singapore franchise agreement

8/2/2019 Singapore Franchise Agreement

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Document Information

Document Name

Franchise Agreement

Chapter

Agency & Distribution

Document Description

This agreement may be used by the owner (or franchisor) of proprietary rights andoperating know-how relating to a particular business, for example retail outlets sellingwell-known branded goods, to grant rights to a third party (or franchisee) to establishand operate a business on its own account using the franchisors rights and know-how.The agreement addresses such matters as payment of franchise fees, licence to occupyand fitting out of premises, consultancy and other assistance, intellectual propertyrights, sale of the franchisees business and termination.

Please also note that a number of highlighted areas in the agreement will need to becompleted after the relevant issues have been properly considered. Also, do not forgetto delete the guidance notes appearing in various parts of the agreement.

Editor

Edward S Tay, Nanyang Law LLCTel: +65 63240040, Email: [email protected]

Update Notes

Please consult the update notes and commentary at www.legalstudio.com/. You willneed your username and password to access the notes. Please check to ensure that you

are using the most up-to-date version of this document.

Disclaimer

While reasonable care is taken to ensure the accuracy and completeness of thepublication, neither LegalStudio.com Ltd. (or any of its subsidiaries) nor the abovenamed Editor makes any representations or warranties, express or implied, that the

publication is free from errors or omissions. This document is based upon the Editorsexperience only, and should be used for general reference purposes only and inconjunction with the other relevant documents in the General Commercial ContractsService. Specific and detailed professional advice should always be obtained in relationto any proposed legal agreement. This document should not be relied upon as asubstitute for legal or other professional advice.

Document NumberSA03

Version Date

15 November 2002

Copyright

LegalStudio.com Ltd. 2004. Please consult your product licence agreement.
http://www.legalstudio.com/http://www.legalstudio.com/http://www.legalstudio.com/


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TABLE OF CONTENTS

1. INTERPRETATION ..................................................................................1

2. GRANT OF FRANCHISE .........................................................................5

3. CONDITIONS PRECEDENT ...................................................................5

4. LICENCE AGREEMENT .........................................................................6

5. OBLIGATIONS OF FRANCHISOR .........................................................6

6. OBLIGATIONS OF FRANCHISEE .........................................................7

7. MAINTENANCE .....................................................................................8

8. ROYALTIES ............................................................................................9

9. FINANCIAL RECORDS AND RECEIPTS ..............................................9

10. OPEN ACCOUNT .................................................................................10

11. AUDITS .................................................................................................10

12. INSURANCE ........................................................................................11

13. TAXES ..................................................................................................11

14. ADVERTISING .....................................................................................11

15. INDEPENDENT CONTRACTOR ........................................................11

16. SALE OF BUSINESS ............................................................................12

17. EARLY TERMINATION AND RENEWAL ........................................14

18. CONSEQUENCES OF EXPIRATION OR TERMINATION ...............16

19. RESTRICTIONS ...................................................................................16

20. GENERAL .............................................................................................17

21. FORCE MAJEURE ...............................................................................18

22. NOTICES ..............................................................................................1923. AMENDMENTS ...................................................................................20

24. HEADINGS ...........................................................................................20

25. APPLICABLE LAW AND JURISDICTION ........................................20

26. COSTS ...................................................................................................21

SCHEDULE A............................................................................................22

SCHEDULE B............................................................................................23

SCHEDULE C............................................................................................24


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FRANCHISE AGREEMENT

THIS AGREEMENT is made on the[ ] day of [ ], 20 [ ]

BETWEEN:

[Name of Franchisor], [(a company incorporated in and existing under the laws of[Insert

Jurisdiction])] [of] [whose [registered office] [principal place of business in Singapore] is at]

[Insert Address] (the Franchisor);

and

[Name of Franchisee], [(a company incorporated in and existing under the laws of [Insert

Jurisdiction])] [of] [whose [registered office] [principal place of business in Singapore] is at][Insert Address] (the Franchisee).

WHEREAS:

A. The Franchisor is engaged in the business of[Insert Details], which is carried on by

it or other franchisees through retail outlets using certain proprietary information,

quality standards and specifications, materials, brand names, insignia, management

methods and operating procedures (collectively the business know-how) and has

devoted substantial time and resources to the development, promotion and use

thereof.

B. The Franchisee wishes to utilise the Franchisors business know-how to carry on such

business upon the terms and conditions of this Agreement.

NOW IT IS HEREBY AGREED as follows:

1. INTERPRETATION

1.1 In this Agreement, unless the context otherwise requires:

Audit means a physical count of the Franchisees Inventory, Receipts and other

assets carried out in accordance with the Franchisors standard procedures as varied

from time to time;

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Business means the business of[Insert Details] to be carried on at the Premises

using the Service Mark, the Proprietary Rights and the System as more particularly

described in the Operating Manual;

Effective Date means the commencement date of the Tenancy Agreement as

specified therein;

Equipment means the apparatus, equipment and machinery to be supplied to the

Franchisee by suppliers nominated by the Franchisor at the sole cost of the Franchisee

for carrying on the Business from time to time;

Financial Statements means the financial records and reports to be provided by

the Franchisee to the Franchisor from time to time in accordance with Clause 9;

Franchise Fee means the initial franchise fee of S$[Insert Amount] payable by

the Franchisee to the Franchisor pursuant to Clause 2;

Gross Turnover means the gross receipts of the Business before deduction of any

outgoings and expenses incurred directly or indirectly in furtherance of the Business

and gross receipts shall include, without limitation, all cash or credit transactions of

whatever nature and the amounts receivable in respect of all Inventory sold and

delivered or other services performed by the Franchisee in the course of the Business;

Inventory means all merchandise intended for sale by the Franchisee in the course

of the Business;

Licence Agreement means the licence agreement in agreed terms to be executed

between the Licensor and the Franchisee in accordance with Clause 4, whereby the

Franchisee shall be permitted to occupy the Premises for the purpose of carrying on

the Business;

Licensor means[Insert Name];

Material Breach means any one or more of the following:

(a) the failure by the Franchisee properly to record, deposit or report

Receipts or to render invoices;

(b) any attempt by the Franchisee to encumber, transfer, or assign any of

its rights or benefits or duties or obligations under this Agreement;

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(c) the abandonment by the Franchisee of all or any substantial part of

the Business for more than twenty-four (24) hours (whether or not the

Franchisee intends to abandon the same);

(d) the failure by the Franchisee to permit any Audit or to allow the

Franchisor access to the Business, the Premises or any part thereof;

(e) any conviction of the Franchisee of a criminal offence punishable by

imprisonment;

(f) any act, omission or improper conduct on the part of the Franchisee

which jeopardises the reputation or goodwill attaching to the Proprietary

Rights, the Business or the System;

(g) any failure by the Franchisee to conduct the Business strictly in

accordance with the Operating Manual or the System;

(h) any failure by the Franchisee to pay any taxes or debts incurred in the

conduct of the Business when due;

(i) any failure by the Franchisee to maintain adequate employees

compensation insurance coverage in accordance with the requirements of

law;

(j) any failure by the Franchisee to indemnify the Franchisor in

accordance with the terms of this Agreement; or

(k) any breach of, or failure by the Franchisee to comply with, any other

provision of this Agreement.

Notional Profit means the surplus (if any) of the consideration received by the

Franchisee upon the sale of the Business over its notional value which shall mean the

aggregate of the Franchise Fee of S$[Insert Amount] and the setting-up costs

specified in Schedule C;

Operating Manual means the written manual prepared by the Franchisor to be

used by the Franchisee in carrying on the Business and any amendment or

replacement thereof which the Franchisor may at any time, and from time to time,

notify to the Franchisee;

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Payment Date means the [Insert Date] day of each calendar month during the

continuance in force of this Agreement provided that, if such date shall fall on a day

which is not a business day (meaning a day (excluding Saturdays) on which licensed

banks are open for business in Singapore) such payment date shall be the next

following business day;

Premises means the premises in the Territory from time to time approved by the

Franchisor at which the Franchisee may carry on the Business;

Proprietary Rights means the trade and service marks, names and logos details of

which are set out in Schedule A and all other trade and service marks, names, logos,

designs, copyright, know-how, patents and designs used in the conduct of, or in any

way relating to, the Business whether or not registered or capable of registration and

all other proprietary rights whatsoever owned or used by the Franchisor now or at any

time hereafter for use in connection with the System;

Receipts means all proceeds of sale (whether cash, cheque, bank draft, credit

instrument or otherwise) received by the Franchisee, whether by way of sale of

Inventory or otherwise, from the Franchisees conduct of the Business;

Robbery means the theft of any Receipts, Inventory, Equipment or other goods

from the Franchisee or its agents or employees by acts or threats of violence or while

Receipts are being transported directly between the Premises and the bank designated

by the Franchisor and in the presence of the Franchisee or its agents or employees;

Services means the services provided in the course of the Business identified by the

Proprietary Rights;

Service Mark means[Insert Details];

System means the distinctive know-how and method developed, promoted andused by the Franchisor in connection with the Business utilising the Proprietary

Rights, Equipment and certain operating procedures and methods, management and

advertising techniques and other information, all as may from time to time be set out

or more fully described in the Operating Manual;

Tenancy Agreement means the tenancy agreement to be executed between the

landlord of the Premises of the one part and the Licensor as the tenant of the other

part in respect of the Premises; and

Territory means the territory described in Schedule B .

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1.2 In this Agreement, references to Clause or Schedules are references to clauses of, or

schedules to, this Agreement. Each Schedule shall have effect as if set out in this

Agreement.

2. GRANT OF FRANCHISE

2.1 In consideration of the payment of the Franchise Fee by the Franchisee to the

Franchisor (receipt whereof the Franchisor hereby acknowledges), the Franchisor

hereby grants to the Franchisee a non-exclusive franchise to carry on the Business,

and use the Proprietary Rights and the System only in connection therewith, for a

term of[Insert Number] years from the Effective Date, subject always to the

provisions of this Agreement.

3. CONDITIONS PRECEDENT

3.1 The Franchisor shall use its best endeavours to make available the Premises within a

reasonable time after the date of this Agreement. The franchise granted to the

Franchisee under Clause 2 shall not take effect unless all of the following conditions

precedent are satisfied, or waived in writing by the Franchisor, on or prior to the

Effective Date:

(a) satisfactory completion of initial training of key employees of the

Franchisee (the Key Employees), being such persons as shall be agreed in

writing by the Franchisor and the Franchisee;

(b) the grant of all leases, licences and permits necessary for establishing

and carrying on the Business;

(c) there having been no breach of this Agreement by the Franchisee ;

and

(d) payment to the Licensor and the Franchisor of the respective setting-

up costs set out in Schedule C.

3.2 If the Premises are not available within one hundred and eighty (180) days after the

date of this Agreement, the Franchisor may, or upon written request of the Franchisee

shall, refund the Franchise Fee without interest, less the amount of S$[Insert

Amount] as a contribution towards the costs and expenses incurred by the Franchisor

in connection with the subject matter of this Agreement and this Agreement shallautomatically terminate and the Franchisor shall have no further liability hereunder.

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4. LICENCE AGREEMENT

4.1 The right of the Franchisee to occupy the Premises shall immediately cease upon

expiry or sooner termination of this Agreement or upon termination of the Tenancy

Agreement (whichever is earlier).

4.2 Upon agreement between the parties hereto as to the location of the Premises, the

Franchisee shall execute the Licence Agreement .

5. OBLIGATIONS OF FRANCHISOR

5.1 The Franchisor undertakes to the Franchisee that, to enable the Franchisee to

commence and carry on the Business:

(a) within three (3) months from the date of this Agreement, it will

provide the Key Employees with initial training in the System as referred to

in Clause 3.1 (a) at such time and at such place as shall be agreed by the

Franchisor and the Franchisee in writing, all costs of travel, accommodation

and subsistence incurred by the Key Employees in connection therewith to be

borne by the Franchisee;

(b) it will deliver to the Franchisee at the time of such initial training one(1) copy of the Operating Manual and such other materials as the Franchisor

may in its discretion consider appropriate;

(c) it will provide the Franchisee with reasonable consultation and

advice concerning the location and suitability of the Premises;

(d) it will make available to the Franchisee technical specifications for

the internal layout of the Premises and advice relating to the Franchisees

plans for construction, conversion and refurbishment of the Premises to

ensure compliance with the System;

(e) it will supervise the construction, conversion and refurbishment of

the Premises to such extent and at such times as the Franchisor shall in its

discretion consider appropriate; and

(f) it will provide such general assistance as the Franchisor shall in its

discretion consider appropriate in connection with the opening of the

Premises and pre-opening and launch of the Business.

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5.2 The Franchisor agrees with the Franchisee that, at all times during the continuance of

this Agreement, it shall

(a) permit the Franchisee to carry on the Business utilizing the Service

Mark and otherwise in accordance with the terms of this Agreement;

(b) provide the Franchisee with reasonable advice and consultation

relating to the System and any questions from time to time arising in

connection therewith;

(c) provide advice to the Franchisee regarding recruitment of suitable

staff to carry on the Business;

(d) make available to the Key Employees such further training as may

from time to time be necessary in consequence of any improvements or

developments of the System, all costs of travel, accommodation and

subsistence incurred by the Key Employees in connection therewith to be

borne by the Franchisee; and

(e) assist the Franchisee in obtaining inventory, products, services and

equipment from suppliers nominated by the Franchisor from time to time all

costs incurred in connection therewith to be borne by the Franchisee.

6. OBLIGATIONS OF FRANCHISEE

6.1 The Franchisee agrees and undertakes to the Franchisor as follows:

(a) not to commence the Business until the Key Employees have

undergone initial training in accordance with Clause 5.1(a) and have been

approved as competent by the Franchisor, nor at any time thereafter to

employ any such person as a key member of staff who has not undergone

such initial training or been so approved;

(b) not to commence any construction, conversion or refurbishment work

at the Premises unless and until and Franchisor has approved the identity of

the contractor(s) to be engaged to carry out such works and approved the

Franchisees construction, conversion or refurbishment plans;

(c) to enter into, and to perform with due diligence its obligations under,

the Licence Agreement and to ensure that the Premises are without delay and

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at the Franchisees expense constructed, converted and refurbished in

accordance with this Agreement;

(d) to ensure that the Franchisee has sufficient working capital and other

resources to fulfil all its obligations under this Agreement;

(e) to carry on the Business strictly in accordance with the Operating

Manual and all quality, service and other standards set out therein and to

conform in all respects with the System as the same may be modified,

improved or developed from time to time;

(f) to comply promptly with all advice and instructions given by the

Franchisor with regard to the System;

(g) to procure that any one or more of the Key Employees shall attend

such further periods of training as may from time to time be required by the

Franchisor, all costs of travel, accommodation and subsistence in connection

therewith incurred by the Key Employees to be borne by the Franchisee;

(h) to use only such stationery, materials, promotional literature and

other items in connection with the Business as shall be permitted by the

Operating Manual or otherwise from time to time approved in writing by the

Franchisor; and

(i) to use its best endeavours to promote the Business and to cooperate

generally with the Franchisor and the other franchisees of the Franchisor in

connection therewith.

7. MAINTENANCE

7.1 Except as otherwise provided in this Agreement, the Franchisee shall be responsible

for, and shall observe and perform, all of the Licensors obligations as tenant under

the Tenancy Agreement pursuant to which the Licensor holds the Premises and for all

expenses relating to the Business, including, without limitation, maintenance of the

Equipment and other items used in the Business in a clean, attractive, orderly, safe

and sanitary condition and in good repair and operating condition.

7.2 The Franchisee shall at its expense, when the Franchisor deems necessary, arrange for

the interior and exterior of the Premises to be repainted or repaired, including,

without limitation, any broken or damaged glass, windows, doors and floor covering.

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7.3 The Franchisee shall pay to the Licensor a licence fee equal to the rental of the

Premises from time to time payable under the Tenancy Agreement, and shall bear the

cost of all telephone, electricity, water, gas and any other utilities and outgoings

required to carry on the Business.

8. ROYALTIES

8.1 In addition to the Franchise Fee, the Franchisee shall pay to the Franchisor (or such

other person as the Franchisor may in writing direct) during the continuance of this

Agreement, royalties equivalent to [Insert Number] per cent of the Gross Turnover

in each calendar month.

8.2 All such royalties shall be paid by the Franchisee free and clear of any deduction,withholding, set off or counterclaim of any nature whatsoever, except any deduction

or withholding which may be required by law in relation to any tax, in which case the

Franchisee shall ensure that the amount by which the payment is reduced (the

Relevant Amount) does not exceed the amount legally required, shall account in full

for the Relevant Amount to the competent taxation authority on or before the due date

and shall furnish to the Franchisor on or before the due date an official receipt issued

by the competent taxation authority for the Relevant Amount or, if it is not the

practice of such authority to issue such receipts, equivalent evidence of payment of

the Relevant Amount.

9. FINANCIAL RECORDS AND RECEIPTS

9.1 The Franchisee shall maintain adequate financial and other records in respect of the

Business. The Franchisor shall have the right to inspect and take copies of such

records at any time during normal business hours.

9.2 The Franchisee shall deposit all Receipts in the Open Account (as defined and

referred to in Clause 10) and shall, whenever so requested by the Franchisor, provide

written verification from the bank at which the Open Account is held of the deposit of

any Receipts or, if so requested, deliver the Receipts directly to the Franchisor.

9.3 The Franchisee shall prepare and furnish to the Franchisor (in such manner and at

such times as may be acceptable to the Franchisor) summaries of Inventory, reports

of Receipts and such additional reports as to financial and other matters as the

Franchisor may require from time to time.

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9.4 The Franchisee shall deliver or furnish to the Franchisor copies of (i) receipts and

invoices for all purchases made by the Franchisee and (ii) receipts and bills for

operating expenses incurred by the Franchisee and keep the Franchisor regularly

advised in writing of the Franchisees retail sales prices and of any discounts or

allowances given by the Franchisee.

10. OPEN ACCOUNT

10.1 The Franchisor shall establish and maintain an open bank account (the Open

Account) in the name of the Franchisor (or such other party or parties as the

Franchisor may in writing direct).

10.2 All Receipts (which may be withdrawn by, or otherwise used for the benefit of, theFranchisor at any time without payment by the Franchisor of interest or other

compensation to the Franchisee) shall be credited to the Open Account.

10.3 The Franchisor shall have the exclusive right to operate and control the Open

Account and shall manage and maintain the same and make deductions therefrom for

all Inventory, costs and expenses for which the Franchisee is responsible, and

payments due from the Franchisee to the Franchisor under this Agreement or to the

Licensor under the Licence Agreement. The remaining balance shall be deposited in

the Franchisees own bank account on each Payment Date. In the case of any deficit,the Franchisee shall make up the difference in the Open Account on each Payment

Date.

11. AUDITS

11.1 The Franchisor shall cause at least one Audit to be carried out in each calendar

quarter and, upon the Franchisees request, shall carry out additional Audits at the

cost of the Franchisee.

11.2 The Franchisor shall have the right to carry out an Audit or cause an Audit to be

carried out at any time without prior notice to the Franchisee.

11.3 The Franchisor may cause any Audit to be carried out by any third party whom it

appoints for such purpose.

11.4 Both the Franchisor and the Franchisee shall receive copies of each Audit report.

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12. INSURANCE

12.1 The Franchisor shall arrange insurance at the Franchisees expense in respect of all

normal risks relating to the Business including, without limitation, any loss of or

damage to the Premises, Inventory and such other items as the Franchisor may in its

discretion deem necessary from time to time.

13. TAXES

13.1 The Franchisee shall be responsible for payment of all taxes, rates, duties, fees and

other imposts levied by any government authority in respect of the conduct of theBusiness and for making or filing all returns required in connection therewith.

13.2 The Franchisor shall be responsible for its own profits tax liability in respect of

amounts paid to it by the Franchisee in accordance with this Agreement.

14. ADVERTISING

14.1 The Franchisor shall provide the Franchisee with advertising materials in accordance

with the Operating Manual and may, in addition, arrange such advertising of the

Business, the Service Mark or the System as the Franchisor may in its discretion

consider appropriate.

14.2 Subject to the prior written approval of the Franchisor, the Franchisee may engage in

advertising activities provided that it complies with all applicable laws and

regulations.

15. INDEPENDENT CONTRACTOR

15.1 The Franchisee shall, in the conduct of the Business, act as an independent contractor

and shall assume complete control over, and bear full responsibility for all acts or

omissions of, the Franchisees agents and employees. The Franchisee agrees to

indemnify and keep indemnified the Franchisor from and against any cost, loss,

liability, claim or damage which the Franchisor incurs or suffers as a result of any act

or omission on the part of any of the Franchisees agents or employees.

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15.2 The Franchisee undertakes to the Franchisor that its agents and employees shall not

be, or held out to be, agents or employees of the Franchisor and shall not, as the

Franchisee shall procure, negotiate or enter into any agreement or incur any liability

(whether legally binding or not) in the name of or on behalf of, or that purports to

bind, the Franchisor.

16. SALE OF BUSINESS

16.1 All the rights granted to the Franchisee hereunder are personal to the Franchisee and,

without limitation, the following acts and events shall, unless approved in writing by

the Franchisor, be deemed to be Material Breaches:

(a) if the Franchisee is a partnership, the taking in of one or more new partners whether on the death or retirement of an existing partner or

otherwise;

(b) if the Franchisee is an individual (including a sole surviving partner

of a partnership franchisee), the death, insanity or other legal disability of

such individual in which event no right to carry on the Business or use the

Proprietary Rights or the System or any part thereof shall vest in the

executors, administrators, personal representatives, next-of-kin, trustee,

receiver or guardian of such individual;

(c) if the Franchisee is a body corporate, any amalgamation or

restructuring (unless approved by the Franchisor, such approval not to be

unreasonably withheld), or change in the person or persons who owns or own

a majority of its voting shares or who otherwise has or have effective control

thereof; and

(d) the giving by the Franchisee of a power of attorney or similar

authority whereby the donee of such power or authority obtains the right to

conduct the Business or use the Proprietary Rights or the System or any part

thereof or does in fact use the same.

16.2 If the Franchisee intends to sell the Business to a proposed purchaser, the following

provisions shall apply:

(a) The Franchisee shall forthwith on receipt of a written offer from a

proposed purchaser submit to the Franchisor a copy thereof together with (if

available):

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(i) a business history and details of the financial status of the

proposed purchaser; and

(ii) full written details of any other terms agreed between the

Franchisee and the proposed purchaser.

(b) Upon receipt of the information specified in Clause 16.2(a) the

Franchisor shall have an option to purchase the Business at the same price

and upon the same terms as have been offered by the proposed purchaser by

giving notice in writing to the Franchisee within fourteen (14) days after the

Franchisors receipt of such information. The Franchisee shall forthwith

notify the Franchisor in writing of any variation in the price or terms which

have been offered by the proposed purchaser and such period of fourteen (14)

days shall recommence as from the date of notification to the Franchisor of

such variation.

(c) If the Franchisor gives notice to the Franchisee exercising its option,

the sale and purchase of the Business shall be completed within twenty-eight

(28) days following the giving of such notice.

(d) If the Franchisor does not give such notice exercising its option

within such period, the Franchisors option to purchase the Business shall

lapse and thereafter, subject to the following conditions and with the prior

written consent of the Franchisor, the Franchisee shall have the right to sell

the Business to the proposed purchaser. The proposed purchaser shall have

the same rights as are conferred on the Franchisee hereunder, subject to such

variation as the Franchisor in its absolute discretion thinks fit, and such rights

shall terminate [Insert Number] years after the Effective Date, subject to

Clause 17 . Such conditions are:

(i) the proposed purchaser shall satisfy all the standards andcriteria deemed necessary by the Franchisor in relation to, inter alia,

experience, qualifications, expertise and financial status and it or its

key employee(s) shall undergo and complete a programme of initial

training to the satisfaction of the Franchisor;

(ii) the Franchisee shall pay to the Franchisor the sum of

S$[Insert Amount] or ten per cent. (10%) of the Notional Profit

(whichever is greater) to compensate the Franchisor for dealing with

the application for the above-mentioned consent and the training of

the proposed purchaser or its key employee(s);

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(iii) the Franchisee shall not at the time of the application for

such consent be in breach of this Agreement;

(iv) if the proposed purchaser is a company, the shareholders and

directors of such company shall be acceptable to the Franchisor

according to the criteria set out in (i) above and shall undertake to the

Franchisor in writing in such form as the Franchisor shall in its

absolute discretion require to observe and perform all the obligations

on the part of the Franchisee contained in the form of franchise

agreement then used by the Franchisor for franchisees which are

companies; and

(v) the payment by the Franchisee of all outstanding monies due

to the Franchisor under this Agreement and to the Licensor under the

Licence Agreement and the discharge by the Franchisee of all other

outstanding obligations owed by the Franchisee to any third party

(including, but not limited to, its employees) relating to the Business.

16.3 The Franchisee agrees not to disclose any of the contents of the Operating Manual to

any proposed purchaser and shall procure that no such proposed purchaser shall use

any of the Proprietary Rights nor operate the System or any part thereof without the

prior written consent of the Franchisor.

16.4 Upon the sale by the Franchisee of the Business, the rights of the Franchisee in

respect thereof shall terminate but without prejudice to any obligations of the

Franchisee arising prior to the date of sale or thereafter.

17. EARLY TERMINATION AND RENEWAL

17.1 This Agreement may be terminated by the Franchisor by notice to the Franchisee at

any time upon the occurrence of any of the following events:

(a) a Material Breach;

(b) compulsory acquisition of the Business by the Government of the

Republic of Singapore or any other competent authority;

(c) loss of or damage to the Equipment, the Premises or other assets used

in the Business which cannot in the reasonable opinion of the Franchisor be

repaired or replaced within thirty (30) days;

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(d) closure of the Business as required by law; or

(e) the Franchisee, being an individual, is adjudicated bankrupt or enters

into any voluntary arrangement with his or her creditors or , being a body

corporate, enters into voluntary or compulsory liquidation (other than

pursuant to an amalgamation or restructuring approved by the Franchisor

(such approval not to be unreasonably withheld) or has a receiver appointed

in respect of all or any of its assets or undertaking or makes a composition

with any of its creditors.

17.2 In the event that the Franchisee is, in the sole discretion of the Franchisor incapable

of carrying on the Business in a good and efficient manner or at all, the Franchisor

may take possession of all or any of the Premises, the Equipment, Inventory, Receipts

or other assets or items used in the Business and continue to carry on the Business in

the Premises for the benefit and account of the Franchisee (or its heirs or legal

representatives). In such event, the Franchisor shall be entitled to charge such

management fee as in the Franchisors discretion it shall think fit.

17.3 In the event that the Tenancy Agreement (as renewed if applicable) expires or is

otherwise terminated on a date later than the expiration date of the rights granted

hereunder, the term of this Agreement shall automatically be extended and expire on

the date of expiry or sooner termination of the Tenancy Agreement and the

Franchisee shall forthwith on the commencement date of the extension of such term

pay to the Franchisor a due proportion of the franchise fee for such period of

extension at the rate then charged by the Franchisor to new franchisees.

17.4 In the event that the Franchisee wishes to renew this Agreement upon the expiration

hereof, and conditional upon there being no outstanding breach of this Agreement by

the Franchisee, the Franchisee may by written notice given to the Franchisor not later

than [Insert Number] months prior to the date of expiry of the initial term referred

to in Clause 2 exercise the right to renew this Agreement for a further term of[Insert Number] years whereupon the Franchisor shall be granted a new franchise

and the Franchisor and the Franchisee shall execute a new franchise agreement in the

Franchisors then current form save and except for any clause regarding renewal and

that the franchise fee payable for the renewal term shall be equal to [Insert

Number] per cent.( %) of the amount then charged to new franchisees by the

Franchisor.

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18. CONSEQUENCES OF EXPIRATION OR TERMINATION

18.1 On expiration or sooner termination of this Agreement, the Franchisee shall:

(a) peaceably and quietly vacate the Premises and surrender such of the

Equipment as has not been sold to the Franchisee in good clean and tidy

condition, fair wear and tear excepted;

(b) transfer all remaining Inventory to the Franchisor at cost value to the

Franchisee less, at the Franchisors option, merchandise of a type, quality,

quantity or variety which is inconsistent with the reputation or image

associated with the Service Mark;

(c) transfer to the Franchisor all Receipts and other items or assets used

in the conduct of the Business;

(d) cease using the Service Mark and any part of the System;

(e) return to the Franchisor all copies of the Operating Manual then in its

possession; and

(f) deliver to the Franchisor all materials relating to the System then in

its possession.

18.2 Within thirty (30) days after expiration or sooner termination of this Agreement, the

Franchisor shall deliver to the Franchisee a final statement of account.

18.3 Within three (3) days after delivery of such final statement of account, the Franchisor

shall pay to the Franchisee any credit balance in the Open Account or, if there is any

amount due from the Franchisee to the Franchisor, the Franchisee shall immediately

pay the same to the Open Account. Any property belonging to the Franchisee andleft in the Premises after such expiration or sooner termination of this Agreement

shall belong to the Franchisor.

19. RESTRICTIONS

19.1 The Franchisee covenants with the Franchisor that, during the term of this Agreement

and for a period of[Insert Period] after the expiration or sooner termination (for

any reason) of this Agreement, it shall not, whether by itself or together with, or on

behalf of, any other person, firm or company in any capacity whatsoever:

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(a) engage, or be interested or concerned, in any other business which is

similar to or competitive with the Business; or

(b) employ or seek to employ in any business similar to or competitive

with the Business any person who, according to the Franchisees actual

knowledge, is at that time or has at any time in the previous two (2) years

been employed by the Franchisor or any other franchisee of the Franchisor or

otherwise, directly or indirectly, induce or seek to induce any such person to

leave his or her employment whether or not in breach of his or her contract of

employment; or

(c) solicit customers or former customers of the Business or divert or

seek to divert any customer from the Franchisor or any other franchisee of the

Franchisor.

19.2 The Franchisee hereby acknowledges that the contents of this Agreement, the

Operating Manual and all other information and knowledge relating to the System are

of a strictly confidential nature and, accordingly, the Franchisee covenants that it will

not, and it will procure that no other person over whom it has any control shall, at any

time without the prior written consent of the Franchisor, whether before or after

expiration or sooner termination of this Agreement, divulge or use any of such

information or knowledge relating to the System which may be communicated to or

otherwise acquired by the Franchisee, its directors, agents or employees except (i) to

the employees of the Franchisee or (ii) unless required by law or by the order of a

court or tribunal of competent jurisdiction or by a regulatory or governmental

authority acting in accordance with its powers to divulge the same.

19.3 The restrictions contained in this Clause 19 are considered reasonable by the

Franchisee, but if any such restriction shall be found to be void or voidable but would

be valid and effective if some part or parts thereof were deleted, such restriction shall

apply with such modification as may be necessary to make it valid and effective.

20. GENERAL

20.1 The parties hereto acknowledge that this Agreement, together with any documents

referred to herein, constitutes the entire agreement between them relating to its

subject matter and that this Agreement replaces and supersedes any previous oral or

written arrangements, agreements, drafts, warranties, representations or

understandings made or existing between them with respect to such subject matter.

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20.2 The Franchisee acknowledges to the Franchisor that it has not been induced to enter

into this Agreement by any warranty, representation or statement other than as set out

herein and agrees that it shall not be entitled to any remedy against the Franchisor in

relation to any such other warranty, representation or statement except in the case of

any fraud or similar misconduct.

20.3 No failure by either the Franchisor or the Franchisee to exercise nor any delay on

their part in exercising any right, power, privilege or remedy under this Agreement

shall impair or operate as a waiver thereof . No single or partial exercise of any right,

power, privilege or remedy hereunder shall prevent any further or other exercise

thereof or the exercise of any other right, power, privilege or remedy.

20.4 The Franchisee consents to the disclosure by the Franchisor of any information

relating to this Agreement or the Business.

20.5 The Franchisee warrants and represents to the Franchisor that the Franchisee has the

full and unrestricted right to enter into this Agreement and that it is not party to any

agreement or subject to any obligation of any nature whatsoever which prevents or

restricts its entry into this Agreement or the exercise, discharge or performance of its

rights, duties and obligations hereunder.

21. FORCE MAJEURE

21.1 Neither party to this Agreement (hereinafter in this Clause 15 referred to as the

affected party) shall be deemed to be in breach of this Agreement or otherwise

liable to the other as a result of any delay or failure in the performance of its

obligations hereunder if and to the extent that such delay or failure is caused by any

force majeure and the time for performance of the relevant obligation(s) shall be

extended accordingly. For the purposes of this clause, force majeure shall mean any

event or circumstances which is or are beyond the reasonable control of the affected

party including, without limitation, any flood, earthquake, storm, typhoon,

subsidence, epidemic or other natural disaster or calamity, any war or threat thereof,

terrorist action, riot, invasion, civil disorder, insurrection, any action or failure to act

on the part of any governmental authority in any jurisdiction, any trade embargo,

industrial action, strike or lockout, any shortage or absence of raw materials, labour

or components, any destruction, damage or malfunction of or to any factory,

equipment, plant or materials and any breach of contract , default or insolvency by or

of any third party (including, without limitation, any sub-contractor), not being a third

party which is a member of the same group of companies as the affected party, or an

employee or officer of such third party.

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21.2 The affected party shall forthwith notify the other party of the nature, extent and

possible duration of the event or circumstances constituting the force majeure, use all

reasonable endeavours to reduce the effect of such event or circumstances on the

performance of its obligations hereunder and, forthwith after cessation of such event

or circumstances, notify the other party thereof and resume full performance of its

obligations under this Agreement.

21.3 If any event or circumstances constituting the force majeure delays the performance

by the affected party of its obligations hereunder for a continuous period of not less

than [six (6)] months, the other party hereto shall be entitled to give notice to the

affected party to terminate this Agreement. Any such notice, which shall be

irrevocable, shall specify the date on which such termination is to have effect, not

being less than[fourteen (14)] days after the date on which such notice is deemed

to be given. The provisions of this Agreement as to the consequences of termination

shall apply to any termination pursuant to this Clause 15.3.

22. NOTICES

22.1 Any notice required or authorised to be given under, or in connection with, this

Agreement by either party to the other shall be in writing in the English language.

22.2 Any such notice shall be sent to the recipient at the address set out in Clause 19.4 , oras otherwise directed by the recipient pursuant to Clause 19.5 . Notices may be

delivered by hand or sent by registered post, courier or by facsimile.

22.3 If delivered by hand or sent by courier, notice will be deemed to have been given on

the date of delivery at the recipients address. If sent by facsimile, notice will be

deemed to have been given on the date of despatch, subject to confirmation of

uninterrupted transmission by a transmission report provided that any notice sent by

facsimile after 5:30 p.m. (local time at the recipients address) on any business day or

at any time on a Saturday, Sunday or public holiday (in the jurisdiction where the

recipient has its address) shall be deemed to have been given at 9:00 a.m. on the next

following business day. If sent by registered post, notice will be deemed to have been

given two (2) business days after posting if sent from Singapore to an address within

Singapore or seven (7) business days after posting if sent from overseas to an address

within Singapore or vice versa.

22.4 The parties addresses and other details for the purposes of this Clause 19 are,

subject to Clause 19.5, as follows:

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DISTRIBUTOR:

[Insert Address]

Fax Number:[Insert Fax Number]

For the attention of

SUPPLIER:

[Insert Address]

Fax Number:[Insert Fax Number]

For the attention of

22.5 Either party hereto may notify the other of any change of its address, facsimile

number or the person for whose attention any notice should be marked, provided that

such notification shall not have effect earlier than two (2) business days after the date

on which it is deemed given pursuant to this Clause 19.

23. AMENDMENTS

23.1 No amendment or variation of this Agreement shall be effective unless made in

writing and signed by the parties hereto.

24. HEADINGS

24.1 The headings set out in this Agreement are included for convenience only and shall

not in any way affect the construction or interpretation hereof.

25. APPLICABLE LAW AND JURISDICTION

25.1 This Agreement shall be governed by, and construed in all respects in accordance

with, the laws of the Republic of Singapore.

In relation to any proceedings to enforce, or arising out of or in respect of, thisAgreement, both parties irrevocably and unconditionally agree to submit to the

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exclusive jurisdiction of the courts of the Republic of Singapore and waive any

objection to proceedings in the courts of the Republic of Singapore on the grounds of

forum non conveniens or venue.

26. COSTS

26.1 Subject to any express provisions to the contrary, each of the Franchisor and

Franchisee shall pay its own costs and disbursements of or incidental to the

negotiation, preparation, execution and implementation of this Agreement.

AS WITNESS the hands of[duly authorised representatives of] the Franchisor and the

Franchisee the day and year first above written

SIGNED by )

[Insert Name] )

for and on behalf of )

[Insert Name] in the presence of: )

SIGNED by )

[Insert Name] )

for and on behalf of )

[Insert Name] in the presence of: )

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SCHEDULE A

Proprietary Rights : Trade and Service Marks, Names and Logos

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SCHEDULE B

Territory

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(Clause 3.1(d))

SCHEDULE C

Setting-Up Costs

Amount payable by Franchisee to the Franchisor: [specify]

Amount payable by Franchisee to Licensor: [specify]

singapore franchise agreement

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