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Sub Franchise Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Sub Franchise Agreement

"I need a Sub Franchise Agreement for a Hong Kong-based food and beverage chain, where the master franchisee will grant rights to sub-franchisees to operate multiple locations, with strict quality control measures and a requirement for monthly sales reporting."

Document background
The Sub Franchise Agreement is a crucial document used when a master franchisee, who holds rights from the original franchisor, wishes to grant franchise rights to third parties (sub-franchisees) within Hong Kong. This agreement type is particularly relevant in the Hong Kong market where many international brands expand through multi-tiered franchise structures. The document must comply with Hong Kong's common law system and relevant ordinances, including those governing contracts, intellectual property, and competition law. It typically includes detailed provisions on operational standards, financial terms, territory rights, and brand protection measures. The agreement serves as the primary legal framework governing the relationship between the master franchisee and sub-franchisee, ensuring consistency in brand standards while adapting to local market requirements.
Suggested Sections

1. Parties: Identification of the master franchisee (as sub-franchisor) and sub-franchisee

2. Background: Context of the agreement, including reference to the master franchise agreement and authority to grant sub-franchises

3. Definitions: Key terms used throughout the agreement

4. Grant of Sub-Franchise: Scope of rights granted, territory, and exclusivity terms

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

6. Fees and Payments: Initial fees, ongoing royalties, advertising contributions, and payment terms

7. Obligations of Sub-Franchisor: Support, training, and assistance obligations of the master franchisee

8. Obligations of Sub-Franchisee: Operational requirements, compliance with system standards, and reporting obligations

9. Intellectual Property: Use of trademarks, copyright materials, and protection of intellectual property

10. Confidentiality: Protection of confidential information and trade secrets

11. Training: Initial and ongoing training requirements

12. Quality Control: Maintenance of standards and inspection rights

13. Marketing and Advertising: Marketing obligations and restrictions

14. Records and Reporting: Record-keeping requirements and reporting obligations

15. Transfer and Assignment: Restrictions on transfer of rights and change of control

16. Termination: Grounds for termination and termination procedures

17. Post-Termination Obligations: Obligations following termination or expiry

18. Governing Law and Dispute Resolution: Applicable law and dispute resolution mechanisms

19. General Provisions: Standard boilerplate clauses including notices, entire agreement, and amendments

Optional Sections

1. Development Schedule: Required when the sub-franchisee has obligations to open multiple units within specified timeframes

2. Supply Chain Requirements: Needed when specific suppliers or supply chain arrangements are mandatory

3. Insurance: Detailed insurance requirements beyond standard coverage

4. Data Protection: Specific provisions for handling customer data and compliance with privacy laws

5. Local Adaptation: Required when allowing modifications to the system for local market conditions

6. Right of First Refusal: Option for sub-franchisee to acquire additional territories or rights

7. Non-Compete Provisions: Additional restrictions on competitive activities

8. Guarantee: Personal or parent company guarantees for sub-franchisee obligations

9. Emergency Management: Procedures for handling crisis situations or force majeure events

Suggested Schedules

1. Territory Description: Detailed description or map of the granted territory

2. Initial Fees and Ongoing Payments: Detailed breakdown of all financial obligations

3. Required Equipment and Specifications: List of required equipment, furniture, and fixtures

4. Operating Manual Summary: Key provisions and requirements from the operating manual

5. Training Program: Details of initial and ongoing training requirements

6. Approved Suppliers: List of approved suppliers and products

7. Brand Standards: Detailed specifications for use of trademarks and brand elements

8. Form of Confidentiality Agreement: Template for confidentiality agreements with employees

9. KPIs and Reporting Templates: Performance metrics and standard reporting formats

10. Insurance Requirements: Detailed insurance coverage requirements

11. Form of Guarantee: Template for personal or corporate guarantee if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


















































Clauses





































Relevant Industries

Food & Beverage

Retail

Hospitality

Education & Training

Healthcare Services

Professional Services

Automotive Services

Beauty & Wellness

Fitness & Recreation

Real Estate Services

Technology Services

Home Services

Child Care Services

Cleaning Services

Relevant Teams

Legal

Operations

Finance

Compliance

Business Development

Commercial

Brand Management

Training

Quality Assurance

Risk Management

Relevant Roles

Chief Executive Officer

Managing Director

Chief Legal Officer

Legal Counsel

Franchise Development Manager

Operations Director

Business Development Manager

Commercial Director

Chief Financial Officer

Franchise Operations Manager

Compliance Officer

Brand Manager

Territory Manager

Training Manager

Quality Assurance Manager

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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