Franchise Agreement

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프랜차이즈 계약은 Distributorship계약과 비슷한 측면이 있긴 하나 본질적으로 다르다. 이들의 차이점을 들어 본다면 다음과 같다. 프랜차이즈 계약은 기본적으로,① 상표, 서비스마크 등으로 대표되는 비지니스체계를 기초로 함. ② Franchisee는 franchiser의 brand 및 goodwill을 이용하여 당해 사업의 운영을 영위하되, brand등의 사용 및 영업지원 등에 대하여franchise 대가를 지불함. 그러나, Dealer 계약 또는 Distributorship계약은 물품의 계속적 공급이 주목적이고 After service의 제공 및 상표 등의 사용은 통상 무료base로서 또한 부차적인 차원에서 지원되는 것에 불과함.

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This Agreement, made as of (                            )  day of (                       ), by and between (                         ), a (                  )

corporation  with offices at (                      ) hereinafter referred to as "Franchisor" and(                 ), a (                      ) corporation with office at hereinafter referred to as "Franchisee", Witnesseth:

WHEREAS, franchiser Is the owner of the trademarks, copyrights, and trade secrets identified in Article 1 (hereinafter referred to as "Properties"), and desires to grant a license to Franchisee to utilize the said Properties in the manufacture and sale of the merchandise identified in Article 1 (hereinafter referred to as "Merchandise") in (             );and

WHEREAS, Franchisee desires to utilize the said Properties in connection with the manufacture, sale, promotion, and distribution of the Merchandise ;

NOW, THEREFORE, it is agreed :

Article 1. Definitions

1. "Properties" as herein defined shall mean the() trademark and any trademarks, copyrights, trade names, marks, symbols, logos, designs, manufacturing techniques, sales techniques and methods, skills and trade secrets owned by Franchisor or which are used in the business of manufacturing and selling products marketed under the (                    ) trademark in (                   ).

2. "Merchandise" as herein defined shall mean products and items identical to those now or in the future manufactured or sold by franchiser under its trademarks in (             ) and any other item approved in writing by franchiser. The Merchandise shall include any Items or products listed in franchiser's Distributor List. Selection of items shall be at Franchisee's sole discretion throughout the term of this Agreement.

3. "Territory" as herein defined shall mean(                  ).

4. "Contract Year" as defined herein shall mean whatever month there may be from the commencement of this Agreement to

(                   ) and thereafter the twelve(12) months period between (January) 1st and (December) 31st of every calendar year of this Agreement.

5. Net Sales" as herein defined shall mean Franchisee's gross sales less sales commissions, volume discounts actually granted,allowances for returns actually given, advertising costs, transportation costs, packing costs and, if Franchisee purchased raw materials and other materials from Franchisor to be used in manufacture of the Merchandise, the costs and charges for such purchase.

Net Sales 의 범위 및 개념이 Franchise fee 결정의 가장 중요한 요소가 됨으로 Definition을 보다 명확히 하거나, 경우에 따라서 매출 액의 일정%를 일괄적으로 빼도록 협의하는 방법이 있을 수 있음.

6. "Month" as herein defined shall mean the calendar month.

Calendar month란 월력상의 month를 의미하는 것으로 월력상의단 며칠일지라도 one calendar month가 된다고 봄. 예를 들어, 5 뭘 28일에서 5뭘 31일까지는 4일에 불과하지만 월력으로 계산하자면 one calendar month가 됨. 따라서 calendar month가 각종 계산. 산출의 단위로 사용될 경우는 특히 그 개념에 유의해야 함.

Article 2. License and Territory

1. Franchisor hereby grants to Franchisee and Franchisee hereby accepts the exclusive license to sell Merchandise and to utilize the said Properties in connection with the business of the manufacture, sale, promotion, and distribution of the Merchandise in the Territory subject to the terms of this Agreement.

2. During the term of this Agreement, Franchisor shall not, directly or indirectly, sell, distribute, promote or offer for sale of the Merchandise, raw materials and other materials thereof and similar merchandise thereto through other channel than Franchisee in the Territory, nor appoint any agent, distributor, licensee, franchisee or competitor of such merchandise other than Franchisee in the Territory. Franchisor shall not sell the Merchandise, raw materials and other materials thereof to any person or company who intends or has reason to resell or distribute such merchandise in the Territory.

Article 3. Experts

Notwithstanding provisions set forth in the paragraph 2 of Article 2hereof, franchiser has reserved the right to export the Merchandise to(           ) or (             ) in the Territory without any of payment to franchisee. Franchisee shall neither export the Merchandise nor permit the same to be exported, sold, or offered for sale, outside the Territory unless authorized to do so by franchiser.

Article 4. Services to be Rendered by Franchiser

franchiser shall, upon the written request of franchisee or on franchiser's initiative, provide, in confidence, the following services and/or information related the Merchandise which are then or then about to be manufactured by franchiser hereunder. All materials and information provided hereunder shall be in the English language and (weights and measures, including improvements and modification made by Franchisor during the term of this Agreement. Franchisee shall be responsible for obtaining, at its costs, any translations or conversions required by Franchisee.

a) Those furnished to Franchisee free of any payment other than the royalty hereinafter provided : information respecting the use of the material referred to in b) (iv ) of this Article; a layout, specifications, designs and drawings of plant; a sample of the raw materials that go into each Merchandise ; information as to the production capacity of each operation; cost production sheets for manufacture broken down for each operation ; information relating to quality control and to time saving devices and process techniques and procedures for manufacturing; information on inspection and testing methods ; advertising and promotional data, including material used in (                    ) national campaigns, promotional and advertising material, such as books, catalogues, cards, etc., all In the same form as given by franchiser to its salespeople; information relating to display ideas including samples; merchandising assistance as to Franchisor's intended use thereof ; and access to Franchisor's sales showroom and factories during regular business hours : and

b) Those furnished to Franchisee: ( i ) samples of all complete line of the Merchandise and packaging thereof; ( i ) the formula and ingredients for each Merchandise and raw materials thereof; ( ii ) a complete set of samples of new lines of the Merchandise to be manufactured by Franchisee, the selection to be made by Franchisee; ( iv )samples of each component part of any Merchandise including Quantities, qualities and other information for the successful manufacture thereof. Franchisee will pay for the materials, overhead, and shipping for each of the Merchandise furnished pursuant to ( i ),( ii )and ( iv ), and will pay the shipping costs for samples furnished pursuant to ( iii )

Article 5. Guaranty

franchiser guarantees that :

a) The services and information furnished by franchiser hereunder shall be fit and suitable for Franchisee's use, manufacture, sales, distribution, package and promotion of the Merchandise in the Territory :

b) the Merchandise, raw materials and other materials supplied and/or procured by franchiser for franchisee hereunder shall be free from any defect in material and workmanship, be fit for the use, sales and/or manufacture of the Merchandise and be merchantable in the Territory ;

c) the samples of the Merchandise furnished by Franchisor hereunder shall be efficient for Franchisee to select the Merchandise for the purpose of successful sales and manufacture thereof.

계약의 당사자인 Franchisor 자신이 하는 보중이므로 Guaranty 및 guarantee라는 용어보다는 Warranty 및 warrant라는 표현이 보다 적절하다고 봄. 제시된 예문에서는 특정목적 적합성(fitness for certain purpose) 및 상업성(merchantability)까지 보중하고 있어 보증의 범위가 통상적인 경우보다 넓은 편이므로, Franchisee에게 유리한 문구로 볼 수 있음.

Article 6. Guidance

franchiser shall arrange for its personnel, at the request of Franchisee to visit Franchisee's place of business to assist Franchisee for reasonable periods of time in undertaking the manufacture and sale of the Merchandise. From the date of departure of such personnel from their headquarters to visit Franchisee to the date of their return to such headquarters, Franchisee agreed to reimburse franchiser for the adequate traveling and living expenses incurred by such personnel ducting said period or on any other basis agreed by both parties hereto.

Article 7. Training.

franchiser agrees that, upon request made by Franchisee in writing, a reasonable number of personnel of Franchisee may visit franchiser's place of business in (              ) for the purpose of obtaining guidance and training by Franchiser in the use of the Properties. It is understood by both parties that the number of personnel engaging in such visits, the number of visits and the nature and extent of the guidance and training provided shall be reasonable and consistent with the purpose of this Agreement. Franchisee shall bear all of the actual expenses in connection with such visits and guidance and training activity.

Article 8. Franchisee's Obligation

During the term of this Agreement Franchisee shall :

a) Not use the franchiser's trademarks or any part or simulation thereof in its corporate, business, or firm name or title, nor use nor permit the use of said trademarks or formulas, samples, methods, or data supplied by franchiser hereunder or any methods, inventions,devices, or other knowledge or Information acquired by Franchisee in the course of manufacturing the Merchandise, for any other purpose than upon or in connection with the Merchandise:

b) Not allow to be sold any Merchandise whose (          ) or Whose expiry date for quality or fitness has passed the date or length of time in which the Merchandise should be hold shall be according to franchiser's standards and guidelines ; provided however after removal of franchiser's trademarks, Franchisee may sell In closeout sales ;

c) Not do anything which might prejudice or invalidate any of the Properties ;

d) Keep franchiser informed as to all locations where the Merchandise are manufactured by Franchisee ;

e) Except in the case of closeouts, cause each Merchandise manufactured or sold by Franchisee and all boxes, cartons, and other containers in which same are sold at wholesale and retail to be legibly imprinted with the Franchisor's trademarks and/or such other trade name and trademarks, if any, as franchiser may, from time to time, direct.

Article 9. Labeling, Packaging and Advertising

1. All Merchandise shall have, in a manner previously approved by franchiser, a label with the trademark agreed between the parties hereto. All advertising and promotional materials used by Franchisee must have the prior written approval of franchiser.

2. Franchisee shall submit to Franchisor for its prior written approval, all new tags, labels and containers, and all packaging, advertising, promotional and display materials or the like containing or referring to the Properties.

Article 10. Use of Trade Name

During the term of this Agreement, Franchisee shall use the corporate or business name of (                ) or (                ), or otherwise where the description of (                   ) is to be used, Franchisee may incorporate a subsidiary company by using any of such names,but if the operation of the subsidiary company shall be by sublicense,then Franchisee shall issue a written guarantee to franchiser as to its subsidiary. Upon termination of this Agreement, Franchisee shall remove or cause to remove the word (           ) from the corporate and business name and appoints and authorizes franchiser to file such removal with the (                ) and with any other agency of the government of (                        ).

Article 11. Trademarks

1. Franchisee hereby undertakes and agrees that, except as franchiser may otherwise consent in writing, it shall use the trademark

"(                   )" on all Merchandise manufactured by it or purchased from franchiser and sold in the Territory.

2. Franchisee recognizes franchiser's ownership of the said trademark in (                 ), but that in (                       ) Franchisee has obtained using rights of the trademark (                        ) for (                     ), that Franchisee shall retain such using rights during the term of this Agreement and extension.

Article 12. Property Right

1. Franchisee recognizes the great value of the goodwill associated with the Properties and acknowledges that the Properties and all rights therein and the goodwill pertaining thereto belong exclusively to franchiser. Franchisee agrees to cooperate fully and in good faith with franchiser for the purpose of securing, reserving, and protecting Franchisor's rights in and to the Properties and to notify franchiser of any infringements of said Properties.

2. Franchisor shall, at its sole option and cost, pursue any such infringements. Franchisee hereby agrees that its every use of the Properties shall inure to the benefit of Franchiser and that Franchisee shall net at any time acquire any rights in such Properties by virtue of any use it may make of the Properties. Upon request of Franchisee, Franchisor shall file industrial property rights in relation to the Properties and/or the Merchandise in the Territory for the purpose of securing Franchisee's selling and manufacturing activities of the Merchandise or, if franchiser intends not to file such rights, Franchisor shall allow Franchisee to file such rights at Franchisee's own cost.

Article 13. Quality of Merchandise

Franchisee agrees that the Merchandise covered by this Agreement shall be of high standard and of such style, appearance, and quality as to be adequate and suited to their exploitation to the best advantage and to the protection and enhancement of the Properties and the goodwill pertaining thereto, that such Merchandise will be manufactured,sold, packaged, promoted, and distributed in accordance with all applicable laws of the Territory and that the policy of sale, distribution, and/or exploitation by Franchisee shall be of high standard and to the best advantage and that the same shall in no manner reflect adversely upon the good name of Franchisor or any of its activities or the Properties. To this end, Franchisee shall, before selling or distributing any Merchandise, furnish to franchiser, free of cost for its written approval, a reasonable number of samples of the Merchandise. The quality and style of such Merchandise shall be subject to the approval of Franchisor. Any item submitted to Franchisor shall not be deemed approved unless and until the same shall be approved by franchiser in writing. After samples have been approved pursuant to this Article,Franchisee shall not depart therefrom in any material respect without franchiser's prior written consent. franchiser shall not withhold its approval unreasonably. If franchiser withhold its approval, Franchiser shall give Franchisee a notice to that effect, accompanied by detailed reasons for withholding its approval in writing sixty(60) days after the date when Franchisee submitted samples to Franchisor. Should franchiser fail to give such a notice to Franchisee within the said period, franchisee may deem it that samples have been approved by franchiser, and Franchisee may commence the sale of such Merchandise. Franchisee further agrees that representatives of franchiser may have access to Franchisee's facilities during regular business hours to permit Franchisee to further check the nature and quality of the Merchandise.

Article 14. Materials

If Franchisee desires to purchase from Franchiser (                      )' row materials or other materials used by Franchisee, for the purpose of manufacturing the Merchandise pursuant to this Agreement, franchiser shall supply such materials to Franchisee on the most favorable conditions. Acceptance of orders by franchiser shall be subject to the terms and conditions of sales being acceptable to franchiser and to payment being made by (                        ).

Article 15. License Fee

1. Franchisee shall pay to franchiser upon the signing of this Agreement, a nonrefundable, noncreditable, initial license fee of

(                        ).

Franchisee의 매출액과는 상관없이 계약의 초기단계에서 지불되는 선불금 성격의 대가임

2. For each Contract Year, Franchisee shall pay to franchiser royalties on each of the amounts of Net Sales of the Merchandise for each Contract Year as follows :

Contract year 란 Calendar Year에 대비되는 개념으로서 당해 계약의 발효일로부터 만 1년이 되는 기간임. 예를 들어, 1994. 2. 28일에 계약이 발효된다면 제1차 Contract Year는 1995. 2. 27일까지가 된다는 의미임. 그러나 이러한 Contract Year의 적용, 채택이 일견 합리적인 것으로 보일지 모르나, 실제에 있어서는 Contract Year기준의 매출액의 집계나 Net Sales의 산출이 지극히 어려우므로, 어떠한 Year기준으로 할 것 인지는 실제의 경우에 보다 신중히 고려할 필요가 있음.

Amount of Contract Year Net Sales                       Percent Royalty Net Sales

From   (                                  )

to      (                                  )             (                    ) %

From   (                                  )

to      (                                  )             (                    ) %

Above (                                  )              (                    ) %

provided however, commencing on (                         ) and for each Contract Year thereafter, if Franchisee shall have yearly net sales of (                  ) or more, Franchisee shall pay a royalty of only (                   ) percent (         %) on Net Sales for that Contract Year.

3. Franchisee guarantees Net Sales of the Merchandise for each Contract Year of this Agreement as follows:

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )     (                           )

Contract Year of (                   )  and for each Contract Year thereafter

(                                             )

계약연도별 최저 매출액(minimum)보중조항으로 볼 수 있는데, 다음 4항의 Net Sales 금액 일정기준 미달시의 계약조기종료권과 연결시켰을 때 사실상의 의무조항적 성격을 띠고 있음. 따라서 Franchisee의 입장에서는 삭제 또는 대폭 수정할 필요 있음.

4. Franchisor shall have the option to terminate this Agreement if Net Sales in (                     ) are less than (              ).

Article 16. Payment

1. Franchisee agrees to keep full, accurate, and compete books of account and other records in sufficient detail to enable the parties to properly ascertain the royalty payable hereunder and to permit Franchiser or their authorized representatives (including public accountants) access to and inspection of Franchisee's offices, factories, books and records, which shall include the right to make a complete annual or other public audit, all at Franchisor's own cost unless Franchisee shall have underpaid the royalty payable for a calendar year by (                 %) or more in which case the costs of the audit shall be an Franchisee's expense.

2. On or before the (          ) day following each (                ) months of a Contract Year, Franchisee shall send franchiser a signed statement setting forth the sales of the Merchandise for such (               ) months and shall concurrently pay to Franchiser a sum equivalent to the higher of the following:( i )the royalty based upon the sales of the Merchandise during such period of

(                ) months,(ii) (               ) of the royalty on minimum guaranteed Net Sales for the Contract Year of which said

(                ) months is a part. If the total of the (                 ) payments made for any Contract Year exceeds the amount which Franchisee is required to pay for such Contract Year hereunder, such excess shall be credited against the (               ) royalties becoming due to Franchisor in the ensuing Contract Year.

3, In calculating the (           ) amount of any royalty payment, the (                ) shall be converted into (                       ) at the exchange rate at which Franchisee may legally purchase (                   ) with (                    ) for transfer to the (                    ) on the date of payment if paid on or before the due date. If there should exist multiple rates of exchange for the purchase of (         )

with (                ), Franchisee shall use the legally available rate most favorable to Franchisor.

4. All payments by Franchisee under this Agreement shall be made in (                ) in (                       ), otherwise directed by Franchisor. If the law of the Territory prohibits any payment becoming due hereunder from being made in (                          ) as aforesaid, then as long as such prohibition exists, payment as aforesaid, then as long as such prohibition exists, payment shall be made in the currency of the Territory and the respective obligations of the parties hereunder shall continue unaffected thereby except that if by reason of such law payment for the items to be furnished by Franchisor under Article 4 b) cannot be made in (             ) as aforesaid, franchiser shall not be required to furnish the same as long as such condition shall continue to exist.

5. Any taxes required to be withheld from royalties due to franchiser, shall be paid by Franchisee to the appropriate governmental agency, and the royalties remitted by Franchisee to Franchisor shall be the net amount after such taxes have been withheld. In the event that an exemption from such withholding or other taxes is available under a treaty or otherwise, Franchisee shall advise Franchisor accordingly and shall obtain such exemption for Franchisor. Franchisee further agrees to act as agent for franchiser in such tax matters and to report to franchisor promptly thereon, in particular, Franchisor shall provide certification or proof of payment of any taxes due and paid, with the royalty reports submitted to Franchisee, Including the sending of copies of the respective tax rectums, tax assessments and vouchers on any taxes paid by it on behalf of Franchisor, sufficient for Franchiser to obtain credit for such payments in (                    ).

Franchisor가 벌게 된 royalty소득에 대하여는, 소득자인 franchiser가 관련 withholding taxes를 부담토록 함이 합리적이라고 봄. 따라서, Franchisee의 입장에서는 예문의 내용을 수 정해야 할 것임.

Article 17. Default

If either party shall ( i ) (ail to make any payment on its due date;or ( ii ) default in the performance of any other term or provision of this Agreement and such default is not cured by it within thirty (30)days after notice by the other party: or ( iii ) go into liquidation, be dissolved, become insolvent or bankrupt or a receiver of any of its assets is appointed: or (iv) without the written consent of the other party first had and obtained, directly or indirectly assign, hypothecate or otherwise part with this Agreement, an interest therein, its business or any substantial portion of its assets; then and in any such event,the other party, by notice to such party, given at any time after the occurrence of such event, forthwith terminate this Agreement as and for a breach hereof, whereupon this Agreement shall then terminate as fully and completely as if it had reached its expiration date.

7rticle 18. Term

This Agreement shall commence on (                  ) and (                   ) terminate on (                  ). Franchisee, at its option, may renew this Agreement for (                 ) additional (                ) year terms,provided that Franchisee Is in full compliance with the provisions of this Agreement and has provided franchiser with written notice of its intent to renew this Agreement at least six (6) months prior to the termination date set forth above or the date of termination of each successive (           ) year term.

Article 19. Disputes

Any controversy, claim, or dispute arising out of or relation to this Agreement or the breach or alleged breach thereof, shall be finally settled by arbitration in (               ) to be conducted by (                  ) in accordance with the Commercial Arbitration Rules of the said Association. The provisions of this Article shall survive the termination, expiration, breach or alleged breach of this Agreement.

Article 20. : Step after Termination

Upon the expiration or sooner termination of this Agreement, Franchisee shall forthwith and thenceforth abstain from :

a) Using any of the Properties and shall accordingly remove Franchiser's labels from all Merchandise prior to selling or offering same for sale:

b) In any way using or referring the Franchisor and/or its past association with franchiser ;

c) Manufacturing or dealing in any manner whatsoever in any Merchandise made in accordance with formulas, samples, and data supplied by franchiser hereunder;

d) Using any of said formulas, samples, methods and data, or copies thereof ;

e) Using any boxes, cartons, or containers bearing the Franchisor's name or trademarks : and

f) Otherwise incorporating the whole or any part of the construction or any of the features of the Merchandise as disclosed by franchiser to Franchisee during the term of this Agreement.

Article 21. Assignment

This Agreement and all rights and duties hereunder are personal to Franchisor and Franchisee and shall not, without the written consent of the other party, be assigned, mortgaged, or otherwise encumbered by either party or by operation of law; provided however, Franchisee may sublicense, may use contractors in manufacturing operations and may use sales agents or distributors in the sale of the Merchandise after mutual negotiation.

Article 22. Notices

All notices and statements to be given shall be sent by registered mail to the respective addresses of the parties as set forth above unless notification of a change of address is given in writing, and the date of mailing shall be deemed the date the notice or statement is given.

Article 23. Non-Waiver

None of the terms of this Agreement can be waived or modified except by an express agreement in writing signed by both parties. There are no representations, promises, warranties, covenants, or undertaking other than those contained in this Agreement, which represents the entire understanding of the parties.

Article 24. Governing Laws

This Agreement shall be interpreted in accordance with the laws of (              ) and shall be binding upon the parties hereto, their

respective successors and assigns.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their proper officers duly authorized the day and year first above written.

Franchisor :

By

(                                                      )

Franchisee :

By

(                                                       )