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Franchise License Agreement for New Zealand

Franchise License Agreement Template for New Zealand

A Franchise License Agreement under New Zealand law is a comprehensive legal document that establishes and governs the relationship between a franchisor and franchisee. It outlines the terms and conditions under which the franchisee is granted the right to operate a business using the franchisor's intellectual property, business systems, and brand. The agreement complies with New Zealand's commercial law framework, including the Fair Trading Act 1986 and Contract and Commercial Law Act 2017, while addressing specific requirements for intellectual property protection, operational standards, financial obligations, and territory rights.

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What is a Franchise License Agreement?

The Franchise License Agreement is a crucial document used when a business (franchisor) wishes to expand its operations by allowing other parties (franchisees) to operate under its brand and business system in New Zealand. This comprehensive agreement covers essential aspects including intellectual property rights, operational requirements, financial obligations, territory rights, and compliance with New Zealand law. It's particularly important as New Zealand doesn't have specific franchise legislation, relying instead on general commercial law, the Fair Trading Act, and common law principles. The agreement must therefore be carefully crafted to protect both parties' interests while ensuring compliance with relevant legislation and business practices. The document typically includes detailed schedules and appendices covering operational requirements, financial terms, and technical specifications.

What sections should be included in a Franchise License Agreement?

1. Parties: Identification of the franchisor and franchisee, including full legal names and addresses

2. Background: Context of the agreement, description of the franchise system, and purpose of the arrangement

3. Definitions and Interpretation: Detailed definitions of key terms and interpretation rules for the agreement

4. Grant of Franchise: Specific rights being granted, territory definitions, and any exclusivity provisions

5. Term and Renewal: Initial term of the franchise, conditions and process for renewal

6. Fees and Payments: Initial franchise fee, ongoing royalties, marketing contributions, and payment terms

7. Franchisor Obligations: Support, training, and ongoing assistance to be provided by the franchisor

8. Franchisee Obligations: Operating standards, compliance requirements, and performance obligations

9. Intellectual Property: Usage rights and restrictions for trademarks, trade secrets, and system property

10. Operations Manual: Reference to and compliance with the operations manual

11. Marketing and Advertising: Marketing obligations, cooperative advertising, and local marketing requirements

12. Records and Reporting: Financial record-keeping requirements and reporting obligations

13. Insurance and Indemnity: Required insurance coverage and mutual indemnification provisions

14. Default and Termination: Events of default, cure periods, and termination procedures

15. Post-Termination Obligations: Obligations and restrictions after agreement termination

16. Dispute Resolution: Process for resolving disputes, including mediation and arbitration procedures

17. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law

What sections are optional to include in a Franchise License Agreement?

1. Supply Arrangements: Required where the franchise involves mandatory product purchasing from designated suppliers

2. Online Operations: Needed for franchises with e-commerce components or online presence requirements

3. Sub-Franchising Rights: Include when the franchisee is granted rights to sub-franchise the business

4. Multiple Unit Rights: Required when franchisee has rights to operate multiple locations

5. Property and Premises: Include when the franchise involves specific location requirements or lease arrangements

6. Equipment Leasing: Necessary when the franchisor provides or requires specific equipment

7. International Operations: Include for franchises with cross-border operations or international expansion rights

8. Data Protection: Detailed section needed for franchises handling significant customer data

What schedules should be included in a Franchise License Agreement?

1. Schedule 1 - Territory Description: Detailed description and/or maps of the granted territory

2. Schedule 2 - Initial Fee and Ongoing Payments: Detailed breakdown of all fees, royalties, and payment structures

3. Schedule 3 - Initial Training Program: Details of required initial training and support

4. Schedule 4 - Approved Products and Services: List of authorized products and services for the franchise

5. Schedule 5 - Intellectual Property: Details of registered trademarks, copyrights, and other IP

6. Schedule 6 - Required Equipment and Supplies: Specifications for required equipment and approved suppliers

7. Schedule 7 - Insurance Requirements: Detailed insurance coverage requirements and minimums

8. Appendix A - Operations Manual Table of Contents: Overview of the operations manual content

9. Appendix B - Opening Requirements: Checklist and requirements for opening the franchise

10. Appendix C - Approved Suppliers: List of approved suppliers and purchasing requirements

Authors

Alex Denne

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

Jurisdiction

New Zealand

Publisher

Ƶ

Document Type

Licensing Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions














































Clauses

































Relevant Industries

Food and Beverage

Retail

Professional Services

Healthcare

Education and Training

Automotive

Real Estate

Hospitality

Personal Services

Home Services

Technology Services

Fitness and Recreation

Business Services

Manufacturing

Relevant Teams

Legal

Operations

Finance

Business Development

Compliance

Brand Management

Commercial

Risk Management

Franchise Development

Property

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Franchise Development Manager

Business Development Manager

Operations Director

Legal Counsel

Commercial Manager

Compliance Officer

Brand Manager

Territory Manager

Finance Director

Franchise Operations Manager

Business Owner

Contract Manager

Intellectual Property 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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