Master Franchise Contract Template for Hong Kong

The Master Franchise Contract serves as the foundational document for expanding franchise operations within a designated territory under Hong Kong law. This agreement is typically used when a franchisor wishes to expand their business internationally or across large territories through a master franchisee who will develop and manage a network of sub-franchisees. The document comprehensively covers the master franchisee's rights and obligations, including territory development schedules, sub-franchising procedures, fee structures, quality control mechanisms, and intellectual property protection. It incorporates specific provisions required under Hong Kong's legal framework, addressing areas such as competition law, trademark protection, and data privacy. The agreement is essential for businesses seeking to establish a structured franchise expansion while maintaining brand consistency and legal compliance in the Hong Kong market and designated territories.

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

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

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Grant of Rights: Scope of master franchise rights, territorial exclusivity, and sub-franchising rights

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Development Schedule: Timeline and targets for opening sub-franchised units in the territory

7. Fees and Payments: Initial fees, ongoing royalties, sub-franchising fees, and payment terms

8. Intellectual Property Rights: Use of trademarks, copyright materials, and protection of the franchise system

9. Training and Support: Franchisor's obligations for initial and ongoing training and support

10. Quality Control: Standards, specifications, and monitoring of sub-franchisees

11. Sub-Franchising Procedures: Process and requirements for granting sub-franchises

12. Advertising and Marketing: Marketing obligations, advertising funds, and approval processes

13. Confidentiality: Protection of confidential information and trade secrets

14. Non-Competition: Restrictions during and after the term of the agreement

15. Default and Termination: Grounds for termination and consequences of default

16. Post-Termination Obligations: Obligations and restrictions following termination

17. Dispute Resolution: Process for resolving disputes under Hong Kong law

18. General Provisions: Standard contractual provisions including notices, assignment, and amendments