{"id":6503,"date":"2023-08-24T08:29:46","date_gmt":"2023-08-24T01:29:46","guid":{"rendered":"https:\/\/cdlaf.az9s.group\/?p=6503"},"modified":"2024-03-07T14:05:28","modified_gmt":"2024-03-07T07:05:28","slug":"key-terms-in-the-franchise-agreement-part-2","status":"publish","type":"post","link":"https:\/\/cdlaf.vn\/en\/key-terms-in-the-franchise-agreement-part-2\/","title":{"rendered":"Key terms in the Franchise Agreement (Part 2)"},"content":{"rendered":"<p>Following the series of articles about the Franchise agreement, in this article, we will share the remaining key terms in the Franchise agreement that the parties should keep in mind.<\/p>\n<p>Accordingly, the terms of manual, business secret, franchise fees \u2013 method of payment, rights, and obligations of the parties, report, unilateral termination of agreement, penalty, etc. need to be established in the franchise agreement.<\/p>\n<figure id=\"attachment_9418\" aria-describedby=\"caption-attachment-9418\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-9418\" src=\"http:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-1200x800.jpg\" alt=\"\" width=\"800\" height=\"533\" srcset=\"https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-1200x800.jpg 1200w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-600x400.jpg 600w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-768x512.jpg 768w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-1536x1024.jpg 1536w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/07\/pexels-pixabay-265087-2048x1365.jpg 2048w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-9418\" class=\"wp-caption-text\">Source: pexels-pixabay-265087<\/figcaption><\/figure>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #a32411;color:#a32411\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #a32411;color:#a32411\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/cdlaf.vn\/en\/key-terms-in-the-franchise-agreement-part-2\/#1_Term_of_franchise_fees\" >1. Term of franchise fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/cdlaf.vn\/en\/key-terms-in-the-franchise-agreement-part-2\/#2_Term_of_the_Franchisors_Rights_and_obligations\" >2. Term of the Franchisor\u2019s Rights and obligations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/cdlaf.vn\/en\/key-terms-in-the-franchise-agreement-part-2\/#3_Term_of_the_Franchisees_Rights_and_obligations\" >3. Term of the Franchisee\u2019s Rights and obligations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/cdlaf.vn\/en\/key-terms-in-the-franchise-agreement-part-2\/#SEND_CONSULTATION_REQUEST\" >SEND CONSULTATION REQUEST<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_Term_of_franchise_fees\"><\/span>1. Term of franchise fees<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The issues of price, franchise fees, and method of payment are the ones that take a lot of time for the parties to negotiate in the franchise transaction. With this term, the parties need to clarify the following contents: initial franchise fees, and monthly franchise fees (if any), as usual in some cases, the parties agree on an additional franchise fee that is paid monthly based on net profit received.<\/p>\n<p>In addition to the franchise fees, incurred fees such as training fees and other relevant fees are specifically recorded in this term. Although these fees may not have been incurred at the time of establishing the agreement, to implement the agreement smoothly, the parties should anticipate the incurred fees and record the method of implementation in the agreement, instead of recording \u201cthe parties will agree at the time of incurring\u201d.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Term_of_the_Franchisors_Rights_and_obligations\"><\/span>2. Term of the Franchisor\u2019s Rights and obligations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This term will fully record the rights of the franchisor, typically as:<\/p>\n<p>The right to require the franchisee to comply with the regulations about display, operation management, and quality of the product with the criteria set by the franchisor. The right to periodically and irregularly inspect the activities of the franchisee to ensure the franchisee is complying with the criteria agreed by the parties, the right to request reports, the right to suspend or unilaterally terminate the agreement when the franchisee violates, and the other relevant rights.<\/p>\n<p>Regarding obligations, depending on the model and franchised object, the parties record the franchisor\u2019s obligations in the agreement. Accordingly, some of the franchisor\u2019s obligations are: providing materials or materials\u2019 information, suppliers, recipes, products\u2019 standards, training, guidance documentation, information confidentiality, obligation to ensure the franchisee\u2019s normal operation, to avoid unfair competition practices, conflicts of interest, etc.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Term_of_the_Franchisees_Rights_and_obligations\"><\/span>3. Term of the Franchisee\u2019s Rights and obligations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you are a franchisee, you need to pay special attention to the franchisor\u2019s legitimate ownership of the franchised object, which must be recorded in legal documents according to the regulations of the law. In order to operate smoothly, maintain competition, the franchisee has the right to require the franchisor to maintain fair competitiveness between the franchisees in the same system. Besides, the scope of use, the franchisee\u2019s rights to trademarks, images, slogans, etc are considered as important contents that the franchisee needs to keep in mind to maintain the franchisee\u2019s normal operation during the agreement term.<\/p>\n<p>Regarding obligations, as usual, the franchise agreement has some basic obligations such as: information confidentiality, commitment not to change any relevant contents of the franchised object, financial commitment and necessary licenses so that the franchisee operates legally, obligations to report, obligations to comply with the advertising regulations to ensure fair competition between the franchisees in the same system, obligations to be punished and compensated when there is a breach of agreement, responsibility when terminating the franchise agreement, etc. The franchisee\u2019s obligations will be determined in detail for each franchised object, for example:<\/p>\n<p>If the franchised object is a beverage shop, the franchisee\u2019s obligations need to be more detailed at these points: materials, recipes, compliance with guidance in provided documentation, obligations of a certificate of food hygiene and safety, obligations of preservation, etc.<\/p>\n<p>In addition to the above terms, to maintain the parties\u2019 compliance with the committed contents of the franchise agreement, the parties need to pay more attention to the terms of penalties for breach of agreement, compensation, unilateral termination of agreement, dispute settlement, applicable law, force majeure events, agreement interpretation, etc.<\/p>\n<p>In the process of consulting for the franchise activities from abroad to Vietnam, we always recommend the parties fully record the agreement. Although we understand that the establishment of a franchise agreement full of contents sometimes prolongs the negotiating time of the parties, the agreement is a legally valid document to guide action, and the behavior of each party during the implementation of the agreement, so fully recording will ensure the parties\u2019 interests.<\/p>\n<p><strong><em>Time of writing:<\/em><\/strong> 01\/<em>07\/2023<\/em><\/p>\n<p><em>The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at <a href=\"https:\/\/mail.google.com\/mail\" target=\"_blank\" rel=\"noopener\"><strong>info@cdlaf.vn<\/strong><\/a><\/em><\/p>\n<div class=\"content-post-nd\">\n<div style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5519 size-full aligncenter\" src=\"http:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG.png\" alt=\"\" width=\"1080\" height=\"600\" srcset=\"https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG.png 1080w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG-720x400.png 720w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG-768x427.png 768w\" sizes=\"auto, (max-width: 1080px) 100vw, 1080px\" \/><\/div>\n<\/div>\n<div class=\"content-post-nd\">\n<p><strong>Why choose CDLAF\u2019s service?<\/strong><\/p>\n<ul class=\"li-content\">\n<li>We provide effective and comprehensive legal solutions that help you save money and maintain compliance in your business;<\/li>\n<li>We continue to monitor your legal matters even after the service is completed and update you when there are any changes in the Vietnamese legal system;<\/li>\n<li>Our system of forms and processes related to labor and personnel is continuously built and updated and will be provided as soon as the customer requests it;<\/li>\n<li>As a Vietnamese law firm, we have a thorough understanding of Vietnam&#8217;s legal regulations, and grasp the psychology of employees, employers, and working methods at competent authorities;<\/li>\n<li>CDLAF&#8217;s team of lawyers has many years of experience in the field of labor and enterprises, as well as human resources and financial advisory.<\/li>\n<li>Strict information security procedures throughout the service performance and even after the service is completed.<\/li>\n<\/ul>\n<\/div>\n<p><strong style=\"color: #a32411;\">You can refer for more information:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/methods-for-enterprise-to-effectively-control-and-debt-management\/\" target=\"_blank\" rel=\"noopener\">Methods for enterprise to effectively control and debt management<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/reduction-of-principal-for-customers\/\" target=\"_blank\" rel=\"noopener\">Reduction of Principal for Customers<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/method-to-publish-and-get-consent-to-personal-data-processing\/\" target=\"_blank\" rel=\"noopener\">Method to publish and get consent to p\u00e9onal data processing<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/terms-of-deposit-penalty-and-compensation-for-damage-in-the-contract\/\">Terms of deposit penalty and compensation for damage in the Contract<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/transfer-of-contributed-capital-when-not-enough-capital-has-been-contributed-risks-and-important-considerations\/\" target=\"_blank\" rel=\"noopener\">Transfer of contributed capital when not enough capital has been contributed, risks and important considerations<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/establishment-of-a-branch-of-foreign-trader-in-vietnam\/\" target=\"_blank\" rel=\"noopener\">Establishment of a branch of foreign Trader in Vietnam<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/foreign-investors-and-labor-outsourcing-activities-in-vietnam\/\" target=\"_blank\" rel=\"noopener\">Foreign investors and labor outsourcing activities in Vietnam<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/manufacturing-enterprises-and-location-related-legal-issues\/\">Manufacturing enterprises and location-related legal issues<\/a><\/li>\n<\/ul>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f2681-o1\" lang=\"en-US\" dir=\"ltr\" data-wpcf7-id=\"2681\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/en\/wp-json\/wp\/v2\/posts\/6503#wpcf7-f2681-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"2681\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.5\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_US\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f2681-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/>\n<\/fieldset>\n<h2 class=\"tt-form\"><span class=\"ez-toc-section\" id=\"SEND_CONSULTATION_REQUEST\"><\/span>SEND CONSULTATION REQUEST\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><label>Full name<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"full-name\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required\" aria-required=\"true\" aria-invalid=\"false\" value=\"\" type=\"text\" name=\"full-name\" \/><\/span><br \/>\n<label>Email<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email\" aria-required=\"true\" aria-invalid=\"false\" value=\"\" type=\"email\" name=\"email\" \/><\/span><br \/>\n<label>Phone Number<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-text wpcf7-validates-as-tel\" aria-invalid=\"false\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<label>Message<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"coment\"><textarea cols=\"40\" rows=\"10\" maxlength=\"2000\" class=\"wpcf7-form-control wpcf7-textarea\" aria-invalid=\"false\" name=\"coment\"><\/textarea><\/span><br \/>\n<input class=\"wpcf7-form-control wpcf7-submit has-spinner btn-yellow\" type=\"submit\" value=\"Send\" \/>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Following the series of articles about the Franchise agreement, in this article, we will share the remaining key terms in the Franchise agreement that the parties should keep in mind. Accordingly, the terms of manual, business secret, franchise fees \u2013 method of payment, rights, and obligations of the parties, report, unilateral termination of agreement, penalty,&#8230;<\/p>\n","protected":false},"author":4,"featured_media":9418,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[64],"tags":[157,156,159,158],"class_list":["post-6503","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-1-term-of-franchise-fees","tag-franchise-agreement","tag-franchisees-rights-and-obligations","tag-franchisors-rights-and-obligations"],"acf":[],"_links":{"self":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts\/6503","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/comments?post=6503"}],"version-history":[{"count":0,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts\/6503\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/media\/9418"}],"wp:attachment":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/media?parent=6503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/categories?post=6503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/tags?post=6503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}