such expected contact/sale does not materialise within the expected lime frame proposed by the Corporate Agent, (iii] any remuneration to be repaid by the Corporate Agent to the Company as a result of a charge-back or commission reversal;
and (iv) any debit balance in the Corporate Agent's commission account on the date of termination of This Agreement.
(i) Any indebtedness from the Corporate Agent to the Company will bear interest from the time the indebtedness is incurred until the time it is repaid at an interest rate of 2% above the prime rate of interest charged from lime to time by the Corporate Agent to its commercially worthy customers. The prime rate applicable for each month is to be based on the prime rate in effect on the first business clay of that month. If this Agreement is terminated, any debit balance owing to the Company by the Corporate Agent will continue to be subject to this interest rate.
(j) The Corporate Agent grants to the Company the right to set off any indebtedness or liability, now or hereafter existing, of the Company to the Corporate Agent against any indebtedness or liability now or hereafter due from the Corporate Agent.
(5) Corporate Agent's Duties :-
The Corporate Agent shall perform the duties listed in This clause to the satisfaction of the Company.
(a) The Corporate Agent shall obtain, renew and keep renewed the prescribed training and seller's license issued by the Company, and any other license required for it or any of its employees fulfilling the obligations of the Corporation Agent under this Agreement, at all times during the term of this Agreement, The Corporate Agent shall at all times during the term of this Agreement, act, and ensure that its employees act, within the scope
of the licenses described in section 5[a) of this Agreement.
The Corporate Insurance Agent shall screen, train and supervise licensed and duly appointed employees to solicit the Products, and provide to the Company a monthly listing of these employees; provided that the Company may at any time advise the Corporate Agent that, in the Company's opinion, the employee is or has become unsuitable to represent the Company in the solicitation, sale or servicing of Products, in which case that employee shall no longer solicit, sell or service any Products. The Corporate Agent represents and warrants that it has established and will maintain a system to screen, train and supervise these employees at its own cost and expense and that this system will at all times meet the requirements of all applicable regulatory guidelines.
The Corporate Agent shall (and shall ensure that its employees shall) solicit and procure business for the Company in consonance with the Company's image and corporate objectives.
The Corporate Agent shall confine its business activities for the Company solely to the Company's business products, inter alia to the solicitation, sale and servicing the Company's plans and scheme.
The Corporate Agent shall maintain performance and production standards equal to or higher than those that the Company will establish periodically and make known to the Corporate Agent in writing.
The Corporate Agent shall (and shall ensure that its employees shall) observe and be bound by (i) the Company's instructions, rules and regulations issued to the Corporate Agent from time to time relating to the conduct of its business, including those dealing with sales procedures, money collections, product delivery, privacy of clients, and sale, solicitation and servicing of Products, and (ii) all rules, regulations, licensing and other requirements of India and of each territory in which the Corporate Agent may transact business in connection with the sale, solicitation or servicing of Products. In particular, the Corporate Agent shall be responsible for the ongoing monitoring and supervision of sales practices used in relation to Products.
(h) The Corporate Agent shall provide to the Company (before they are printed] a draft copy of (i) all sales and other support material prepared by the Corporate Agent or its employees in connection with the solicitation and sale of Products, and (ii) any form developed by or at the direction of the Corporate Agent for client reporting purposes and containing information concerning Products for approval. The Company will have the right to review and approve these materials to ensure they accurately describe the terms and conditions of the Products and that they comply with the Company's standards and policies.
(i) The Corporate Agent shall promptly deliver to the Company in good order and condition when demanded all records, ratebooks, documents, manuals, computers [hardware and software) relating in any way to the products of the Company, including those that have been specifically entrusted to the Corporate Agent pursuant to this engagement. The Corporate Agent hereby acknowledges that such (0 The Corporate Agent, shall not assign any right or benefit under this Agreement to any person without the written consent of the Company.
(g) The Corporate Agent shall not commence or threaten to commence any suit or legal proceedings in the capacity of the Agent of the Company against any third person on any matter arising out of this engagement.
(h) The Corporate Agent shall not demand or accept any remuneration for rendering of services of any kind in connection with or incidental to this engagement and under the authority of this contract,
(i) The Corporate Agent shall not pay product money to the Company without first being paid the amount thereof by the customer or any other person except at its own risk and without a right to recover from the Company any money that may be refunded.
(j) The Corporate Agent shall not conduct any business, directly or indirectly, in the name or on behalf of the Company, other than the sale of the Products, providing sales training and servicing the Products.
(k) The Corporate Agent shall not pay or allow, or offer to pay or allow as an inducement to any person to buy the Products, any rebate of cost or any inducement whatsoever not specified in the product nor make any misrepresentation or incomplete or inaccurate comparison for the purpose of inducing a customer in this or any other company to convert, lapse, forfeit or surrender his products therein, nor endeavor to induce any other representative of the Company to leave Its service.
(1) The Corporate Agent shall not enter into any arrangement or induce any customer or any other person to make any money claim of whatsoever nature which is not a proper and valid claim nor receive/attempt to receive or accept any moneys whether in full or in part paid by the Company pursuant to a validly proven claim or settlement thereon.
(m) The Corporate Agent shall not misrepresent the terms and conditions of any the sales product or other product issued or offer made by the Company.
(n) The Corporate Agent shall preclude delivery of a product by the Company should the Corporate Agent become aware of change in the requirement of the customer after the application tor such product has been submitted to the Company for processing,
(o) The Corporate Agent shall not engage in any conduct which violates the provisions of any laws, rules and regulations applicable to its activities.
(p) The Corporate Agent shall not other than on behalf of the Company, directly or indirectly disclose or use, at any time, either while the Agreement is in force, or subsequent to its termination or cessation, any confidential information, knowledge or data of the Company or any of its clients or customers (whether or not obtained, acquired or developed by the Corporate Agent] without the prior written consent of the Company to such disclosure or use.
(7) Negative covenants for non-solicitation:
(n) the Corporate Agent agrees that it shall not for a period of two years from the date of terminal ion or cessation of this Agreement. contact or solicit with any persons, directly or indirectly, to cancel, lapse, forfeit or surrender a product issued by the Company. (i) "Persons" as referred to in sub-paragraph (a) above shall include:
any persons who are buyers of the Company on date of termination/cessation of this Agreement; or any persons who are known by the Corporate Agent to be such or whom the Corporate Agent has contacted or provided services in the capacity of Corporate Agent of the Company or otherwise approached in the capacity of a Corporate Agent of the Company before the date of cessation/termination of this Agreement, (ii) For all purposes under this clause, the term "persons" above shall include persons with respect to whom orders for purchase of products arc pending, process in addition to persons designated as owner of any product issued by the Company. The Company acquiesces that the above prohibition shall not affect the entering into a new agreement of agency but is only to protect the existing and already solicited business prior to the termination.
[b] The Corporate Agent agrees that it shall not. directly or indirectly during the term of this Agreement or within two years thereafter, induce or attempt to induce any of the Company's other Agents or employees to sell or solicit products for any other company or agency. 8.
(8) Termination and Cessation of Agreement:
This Agreement may be terminated by either party by giving 30 days
notice in writing to the other.
This Agreement shall terminate immediately upon receipt of notice
given by the Company to the Corporate Agent if:
(i) The Corporate Agent is duly adjudicated to have violated any of the relevant provisions of the Companies Act, 1956 by an authority and Court which is duly authorised to do so; (ii) The Corporate Agent breaches any term or condition of this Agreement; (in) The Corporate Agent ceases to carry or business, files a petition for bankruptcy or insolvency or makes a formal assignment for the benefit of its creditors; or (iv) The Corporate Agent or any of its employees commits any act of fraud or dishonesty or violates any law or Government regulation.
(c) Notwithstanding the termination or cessation of this Agreement, the Company shall not be liable in any manner whatsoever to the Corporate Agent by reason of the fact of furnishing information to any person so authorised under law upon any inquiry, regarding the Corporate Agent's record with the Company, provided that this does not violate the privacy of the Company's former or current customers.
Notwithstanding the termination or cessation of this Agreement. Corporate Agent shall not be liable in any manner whatsoever to the Company by reason of the fact of furnishing information to any person so authorized under law upon any inquiry, regarding the Company's record with the Corporate Agent, provided that this does not violate the privacy of the Company's former or current customers.
Notwithstanding the termination of this Agreement, the Corporate Agent agrees that the Company shall have a first charge or lien upon monies accrued or to accrue to the Corporate Agent hereunder for all amounts of indebtedness to the Company or for advances made by the Company to the Corporate Agent and may set off such amounts against any monies accruing to the Corporate Agent under this Agreement until all amounts of such indebtedness or advances are fully paid.
Upon termination or cessation of this Agreement, the Corporate Agent shall promptly deliver to the Company in good order and condition all products records, rate books, documents, manuals, computers, (hardware and software) relating in any way to products
and business of the Company. Should the Corporate Agent reduce its activity to an extent that in the opinion of the Company it is not satisfactorily servicing all or some of its customers from whom it previously solicited business the Company shall have the right after seven days notice to, and consultation with, the Corporate Agent, to allocate the future servicing of such customers to such Agent as decided by the Company. In that event the Corporate Agent shall surrender to the Company on written request by the Company, all records or pertinent information concerning such policy holders.
9. Indemnification:-
The Corporate Agent agrees to indemnify and hold harmless the Company, its officers and employees, from and against any and all liabilities, losses, costs, claims, actions or demands, howsoever arising, which may be brought against or suffered by the Company arising out of any breach or non-fulfillment of any duly or obligation by the Corporate Agent, or any of its directors, officers, employees or other legal representatives, under this Agreement; or any act or transaction by the Corporate Agent or any of its employ/ees relating to the sale and solicitation of Products not authorized by the provisions of this Agreement. This indemnification will survive the termination of this Agreement.
10. Resolution of Disputes:-
(a) In the event of any dispute between the Corporate Agent and any other Agent of the Company with regard to commission or any matter arising out of its activities as Agent, the Corporate Agent shall refer the dispute to the Company for resolution and the
decision of the Company shall be final and binding upon the Corporate Agent.
(b) The parties covenant that any dispute that may arise in consequence to or which emanates from this Agreement or in connection with the interpretation of this Agreement between the Company and the Corporate Agent shall be referred to arbitration, subject to the provisions of Indian Arbitration and Conciliation Act. 1996 and that the place of Arbitration shall be at …………….
(11) Trademarks:-
The Company agrees to grant to the Corporate Agent a non-exclusive, non-transferable right and license to use in India the trademarks applied for or registered in respect of the Company (the "Trademarks") in association with the services for which the Trademarks arc registered. The Corporate Agent agrees; not to use any Trademarks as part of the Corporate Agent's business, or to permit the use of any of the Trademarks as part of the business, of any legal entity related to the Corporate Agent or in which the Corporate Agent has a direct or indirect interest, without the prior written consent of the Company; not to dispute or contest, directly or indirectly, the validity or enforceability of Company's any Trademark nor to depreciate the value of the goodwill attaching to the Trademarks; and to use or display the Company Trademarks only in a manner and form prescribed by the Company in accordance with the standards and specifications of the Company as may be communicated to the Corporate Agent from time to time.
12. General Provisions:-
(a) The books, accounts and records duly and obligatorily maintained by the Company shall be prima facie accepted by the Corporate Agent as the conclusive proof in matter of transactions under this Agreement, unless the Corporate Agent is able to substantiate its claim with cogent, tenable and procedurally acceptable records.
No provision of this Agreement shall be deemed to have been waived by the Company or the Corporate Agent unless the waiver is in writing explicitly stating that it is intended to modify or waive the effect of such provision. In particular, the failure to exercise, or any
delay in exercising, a right or a remedy under this Agreement will not constitute a waiver or the right or remedy or a waiver or any other right or remedy. The parties agree that if any provision of this Agreement is held to be invalid by any Court or regulatory agency, the part of the Agreement will be severable and the remainder of the Agreement will remain in effect. The Corporate Agent and the Company will not use any records pertaining to a customer contracted by the Corporate Agent pursuant to this Agreement in any manner that is inconsistent with the use of these records as authorized by the person to whom the records relate. The Corporate Agent also agrees it will comply with any applicable privacy legislation. The Company shall maintain at all times the strictest confidentiality of any such proprietary information concerning the business of Corporate Agent which may come to the knowledge of the Company in the course of this engagement. The Company shall not directly or indirectly disclose or use. at any time, either while the Agreement is in force or subsequent to its termination or cessation, any confidential information, knowledge or date of Corporate Agent or any of its clients which may come in possession of the Company without the prior written consent of the Corporate Agent.
Upon 48 hours' notice to the Corporate Agent by the Company the Corporate Agent shall allow representatives of the Company to attend at the Corporate Agent's offices during normal business hours to monitor or audit any aspect of the business of the
Corporate Agent, including books and records, relating to the Company or any products.
The headings used in this Agreement are for convenience only. This Agreement shall be assignable by the Company in whole or in part to any successor or affiliated company with due notice to the Corporate Agent. However, the Corporate Agent will not assign or
purport to assign any right or interest which the Corporate Agent may have herein without the prior consent of the Company.
(h) None of terms of this Agreement will be construed as employer/ employee relationship between the Company and the Corporate Agent or any of its employees.
[i] Any notice or other communication provided for in this Agreement will be in writing and will be delivered personally or sent by facsimile or other means of electronic communication.
[j] This Agreement constitutes the entire agreement between the parties relating to the subject matter of this Agreement and supersedes all previous agreements relating to this subject matter, As used in this Agreement, the word "Agreement" means this agreement, including its Recitals and all Annexures, and any amendment to or replacement of any of them in accordance with the terms of this Agreement.
(k) For all disputes or differences the parties further subject themselves to the jurisdiction of .... only.
In testimony whereof the parties to this Agreement have in their complete legal capacity put their signs and seals on this the day of ....20…. in presence of the following witnesses.
The common seal of ………..Ltd. is hereto affixed by and on its behalf by the... Managing Director of the ... Company duly authorised by the Board of Directors by resolution dated ... Who in taken thereof has put his signature aforesaid in the presence of
1…….
2……….
The common seal of ………….Ltd. is hereto affixed in the presence of the .... the Mg. Director duly authorised in that behalf who in taken thereof has put his signature in the presence of
