MASTER FRANCHISE AGREEMENT

[// GUIDANCE: This agreement grants the right to sub-franchise within a defined territory. The Master Franchisee acts as a sub-franchisor and assumes significant obligations. This is a complex structure requiring careful legal review.]

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Grant of Master Franchise
4. Territory
5. Development Obligations
6. Fees
7. Sub-Franchising Rights and Obligations
8. Trademark License
9. Training and Support
10. Operations and Quality Control
11. Advertising and Marketing
12. Accounting and Reports
13. Insurance
14. Confidentiality
15. Term and Renewal
16. Default and Termination
17. Post-Termination Obligations
18. Transfer
19. Indemnification
20. Relationship of Parties
21. Dispute Resolution
22. General Provisions
23. Execution Block

1. PARTIES AND RECITALS

THIS MASTER FRANCHISE AGREEMENT (this "Agreement") is made and entered into as of [EFFECTIVE_DATE] (the "Effective Date"), by and between:

FRANCHISOR:
[FRANCHISOR_LEGAL_NAME], a [STATE/COUNTRY_OF_FORMATION] [ENTITY_TYPE], with its principal place of business at [FRANCHISOR_ADDRESS] ("Franchisor"); and

MASTER FRANCHISEE:
[MASTER_FRANCHISEE_LEGAL_NAME], a [STATE/COUNTRY_OF_FORMATION] [ENTITY_TYPE], with its principal place of business at [MASTER_FRANCHISEE_ADDRESS] ("Master Franchisee").

RECITALS

A. Franchisor has developed and owns a distinctive system (the "System") for the establishment and operation of [BUSINESS_DESCRIPTION] businesses operating under the trade name "[FRANCHISE_TRADE_NAME]" and associated proprietary marks.

B. Franchisor desires to expand the System into the Territory (as defined herein) through a master franchise arrangement.

C. Master Franchisee has demonstrated the financial capacity, business experience, and organizational capability to develop and manage the System in the Territory.

D. Master Franchisee desires to obtain the exclusive right to develop, operate, and sub-franchise [FRANCHISE_TRADE_NAME] businesses within the Territory.

E. Master Franchisee acknowledges receipt of Franchisor's Franchise Disclosure Document where required by applicable law.

NOW, THEREFORE, in consideration of the mutual covenants herein, the parties agree as follows:

2. DEFINITIONS

"Gross Revenue" means all revenue from Sub-Franchisees (including initial fees, royalties, and other fees) and from Master Franchisee-Owned Units, less only sales taxes collected.

"Master Franchisee-Owned Unit" means a [FRANCHISE_TRADE_NAME] business operated directly by Master Franchisee.

"Master Franchise Fee" has the meaning in Section 6.1.

"Operations Manual" means Franchisor's confidential manual, as translated and adapted for the Territory.

"Proprietary Marks" means the trademarks, service marks, trade names, and logos set forth in Exhibit C.

"Sub-Franchise Agreement" means the agreement between Master Franchisee and a Sub-Franchisee.

"Sub-Franchisee" means a person or entity granted a franchise by Master Franchisee to operate a Unit in the Territory.

"System" means Franchisor's distinctive business system for [FRANCHISE_TRADE_NAME] operations.

"Territory" means the geographic area described in Exhibit A.

"Unit" means a [FRANCHISE_TRADE_NAME] business operated under the System.

3. GRANT OF MASTER FRANCHISE

3.1 Grant of Rights

Subject to the terms of this Agreement, Franchisor grants to Master Franchisee:

(a) The exclusive right within the Territory to:
(i) Develop and operate [FRANCHISE_TRADE_NAME] Units;
(ii) Grant Sub-Franchises for the operation of Units;
(iii) Use the Proprietary Marks in connection with the foregoing; and
(iv) Use the System and Confidential Information.

(b) The non-exclusive right to use Franchisor's training materials, operations manuals, and marketing materials, as adapted for the Territory.

3.2 Exclusivity

During the term of this Agreement, provided Master Franchisee is not in default and is meeting its Development Obligations, Franchisor shall not:

(a) Operate or license others to operate Units within the Territory;
(b) Grant master franchise or area development rights in the Territory; or
(c) Sell products under the Marks directly to consumers in the Territory (except through approved e-commerce channels).

3.3 Reserved Rights

Notwithstanding the foregoing, Franchisor reserves the right to:

(a) Operate Units in the Territory in connection with an acquisition;
(b) Sell products through wholesale and institutional channels;
(c) Serve customers in the Territory from locations outside the Territory;
(d) Use alternative trademarks and brands in the Territory; and
(e) Modify the System as provided in this Agreement.

4. TERRITORY

4.1 Defined Territory

The Territory is described in Exhibit A and includes: [COUNTRY/REGION/DESCRIPTION].

4.2 Territory Restrictions

Master Franchisee shall not:

(a) Develop or operate Units outside the Territory;
(b) Grant Sub-Franchises for locations outside the Territory;
(c) Solicit customers located outside the Territory; or
(d) Sell products for use or consumption outside the Territory.

4.3 Modifications to Territory

Franchisor may reduce the Territory if Master Franchisee fails to meet Development Obligations, upon [NOTICE_DAYS] days written notice.

5. DEVELOPMENT OBLIGATIONS

5.1 Development Schedule

Master Franchisee shall develop Units (whether Master Franchisee-Owned Units or Sub-Franchised Units) according to the Development Schedule in Exhibit B.

5.2 Cumulative Obligations

Development obligations are cumulative. Master Franchisee must have the total number of Units open and operating by each milestone date.

5.3 Development Schedule

5.4 Pilot Units

Before commencing Sub-Franchising, Master Franchisee shall open and operate at least [NUMBER] Master Franchisee-Owned Units for a minimum of [MONTHS] months.

5.5 Consequences of Non-Performance

Failure to meet Development Obligations may result in:

(a) Loss of exclusivity;
(b) Reduction of Territory; and/or
(c) Termination of this Agreement.

6. FEES

6.1 Master Franchise Fee

Upon execution, Master Franchisee shall pay a non-refundable Master Franchise Fee of $[MASTER_FEE] (or equivalent in [CURRENCY]).

6.2 Continuing Royalty

Master Franchisee shall pay Franchisor a continuing royalty of [ROYALTY_PERCENTAGE]% of Gross Revenue, payable [MONTHLY/QUARTERLY] within [DAYS] days after each period.

6.3 Marketing Contribution

Master Franchisee shall contribute [AD_PERCENTAGE]% of Gross Revenue to Franchisor's international marketing fund.

6.4 Sub-Franchise Fee Structure

Master Franchisee shall collect from each Sub-Franchisee:

(a) Initial franchise fee of not less than $[MIN_INITIAL_FEE];
(b) Continuing royalty of not less than [MIN_ROYALTY]% of gross revenue; and
(c) Advertising contribution of not less than [MIN_AD]% of gross revenue.

6.5 Fee Sharing

Of the fees collected from Sub-Franchisees:

(a) [FRANCHISOR_SHARE]% of initial franchise fees shall be remitted to Franchisor;
(b) [FRANCHISOR_SHARE]% of continuing royalties shall be remitted to Franchisor;
(c) Master Franchisee shall retain the balance.

6.6 Currency and Payment

All payments to Franchisor shall be made in U.S. dollars by wire transfer to an account designated by Franchisor. Currency conversion shall be at the exchange rate on the payment due date.

6.7 Taxes

Master Franchisee shall pay all taxes imposed on payments under this Agreement. If withholding is required, Master Franchisee shall gross up payments so Franchisor receives the full amount due.

7. SUB-FRANCHISING RIGHTS AND OBLIGATIONS

7.1 Right to Sub-Franchise

After satisfying the pilot unit requirement, Master Franchisee may grant Sub-Franchises within the Territory using the approved Sub-Franchise Agreement.

7.2 Sub-Franchise Agreement

(a) Master Franchisee shall use a form of Sub-Franchise Agreement approved by Franchisor.

(b) The Sub-Franchise Agreement shall contain terms at least as protective of the System as Franchisor's standard franchise agreement.

(c) Any modifications to the approved form require Franchisor's prior written consent.

7.3 Sub-Franchisee Qualifications

Master Franchisee shall grant Sub-Franchises only to persons or entities meeting Franchisor's qualification standards, including:

(a) Adequate financial resources;
(b) Good character and reputation;
(c) Business experience; and
(d) Commitment to operate according to System standards.

7.4 Disclosure Obligations

[// GUIDANCE: If Territory is in a jurisdiction with franchise disclosure laws, Master Franchisee must comply with those requirements.]

(a) Master Franchisee shall comply with all franchise registration and disclosure requirements in the Territory.

(b) Master Franchisee shall prepare, register, and update disclosure documents as required by law.

(c) Master Franchisee shall provide Franchisor with copies of all disclosure documents and registrations.

7.5 Sub-Franchisee Training

Master Franchisee shall provide initial and ongoing training to all Sub-Franchisees equivalent to Franchisor's training program, as adapted for the Territory.

7.6 Sub-Franchisee Support

Master Franchisee shall provide Sub-Franchisees with:

(a) Site selection assistance;
(b) Pre-opening support;
(c) Operations guidance;
(d) Quality control inspections;
(e) Marketing support; and
(f) Ongoing consultation.

7.7 Enforcement

Master Franchisee shall enforce all Sub-Franchise Agreements and take appropriate action against defaulting Sub-Franchisees, including termination when warranted.

7.8 Franchisor as Third-Party Beneficiary

Franchisor shall be a third-party beneficiary of each Sub-Franchise Agreement with the right (but not obligation) to enforce its terms.

8. TRADEMARK LICENSE

8.1 Grant of License

Franchisor grants Master Franchisee a license to use the Proprietary Marks in the Territory solely in connection with this Agreement.

8.2 Ownership

Master Franchisee acknowledges Franchisor's exclusive ownership of the Proprietary Marks worldwide and agrees not to contest such ownership.

8.3 Trademark Registration

(a) Master Franchisee shall, at its expense, register the Proprietary Marks in the Territory in Franchisor's name.

(b) All registrations shall be in Franchisor's name, with Master Franchisee identified as registered user where applicable.

(c) Master Franchisee shall maintain all registrations in good standing.

8.4 Quality Control

Master Franchisee's use of the Marks shall comply with Franchisor's quality standards, and Master Franchisee shall ensure Sub-Franchisee compliance.

8.5 Protection of Marks

(a) Master Franchisee shall notify Franchisor of any infringement or challenge to the Marks in the Territory.

(b) Franchisor shall have sole discretion to determine the response to any infringement.

(c) Master Franchisee shall cooperate with Franchisor in protecting the Marks.

8.6 No Assignment

The trademark license granted herein may not be assigned or sublicensed except to Sub-Franchisees pursuant to approved Sub-Franchise Agreements.

9. TRAINING AND SUPPORT

9.1 Initial Training

Franchisor shall provide initial training for Master Franchisee's key personnel at Franchisor's headquarters, including:

(a) Operations training: [HOURS] hours
(b) Management training: [HOURS] hours
(c) Training of trainers: [HOURS] hours

Master Franchisee shall pay travel, lodging, and wage costs.

9.2 Ongoing Training

Franchisor shall provide periodic updates and training at Franchisor's or Master Franchisee's location.

9.3 Operations Manual

(a) Franchisor shall provide the Operations Manual in electronic format.

(b) Master Franchisee may translate and adapt the Manual for the Territory with Franchisor's approval.

(c) Master Franchisee shall keep the Manual updated and distribute to Sub-Franchisees.

9.4 Ongoing Support

Franchisor shall provide:

(a) Consultation on operational issues;
(b) Product and service development;
(c) System updates and improvements;
(d) Marketing materials and campaigns; and
(e) Technology platform support.

10. OPERATIONS AND QUALITY CONTROL

10.1 System Standards

Master Franchisee shall operate all Master Franchisee-Owned Units and ensure all Sub-Franchised Units are operated in accordance with System standards.

10.2 Quality Control

Master Franchisee shall implement a quality control program including:

(a) Regular inspections of all Units;
(b) Mystery shopper programs;
(c) Customer feedback systems;
(d) Compliance auditing; and
(e) Corrective action procedures.

10.3 Franchisor Inspection Rights

Franchisor may inspect any Unit in the Territory upon reasonable notice to verify compliance with System standards.

10.4 Product Standards

Master Franchisee shall ensure all products and services meet Franchisor's quality specifications, whether sourced locally or from approved suppliers.

10.5 Local Adaptations

Any modifications to products, services, or operations for the Territory require Franchisor's prior written approval.

11. ADVERTISING AND MARKETING

11.1 Territory Marketing Fund

Master Franchisee shall establish and administer a Territory marketing fund, funded by contributions from Sub-Franchisees.

11.2 Marketing Plan

Master Franchisee shall develop and implement annual marketing plans for the Territory, subject to Franchisor's approval.

11.3 Advertising Standards

All advertising and marketing materials must:

(a) Comply with Franchisor's brand guidelines;
(b) Be approved by Franchisor before use;
(c) Comply with local law; and
(d) Be in good taste.

11.4 International Marketing

Master Franchisee's contribution to Franchisor's international marketing fund may be used for international campaigns that benefit the Territory.

12. ACCOUNTING AND REPORTS

12.1 Financial Statements

Master Franchisee shall provide Franchisor:

(a) Monthly royalty reports within [DAYS] days;
(b) Quarterly financial statements within [DAYS] days;
(c) Annual audited financial statements within [DAYS] days; and
(d) Unit-level performance reports as requested.

12.2 Sub-Franchise Reports

Master Franchisee shall maintain and provide:

(a) List of all Sub-Franchisees;
(b) Copies of all Sub-Franchise Agreements;
(c) Sub-Franchise sales reports; and
(d) Unit opening and closing reports.

12.3 Audit Rights

Franchisor may audit Master Franchisee's records upon reasonable notice. If an audit reveals underreporting exceeding 3%, Master Franchisee shall pay audit costs.

12.4 Record Retention

Master Franchisee shall retain all financial and operational records for at least [YEARS] years.

13. INSURANCE

13.1 Required Coverage

Master Franchisee shall maintain:

(a) Commercial general liability: $[AMOUNT];
(b) Products liability: $[AMOUNT];
(c) Professional liability/E&O: $[AMOUNT];
(d) Property insurance: replacement value;
(e) Workers' compensation: as required by law; and
(f) Such other coverage as required by local law.

13.2 Sub-Franchisee Insurance

Master Franchisee shall require each Sub-Franchisee to maintain appropriate insurance coverage.

13.3 Policy Requirements

All policies shall name Franchisor as additional insured and provide [DAYS] days notice of cancellation.

14. CONFIDENTIALITY

14.1 Confidential Information

Master Franchisee acknowledges that the System, Operations Manual, training materials, and business information constitute Franchisor's Confidential Information and trade secrets.

14.2 Obligations

Master Franchisee shall:

(a) Use Confidential Information solely for purposes of this Agreement;
(b) Protect Confidential Information using reasonable security measures;
(c) Disclose Confidential Information only to personnel with a need to know;
(d) Require Sub-Franchisees to maintain confidentiality; and
(e) Return or destroy Confidential Information upon termination.

14.3 Survival

Confidentiality obligations shall survive termination indefinitely.

15. TERM AND RENEWAL

15.1 Initial Term

This Agreement shall commence on the Effective Date and continue for [INITIAL_TERM] years (the "Initial Term").

15.2 Renewal

Master Franchisee may renew for [NUMBER] additional terms of [RENEWAL_TERM] years each, provided:

(a) Master Franchisee provides written notice [MONTHS] months before expiration;
(b) Master Franchisee is not in default;
(c) Master Franchisee has met Development Obligations;
(d) Master Franchisee executes then-current form of agreement;
(e) Master Franchisee pays renewal fee of $[RENEWAL_FEE]; and
(f) Master Franchisee executes general release (where permitted by law).

16. DEFAULT AND TERMINATION

16.1 Termination by Franchisor Without Cure

Franchisor may terminate immediately upon notice if Master Franchisee:

(a) Fails to meet Development Obligations for [NUMBER] consecutive periods;
(b) Abandons the master franchise;
(c) Makes unauthorized transfer;
(d) Becomes insolvent or files bankruptcy;
(e) Is convicted of a felony;
(f) Materially misrepresents information;
(g) Engages in conduct materially harmful to the Marks; or
(h) Fails to register Marks as required.

16.2 Termination by Franchisor With Cure

Franchisor may terminate upon [CURE_DAYS] days notice if Master Franchisee:

(a) Fails to pay amounts due;
(b) Fails to submit required reports;
(c) Breaches any other material provision; or
(d) Fails to enforce Sub-Franchise Agreements.

16.3 Termination by Master Franchisee

Master Franchisee may terminate if Franchisor materially breaches and fails to cure within [DAYS] days after written notice.

16.4 Consequences of Termination

Upon termination:

(a) All Sub-Franchise Agreements shall be assigned to Franchisor or its designee;
(b) All development rights shall cease;
(c) All trademark rights shall revert to Franchisor; and
(d) Provisions of Section 17 shall apply.

17. POST-TERMINATION OBLIGATIONS

17.1 Cessation of Rights

Upon termination or expiration, Master Franchisee shall immediately:

(a) Cease using the Proprietary Marks;
(b) Cease holding itself out as a [FRANCHISE_TRADE_NAME] master franchisee;
(c) Cease granting Sub-Franchises;
(d) Cancel trademark registrations or transfer to Franchisor; and
(e) De-identify all Master Franchisee-Owned Units.

17.2 Assignment of Sub-Franchises

(a) Master Franchisee hereby assigns to Franchisor all Sub-Franchise Agreements, effective upon termination.

(b) Franchisor may assume or terminate Sub-Franchise Agreements at its sole discretion.

(c) Master Franchisee shall cooperate in transitioning Sub-Franchisee relationships.

17.3 Return of Materials

Master Franchisee shall return:

(a) Operations Manual and all copies;
(b) Training materials;
(c) Marketing materials;
(d) Customer data and records; and
(e) All Confidential Information.

17.4 Non-Competition

For [YEARS] years following termination, Master Franchisee shall not engage in any business competitive with [FRANCHISE_TRADE_NAME] in the Territory.

17.5 Payment of Amounts Due

Master Franchisee shall pay all outstanding amounts within [DAYS] days of termination.

18. TRANSFER

18.1 Transfer by Franchisor

Franchisor may transfer this Agreement without Master Franchisee's consent.

18.2 Transfer by Master Franchisee

Master Franchisee shall not transfer any interest without Franchisor's prior written consent.

18.3 Conditions to Transfer

Franchisor may condition consent upon:

(a) Payment of transfer fee of $[TRANSFER_FEE];
(b) Transferee meeting Franchisor's qualifications;
(c) Transferee executing current form of agreement;
(d) Master Franchisee being in compliance;
(e) Payment of all amounts owed; and
(f) Execution of non-compete and release.

18.4 Right of First Refusal

Franchisor has the right of first refusal for any proposed transfer.

19. INDEMNIFICATION

19.1 By Master Franchisee

Master Franchisee shall indemnify Franchisor against all claims arising from:

(a) Operation of Units in the Territory;
(b) Grant or administration of Sub-Franchises;
(c) Employment matters;
(d) Product liability claims;
(e) Breach of this Agreement; and
(f) Violation of applicable law.

19.2 By Franchisor

Franchisor shall indemnify Master Franchisee against claims arising from:

(a) Franchisor's breach of this Agreement; and
(b) Infringement claims related to the Marks (except where caused by Master Franchisee's unauthorized use).

20. RELATIONSHIP OF PARTIES

20.1 Independent Contractor

The parties are independent contractors. Master Franchisee is not Franchisor's agent, partner, or employee.

20.2 No Authority to Bind

Master Franchisee has no authority to bind Franchisor.

20.3 Separate Entity

Master Franchisee shall operate as a separate legal entity from Sub-Franchisees.

21. DISPUTE RESOLUTION

21.1 Governing Law

This Agreement shall be governed by the laws of [GOVERNING_LAW_STATE/COUNTRY].

21.2 Arbitration

Disputes shall be resolved by ICC arbitration in [ARBITRATION_CITY], conducted in English.

21.3 Injunctive Relief

Either party may seek injunctive relief in any court of competent jurisdiction.

21.4 Waiver of Jury Trial

The parties waive right to jury trial.

22. GENERAL PROVISIONS

22.1 Entire Agreement

This Agreement constitutes the entire agreement between the parties.

22.2 Amendment

Amendments must be in writing signed by both parties.

22.3 Severability

Invalid provisions shall be severed; remaining provisions shall continue.

22.4 Notices

Notices shall be in writing to addresses in the preamble.

22.5 Language

This Agreement is executed in English. Any translation is for convenience only.

22.6 Counterparts

This Agreement may be executed in counterparts.

23. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Master Franchise Agreement as of the Effective Date.

FRANCHISOR:

[FRANCHISOR_LEGAL_NAME]

MASTER FRANCHISEE:

[MASTER_FRANCHISEE_LEGAL_NAME]

EXHIBITS

Exhibit A - Territory Description and Map
Exhibit B - Development Schedule
Exhibit C - Proprietary Marks
Exhibit D - Approved Sub-Franchise Agreement Form
Exhibit E - Fee Schedule
Exhibit F - Principal Information and Guaranty

NOTICE: This template is provided for informational purposes only and does not constitute legal advice. Master Franchise Agreements are complex international transactions requiring expertise in franchise law, intellectual property, and international business law. Consult qualified counsel in all relevant jurisdictions.