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Agency and Franchisee Agreements

Agency Agreements

  • Agents are your representative who will sell your products, without taking ownership of the products. The Agents does not take ownership, it represents you in the place where you cannot establish your shop. It showcases your product, promote your product against your competitors and sell the product at the price fixed by you. The Agent gets commissioning for selling each unit of the product.

    Appointing agent is very popular across the globe to reach out to the market where you cannot reach and someone has already established infrastructure to sell your kind of product. There are various other methods as well such as franchisee model or distributor model however each one has its own pluses and minuses. Agency is used for all across sectors and markets.

  • The agents can be appointed for:
    • Product like selling equipment, Food items, electronic items, consumption items, etc.
    • Services like advisory services, accounting services, transportation services, etc.
    Agent being your face to the market need to be selected well and should bound with terms and Conditions. The Agent also creates some obligations and risks for you as he represents you in the market. Hence drafting and signing of Agency Agreement is very crucial for your business

    The Agency agreement creates legal relation between the principal (Owner) and seller (Agent) for distribution and selling of product.

  • Benefits of Agency
    • Agency makes it possible to access to unknown market,remote market
    • Expand business without being invested in infrastructure.
    • Can help in running the business by using specialized skills without employing them directly
    • Makes it possible to represent you without your personal presence at that place.

    Like benefits of Agency there are inherent risk which agency model brings.

  • Risk of Agency
    • Principal is held responsible for the misconduct of Agent.
    • Agent can create risks for principal.
    • Principal is held liable for any illegal act conducted by Agent while representing principal.
    • For sole selling Agent, principal cannot appoint another agent during the validity of agreement in spite of weak sales or non-satisfactory performance.
    • Being an independent contractor / person, the principal do not have direct control over agent, as he would have on his employees.
  • Duties of Agent
    • To follow instruction of Principal or prevalent customs
    • Have reasonable care and skill, while perming the agency
    • To avoid conflict of interest
    • Not to make secrete profit
    • Remit Sums
    • Maintain proper books
    • Not to delegate, unless authorised.

  • Our Expertise

    We carefully understand your business and your exact requirements before drafting any agency agreement.

    We understand the risks which it can create on principals and responsibilities of both the parties. We also suggest and discuss before concluding, remedies which may be possible to employ.

Franchisee Agreements

  • A franchise is a contract between a brand owner (the franchisor) and another party (the franchisee) to use the brand, but also to obtain the product, services and Support from the franchisor.

    The franchisee actually purchases the product from franchisor own them and sell by adding his margin. The price may or may not be influenced by the Franchisor.

    While using the Franchisor brand, the franchisee is often obliged to use the shop furnishing, sign, corporate style, procedures and methods and pay for the same.

    Each franchisor has its unique requirements of his brands and would like the franchisee to follow the same to the last bit. Therefore the franchisee agreement do not have templates as the requirements are different for each franchisor. However there are some fundamental requirements of each franchisee agreements, following are some of them

    1. Location / Territory: The franchisee agreement will outline the location or the territory in which the franchisee will operate
    2. Operations: It details how the franchisee outlet will operate. These are elaborated much in details as per requirements of franchisor.
    3. Duration: The period for which the franchisee agreement is valid
    4. Training / Support: The operations as desired by franchisor entails training of franchise staff and support .In some cases the staff is provided by the franchisor while the cost is borne by Franchisee.
    5. Royalty Fees: The franchisor charges royalty part from share in profit for using their name and brand.
    6. Marketing: Who and how the marketing shall be done and who shall bear the expenses. It also list down the minimum of marketing campaign what has been agreed between franchisor and franchisee
    7. Termination / Cancellation: In what conditions the franchisee arrangement is terminated or cancelled and what are the obligations of the parties post termination.
    8. Dispute Resolution: In case of dispute the amicable dispute resolution mechanism between the parties.

    The franchisee agreements goes in explaining each of the item which either party wishes to clarify, as it is very specific to parties and for the purpose. Both the parties like the relationship to last long and flourish hence the franchisee agreements are more elaborative that Agency agreements.

  • Our Expertise

    By nature of franchisee business, what matters most in drafting and reviewing the franchisee agreement is experience in the field.

    We have handled franchisee agreement and well understand the exact requirements before drafting agreement.