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The Exclusive Territory Franchise Agreement is essential for businesses expanding through franchising in Malaysia while protecting territorial exclusivity. This document is used when a franchisor wishes to grant exclusive rights to a franchisee to operate within a defined geographic area, preventing other franchisees from competing within the same territory. The agreement must comply with the Malaysian Franchise Act 1998, which requires mandatory registration with the Franchise Registry and specific disclosure requirements. It includes detailed provisions on territorial rights, operational standards, support services, fees, and compliance requirements. This type of agreement is particularly important in the Malaysian market where territorial protection is often a key negotiation point for franchisees making significant investments in developing their assigned areas.

1. Parties: Identification of franchisor and franchisee with full legal names and registration details

2. Background: Brief description of the franchise business, the franchisor's rights, and the purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Grant of Franchise: Terms of franchise grant including exclusivity provisions and territorial rights

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

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

7. Territorial Rights: Detailed definition of exclusive territory and territorial protection provisions

8. Obligations of Franchisor: Training, support, operations manual, marketing support and ongoing assistance

9. Obligations of Franchisee: Compliance with system standards, training requirements, reporting obligations

10. Intellectual Property: Use of trademarks, trade secrets, and other IP rights

11. Quality Control: Standards maintenance, inspections, and compliance requirements

12. Marketing and Advertising: Marketing obligations, advertising funds, and local marketing requirements

13. Records and Reporting: Financial records, reports, and audit rights

14. Non-Competition and Confidentiality: Non-compete obligations during and post-term, confidentiality provisions

15. Transfer and Assignment: Conditions for transfer of franchise rights

16. Termination: Termination grounds and procedures

17. Post-Termination Obligations: Obligations after agreement ends

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

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