The Franchise Lease Agreement is a specialized legal instrument used when a franchisor either owns or controls the premises from which the franchised business will operate. This document is essential in the New Zealand market where property rights and franchise operations must comply with local commercial law, including the Property Law Act 2007 and various commercial regulations. It integrates franchise operational requirements with property lease obligations, ensuring that the franchisee's use of the premises aligns with the franchise system's standards. The agreement typically includes detailed provisions for both the franchise relationship (such as brand standards, operating procedures, and royalties) and the property lease (including rent, maintenance, and property use restrictions). This type of agreement is particularly common in retail and food service franchises where location and standardized premises presentation are crucial to the franchise system's success.
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1. Parties: Identification of the franchisor, franchisee, and any guarantors
2. Background: Context of the agreement, including brief description of the franchise system and property
3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement
4. Grant of Franchise: Terms of the franchise license, territory rights, and intellectual property usage
5. Grant of Lease: Key terms of the property lease including premises description and permitted use
6. Term and Renewal: Duration of both franchise and lease agreements, renewal conditions and processes
7. Rent and Financial Obligations: Rent, operating expenses, franchise fees, royalties, and payment terms
8. Franchisee Obligations: Operating standards, compliance requirements, reporting obligations
9. Franchisor Obligations: Support services, training, and ongoing assistance provided
10. Property Maintenance and Repairs: Responsibilities for maintenance, repairs, and improvements
11. Insurance and Indemnity: Required insurance coverage and indemnification provisions
12. Default and Termination: Events of default, remedies, and termination procedures
13. Post-Termination Obligations: Requirements and restrictions after agreement ends
14. Assignment and Transfer: Conditions for transferring franchise or lease rights
15. Dispute Resolution: Procedures for resolving disputes
16. General Provisions: Standard contractual provisions including notices, governing law, etc.
1. Guarantee: Personal or corporate guarantees - include when franchisee is a company
2. Development Rights: Include when franchisee has rights to develop multiple locations
3. Common Area Provisions: Include for premises in shopping centers or shared facilities
4. Environmental Compliance: Include for businesses with significant environmental impact
5. Online Operations: Include for franchises with e-commerce components
6. Crisis Management: Include for food service or high-risk operations
7. Building Access and Security: Include for premises requiring special security arrangements
8. Alterations and Fitout: Include when significant premises modifications are required
1. Schedule 1 - Premises Details: Detailed description of premises, including plans and specifications
2. Schedule 2 - Financial Terms: Detailed breakdown of all financial obligations including rent, fees, and royalties
3. Schedule 3 - Operating Manual Reference: Key provisions and requirements from the franchise operating manual
4. Schedule 4 - Fit-out Specifications: Required premises fit-out and brand standards
5. Schedule 5 - Initial Training Program: Details of required initial training for franchisee
6. Schedule 6 - Intellectual Property: List of trademarks, copyrights, and other IP included in franchise
7. Schedule 7 - Required Insurance: Detailed insurance requirements and minimum coverage
8. Schedule 8 - Guarantee Terms: Terms of any personal or corporate guarantees
9. Appendix A - Property Rules and Regulations: Building or center rules if applicable
10. Appendix B - Condition Report: Initial condition report of the premises
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