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EXHIBIT 10.14
ZLAND AUSTRALIA PTY LIMITED
THE PERSON OR CORPORATION SPECIFIED IN THE SCHEDULE
FRANCHISE AND AGENCY AGREEMENT
(C)SWAAB ATTORNEYS
Swaab House
▇▇▇▇▇ ▇, ▇▇ ▇'▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
DX ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Email: ▇▇▇▇@▇▇▇▇▇.▇▇▇.▇▇
Reference: RHB:991126
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INDEX
1. DEFINITIONS AND INTERPRETATION......................................... 1
1.1 Definitions........................................................ 1
1.2 Interpretation..................................................... 5
2. GRANT OF FRANCHISE..................................................... 6
2.1 Appointment of Franchisee.......................................... 6
2.2 Franchisor's Agent................................................. 6
2.3 Obligations of Franchisor.......................................... 7
3. COOLING OFF, COMMENCEMENT, TERMINATION AND RENEWAL..................... 7
3.1 Cooling Off........................................................ 7
3.2 Initial Term....................................................... 7
3.3 Renewal............................................................ 7
3.4 Terms of Renewal Agreement......................................... 7
4. PRECONDITIONS.......................................................... 8
4.1 Preliminary Obligations............................................ 8
4.2 Obligations Upon Execution......................................... 8
4.3 Termination........................................................ 8
5. TERRITORY.............................................................. 8
5.1 Exclusive Territory................................................ 8
5.2 Exception to Territory............................................. 8
5.3 Specific Territory................................................. 8
6. CUSTOMER MANAGEMENT.................................................... 9
6.1 Franchisor Obligation.............................................. 9
6.2 Exceptions......................................................... 9
6.3 Enquiries from Outside the Territory............................... 9
7. PAYMENT OBLIGATIONS.................................................... 9
7.1 Franchise Fee...................................................... 9
7.2 National Advertising Fee.......................................... 9
7.3 Renewal Fee........................................................ 10
7.4 Late Payments...................................................... 10
8. THE CODE............................................................... 10
8.1 Compliance......................................................... 10
8.2 Termination........................................................ 10
8.3 Effect............................................................. 10
9. INTELLECTUAL PROPERTY.................................................. 10
9.1 Use of Intellectual Property....................................... 10
9.2 Franchisor Retains Title To Property............................... 11
9.3 Restriction On Use Of Intellectual Property........................ 11
9.4 Damages and Costs.................................................. 11
9.5 Franchisee To Comply With Franchisor Directions.................... 12
9.6 Title To Trademarks................................................ 12
9.7 Franchisee To Use Business Name.................................... 12
9.8 Discontinuance On Default.......................................... 12
9.9 Franchisee Not To Assign Name...................................... 12
10. NATIONAL MARKETING FUND............................................... 12
10.1 The Fund.......................................................... 12
10.2 Objectives........................................................ 12
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10.3 Appointment of Franchisor......................................... 13
10.4 The Code.......................................................... 13
11. FRANCHISEE'S MARKETING/ADVERTISING OBLIGATIONS........................ 13
11.1 Promotion......................................................... 13
11.2 Internet Advertising.............................................. 13
11.3 Franchisor to Approve Marketing Material.......................... 13
11.4 Franchisee Indemnity.............................................. 14
12. TRAINING AND SUPPORT.................................................. 14
12.1 Initial Training Program.......................................... 14
12.2 Additional Training............................................... 14
12.3 Franchisee Solely Responsible..................................... 14
12.4 Employees To Be Trained........................................... 14
12.5 Additional Assistance............................................. 15
12.6 Costs and Expenses................................................ 15
13. COMPANY STORE ARRANGEMENTS............................................ 15
13.1 Franchisor May Enter.............................................. 15
13.2 Franchisee Obligation............................................. 15
13.3 Apportionment of Fees............................................. 15
13.4 Assignment of Contract............................................ 15
14. OPERATING THE FRANCHISED BUSINESS..................................... 15
14.1 Franchisee To Conduct Franchised Business......................... 15
14.2 Minimum Work Commitment........................................... 16
14.3 Business Sole Undertaking......................................... 16
14.4 Competition; Other Business...................................... 16
14.5 Other Products and Services....................................... 16
14.6 Employee Requirements............................................. 16
14.7 Exclusivity....................................................... 17
14.8 Independent Contractors........................................... 17
14.9 Liability for Independent Contractors and Employees............... 17
14.10 Franchisee To Obtain Permits And Licences........................ 17
14.11 Franchisee Advertising / Marketing Standards..................... 17
14.12 Premises......................................................... 18
14.13 Equipment........................................................ 18
14.14 Business System and Services..................................... 18
14.15 Accepting Business............................................... 19
14.16 Franchisee Meetings.............................................. 19
15. OPERATING STANDARDS................................................... 19
15.1 Not Hold Itself Out............................................... 19
15.2 Operating Standards............................................... 19
15.3 Disputes.......................................................... 20
16. ACCOUNTING AND INVOICE................................................ 20
16.1 Responsibility For Invoicing...................................... 20
16.2 No Other Products Invoiced........................................ 20
16.3 Accounting to the Franchisee...................................... 20
16.4 Commissions....................................................... 21
16.5 GST............................................................... 21
17. AUDIT RIGHTS.......................................................... 21
17.1 Franchisee's Rights............................................... 21
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17.2 Franchisor's rights............................................... 21
18. RECORD KEEPING AND REPORTING.......................................... 21
18.1 Business Records.................................................. 21
18.2 Records........................................................... 21
18.3 Franchisee to Provide Reports..................................... 22
18.4 Inspection of Records............................................. 22
18.5 Costs of Inspection............................................... 22
19. THIRD PARTY INTEREST.................................................. 23
19.1 No Encumbrances................................................... 23
20. PERFORMANCE STANDARD.................................................. 23
20.1 Comparison........................................................ 23
20.2 Performance Requirement........................................... 23
21. CORRECTION OF DEFECTS................................................. 24
21.1 The Franchisor's Obligation To Correct Or Replace Defects......... 24
21.2 Franchisor to Correct............................................. 24
21.3 Correction Of Defects............................................. 24
22. WARRANTIES............................................................ 24
22.1 By the Franchisee................................................. 24
22.2 By the Franchisor................................................. 25
22.3 Scope of Warranty................................................. 25
22.4 Warranties Not Included........................................... 25
23. LIMITATION OF LIABILITY............................................... 26
23.1 The Franchisor Not Responsible.................................... 26
23.2 Implied Warranties Excluded....................................... 26
23.3 Exclusion Of Damages.............................................. 26
23.4 Severability Of Actions........................................... 26
24. INDEMNITIES........................................................... 26
24.1 Indemnity of Franchisee........................................... 26
24.2 Limitation Of Indemnity........................................... 27
24.3 Indemnity of Franchisor........................................... 27
24.4 Proceedings....................................................... 27
25. MANUALS / CONFIDENTIALITY............................................. 28
25.1 Franchisor May Develop Manuals.................................... 28
25.2 Amendments and Updates............................................ 28
25.3 Franchisee To Comply With Manuals................................. 28
25.4 Manual is Confidential............................................ 28
25.5 Confidentiality................................................... 28
26. INSURANCE............................................................. 29
26.1 Franchisee Insurance.............................................. 29
26.2 Certificates of Currency.......................................... 29
26.3 Franchisor May Require Increased Limits........................... 29
27. ASSIGNMENT............................................................ 29
27.1 Franchisor May Assign............................................. 29
27.2 Franchisee May Not Assign Without Consent......................... 29
27.3 Disposal Where Underlying Interests Change........................ 30
27.4 First Refusal..................................................... 30
27.5 Right of Sale..................................................... 31
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28. DEFAULT............................................................... 31
28.1 Events of Default................................................. 31
29. TERMINATION........................................................... 32
29.1 Termination by Franchisor......................................... 32
29.2 Termination by Franchisee......................................... 32
29.3 Cross Default..................................................... 32
30. CONSEQUENCES OF TERMINATION........................................... 33
30.1 Payment of Accounts............................................... 33
30.2 Return Materials.................................................. 33
30.3 Transfer Registrations............................................ 33
31. RESTRAINTS............................................................ 33
31.1 Restraint Covenants............................................... 33
31.2 Deemed Conduct of Business........................................ 34
31.3 Non Solicitation.................................................. 34
31.4 Non-Enticement.................................................... 34
31.5 Restraints Reasonable............................................. 34
31.6 Validity.......................................................... 34
32. RELATIONSHIP BETWEEN THE PARTIES...................................... 34
33. DISPUTE RESOLUTION.................................................... 35
33.1 Procedure......................................................... 35
33.2 Other Remedies.................................................... 36
33.3 Not to Affect Termination Rights.................................. 36
34. NOTICES............................................................... 36
34.1 Method of Giving Notices.......................................... 36
34.2 Time of Receipt................................................... 36
34.3 Address of Parties................................................ 36
35. LAW AND JURISDICTION.................................................. 37
35.1 Governing Law..................................................... 37
35.2 Submission to Jurisdiction........................................ 37
36. GENERAL............................................................... 37
36.1 Franchisee to Pay Franchisor's Costs.............................. 37
36.2 Continuing Obligations............................................ 37
36.3 No Set-Off........................................................ 37
36.4 Unenforceable Parts Severable..................................... 37
36.5 Amendment......................................................... 37
36.6 Counterparts...................................................... 37
36.7 Attorneys......................................................... 38
36.8 Waiver............................................................ 38
36.9 Further Assurance................................................. 38
36.10 Force Majeure.................................................... 38
36.11 Entire Agreement................................................. 38
36.12 Time............................................................. 38
SCHEDULE INFORMATION...................................................... 40
ANNEXURE A COMPLIANCE DOCUMENTS........................................... 41
CERTIFICATE OF INDEPENDENT LEGAL ADVISOR.................................. 44
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CERTIFICATE OF INDEPENDENT BUSINESS ADVISOR............................... 45
CERTIFICATE OF INDEPENDENT FINANCIAL ADVISOR.............................. 46
ANNEXURE B................................................................ 48
FRANCHISEE'S NON DISCLOSURE AGREEMENT..................................... 48
ANNEXURE C MANUAL......................................................... 56
ANNEXURE D OTHER PARTY NON DISCLOSURE AGREEMENT........................... 57
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THIS AGREEMENT is made on 2000
PARTIES
1. ZLAND AUSTRALIA PTY LTD (ACN 085 819 067) of ▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ (FRANCHISOR).
2. The person or corporation specified in Item 1 of the Schedule
(FRANCHISEE).
RECITALS
A. The Franchisor is the owner of or has the right to licence a suite of
Internet-based business systems marketed under the Trade Marks and
Corporate Image in accordance with methodologies and the Manual
developed by the Franchisor.
B. The Franchisor has developed a business model using such business
system which it wishes to franchise.
C. The Franchisor wishes to grant to the Franchisee, and the Franchisee
has accepted, the Franchise to operate the Franchised Business subject
to the terms and conditions of this Agreement.
OPERATIVE PROVISIONS
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement unless the context otherwise requires or permits:
ACCOUNTS means the accounts of the Franchisor with respect to the Gross
Fees.
ACCOUNTING MONTH means each consecutive period of 1 calendar month
provided that:
(a) where the Effective Date is not the first day of the month,
the first accounting month will be the period from that day
until the last day of the calendar month in which the
Effective Date occurs; and
(b) where the term concludes on a day which is not the last day of
the month then the last accounting month will be the period
from the conclusion of the immediately preceding accounting
month until and including the date of termination of this
Agreement.
ADDITIONAL SERVICES means the services provided by the Franchisor from
time to time which are not Core Services.
BUSINESS DAY means a day on which trading banks are open for business
in the Territory.
BUSINESS NAME means the business name or trading name under which the
Franchisee will conduct the Franchised Business.
BUSINESS SYSTEM means the Internet-based computer system adapted for
integration with interactive computer networks for business
enterprises, database enabled forms,
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communications systems and web page hosting services provided by the
Franchisor and includes the activities specified in the Manual..
CODE means the Franchising Code of Conduct as amended from time to
time.
COMMISSIONS means the percentage specified in the Manual of the Retail
Price of the Business System and the Services supplied by the
Franchisee or the Franchisor at the request of the Franchisee or a
Customer to Customers in each relevant Invoice Period together with any
sums in excess of the Retail Price in respect of such supply which is
payable to the Franchisee during the Term in accordance with CLAUSE 16.
COMPANY STORE ARRANGEMENT means a large user number licence granted by
the Franchisor directly to a Customer or potential customer in respect
of:
(a) a customer's company-wide or nationwide operations or
(b) group services provided to lessees in shopping centres, office
blocks or other defined areas
entered into pursuant to CLAUSE 13. All Company Store Arrangements
existing at the date of this Agreement is executed are disclosed in
Item 2 of the SCHEDULE.
COMPLIANCE DOCUMENTS means the following documents attached as Annexure
A to this Agreement:
(a) Franchisee's Acknowledgment of Receipt of Franchise Documents;
(b) Statement of Franchisee Concerning Independent Advice;
(c) Certificate of Independent Legal Advisor;
(d) Certificate of Independent Business Advisor;
(e) Certificate of Independent Financial Advisor; and
(f) Statement of Cessation of Business Under Business Name.
CONFIDENTIAL INFORMATION means all confidential information of the
Franchisor or any Related Body Corporate and includes:
(a) confidential information relating to the Business System, the
Manual and any Documentation;
(b) information relating to the policies, business plans,
financial information, client lists and other confidential
information of the Franchisor;
(c) information relating to the terms and conditions of this
Agreement; and
(d) any other information of the Franchisor identified or
reasonably identified as confidential and proprietary
information of the Franchisor or any Related Body Corporate.
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CORE SERVICES means the basic services specified in Item 3 of the
SCHEDULE which the Franchisee (or the Franchisor on request by the
Franchisee or the Customer) will perform for a Customer relating to the
Business System, and any other services nominated by the Franchisor.
CORPORATE IMAGE means the standards and specifications required by the
Franchisor for the operation of the Franchised Business, including but
not limited to:
(a) the manner of dealing with Customers, potential customers and
other members of the public; and
(b) advertising and marketing procedures for the Business System
and Services.
CORPORATIONS LAW means the Corporations ▇▇▇ ▇▇▇▇ (Cth) and all
amendments to it.
CUSTOMERS means the persons who have taken licences of the Business
System or procured Services from the Franchisee.
DEPOSIT means the amount specified in Item 4 of the SCHEDULE paid by
the Franchisee to the Franchisor in accordance with CLAUSE 4.1(b).
DOCUMENTATION means the complete or partial copies of the Franchisor's
standard documentation, in human or machine-readable format or in any
other medium, delivered to the Franchisee under this Agreement,
including the Manual, any specifications and functional specifications
for the Business System, and any program listings, data models, flow
charts, logic diagrams, input and output forms, functional
specifications and instructions relating to the Business System and the
Franchised Business.
EFFECTIVE DATE means the date on which the Franchisee has satisfied all
of the preconditions provided in CLAUSES 4.1 and 4.2 and the statutory
cooling off period provided for in CLAUSE 3.1 has expired.
EQUIPMENT means the hardware, software and equipment specified in Item
5 of the SCHEDULE and in the Manual.
EXPIRY DATE means the 7th anniversary date of this Agreement.
FRANCHISE means the rights, obligations and liabilities of the
Franchisee relating to the Franchised Business created by this
Agreement.
FRANCHISE ADVERTISING FEE means the fee specified in Item 6 of the
SCHEDULE.
FRANCHISE FEE means the fee specified in Item 7 of the SCHEDULE paid by
the Franchisee upon execution of this Agreement.
FRANCHISED BUSINESS means the business of licensing the Business System
and supplying the Services to Customers or potential customers and any
other activities relating to such activities in accordance with this
Agreement.
FRANCHISEE'S NON-DISCLOSURE AGREEMENT means the form of non-disclosure
agreement attached in ANNEXURE B to this Agreement.
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FRANCHISOR'S BANK ACCOUNT means the banking details specified in Item 8
of the SCHEDULE.
FRANCHISOR'S PRICE means the prices specified in the Manual for the
provision of the Business System and Services prescribed by the
Franchisor from time to time (unless agreed otherwise in writing by the
Franchisor).
GROSS FEES means the fees received by the Franchisor from Customers,
including but not limited to any fees for the provision of the Business
System and Core Services received by the Franchisor in each relevant
Invoice Period pursuant to CLAUSE 16 and not including any fees for
Additional Services.
GST means the tax imposed or to be imposed by A New Tax System (Goods
and Services Tax) ▇▇▇ ▇▇▇▇ (Cth).
INTELLECTUAL PROPERTY means:
(a) the registered or unregistered Trade Marks;
(b) copyright in and to all Documentation and any other material
supplied by the Franchisor to the Franchisee;
(c) the Corporate Image;
(d) the Business Name;
(e) the information, know how and expertise comprising the
Business System;
(f) the Confidential Information;
(g) all copyright, trademarks, designs and trade secrets owned by,
licensed to or developed by the Franchisor in connection with
the Franchised Business; and
(h) all other copyright, trademarks and intellectual property of
the Franchisor.
INITIAL TERM means an initial period of 7 years from the date of execution of
this Agreement.
INITIAL TRAINING PROGRAM means the training program provided by the
Franchisor to the Franchisee pursuant to CLAUSE 12.1.
INVOICE PERIOD means in respect of the Payment Date the period from the
25th of the preceding month to the 24th of the current month
(inclusive).
KEY EMPLOYEES means the employees and the contractors of the Franchisee
who will market the Business System and Services and deliver the
Services to Customers as determined by the Franchisor in accordance
with the Manual.
MANUAL means the operations manual attached as ANNEXURE C to this
Agreement developed by or for the Franchisor as supplemented by the
information found at the website, "▇▇▇.▇▇▇▇▇.▇▇▇", as amended from time
to time, together with any other documentation identified as such by
the Franchisor and recommending or prescribing the manner of conduct of
the Franchised Business.
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NATIONAL ADVERTISING FEE means the fee specified in Item 9 of the
SCHEDULE.
NATIONAL MARKETING FUND means the fund established under CLAUSE 10.
OTHER PARTY'S NON-DISCLOSURE AGREEMENT means the form of non-disclosure
agreement attached as ANNEXURE D to this Agreement.
PAYMENT DATE means the 25th day of each month throughout the Term.
RELATED BODY CORPORATE and ASSOCIATE in relation to a company
(including the Franchisor) have the meanings ascribed to those
expressions by the Corporations Law.
RENEWAL AGREEMENT means an agreement for the renewal of the Franchise
entered into between the parties.
RENEWAL FEE means the fee specified in Item 10 of the SCHEDULE.
RENEWAL TERM means the period set out in Item 11 of the SCHEDULE.
SERVICES means the Core Services and the Additional Services.
TERM means the Initial Term together with any Renewal Term if
applicable.
TERRITORY means the area specified in Item 12 of the SCHEDULE.
TRADE MARKS means the trade marks specified in Item 13 of the SCHEDULE
and such other trade marks or service marks as the Franchisor may from
time to time provide for use in connection with the Franchised
Business.
TRANSFER FEE means the fee specified in Item 14 of the SCHEDULE.
WARRANTY PERIOD means the first year of any licence of a Business
System.
Y2K COMPLIANT means the satisfactory adaptation of a computer system to
overcome any problems associated with the rollover of the date from
3/12/1999 to 1/1/2000.
1.2 INTERPRETATION
In this Agreement unless the context otherwise requires or permits:
(a) references to a party will include as the context requires
respective executors, administrators, successors and permitted
assigns;
(b) references to a person includes any other entity recognised by
law and vice versa;
(c) headings, underlinings and marginal notes are only included
for ease of reference;
(d) references to legislation or legislative provisions will
include modifying, consolidating or replacing legislation or
legislative provisions;
(e) references to months and years means calendar months and
years;
(f) words denoting the singular number include the plural and vice
versa;
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(g) words denoting one gender include every gender;
(h) words denoting natural persons include any Corporation or
other owners corporation or Government Body and vice versa;
(i) where any word or phrase is given a defined meaning any other
grammatical form of that word or phrase will have a
corresponding meaning;
(j) every covenant or provision applying to or binding more than
one person will bind them jointly and each of them severally;
(k) delivery of this Agreement will be taken to have been given on
the date it bears;
(l) if any part of this Agreement is void or unenforceable or
would be so unless severed, then the rest of the document will
continue to have full force and effect;
(m) the use of headings are only for convenience and do not affect
interpretation;
(n) references to this Agreement includes the Recitals, Schedules,
appendices, Annexures, exhibits; and
(o) if the day on which any act, matter or thing is to be done
under or pursuant to this Agreement is not a business day,
that act, matter or thing may be done on the next business
day.
2. GRANT OF FRANCHISE
2.1 APPOINTMENT OF FRANCHISEE
In consideration of the Franchisee agreeing to perform its obligations
under this Agreement, the Franchisor grants to the Franchisee the
Franchise for the Term and, subject to CLAUSES 5.2 and 13, the
exclusive rights in the Territory, to:
(a) conduct the Franchised Business in accordance with this
Agreement;
(b) use the Intellectual Property in connection with the
Franchised Business;
(c) provide the Services to Customers using the techniques, know
how and operations methods set out in the Manual; and
(d) grant licences for the Business Systems to Customers.
2.2 FRANCHISOR'S AGENT
For the purpose of licensing the Business System and supplying the
Services to Customers or potential customers, the Franchisee will act
as agent of the Franchisor. The Franchisee will:
(a) deliver the Business System and the Services to the Customer
for a sum not less than the Franchisor Price;
(b) make contracts with Customers for the Business System and the
Services on the Franchisor's then current terms and conditions
(whether contained in the Manual or
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otherwise) and will not take orders from customers unless they
assent to such terms and conditions or the Franchisor has
consented in writing to different terms and conditions; and
(c) not to hold itself out as an agent of the Franchisor except in
accordance with this Agreement.
2.3 OBLIGATIONS OF FRANCHISOR
The Franchisor will provide to each Customer on behalf of the
Franchisee:
(a) the Business System as specified by the Franchisee in
accordance with the Manual; and
(b) the Core Services and any Additional Services requested by the
Franchisee or a Customer.
3. COOLING OFF, COMMENCEMENT, TERMINATION AND RENEWAL
3.1 COOLING OFF
The Franchisee must give written notice to the Franchisor that the
Franchisee does not wish to accept the Franchise within 7 days after
execution of this Agreement and the Franchisor will on receipt of such
written notice refund the Franchise Fee. On refund of the Franchise
Fee, the parties will have no further claims against each other.
3.2 INITIAL TERM
This Agreement will commence on the Effective Date and continue for the
Initial Term unless earlier terminated under CLAUSE 29.
3.3 RENEWAL
The Franchisee may renew the Franchise for the Renewal Term by written
notice to the Franchisor given not less than 6 months prior to the
Expiry Date if:
(a) the Franchisee has throughout the Initial Term complied with
this Agreement and all other agreements between the Franchisor
and the Franchisee, and any agreement with other parties
relating to this Agreement and the Franchised Business;
(b) the Franchisee enters into the Renewal Agreement;
(c) the Franchisee has paid all outstanding amounts due to the
Franchisor and any Related Body Corporate or associate of the
Franchisor and/or any other amounts due under this Agreement
or any other document relating to this Agreement; and
(d) the Franchisee pays to the Franchisor the Renewal Fee in
accordance with CLAUSE 7.3.
3.4 TERMS OF RENEWAL AGREEMENT
Unless otherwise agreed, any Renewal Agreement must be on the same
terms and conditions as the then current Franchise Agreement.
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4. PRECONDITIONS
4.1 PRELIMINARY OBLIGATIONS
Prior to the execution of this Agreement the Franchisee will:
(a) duly execute and deliver to the Franchisor a Franchisee's
Non-Disclosure Agreement; and
(b) pay the Deposit to the Franchisor.
4.2 OBLIGATIONS UPON EXECUTION
Prior to the Effective Date, the Franchisee will:
(a) pay the Franchise Fee to the Franchisor;
(b) duly execute and deliver to the Franchisor this Agreement and
the applicable Compliance Documents;
(c) obtain all necessary permits and licences to enable the
Franchisee to properly operate the Franchised Business in
accordance with this Agreement and the law; and
(d) obtain and install the Equipment.
4.3 TERMINATION
If the Franchisee has not complied with the provisions of CLAUSES 4.1
and 4.2 to the reasonable satisfaction of the Franchisor, the
Franchisor may refuse to grant (or terminate) the Franchise by giving
the Franchisee written notice. The Franchise will be terminated on
delivery of the notice to the Franchisee.
5. TERRITORY
5.1 EXCLUSIVE TERRITORY
Subject to CLAUSE 5.2, the Franchisee has the exclusive right to
provide the Business System and the Services and to conduct the
Franchised Business in the Territory.
5.2 EXCEPTION TO TERRITORY
Unless the Franchisor consents in writing, the Franchisee may not
solicit nor attempt to solicit any business from or enter into an
agreement to provide the Business System or Services with any
prospective customers who are under (or are notified by the Franchisor
that they may be under) a Company Store Arrangement.
5.3 SPECIFIC TERRITORY
Except as provided in CLAUSES 6.3, 11.2 and 13, the Franchisee must not
conduct the Franchised Business outside the
Territory.
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6. CUSTOMER MANAGEMENT
6.1 FRANCHISOR OBLIGATION
Subject to CLAUSE 6.2, the Franchisor will refer all enquiries and
opportunities relating to prospective customers in the Territory to the
Franchisee.
6.2 EXCEPTIONS
The Franchisor may at any time (and without prior consultation with the
Franchisee) enter into a Company Store Arrangement with any customer in
the Territory.
6.3 ENQUIRIES FROM OUTSIDE THE TERRITORY
(a) The Franchisee must refer to the Franchisor all enquiries and
opportunities relating to the Business System or Services from
prospective customers outside the Territory. The Franchisor
will allocate any opportunities to the relevant franchisee or
make other arrangements which the Franchisor may deem in the
best interests of the prospective customer;
(b) If the Franchisor appoints the Franchisee to manage a
prospective customer outside the Territory, the Franchisee
must not enter into any agreement to provide the Business
System or Services for a term longer than 1 year;
(c) If the Franchisor grants a franchise to a franchisee (other
than the Franchisee) to provide the Business System or
Services in a territory other than the Territory where the
Franchisee has Customers, the Franchisee must assign all
rights to and benefits from any agreements with such Customers
to the Franchisor or the franchisee of that territory
immediately upon receipt of written notice from the
Franchisor. After receiving such notice, the Franchisee must
not provide or offer to provide the Business System or
Services to such Customer unless directed by the Franchisor;
and
(d) The provisions of CLAUSE 6.3(B) are specific to a customer and
except as provided in CLAUSE 6.3(B), nothing in this clause or
in this Agreement entitles the Franchisee to act as a
franchisee in relation to any territory outside the Territory.
7. PAYMENT OBLIGATIONS
7.1 FRANCHISE FEE
The Franchisee will pay the Franchise Fee in the manner specified in
the Manual to the Franchisor's Bank Account. The payment of the
Franchise Fee will be non-refundable after the expiration of the
cooling off period specified in CLAUSE 3.1.
7.2 NATIONAL ADVERTISING FEE
The Franchisee will pay to the Franchisor the National Advertising Fee
on the first business day of each Accounting Month in the manner
specified in the Manual.
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7.3 RENEWAL FEE
In the event that the Franchisee renews the Franchise, the Franchisee
will pay to the Franchisor in the manner specified in the Manual the
Renewal Fee on the date it notifies the Franchisor of its intention to
renew this Agreement. The Franchisor will hold the Renewal Fee on trust
for the Franchisee and will refund it in full (less any reasonable
costs and expenses incurred by the Franchisor in preparing the Renewal
Agreement) if the Franchisee notifies the Franchisor that it wishes to
withdraw its notice to renew at any time before the Renewal Agreement
is executed. Upon execution by both parties of the Renewal Agreement
the Franchisor will be absolutely entitled to the Renewal Fee.
7.4 LATE PAYMENTS
If the Franchisee fails to make any payment required under this clause
within 7 days after receiving notice from the Franchisor, the
Franchisor may require the Franchisee to pay interest calculated at 2%
over the published indicator lending rate charged by Westpac Banking
Corporation for business overdraft facilities of less than $100,000.00
published from time to time from the date due until paid. The
Franchisee hereby authorises the Franchisor to deduct any late payments
and interest from any money due to the Franchisee.
8. THE CODE
8.1 COMPLIANCE
The Franchisor and Franchisee must comply with the provisions of the
Code throughout the Term.
8.2 TERMINATION
If:
(a) the Code is withdrawn or declared invalid or unconstitutional
by any court of competent jurisdiction; or
(b) the Code ceases to be mandatory;
the Franchisor may notify the Franchisee in writing that the
obligations of CLAUSE 8.1 no longer apply.
8.3 EFFECT
The giving of such notice will not affect the validity of the rest of
this Agreement.
9. INTELLECTUAL PROPERTY
9.1 USE OF INTELLECTUAL PROPERTY
The Franchisor grants to the Franchisee a non-exclusive licence to use
the Intellectual Property for the purposes of conducting the Franchised
Business in the Territory in accordance with this Agreement.
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9.2 FRANCHISOR RETAINS TITLE TO PROPERTY
The Franchisee acknowledges that:
(a) the Franchisor is the owner of or has the right to use the
Intellectual Property; and
(b) the Franchisee's right to use the Intellectual Property and
the Documents are limited to the uses specified in CLAUSE 9.3
and the Manual.
9.3 RESTRICTION ON USE OF INTELLECTUAL PROPERTY
The Franchisee will:
(a) use the Intellectual Property only as specified by the
Franchisor as an integral means of promoting the Franchised
Business;
(b) display the Intellectual Property in the manner specified in
the Manual or as the Franchisor may direct in writing.
(c) not use any other trade or service marks which are in the
opinion of the Franchisor similar or substantially similar to
the Trade Marks or so nearly resemble the Trade Marks as to be
likely to cause deception or confusion;
(d) inform the Franchisor as to the Franchisee's use of the Trade
Marks as required by the Franchisor;
(e) render assistance to the Franchisor as it may request to
support any applications to register any of the Trade Marks
pursuant to the Trade Marks ▇▇▇ ▇▇▇▇;
(f) refrain from doing anything which might prejudice an
application to register the Trade Marks or invalidate the
registration of or any application to register the Trade
Marks;
(g) refrain from doing anything which might support an application
to remove a registered Trade ▇▇▇▇ from the Australian Trade
Marks Register or cause a Registrar to require a disclaimer of
a monopoly on all or part of the Trade Marks;
(h) immediately notify the Franchisor of any actual or apparent
infringement of, or challenge to, the Franchisor's ownership
of or the Franchisee's use of the Intellectual Property; and
(i) at all times and in all respects, comply with the directions
of the Franchisor in respect of any action, compromise,
settlement, or conduct of any litigation or administrative
proceeding arising out of any infringement of, or challenge or
claim to, any of the Intellectual Property and use its best
endeavours to assist the Franchisor in any such action.
9.4 DAMAGES AND COSTS
The Franchisee acknowledges that any damages or other benefits arising
out of any claim of infringement or similar claim will be the property
of the Franchisor. The Franchisor will reimburse the Franchisee for any
costs reasonably incurred by the Franchisee in complying with CLAUSE
9.3(h) and (i).
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9.5 FRANCHISEE TO COMPLY WITH FRANCHISOR DIRECTIONS
Notwithstanding CLAUSE 9.1, the Franchisee will modify or discontinue
use of any of the Trade Marks, and use substitute trade marks or
service marks as directed by the Franchisor. Any substitute trade marks
or service marks will be included in the definition of the Trade Marks.
9.6 TITLE TO TRADEMARKS
The use of the Trade Marks and any goodwill attached to such Trade
Marks by the Franchisee is for the exclusive benefit of the Franchisor
or the grantor of such rights.
9.7 FRANCHISEE TO USE BUSINESS NAME
(a) The Franchisee will conduct the Franchised Business under the Business
Name incorporating the words "ZLand" or a substitute name approved by
the Franchisor.
(b) The Franchisee covenants:
(i) to register at its own cost, the Business Name not later than
1 week after the Effective Date; and
(ii) subject to this clause, to keep the Business Name registered
and current during the Term.
9.8 DISCONTINUANCE ON DEFAULT
Upon execution of this Agreement the Franchisee will execute and
deliver to the Franchisor a statement of cessation of the business name
in the form approved by the Franchisor. Such notice of discontinuance
of business name will to be held by the Franchisor during the Term. The
Franchisee hereby irrevocably appoints the Franchisor or its nominee as
its agent and attorney to execute and complete such notice of
discontinuance of the business name upon termination of this Agreement
and to file the notice of discontinuance of the business name with the
relevant authority.
9.9 FRANCHISEE NOT TO ASSIGN NAME
The Franchisee must not transfer or assign any interest, whether legal
or beneficial, in the Business Name without first obtaining the consent
in writing of the Franchisor.
10. NATIONAL MARKETING FUND
10.1 THE FUND
The Franchisor may establish the National Marketing Fund to develop
marketing initiatives for promoting the goodwill and reputation of the
Business System, the Services and the Franchised Businesses in
Australia for the benefit of all franchisees.
10.2 OBJECTIVES
The National Marketing Fund will be used for the advertising, marketing
and/or public relations programs, services and / or materials that
the Franchisor deems necessary or
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appropriate to promote these objectives. The National Marketing Fund
may be combined with any marketing fund otherwise established for use
in accordance with this Agreement.
10.3 APPOINTMENT OF FRANCHISOR
If the Franchisor establishes the National Marketing Fund, the
Franchisee:
(a) nominates and appoints the Franchisor as trustee of the
National Marketing Fund;
(b) will pay the National Advertising Fee as provided for in
CLAUSE 7.2;
(c) agrees that the Franchisor may use National Marketing Fund in
its absolute discretion for the purposes of the National
Marketing Fund specified in CLAUSE 10.2; and
(d) agrees to comply with and participate in all marketing and
advertising programs required by the Franchisor.
10.4 THE CODE
The National Marketing Fund will be governed and administered by the
provisions in the Code even if the Franchisor notifies the Franchisee
that the Code no longer applies in accordance with CLAUSE 8.2.
11. FRANCHISEE'S MARKETING/ADVERTISING OBLIGATIONS
11.1 PROMOTION
In addition to the obligations of the Franchisee pursuant to CLAUSE 10
and subject to CLAUSE 11.3 the Franchisee will:
(a) conduct and diligently market and advertise the Franchised
Business within the Territory;
(b) spend the entire Franchisee Advertising Fee for this purpose
and provide evidence to the Franchisor of all such
expenditures; and
(c) comply with CLAUSE 9.3 in performing its obligations under
this clause.
11.2 INTERNET ADVERTISING
Notwithstanding CLAUSE 5.3 the Franchisee may conduct marketing or
advertising on the Internet.
11.3 FRANCHISOR TO APPROVE MARKETING MATERIAL
The Franchisee will:
(a) obtain the Franchisor's written approval for any advertisement
or advertising or marketing material prior to its publication
of dissemination;
(b) supply the Franchisor with a copy of such advertisement or
advertising or marketing material no less than 14 days prior
to the date of publication or dissemination; and
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(c) comply with the terms and conditions of the approval given by
the Franchisor for such advertisement or advertising or
marketing material prior to its publication or dissemination.
11.4 FRANCHISEE INDEMNITY
The Franchisee will indemnify the Franchisor, its officers and
employees against all claims, damages, liabilities and costs arising
from claims or proceedings for:
(a) libel, slander, defamation or indecent, false, misleading or
deceptive conduct;
(b) infringement of trade ▇▇▇▇, copyright, title, trade methods of
identification or other proprietary rights of others;
(c) piracy, counterfeiting, plagiarism, unfair competition or idea
misappropriation; and
(d) invasion of the right of privacy, arising out of any
advertising or publicity carried out or authorised by the
Franchisee that is not in accordance with the advertising
policies and advice of and approved by the Franchisor.
The indemnity referred to in this subclause is limited to claims
arising from advertising and marketing the Business System and the
Services conducted by the Franchisee and does not extend to claims or
proceedings arising from claims of ownership of the Intellectual
Property.
12. TRAINING AND SUPPORT
12.1 INITIAL TRAINING PROGRAM
The Franchisee (or if a body corporate, its Key Employees) must attend
and complete the Initial Training Program to the satisfaction of the
Franchisor within 6 months after the Effective Date.
12.2 ADDITIONAL TRAINING
The Franchisor may require that the Franchisee (or if a body corporate,
its Key Employees) undergo additional training during the Term. No
additional training course will be conducted for a period longer than 1
week or more frequently than once per year.
12.3 FRANCHISEE SOLELY RESPONSIBLE
Notwithstanding the provision of training by the Franchisor, the
Franchisee is exclusively responsible for the operation, conduct and
profitability of the Franchised Business. The Franchisee acknowledges
that the Franchisor is not responsible or liable for the operation,
conduct or profitability of the Franchised Business.
12.4 EMPLOYEES TO BE TRAINED
The Franchisee (and if a body corporate its Key Employees) will undergo
and complete to the satisfaction of the Franchisor any other
educational or training programs it deems necessary, and obtain and
retain such academic and professional qualifications as the Franchisor
may reasonably require. No person designated by the Franchisor to
receive
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such education or training will be allowed to participate in the
Franchised Business without completing such training without the prior
approval of the Franchisor.
12.5 ADDITIONAL ASSISTANCE
In addition to the training requirements specified in CLAUSES 12.1,
12.2 AND 12.4, the Franchisor may provide the Franchisee with support
and assistance in the operation, advertising, marketing, promotion and
administration of the Franchised Business as the Franchisor may
reasonably deem necessary or desirable.
12.6 COSTS AND EXPENSES
The Franchisor will notify the Franchisee of the prices charged for
such training prior to commencement. The Franchisee will be liable for
all costs and expenses incurred for all training provided in accordance
with CLAUSE 12.
13. COMPANY STORE ARRANGEMENTS
13.1 FRANCHISOR MAY ENTER
The Franchisor may enter into Company Store Arrangements with any
prospective customer in its discretion.
13.2 FRANCHISEE OBLIGATION
If the Franchisor enters into an agreement for the provision of the
Business System and Services under a Company Store Arrangement, and
such Customer operates from or is resident within the Territory, the
Franchisee will on behalf of the Franchisor provide the Business System
and Services to such Customer as directed by the Franchisor.
13.3 APPORTIONMENT OF FEES
The Franchisor will apportion any fees received by the Franchisor in
the manner set out in the Manual for the provision of the Business
System or the Services in relation to a Company Store Arrangement among
the franchisees who provide services to the Customer. The Franchisee's
portion of such fees will form part of the Gross Fees.
13.4 ASSIGNMENT OF CONTRACT
If in the opinion of the Franchisor any transaction with a Customer
qualifies as a Company Store Arrangement (whether at the time of
contracting with the Franchisee or otherwise), the Franchisor shall
notify the Franchisee. The Franchisee will assign such contract to the
Franchisor immediately upon receipt of such notice, and the provisions
of CLAUSES 13.2 and 13.3 shall apply.
14. OPERATING THE FRANCHISED BUSINESS
14.1 FRANCHISEE TO CONDUCT FRANCHISED BUSINESS
The Franchisee will use its best endeavours to conduct the Franchised
Business in a proper and efficient manner and will actively promote the
Franchised Business and the Business System.
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14.2 MINIMUM WORK COMMITMENT
The Franchisee will conduct the Franchised Business between the hours
of 8:00 am and 5:00 pm from Monday to Friday inclusive (other than
public holidays), and at such other times specified in the Manual.
14.3 BUSINESS SOLE UNDERTAKING
The Franchisee shall, (and if the Franchisee is a body corporate, it
will ensure that its Key Employees shall) devote the majority of its
commercial efforts promoting the Franchised Business.
14.4 COMPETITION; OTHER BUSINESS
The Franchisee will not engage in any other business or undertaking
without the Franchisor's prior written consent. The Franchisor will not
be obliged to give such consent if the Franchisor considers that the
other business or undertaking may compete directly or indirectly, with
or detract business from the Franchised Business.
14.5 OTHER PRODUCTS AND SERVICES
If the Franchisee wishes to offer and sell any product or service not
previously authorised by the Franchisor, the Franchisee must advise the
Franchisor in writing and provide a product specification, a sample of
the product, information about the supplier and any other information
which the Franchisor may require. The Franchisor will notify the
Franchisee whether or not it approves of such product or service within
30 days of submission of the Franchisee's request. The Franchisor's
silence may not be construed as consent. The Franchisor may withdraw
its approval if any product or service at any time in its sole
discretion. The Franchisor's criteria and reasons for approving or not
approving a particular product or service are confidential. The
Franchisor may withhold such information from the Franchisee in its
discretion.
14.6 EMPLOYEE REQUIREMENTS
The Franchisee will:
(a) (and ensure that its Key Employees will) comply with the
provisions of the Manual governing the minimum
responsibilities, duties and tasks required of the
Franchisee's employees;
(b) ensure that it has an adequate number of competently trained
and qualified employees or independent contractors necessary
to comply with its obligations under this Agreement and to
Customers; and
(c) ensure that its employees enter into an Other Party Non
Disclosure Agreement prior to commencing employment.
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14.7 EXCLUSIVITY
The Franchisee will not, and will procure that its employees and
contractors will not, without the prior written consent of the
Franchisor:
(a) be concerned or interested either directly or indirectly in
the supply of any products or services which are similar to or
competitive with the Business System or Services except for
those products and services supplied by the Franchisee prior
to the Effective Date which have been fully disclosed in
writing to the Franchisor;
(b) subject to CLAUSE 6.3(b) enter into an agreement, directly or
indirectly, to provide the Business System or Services to any
person in the Territory knowing or having reason to believe
that they would be resold outside the Territory or conduct the
Franchised Business outside the Territory.
14.8 INDEPENDENT CONTRACTORS
Prior to entering into any agreement with an independent contractor for
the provision of any services relating to the Franchised Business, the
Franchisee will:
(a) notify the Franchisor in writing of the details of such
independent contractor, including the name and address of the
independent contractor, and if a body corporate, the ACN and
registered office of such contractor, and a description of the
services to be provided; and
(b) ensure that the independent contractor executes an Other Party
Non-Disclosure Agreement and provides a copy of such agreement
to the Franchisor.
14.9 LIABILITY FOR INDEPENDENT CONTRACTORS AND EMPLOYEES
The Franchisee will bear all liabilities, including payment of any
consultancy fees or other remuneration, for its obligations under an
agreement with any independent contractor engaged by the Franchisee and
for any claims, costs and damages arising out of such independent
contractor's activities. The Franchisee will indemnify the Franchisor
against all claims, damages, liabilities and costs arising from claims
or proceedings by or against any employee or independent contractor of
the Franchisee.
14.10 FRANCHISEE TO OBTAIN PERMITS AND LICENCES
The Franchisee will be solely responsible for the acquisition and
maintenance of all necessary registrations, permits and licences for
the lawful operation of the Franchised Business. The Franchisee will
keep all such registrations, permits and licences current at all times.
14.11 FRANCHISEE ADVERTISING / MARKETING STANDARDS
The Franchisee will not knowingly:
(a) make any false or misleading representations in connection
with the Business System, the Services or the Franchised
Business; and
(b) conduct the Franchised Business in contravention of any
guidelines or ethical standards published by the Franchisor
including but not limited to standards and
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guidelines specified in the Manual or in contravention of any
acceptable and usual business practice.
14.12 PREMISES
(a) Within 9 months of the Effective Date the Franchisee must have
established suitable business premises within the Territory
from which to operate the Franchised Business.
(b) The Franchisee will ensure that at all times during the Term
the business premises and all furnishings for such premises:
(i) are in a good state of repair and decoration;
(ii) meet the standards and guidelines for the business
premises and furnishings specified in the Manual or
the reasonable directions of the Franchisor.
14.13 EQUIPMENT
(a) Prior to the Effective Date or such other date as the parties
may agree, the Franchisee will purchase and install the
Equipment and throughout the Term purchase and install such
further equipment as the Franchisor may from time to time deem
necessary for the efficient operation of the Business System
and the Franchised Business.
The Franchisor may make changes in, among other things,
standards and specifications in the Business System and
Services and the price or pricing method for the Business
System and Services, when, in the sole discretion of the
Franchisor, changes are needed to ensure the continued success
and development of the Franchised Business. These changes may
include the purchase of improved technology from the
Franchisor, the purchase of equipment, supplies, furnishings
or other goods from third parties and the completion of
additional training by the Franchisee's staff or other
actions. The Franchisee must promptly conform to the modified
standards and specifications at its own expense.
(b) All costs and expenses incurred in connection with the
purchase and installation of the Equipment and any further
Equipment will be paid by the Franchisee; and
(c) The Franchisee understands that the Equipment is supplied by a
third party and the Franchisor makes no warranties or
representations of any kind, express or implied, in relation
to it, including in respect of suitability or fitness for
purpose.
14.14 BUSINESS SYSTEM AND SERVICES
(a) The Franchisor will deliver the Business System and any
Services which the Franchisor agrees to provide upon receipt
of the Franchisee's written request and invoice the Customer
for the Business System and Services at the then current
Franchisor's Price or as specified by the Franchisee unless
the prices specified by the Franchisee are less than the
Franchisor's Price;
(b) The Franchisor may make the Services available to the
Franchisee and add or delete services comprising the Services
at any time; and
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(c) The Franchisee will promptly disclose to the Franchisee any
modification, adaptation or extension of the Business System
and will immediately assign (and does assign under this
Agreement) its entire right, title and interest in, to and
under such modifications, adaptations and extensions including
without limitation all intellectual property rights therein to
the Franchisor. No modification, adaptation or extension of
the Business System may be implemented for a Customer without
the written approval of the Franchisor.
14.15 ACCEPTING BUSINESS
The Franchisee may not accept business from a prospective customer
unless the Franchisee has the capacity to provide the Services to the
Customer in accordance with the Manual and is able to travel to and
from the prospective customer's premises if necessary.
14.16 FRANCHISEE MEETINGS
During the Term the Franchisor may convene meetings of all franchisees
to discuss matters of mutual interest. The Franchisee will attend at
all such meetings at its cost. Any decisions of the franchisees in such
meetings will be carefully considered by the Franchisor but will have
no binding legal effect on the Franchisor or the Franchisee. The
Franchisor may circulate a letter or other communication to all
Franchisees in lieu of convening any such meeting.
15. OPERATING STANDARDS
15.1 NOT HOLD ITSELF OUT
The Franchisee will ensure that its business premises, advertisements,
correspondence and business cards confirm that it is conducting the
Franchised Business independently of the Franchisor and will not
represent to any party that it conducts any part of the Franchised
Business as agent or on behalf of the Franchisor.
15.2 OPERATING STANDARDS
The Franchisee will (and will ensure that its employees will) at all
times during the Term:
(a) not enter into any agreement to provide the Business System or
Services for consideration less than the Retail Price;
(b) develop and maintain high and uniform operating standard based
on the concepts of consistency, reliability and
professionalism in accordance with the Manual;
(c) promote and increase the demand for the Business System and
Services;
(d) observe the requirements of any collateral document or
agreement relating to the Franchised Business;
(e) establish and maintain a reputation for delivering high
quality Services exemplifying high customer servicing
standards;
(f) give prompt, courteous, friendly and efficient service to all
Customers and prospective customers;
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(g) adhere to the highest standards of honesty, integrity, fair
dealing and ethical conduct;
(h) identify itself on all correspondence and stationery in such
manner as the Franchisor may require;
(i) comply in every respect with the standards set by the
Franchisor for the operation of the Franchised Business in
accordance with the Manual or instructed by the Franchisor;
(j) comply with the reasonable directions of the Franchisor in the
manner of dealing with any complaints from Customers,
including, if necessary, permitting the Franchisor or another
of its franchisees to rectify the complaint at the cost of the
Franchisee and Franchisor reasonable access to the Customer's
premises to rectify such complaint; and
(k) deliver the information and records specified in CLAUSE 18.2
on request by the Franchisor.
15.3 DISPUTES
If any disputes arise involving the requirements or standards contained
in the Manual, the interpretation by the Franchisor will control.
16. ACCOUNTING AND INVOICE
16.1 RESPONSIBILITY FOR INVOICING
The Franchisor will invoice each Customer directly for the Business
System and any Services in accordance with the Franchisor's current
standard terms and conditions.
16.2 NO OTHER PRODUCTS INVOICED
The Franchisor will not, and the Franchisee must not, invoice the
Customer for any products or services other than the Business System
and Services supplied by the Franchisee (or the Franchisor at the
request of the Franchisee) whether or not such products and services
were provided at the same time as the Business System and Services.
16.3 ACCOUNTING TO THE FRANCHISEE
For each Invoice Period, the Franchisor will provide the Franchisee
with an itemised statement based on the monthly report of the
Franchisee delivered in accordance with CLAUSE 18.3(a) showing:
(a) each Customer's orders that have been invoiced;
(b) each invoice that has been paid;
(c) the Gross Fees received; and
(d) the GST that had been paid
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16.4 COMMISSIONS
On the Payment Date the Franchisor will deliver a cheque for the
Commissions payable to the Franchisee based on the information
contained in the itemised statement referred to in CLAUSE 16.3
calculated in the manner specified in the Manual, along with such
itemised statement.
16.5 GST
The Franchisor will account to the Commissioner of Taxation at the
Australian Tax Office on behalf of the Franchisee for all GST on the
supply of the Business System and Services to the Customer by the
Franchisee.
17. AUDIT RIGHTS
17.1 FRANCHISEE'S RIGHTS
The Franchisee (or its nominated agent) may conduct an audit of the
accounts relating to the Franchised Business in the possession of the
Franchisor at any time during normal business hours provided it has
given the Franchisor at least 5 business days prior written notice. The
Franchisee may conduct only 1 audit during any 12 month period. The
Franchisee will bear the cost of each such audit unless it reveals that
an act or omission of the Franchisor has resulted in a discrepancy of
more than 10 per cent to the Franchisee's disadvantage. In such event,
the Franchisor will bear the costs of such audit.
17.2 FRANCHISOR'S RIGHTS
The Franchisor (or its nominated agent) may conduct an audit of the
accounts and business records relating to the Franchised Business in
the possession of the Franchisee at any time during normal business
hours provided it has given the Franchisee at least 5 business days
prior written notice. The Franchisor may conduct only 1 audit during
any 12 month period. The Franchisor will bear the cost of each such
audit unless it reveals that an act or omission of the Franchisee has
resulted in a discrepancy of more than 10 per cent to the Franchisor's
disadvantage. In such event, the Franchisee will bear the costs of such
audit.
18. RECORD KEEPING AND REPORTING
18.1 BUSINESS RECORDS
The Franchisee will compile and maintain the books and records of the
Franchised Business honestly and accurately in accordance
with the Manual.
18.2 RECORDS
The Franchisee will maintain time and proper accounts and records as
specified in the Manual including but not limited to:
(a) a list of Customers;
(b) each Business System and any Services provided;
(c) the dates on which such Services were provided;
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(d) the expenses and outgoings of the Franchised Business;
(e) all marketing, advertising or promotions conducted by the
Franchisee;
(f) the locations where the Franchisee provided the Services to
Customers; and
(g) all other transactions, costs, liabilities and other relevant
information relating to f the Franchised Business as the
Franchisor may reasonably require from time to time.
18.3 FRANCHISEE TO PROVIDE REPORTS
(a) The Franchisee will provide the Franchisor with a report of
the Franchised Business for the previous Accounting Month in
the manner specified in the Manual or as the Franchisor may
reasonably require, including but not limited to:
(i) each Business System licensed that month;
(ii) any Services provided to Customers that month
(whether by the Franchisee or the Franchisor at the
request of the Franchisee or a Customer); and
(iii) the amount spent by the Franchisee that month
pursuant to its obligations under CLAUSE 11;
(b) Within 1 month after 31 March, 30 June, 30 September and 31
December in each year of the Term the Franchisee will submit
the quarterly reports showing income and expenses for the
Franchised Business in the manner specified in the Manual or
as the Franchisor may reasonably require; and
(c) At any other time on the written request of the Franchisor the
Franchisee will submit all reports, returns and other
information relating to the operation of the Franchised
Business as the Franchisor may reasonably require.
18.4 INSPECTION OF RECORDS
The Franchisor (and its authorised agents) may, at any time during
normal business hours, after giving the Franchisee not less than 14
days notice, enter the Franchisee's business premises or such other
place where the records relating to the Franchised Business are kept
and maintained to:
(a) examine and audit the records;
(b) take copies of the records; or
(c) examine and review the operating methods of the Franchisee.
18.5 COSTS OF INSPECTION
If an examination or audit of the Franchisee's records reveals that any
payment to the Franchisor on any account is more than 1 week overdue on
more than 2 occasions in any 3 month period, the Franchisee will pay
the Franchisor's costs incidental to such examination or audit.
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19. THIRD PARTY INTEREST
19.1 NO ENCUMBRANCES
The Franchisee will not create or permit to exist any third party
security interest by way of mortgage, pledge, lien, charge, encumbrance
or any other security interest or agree to create or give any such
security interest over this Agreement, the Intellectual Property or the
Franchised Business without the prior written consent of the
Franchisor. The Franchisee will indemnify the Franchisor for any costs,
losses, expenses or liabilities incurred by the Franchisor as a result
of the breach of the Franchisee of this clause.
20. PERFORMANCE STANDARD
20.1 COMPARISON
Every 6 months following the Effective Date, the Franchisor will
compare the Gross Fees of the Franchisee for Customers whose primary
offices are located in the Territory, with the average gross fees
attributable to other franchisees having, in the opinion of the
Franchisor, a substantially similar territory or market as the
Franchisee. The Franchisor will notify the Franchisee of the results of
such comparison.
20.2 PERFORMANCE REQUIREMENT
(a) If, after 12 months from the Effective Date, Gross Fees are
less than 50% of the average gross fees attributable to other
franchisees having a substantially similar territory or market
as the Franchisee, the Franchisor will notify the Franchisee
in writing advising such under-performance;
(b) If the Franchisor has given the notice referred to in
subclause (a):
(i) the Franchisor shall provide any further training and
assistance as the Franchisor deems necessary to
assist the Franchisee, at the cost and expense of the
Franchisee in addition to its obligation specified in
CLAUSE 12; or
(ii) within 10 days of receiving the notice, the
Franchisee may notify the Franchisor that it wishes
to transfer the Franchise and the provisions of
CLAUSE 27 are to apply;
(c) If the Franchisee under-performs in the next successive 6
month period, the Franchisee may give written notice to the
Franchisor within 10 days of notification of such
under-performance that it wishes to transfer the Franchise and
the provisions of CLAUSE 27 are to apply; and
(d) If the Franchisee does not elect to transfer the Franchise
pursuant to subclause (b) or (c), or is unable procure a
qualified substitute franchisee within 120 days from the date
of notifying the Franchisor of its intention to transfer the
Franchise, the Franchisor may terminate this Agreement by
written notice effective 30 days after the date the notice is
received by the Franchisee.
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21. CORRECTION OF DEFECTS
21.1 THE FRANCHISOR'S OBLIGATION TO CORRECT OR REPLACE DEFECTS
If any component of the Business System fails to conform substantially
to the functional specifications during the Warranty Period, the
Franchisor's sole obligation will be, at the Franchisor's option, to:
(a) correct the defect by bringing the performance of the Business
System into substantial compliance with the functional
specifications in the Documentation; or
(b) replace the defective component.
21.2 FRANCHISOR TO CORRECT
If use of the Business System is significantly restricted by a reported
defect and the Franchisee gives written notice of such restriction to
the Franchisor, the Franchisor will use its best efforts to commence
work on correcting the defect no later than the first working day after
it receives the Franchisee's written notice, subject in each case to
the provisions of CLAUSE 21.
21.3 CORRECTION OF DEFECTS
The Franchisor will use its best efforts to correct the defect by
remote access. If the Franchisor is unable to correct the defect by
remote access and it deems that a written correction is appropriate, it
may develop and deliver a correction of the defect in writing or in
machine readable form. Installation of such correction will be the
responsibility of the Franchisor unless otherwise agreed in writing by
the Franchisor. The Franchisor may correct a defect in the Business
System which is not under warranty if requested by the Franchisee. The
Franchisee will pay additional charges.
22. WARRANTIES
22.1 BY THE FRANCHISEE
The Franchisee represents and warrants that:
(a) it has relied on its own inquiries as to the performance and
functional characteristics of the Business System, and does
not rely on any warranties or representations not set out in
this Agreement and the Manual;
(b) it is a corporation, duly incorporated and validly existing in
good standing under the laws of Australia;
(c) it has full rights, power, legal capacity and authority to
enter into this Agreement and to carry out and perform its
obligations under this Agreement; and
(d) the execution and delivery of this Agreement and the
transactions contemplated by the parties under it do not and
will not conflict with or result in a breach of any condition
or provision, or constitute a default under, any agreement or
undertaking of the Franchisee.
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22.2 BY THE FRANCHISOR
The Franchisor warrants
that:
(a) the Business System:
(i) will substantially conform to the functional
specifications contained in the Documentation for the
Warranty Period;
(ii) will perform when in use without material alteration
on the Equipment in accordance with the functional
specifications set forth in the Documentation; and
(iii) is Y2k compliant;
(b) it is entitled to authorise the Franchisee to enter into
agreements for the provision of the Business System and the
Services; and
(c) it has all rights necessary to license the Intellectual
Property to the Franchisee in accordance with this Agreement.
22.3 SCOPE OF WARRANTY
The warranties set forth in CLAUSE 23.2 will not apply:
(a) if the Business System is not installed or used in accordance
with the Documentation;
(b) if the Franchisee and/or the Customers use the Business System
on equipment other than the Equipment;
(c) if the defect or malfunction is caused by the failure of a
third party service provider;
(d) if the defect or malfunction is caused by the use of the
Business System in combination with third party software which
has not been approved by the Franchisor for use in connection
with the Business System;
(e) to the extent that the defect or malfunction is caused by or
is contributed to by the Franchisee or the Customers; or
(f) if the defect is caused by a third party software or equipment
malfunction.
22.4 WARRANTIES NOT INCLUDED
The Franchisor does not warrant that:
(a) the Business System will operate uninterrupted;
(b) the Business System will be free from minor defects or errors
which do not materially affect the performance of the Business
System; or
(c) the applications contained in the Business Systems are
designed to meet all the Franchisee's or the Customer's
business requirements.
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23. LIMITATION OF LIABILITY
23.1 THE FRANCHISOR NOT RESPONSIBLE
The Franchisor will not be responsible under this Agreement for:
(a) the modification or extension of the Business System to fit
the particular requirements of a Customer or the Franchisee;
(b) the correction of any program errors resulting from such
modifications or improvements;
(c) the correction of any program errors as a result of the use of
the Business System by the Franchisee or a Customer outside of
the terms and conditions of this Agreement;
(d) the failure of the Equipment or network; or
(e) the preparation or conversion of the Franchisee's or a
Customer's data into a form required for use with the Business
System.
23.2 IMPLIED WARRANTIES EXCLUDED
The Franchisor makes no express warranties beyond those stated in this
Agreement. All conditions and warranties implied by statute or common
law are expressly excluded to the extent permitted by law.
23.3 EXCLUSION OF DAMAGES
Under no circumstances will the Franchisor be liable to the Franchisee
or any other person or entity for special, incidental, consequential,
or indirect damages, loss of goodwill or business profits, work
stoppage, data loss, computer failure or malfunction, all other
commercial damages or loss, or exemplary or punitive damages relating
to the Business System, its performance, the negligence or default of
the Franchisor or any error in information supplied to the Franchisee
before or after the date of this Agreement.
23.4 SEVERABILITY OF ACTIONS
Each provision of this Agreement which provides for a limitation of
liability, disclaimer of warranties, or exclusion of damages is
intended by the parties to be severable and independent of any other
provision.
24. INDEMNITIES
24.1 INDEMNITY OF FRANCHISEE
Subject to CLAUSE 24.2 below, the Franchisor will:
(a) indemnify the Franchisee for all claims, damages liabilities
and costs for which the Franchisee is held liable in any
claims for infringement of Intellectual Property;
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(b) reimburse the Franchisee for all costs reasonably incurred by
the Franchisee in the defence of any claim brought against it
or in any such proceeding in which it is a party;
(c) at the Franchisor's expense keep the Intellectual Property
(but not the Business Name) current; and
(d) take whatever steps are necessary to protect the Franchisee's
right to use the Intellectual Property against the
unauthorised use of it by others.
24.2 LIMITATION OF INDEMNITY
The Franchisor will not be obligated to indemnify the Franchisee under
the provisions of CLAUSE 24.1 unless the Franchisee:
(a) notifies the Franchisor in writing as soon as practicable of
any infringement, suspected infringement or alleged
infringement;
(b) gives the Franchisor the option to conduct the defence of such
claim, including negotiations for settlement or compromise
prior to the institution of legal proceedings;
(c) provided the Franchisor with reasonable assistance in
conducting the defence of such claim;
(d) permits the Franchisor to modify, alter or substitute the
infringing part of the Business System, at its own expense, to
render the Business System non-infringing; and
(e) authorises the Franchisor to procure for the Franchisee the
authority to continue the use and possession of the Business
System.
24.3 INDEMNITY OF FRANCHISOR
The Franchisee will indemnify the Franchisor and its licensors against
all claims, liabilities, and costs, including reasonable legal fees,
reasonably incurred in the defence of any claim (other than for the
infringement of intellectual property rights specified in CLAUSE 24.2),
arising out of the Franchisee's unauthorised use of the Business
System, Documentation and Intellectual Property pursuant to this
Agreement.
24.4 PROCEEDINGS
(a) If proceedings are brought or threatened by a third party
against the Franchisee alleging that the Franchisee's use of
the Business System constitutes an infringement of the
intellectual property rights of such third party, the
Franchisor may, at its option and at its own expense, conduct
the defence of such proceedings. The Franchisee will provide
all necessary assistance and information required by the
Franchisor in the defence of such proceedings.
(b) The Franchisor will take such action as it determines is
reasonably necessary in its sole discretion to defend any
claims or proceedings for infringement or alleged infringement
by a third party of the Business System.
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25. MANUALS / CONFIDENTIALITY
25.1 FRANCHISOR MAY DEVELOP MANUALS
The Franchisor has developed the Manual to assist the Franchisee in its
daily operations of the Franchised Business. The Manual specifies the
processes and procedures for the operation of the Franchised Business.
25.2 AMENDMENTS AND UPDATES
The Franchisor may amend, alter or replace any information contained in
the Manual at any time. The Franchisor will supply to the Franchisee a
copy of any replacement pages, insertions, additions, reviews,
amendments, alterations or modifications to the Manual as soon as
practicable after completion.
25.3 FRANCHISEE TO COMPLY WITH MANUALS
Upon receipt of the Manual, the Franchisee will:
(a) operate the Franchised Business strictly in accordance with
the relevant provisions of the Manual and otherwise use the
Manual as a guide to the independent conduct of the Franchised
Business, to the extent, if any, that the Manual requires a
manner of conduct of the Franchised Business;
(b) keep the Manual up to date with any replacement pages,
insertions, additions, reviews, amendments, alterations or
modifications to the Manual sent by the Franchisor; and
(c) immediately on termination of this Agreement return to the
Franchisor all copies of the Manual in the possession, power,
custody or control of the Franchisee, whether or not the
Franchisor authorised the making of such copies.
25.4 MANUAL IS CONFIDENTIAL
The Franchisee:
(a) acknowledges that the Manual contains Intellectual Property
which the Franchisor is the owner of or has the right to use;
(b) must not make any copies of the Manual; and
(c) must ensure that the officers, contractors and employees of
the Franchisee do not disclose the contents of the Manual to
any person.
25.5 CONFIDENTIALITY
The Franchisee will:
(a) keep all Confidential Information secure from theft and
confidential;
(b) not use any Confidential Information in any business but the
Franchised Business or in any other manner without the consent
of the Franchisor;
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(c) not disclose any of the methods or system(s) including, but
not limited to the Business System, of the Franchisor.
Nothing in this subclause will prevent the Franchisee from disclosing
Confidential Information to the Franchisee's professional advisors, if
required by law or if such information is in the public domain.
26. INSURANCE
26.1 FRANCHISEE INSURANCE
The Franchisee will procure and maintain throughout the Term the
following insurances with an insurer acceptable to the Franchisor
showing the Franchisor as an additional insured:
(a) public liability in an amount no less than $5 million;
(b) professional indemnity insurance;
(c) all risks insurance;
(d) business interruption and loss of profit insurance; and
(e) disability insurance.
26.2 CERTIFICATES OF CURRENCY
The Franchisee will, upon request by the Franchisor, provide
certificates of the Franchisee's insurance to the Franchisor to
evidence that it has complied with its obligations under this clause.
26.3 FRANCHISOR MAY REQUIRE INCREASED LIMITS
The Franchisor may require the Franchisee to increase the minimum
insurance limits specified in CLAUSE 26.1 or require the Franchisee to
obtain different or additional kinds of insurance to reflect changes in
insurance standards, normal business practices, higher court awards and
other relevant circumstances.
27. ASSIGNMENT
27.1 FRANCHISOR MAY ASSIGN
The Franchisor may assign all or part of this Agreement and the
assignee or other legal successor will be bound by its terms.
27.2 FRANCHISEE MAY NOT ASSIGN WITHOUT CONSENT
The Franchisee's rights and obligations of the Franchisee under this
Agreement are personal to the Franchisee. The Franchisee may not
transfer or encumber any part of its interests under this Agreement; or
sub-licence or delegate the performance of any of its rights duties or
obligations under this Agreement without the prior written consent of
the Franchisor. The Franchisor:
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(a) will not unreasonably withhold its consent to any proposed
transfer or encumbrance if:
(i) the proposed assignee meets the requirements of the
Franchisor for such assignment and is in the opinion
of the Franchisor a respectable, responsible, solvent
and financially sound person or corporation with
sufficient business experience and professional
qualifications to carry on the Franchised Business
and to fully and expeditiously carry out the
Franchisee's obligations under this Agreement; e
proposed assignee enters into the Franchisor's then
current form of Franchise Agreement; and
(ii) the Franchisee or the assignee pays the Transfer Fee;
and
(b) may require that the Franchisee make such transfer or
encumbrance only on the conditions that the Franchisor deems
necessary, including but not limited to the requirement that
the Franchisee not be in default or arrears in respect of any
payments to the Franchisor and be otherwise in full compliance
with its obligations under this Agreement.
27.3 DISPOSAL WHERE UNDERLYING INTERESTS CHANGE
If any transaction or series of transactions occurs in respect of the
shares of a corporate or trustee Franchisee or a holding company of the
Franchisee (as defined by the Corporations Law) as a combined result of
which there is a change of:
(a) the legal or beneficial ownership of, or the power to exercise
the voting rights of, more than 24% of the issued capital or
other equity of the Franchisee as at the date of this
Agreement; and
(b) the directors of the Franchisee as they are constituted at the
Effective Date,
that transaction or series of transactions will, for the purposes of
this Agreement, be deemed to be an assignment of the Franchisee's
interests under this Agreement and will require compliance with CLAUSE
27.2.
27.4 FIRST REFUSAL
(a) The Franchisee will not accept any offer for the transfer or
assignment of any interest in the Franchised Business unless:
(i) the offer is bona fide;
(ii) in writing; and
(iii) the Franchisee first offers the interest to the
Franchisor by delivering a notice containing a copy
of the offer to purchase or the terms on which the
interest is proposed to be assigned and state the
price and consideration for the proposed assignment.
(b) The Franchisor may purchase the interest to be transferred or
assigned for the price minus the Transfer Fee and on any terms
and conditions stated in the notice within 6 weeks from the
date of receipt of the notice. The Franchisor may deduct
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from the price any unpaid debts of the Franchisee and may pay
out of the price any of the Franchisee's unpaid creditors.
27.5 RIGHT OF SALE
If the Franchisor does not purchase the interest of the Franchisee, the
Franchisee may transfer or assign the interest for the price set out in
the notice to the Franchisor, plus or minus 5% and on the same terms
and conditions specified in such notice. If the transfer or assignment
is not completed within 3 months of delivery of the notice to the
Franchisor, the Franchisor may purchase the interest of the Franchisee
in accordance with CLAUSE 27.4.
28. DEFAULT
28.1 EVENTS OF DEFAULT
The Franchisee will be in default under this Agreement if any of the
following events occur:
(a) the Franchisee fails to make any payments to the Franchisor
whether under this Agreement or otherwise within 14 days of
becoming due;
(b) the Franchisee or any director, shareholder or member of the
Franchisee becomes financially interested (whether as
director, shareholder, employee or consultant) in any business
in competition with the Franchised Business without the
Franchisor's prior written consent;
(c) an execution, levy or distress is levied against the
Franchisee or against its directors or shareholders or the
assets of the Franchised Business;
(d) the Franchisee abandons, surrenders or transfers control of
the Franchised Business or fails to actively carry on the
Franchised Business for a period of 6 weeks;
(e) the Franchisee operates the Franchised Business in a manner
which, in the reasonable opinion of the Franchisor, is
unlawful, unprofessional, negligent, defamatory or lowers the
reputation of the Franchisor or operates the Franchised
Business in a way that endangers public health or safety, and
fails to take reasonable steps to correct such manner of
operation after notice from the Franchisor or any authorised
governmental authority within the time limit specified in such
notices;
(f) the Franchisee or any of its directors or employees no longer
possesses the necessary registrations, licenses or permits
required to conduct the Franchised Business;
(g) the Franchisee provides for consideration services which are
not Services in the course of its conduct of the Franchised
Business without the Franchisor's prior written consent; and
(h) the Franchisee fails to comply with any other provision of
this Agreement, any provision of the Manual or other
specification, standard operating procedure or instruction
required by the Franchisor on 2 or more occasions within a
period of 3 consecutive calendar months and, if such failure
is capable of correction, does not correct such failure within
14 days after receiving notice of such failure.
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29. TERMINATION
29.1 TERMINATION BY FRANCHISOR
(a) The Franchisor may terminate this Agreement by written notice
effective immediately if the Franchisee or any of its principals:
(i) commences any act of bankruptcy as defined in the
Bankruptcy ▇▇▇ ▇▇▇▇ Cth, makes a scheme or arrangement with
its creditors or is placed in receivership, liquidation,
administration or any form of insolvency or administration;
(ii) is convicted of a criminal offence carrying a jail term of
5 years or more, or an offence involving fraud, deception,
dishonesty or misleading conduct;
(iii) is fraudulent in connection with the operation of the
Franchised Business;
(iv) fails to comply with any of its material obligations
specified in CLAUSES 6.3, 14, 19 and 27;
(v) where the Franchisee loses the right to occupy its business
premises and fails to secure replacement premises approved
by the Franchisor within 14 days thereafter;
(vi) if an individual, dies or becomes legally incompetent to
carry out the obligations under this Agreement;
(vii) where the Franchisee defaults under this Agreement 3 times
within any 12 month period;
(viii) the Franchisee invoices or collects money for providing the
Franchised Business directly from Customers;
(ix) the Franchisee does not meet the Performance Standards in
the manner provided in CLAUSE 20.2.
(b) If the Franchisee commits an event of default as described in
CLAUSE 28 and such default remains unremedied for the period of 7
days following the expiry of 14 days' written notice by the
Franchisor to the Franchisee of the default, the Franchisor may
terminate this Agreement immediately. The Franchisor will give
written notice to the Franchisee of such termination.
29.2 TERMINATION BY FRANCHISEE
The Franchisee may terminate this Agreement at any time by giving 90 days
prior written notice to the Franchisor.
29.3 CROSS DEFAULT
Where another agreement exists between the Franchisor and the Franchisee,
any breach by either of them of any term or condition of this Agreement
or such other agreement will constitute a breach of such other agreement,
unless this Agreement or the other
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agreement specifies otherwise, and the non-breaching party may exercise
its rights and remedies provided or implied by this Agreement or at law.
30. CONSEQUENCES OF TERMINATION
30.1 PAYMENT OF ACCOUNTS
The Franchisee will pay, within 7 days of the effective date of
termination or expiration of this Agreement, all amounts owed to the
Franchisor and any Related Body Corporate including interest, and the
Franchisee's trade and other creditors which are then unpaid.
30.2 RETURN MATERIALS
(a) The Franchisee will, within 7 days of the effective date of
termination or expiration of this Agreement:
(i) deliver to the Franchisor all copies of the Documentation
together with all client lists, point of sale material,
advertising and marketing materials, computer software and
databases, forms, customer listings, stationery, business
cards, and other printed matter within the possession,
power, custody or control of the Franchisee including those
which bear the Trade Marks, Business Name or any other
Intellectual Property of the Franchisor; and
(ii) transfer to the Franchisor telephone and facsimile numbers
and listings, Yellow Pages and any similar directory
listings. The Franchisee appoints the Franchisor (or its
nominee) as the attorney of the Franchisee to complete such
transfers if the Franchisees defaults or refuses to
complies with this clause.
(b) If the Franchisee does not deliver the material as required in
CLAUSE 30.2(A), the Franchisee irrevocably authorises the
Franchisor to enter upon its business premises and take possession
of such material.
30.3 TRANSFER REGISTRATIONS
Upon termination or expiration of this Agreement the Franchisee will take
such action as may be required to cancel, or at the option of the
Franchisor transfer to the Franchisor or its nominee, at no cost to the
Franchisor, any registrations relating to the Franchisee's use of the
Trade Marks.
31. RESTRAINTS
31.1 RESTRAINT COVENANTS
The Franchisee covenants that neither it nor its directors, officers or
shareholders will conduct the Franchised Business or any form of business
similar to that of the Franchised Business within the Territory or within
a 5 kilometre radius outside the Territory, directly or indirectly, for a
period of 2 years from the date of termination of this Agreement without
the prior written consent of the Franchisor.
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31.2 DEEMED CONDUCT OF BUSINESS
For the purposes of CLAUSE 31.1 the Franchisee and its directors,
officers, and shareholders will be deemed to have conducted a business
similar to the Franchised Business directly or indirectly if any of such
persons:
(a) has an interest in such business on its own account, or jointly or
with or on behalf of any other person, firm or corporation, or as
an employee, independent contractor, consultant, partner, joint
venturer or agent of such business, or
(b) has an interest in such business through any firm, trust or
corporation in which the Franchisee, its directors, officers or
shareholders may be interested as director, officer, shareholder,
beneficial owner of shares, consultant, lender, adviser or
otherwise.
31.3 NON SOLICITATION
The Franchisee covenants that neither it nor its directors, officers or
shareholders will solicit, canvass or endeavour to obtain contracts or
arrangements in respect of Customers or those who have been Customers or
prospective customers at any time throughout the term of this Agreement
directly or indirectly for a period of 2 years from the date of
termination of this Agreement without the prior written consent of the
Franchisor. For the purpose of this clause, any reference to "prospective
customer" means a person with whom the Franchisee or the Franchisor has
carried on substantial negotiations or discussions at any time during the
12 months prior to date of termination of this Agreement.
31.4 NON-ENTICEMENT
The Franchisee covenants that neither it nor its directors, officers or
shareholders will entice or attempt to entice, directly or indirectly,
throughout the Term and for a period of 2 years from the date of
termination of this Agreement, without the prior written consent of the
Franchisor, any employee, agent or contractor of the Franchisor or who
was at any time during the term of this Agreement an employee, agent or
contractor of the Franchisor from continuing its relationship with the
Franchisor.
31.5 RESTRAINTS REASONABLE
The Franchisee acknowledges that the restraints contained in this
Agreement are reasonable having regard to the nature of the relationship
and the consideration provided by both parties.
31.6 VALIDITY
If any of the covenants stated in this clause is or becomes unenforceable
or invalid, such unenforceability or invalidity will not effect the
validity and enforceability of the other covenants of this clause which
will remain binding.
32. RELATIONSHIP BETWEEN THE PARTIES
The relationship between the Franchisor and the Franchisee is limited to
that of Franchisor and Franchisee and nothing contained in this Agreement
will be construed to create a partnership, joint venture or (except as
expressly provided) an agency.
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33. DISPUTE RESOLUTION
33.1 PROCEDURE
If a dispute arises under this Agreement:
(a) the complaining party will give written notice to the other party
setting out the nature of the dispute, the outcome required by the
complainant and what action the complainant thinks will settle the
dispute;
(b) both parties will make every effort to resolve the dispute by
mutual negotiation;
(c) if the parties are unable to resolve the dispute by mutual
negotiation within 21 days after commencing negotiations, either
party may by notice advise the other party that it wishes to have
the dispute resolved by a mediator;
(d) within a further period of 21 days or such other time period
agreed by the parties, the parties may refer the matter to a
mutually agreed mediator. If no agreement can be reached on an
appropriate mediator, either party may ask the mediation adviser
to appoint a mediator;
(e) the mediator may determine the procedures to be followed
(including the time and place for the mediation), may choose to
allow the legal adviser of the parties to be present and may
co-opt other expert assistance;
(f) the parties will attend the mediation and genuinely try to resolve
the dispute;
(g) proceedings of the mediator will be as informal as is consistent
with the proper conduct of the matter and will allow the mediator
to communicate privately with the parties or with their legal
advisers;
(h) the parties agree that:
(i) everything that occurs before the mediator is in confidence
and in closed session;
(ii) all discussions and settlement offers will be without
prejudice;
(iii) no documents brought into existence specifically for the
purpose of the mediation may be called into evidence in any
subsequent litigation by either party;
(iv) the mediator will act fairly, in good faith and without
bias;
(v) each party will have the opportunity to adequately present
its case to the mediator;
(vi) the mediator will deal with any matter as expeditiously as
possible no later than 14 days after referral to the
mediator;
(vii) the parties will report back to the mediator within 14
days, on actions taken, based on the outcome of the
mediation; and
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(viii) unless the parties otherwise agree the costs of the
mediator will be borne equally.
33.2 OTHER REMEDIES
Nothing contained in CLAUSE 33.1 will deny a party to the Agreements the
right to seek injunctive relief from an appropriate Court, where failure
to obtain such relief would cause irreparable damage to the party
concerned.
33.3 NOT TO AFFECT TERMINATION RIGHTS
The provisions of CLAUSE 33.1 will not apply to any events of termination
provided in CLAUSE 29.1 where the event is clearly specified in the
Agreement and there is no legitimate dispute as to the interpretation of
their meaning or factors giving rise to such events.
34. NOTICES
34.1 METHOD OF GIVING NOTICES
All notices required or permitted to be given by one party to another
under this Agreement must be in writing, addressed to the other party
and:
(a) delivered to that party's address; or
(b) transmitted by facsimile transmission to that party's address.
34.2 TIME OF RECEIPT
A notice given to a party under CLAUSE 34.1 is treated as having been
given and received:
(a) if delivered to a party's address on the day of delivery if a
business day, otherwise on the next following business day; and
(b) if transmitted by facsimile to a party's address and a correct and
complete transmission report is received, on the day of
transmission if a business day, otherwise on the next following
business day.
34.3 ADDRESS OF PARTIES
For the purposes of CLAUSES 34.1 and 34.2 the address of a party is set
out below or is an address within a radius of 5 kilometres of the GPO
Sydney of which that party may from time to time give notice to each
other party:
THE FRANCHISOR
▇▇▇▇▇ ▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
43
THE FRANCHISEE
The address and facsimile specified in the Schedule.
35. LAW AND JURISDICTION
35.1 GOVERNING LAW
This Agreement is governed by the law in force in New South Wales,
Australia.
35.2 SUBMISSION TO JURISDICTION
The parties submit to the non-exclusive jurisdiction of the courts of New
South Wales and any courts that may hear appeals from those courts in any
proceedings relating this Agreement.
36. GENERAL
36.1 FRANCHISEE TO PAY FRANCHISOR'S COSTS
The Franchisee will pay the Franchisor's costs, expenses and outgoings
including the costs of the Franchisor's solicitors on a solicitor and own
client basis for the preparation, negotiation and execution of this
Agreement (limited to a maximum of $300.00) and any stamp duty which may
be assessed on this Agreement upon demand by the Franchisor.
36.2 CONTINUING OBLIGATIONS
All obligations of the parties which expressly, or by their nature, are
to survive the expiration or termination of this Agreement will continue
in full force and effect, including without limitation the provisions of
CLAUSE 30 insofar as they relate to periods prior to termination of this
Agreement.
36.3 NO SET-OFF
The Franchisee will not withhold payment of any amount due under this
Agreement for any reason.
36.4 UNENFORCEABLE PARTS SEVERABLE
Any provision of this Agreement which is unenforceable in a jurisdiction
will be ineffective to the extent of the unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of the provision in another jurisdiction.
36.5 AMENDMENT
This Agreement may only be amended or supplemented only in writing signed
by the parties.
36.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
those counterparts taken together constitute one and the same instrument.
44
36.7 ATTORNEYS
Any attorney who executes this Agreement on behalf of a party declares
that the attorney has no notice of revocation of the power of attorney
under the authority of which the attorney executes this Agreement and no
notice of the death of the grantor.
36.8 WAIVER
The non-exercise of or delay in exercising any power or right of a party
will not operate as a waiver of that power or right, nor does any single
exercise of a power or right preclude any other or further exercise of it
or the exercise of any other power or right. A power or right may only be
waived in writing, signed by the party to be bound by the waiver.
36.9 FURTHER ASSURANCE
Each party will, and will procure that each of its employees, agents and
contractors will, execute and deliver all deeds, documents and
instruments and take all acts reasonably necessary to carry out and give
full effect to this Agreement and the rights and obligations of the
parties under it.
36.10 FORCE MAJEURE
Any delay or non-performance of any provision of this Agreement (other
than for the payment of amounts due ) caused by conditions beyond the
reasonable control of the performing party will not constitute a breach
of this Agreement. The time for performance of such provision, if any,
will be deemed to be extended for a period equal to the duration of the
conditions preventing performance.
36.11 ENTIRE AGREEMENT
This Agreement and any annexures constitute the entire agreement of the
parties on the subject matter. The only enforceable obligations and
liabilities of the parties in relation to the subject matter are those
that arise out of this Agreement. All representations, communications and
prior agreements in relation to the subject matter are merged in and
superseded by this Agreement.
36.12 TIME
Unless provided for in any other manner, the time for a party to comply
with an obligation will be of the essence.
45
EXECUTED AS A DEED in New South Wales
THE FRANCHISOR
EXECUTED by ZLAND AUSTRALIA PTY )
LIMITED ACN 085 819 067 by: )
)
_____________________________________ ) _____________________________________
Director ) Secretary
)
_____________________________________ ) _____________________________________
Name (BLOCK LETTERS) ) Name (BLOCK LETTERS)
)
THE FRANCHISEE
(IF A BODY CORPORATE)
EXECUTED by )
___________________________ ACN ) _____________________________________
_________________________________ by: ) Secretary
)
_____________________________________ ) _____________________________________
Director ) Name (BLOCK LETTERS)
_____________________________________
Name (BLOCK LETTERS)
THE FRANCHISEE )
(IF AN INDIVIDUAL) )
SIGNED by )
)
_____________________________________ )
in the presence of: )
)
_____________________________________ )
Signature of witness ) _____________________________________
)
_____________________________________ )
Name of witness - please print )
)
_____________________________________ )
Address of witness
46
SCHEDULE
INFORMATION
Item 1: The Franchisee
Item 2: Company Store Arrangements (Clause 13)
Item 3: Core Services (Clause 2.2)
Item 4: Deposit - $1,000.00 (Clause 4.1)
Item 5: Equipment (Clause 14.13)
Item 6: Franchisee Advertising Fee - not less than $250.00 per month for the
first year of the Term and thereafter not less than 1% of the Gross
Fees (Clause 11.1)
Item 7: Franchise Fee - $50,000.00 (Clauses 4.2 and 7.1)
Item 8: Franchisor's Bank Account
Item 9: National Advertising Fee - the greater of 1% of the Gross Fees in each
Accounting Month or $250.00 (subject to an annual adjustment for
inflation) (Clauses 7.2 and 10.1)
Item 10: Renewal Fee - the greater of 25% of the then current Franchise Fee or
$12,500.00 (Clause 7.3)
Item 11: Renewal Term means years (Clause 3.3)
Item 12: Territory (Clause 5.1)
Item 13: Trade Marks (Clause 9)
Item 14: Transfer Fee - $4,000.00 plus 25% of the then current Franchise Fee
(Clauses 20 and 27.2)
47
ANNEXURE A
COMPLIANCE DOCUMENTS
48
FRANCHISEE'S ACKNOWLEDGMENT OF RECEIPT OF FRANCHISE DOCUMENTS
I/we
________________________________________________________________________________
of
________________________________________________________________________________
as a franchisee/prospective franchisee state that:
1. I/we have received the disclosure document dated _________________
November 1999 (DISCLOSURE DOCUMENT) with the following document attached:
(a) a copy of the Franchise Agreement which includes the following:
(i) a set of compliance documents including:
A. Statement of Franchisee Concerning Independent
Advice;
B. Certificate of Independent Legal Advisor;
C. Certificate of Independent Business Advisor;
D. Certificate of Independent Financial Advisor; and
E. Statement of Cessation of Business Under Business
Name;
(ii) Manual;
(iii) Franchisee's Non-Disclosure Agreement; and
(iv) Other Party's Non-Disclosure Agreement; and
(b) a copy of the Franchise Code of Conduct (CODE).
2. I/we have read the Disclosure Document, the Franchise and Agency
Agreement and all of its annexures and the Code.
3. I/we have had a reasonable opportunity to understand the Disclosure
Document, the Franchise and Agency Agreement and all of its annexures and
the Code.
Signed on _________________________________________
________________________________________________________________________________
Franchisee/Prospective Franchisee
________________________________________________________________________________
(Printed name of Franchisee/Prospective Franchisee)
49
STATEMENT OF FRANCHISEE CONCERNING INDEPENDENT ADVICE
I/we
________________________________________________________________________________
of
________________________________________________________________________________
as a prospective franchisee state that:
1. I/we have been given advice about the proposed franchise agreement or
franchised business by one or more of the following:
(a) [ ] an independent legal adviser, a copy of whose signed statement
is attached;
(b) [ ] an independent business adviser, a copy of whose signed
statement is attached;
(c) [ ] an independent accountant, a copy of whose signed statement is
attached; or
2. If no such advice or statement was given:
(a) I/we state that I/we have been given legal, business or accounting
advice about the proposed franchise agreement or franchised
business; or
(b) I/we state that I/we have been told that that kind of advice
should be sought but have decided not to seek it.
Signed on _________________________________________.
________________________________________________________________
Prospective Franchisee
________________________________________________________________
(Printed Name of Prospective Franchisee)
50
CERTIFICATE OF INDEPENDENT LEGAL ADVISOR
I, _________________________________________________being a Solicitor in the
employ of / partner in _____________________________________________ solicitors,
and holding a full unrestricted practising certificate hereby certify that:
1. prior to ________________________________________________ (FRANCHISEE)
executing the Franchise Agreement between ZLand Australia Pty Limited and
the Franchisee (FRANCHISE AGREEMENT):
(a) I explained to it/them the provisions in the Franchise Agreement;
(b) I drew to the attention of the Franchisee:
(i) its/their respective financial obligations and other
obligations to be performed and observed; and
(ii) the consequences if obligations were not so performed and
observed; and
2. to the best of my knowledge the Franchisee indicated that it/they
understood my advice;
3. to the best of my information and belief the Franchise Agreement was
entered into voluntarily; and
4. it is my opinion that the Franchisee appeared to be aware of and
understood its/their obligations pursuant to the Franchise Agreement.
I advise having informed the Franchisee that accounting and finance advice
should be sought as to the financial and related matters concerning the
franchised business and the franchise.
Dated:
Signed:_____________________________________
_____________________________________
(Printed Name of Solicitor)
51
CERTIFICATE OF INDEPENDENT BUSINESS ADVISOR
I, _________________________________________________being an employee of /
partner in _____________________________________________ business advisers,
hereby certify that:
1. I have been instructed by
________________________________________________ (FRANCHISEE) to explain
the business risks and implications being assumed by the Franchisee
arising from the Franchise Agreement between ZLand Australia Pty Limited
and the Franchisee (FRANCHISE AGREEMENT);
2. Prior to the Franchisee executing the Franchise Agreement, I gave the
Franchisee advice in respect the business risks and implications of the
Franchise Agreement;
3. I informed the Franchisee in very clear terms that I was not expressing
my opinion nor advising on the legal, financial or taxation aspects of
the Franchise Agreement;
4. I further informed the Franchisee that if in any doubt on those aspects,
the Franchisee should obtain independent legal, financial and tax advice
before signing the Franchise Agreement; and
5. Following my explanations, the Franchisee stated to me that the
Franchisee understood my advice as to the business risks and implications
in respect of the Franchise Agreement.
Dated:
Signed:_____________________________________
_____________________________________
(Printed Name of Business Adviser)
52
CERTIFICATE OF INDEPENDENT FINANCIAL ADVISOR
I, _________________________________________________being an employee of /
partner in _____________________________________________ accountants, hereby
certify that:
1. I have been instructed by _______________________________________________
(FRANCHISEE) to explain the financial risks and taxation implications
being assumed by the Franchisee arising from the Franchise Agreement
between ZLand Australia Pty Limited and the Franchisee (FRANCHISE
AGREEMENT);
2. Prior to the Franchisee executing the Franchise Agreement, I gave
financial and taxation advice in respect of the Franchise Agreement;
3. I informed the Franchisee in very clear terms that I was not expressing
my opinion nor advising on the legal aspects of the Franchise Agreement;
4. I further informed the Franchisee that if in any doubt on those aspects,
the Franchisee should obtain independent legal advice before signing the
Franchise Agreement; and
5. Following my explanations, the Franchisee stated to me that the
Franchisee understood my advice as to the financial and taxation
implications in respect of the Franchise Agreement.
Dated:
Signed:_____________________________________
_____________________________________
(Printed Name of Financial Adviser)
53
STATEMENT OF CESSATION OF BUSINESS UNDER BUSINESS NAME
The undersigned proprietor of the business name ________________________________
(BUSINESS NAME), Registration Number _____________________________________ in
the State of __________________________________________ (STATE) has ceased to
carry on business in the State under the Business Name on _____________________,
2000, and no other person has commenced to carry on business under the Business
Name.
The proprietor:
1. requests that the State cancel the registration of the Business Name; and
2. authorises ZLand Australia Pty Limited to execute all documents required
by the State to carry out the cancellation of the registration of the
Business Name.
Proprietor:
_______________________________________________________________
_______________________________________________________________
(Printed name of Proprietor)
54
ANNEXURE B
FRANCHISEE'S NON DISCLOSURE AGREEMENT
55
FRANCHISEE'S NON DISCLOSURE AGREEMENT
THIS AGREEMENT is made on 2000
PARTIES
1. ZLAND AUSTRALIA PTY LIMITED (ACCN 085 819 067) of ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, New South Wales 2060 (FRANCHISOR).
2. THE PERSON OR CORPORATION SPECIFIED IN SCHEDULE 1 (FRANCHISEE).
RECITALS
A. The Franchisor is the owner of or has the right to licence a suite of
Internet-based business systems marketed under its trade ▇▇▇▇ and
corporate image in accordance with the methodologies developed by the
Franchisor.
B. The Franchisor has developed a business model using such business system
which it wishes to franchise.
C. The Franchisee wishes to evaluate the business model and business system
and has asked the Franchisor to disclose certain information about such
business model and business system that the Franchisor designated as
confidential and proprietary.
D. In consideration of the Franchisor disclosing such confidential and
proprietary information to the Franchisee, the Franchisee has agreed to
keep such information confidential and to maintain such confidence on the
terms and conditions which follow.
OPERATIVE PROVISIONS
1. DEFINITIONS
In the construction of this Agreement unless the contrary intention
appears:
BUSINESS SYSTEM means the Internet-based computer system adapted for
integration with interactive computer networks for business enterprises,
database enabled forms, communication systems and web page hosting
services.
CONFIDENTIAL INFORMATION means all confidential information of the
Franchisor or any related body corporate as that term is defined in the
Corporations Law, and includes:
(a) confidential information relating to the Business System and any
Documentation;
(b) information relating to the policies, business plans, financial
information, client and customer lists and other confidential
information; and copyright in and to all Documentation and other
material in possession of the Franchisor relating to the conduct
of the Franchised Business;
(c) the information, know-how and expertise comprising the Business
System;
56
(d) all of the copyright, trade marks, trade secrets and intellectual
property owned by or licensed to the Franchisor;
(e) information relating to the terms and conditions of the Franchise
Agreement; and
(f) any information of the Franchisor identified or reasonably
identified as confidential and proprietary information of the
Franchisor or any related body corporate.
DOCUMENTATION means the complete or partial copies of the standard
documentation relating to the Business System, in human or
machine-readable format or in any other medium, including any operations
manuals, any specifications and functional specifications for the
Business System, any program listings, data models, flow charts, logic
diagrams, input and output forms and instructions relating to the
Business System.
FRANCHISE AGREEMENT means the agreement between the Franchisor and the
Franchisee relating to the Franchised Business.
FRANCHISED BUSINESS means the provision by the Franchisee pursuant to the
Franchise Agreement of the Business System and supply of related services
to customers or potential customers of the Franchisee and any other
activities reasonably related to it.
INVENTIONS means all inventions, discoveries and designs, whether or not
registerable as such, including any developments of and improvements to
any part of the Business System and the know how, expertise and
techniques used by the Franchisee in conducting the Franchised Business.
MODIFICATIONS means any modifications, adaptations or extensions of any
component or element of the Business System.
SERVICES means the services to be provided by the Franchisee or the
Franchisor at the request of the Franchisee or a Customer to the
Franchisee in relation to the Franchised Business whether as an employee,
consultant, independent contractor or otherwise.
TERMINATION means the earlier to occur of:
(a) the termination or discontinuance of this Agreement which will
occur when the cooling off period defined in the Franchise
Agreement has expired and the Franchise Agreement has become
binding on the Franchisee; or
(b) the withdrawal prior to the expiration of the cooling off period
of the Franchisee's offer to enter into the Franchise Agreement.
2. CONFIDENTIAL INFORMATION
2.1 DISCLOSURE PROHIBITED
The Franchisee acknowledges that while evaluating the Franchised
Business, it may become acquainted with or have access to the
Confidential Information. The Franchisee will keep the Confidential
Information confidential and prevent its unauthorised disclosure to or
use by any other person.
57
2.2 RESTRICTED PURPOSE
The Franchisee will not use the Confidential Information for any purpose
other than to evaluate the Franchised Business.
2.3 REPRODUCTION PROHIBITED
The Franchisee will not appropriate, copy, memorise or in any manner
reproduce any of the Confidential Information unless directed by the
Franchisor.
2.4 RETURN OF CONFIDENTIAL INFORMATION
The Franchisee will return all Confidential Information in the possession
or under the control of the Franchisee on the earlier of the request by
the Franchisor or Termination.
2.5 PERMITTED DISCLOSURES
Nothing in this Agreement will obligate the Franchisee to maintain any
Confidential Information in confidence which is:
(a) required to be disclosed pursuant to a lawful order of any court
or government authority; or
(b) in the public domain at the time the Franchisee receives it.
3. TITLE TO BUSINESS SYSTEM
3.1 PROPERTY
The Franchisee acknowledges that the Business System, the Confidential
Information and any goodwill attached to them is the property of the
Franchisor or the grantor of such rights to the Franchisor.
3.2 INVENTIONS AND MODIFICATIONS
Any Inventions or Modifications developed or created by the Franchisor,
whether solely or jointly with others, in the course of providing the
Services are the property of the Franchisor:
3.3 DISCLOSURE
The Franchisee will promptly disclose in writing all Inventions and
Modifications to the Franchisor.
3.4 ASSIGNMENT
The Franchisee assigns all of its right, title and interest in and to the
Inventions and Modifications, including without limitation all
intellectual property rights, to the Franchisor or its nominee. The
Franchisee will execute all documents required by the Franchisor and take
such other actions as the Franchisor may reasonably require to effect
such assignment.
58
4. RESTRAINTS
4.1 NON-SOLICITATION
The Franchisee covenants that neither it nor, if a body corporate, its
directors, officers or shareholders, will solicit, canvass or endeavour
to obtain contracts or arrangements with current or past customers or
prospective customers of the Franchisee, directly or indirectly, for a
period of 2 years from the date of Termination without the prior written
consent of the Franchisor. In this clause, any reference to "customer" or
"prospective customer" means a person with whom the Franchisee has
carried on substantial negotiations or discussions at any time during the
12 months prior to date of Termination.
4.2 NON-ENTICEMENT
The Franchisee covenants that neither it nor, if a body corporate, its
directors, officers or shareholders, will entice or attempt to entice,
directly or indirectly, for a period of 2 years from the date of
Termination, any employee, agent or contractor of the Franchisor, or who
was at any time prior to the date of Termination an employee, agent or
contractor of the Franchisor, from continuing in its relationship with
the Franchisor, without the prior written consent of the Franchisor.
4.3 INDEPENDENT RESTRAINT
Each of the covenants constitutes an independent and separate restraint
imposed on the Franchisee under this Agreement.
4.4 RESTRAINTS REASONABLE
The Franchisee acknowledges that the restraints contained in this
Agreement are reasonable having regard to the nature of the Franchisor's
legitimate business interest in the Franchised Business.
4.5 VALIDITY
If any of the restraints contained this clause is or will become
unenforceable, the validity and enforceability of the other restraints
imposed will not be affected and will remain binding on the Franchisee.
5. BREACH
In the event of a breach or threatened breach of the terms of this
Agreement by the Franchisee, the Franchisor may:
(a) obtain an injunction restraining the Franchisee from committing
any breach of this Agreement without showing or proving any actual
loss sustained by the Franchisor;
(b) bring a claim for damages for any loss suffered, either directly
on indirectly, by the Franchisor as a consequence of any such
breach; or
(c) both (a) and (b).
59
6. INDEMNITY
The Franchisee will indemnify the Franchisor for any loss or damage
suffered by the Franchisor from any breach of the Franchisee's
obligations or undertakings including without limitation all damages,
liability, losses, claims and expenses (including legal expenses).
7. CONSULTANTS AND EMPLOYEES
The Franchisee will be responsible for the actions of each party to which
it discloses, or which will have access to, any Confidential Information.
The Franchisee will ensure that each party who will have access to the
Confidential information becomes bound by the obligations created under
this Agreement prior to disclosing any Confidential Information to them.
8. OBLIGATIONS SHALL SURVIVE
The obligations of the Franchisee in this Agreement will continue in full
force and effect for 2 years after the date of Termination.
9. RIGHTS
This Agreement will not be construed as granting the Franchisee any
rights to the Business System, Confidential Information or Franchised
Business unless specifically agreed by the parties in writing.
EXECUTED in SYDNEY ON ______________________________ 2000.
EXECUTED by ZLAND AUSTRALIA PTY )
LIMITED ACN 085 819 067 by: )
) _________________________________
) Sole Director and Secretary
)
) _________________________________
) Name (BLOCK LETTERS)
)
FRANCHISEE (IF A COMPANY)
EXECUTED by )
___________________________ ACN )
____________________________________ ) _________________________________
by: ) Sole Director and Secretary
)
) _________________________________
) Name (BLOCK LETTERS)
)
60
FRANCHISEE (IF AN INDIVIDUAL)
SIGNED by
_____________________________________ ) _________________________________
in the presence of: )
)
_____________________________________ )
Signature of witness )
)
_____________________________________ )
Name of witness - please print )
)
_____________________________________ )
Address of witness )
61
THE SCHEDULE
The Franchisee
62
ANNEXURE C
MANUAL
63
ANNEXURE D
OTHER PARTY NON DISCLOSURE AGREEMENT
64
OTHER PARTY NON DISCLOSURE AGREEMENT
THIS AGREEMENT is made on 2000
PARTIES
1. THE PERSON OR CORPORATION SPECIFIED IN ITEM 1 OF SCHEDULE 1
(FRANCHISEE).
2. THE PERSON OR CORPORATION SPECIFIED IN ITEM 2 OF SCHEDULE 1 (SERVICE
PROVIDER).
RECITALS
A. The Franchisee is the operator of a business which has the right to
licence certain Internet-based business systems pursuant to an
agreement with ZLand Australia Pty Limited.
B. The Franchisee wishes to engage the Service Provider to provide certain
services in connection with the Franchisee's business.
C. In the course of providing such services the Service Provider will have
access to or may become acquainted with confidential information of the
Franchisee.
D. The Service Provider agrees to provide the services on the terms and
conditions which follow.
OPERATIVE PROVISIONS
1. DEFINITIONS
In the construction of this Agreement unless the contrary intention
appears:
BUSINESS SYSTEM means the Internet-based computer system adapted for
integration with interactive computer networks for business
enterprises, database enabled forms, communication systems and web page
hosting services.
CONFIDENTIAL INFORMATION means all confidential information of ZLand or
the Franchisee or any related body corporate as that term is defined in
the Corporations Law, and includes:
(a) confidential information relating to the Business System and
any Documentation;
(b) information relating to the policies, business plans,
financial information, client and customer lists and other
confidential information; and copyright in and to all
Documentation and other material in possession of the
Franchisee relating to the conduct of the Franchised Business;
(c) the information, know-how and expertise comprising the
Business System;
(d) all of the copyright, trade marks, trade secrets and
intellectual property owned by or licensed to ZLand or the
Franchisee;
(e) information relating to the terms and conditions of the
Franchise Agreement; and
65
(f) any information of ZLand or the Franchisee identified or
reasonably identified as confidential and proprietary
information of ZLand or the Franchisee or any related body
corporate.
DOCUMENTATION means the complete or partial copies of the standard
documentation relating to the Business System, in human or
machine-readable format or in any other medium, including any
operations manuals, any specifications and functional specifications
for the Business System, any program listings, data models, flow
charts, logic diagrams, input and output forms and instructions
relating to the Business System.
FRANCHISE AGREEMENT means the agreement between ZLand and the
Franchisee relating to the Franchised Business.
FRANCHISED BUSINESS means the provision by the Franchisee pursuant to
the Franchise Agreement of the Business System and supply of related
services to customers or potential customers of the Franchisee and any
other activities reasonably related to it.
INVENTIONS means all inventions, discoveries and designs, whether or
not registerable as such, including any developments of and
improvements to any part of the Business System and the know how,
expertise and techniques used by the Franchisee in conducting the
Franchised Business.
MODIFICATIONS means any modifications, adaptations or extensions of any
component or element of the Business System.
SERVICES means the services to be provided by the Service Provider to
the Franchisee or ZLand in relation to the Franchised Business whether
as an employee, consultant, independent contractor or otherwise.
TERMINATION means the termination or discontinuance of this Agreement.
ZLAND means ZLand Australia Pty Limited.
2. CONFIDENTIAL INFORMATION
2.1 DISCLOSURE PROHIBITED
The Service Provider acknowledges that while providing the Services,
the Service Provider may become acquainted with or have access to the
Confidential Information. The Service Provider will keep the
Confidential Information confidential and prevent its unauthorised
disclosure to or use by any other person.
2.2 RESTRICTED PURPOSE
The Service Provider will not use the Confidential Information for any
purpose other than to provide the Services.
2.3 NON-REMOVAL
The Service Provider will not remove the Confidential Information or
any material containing the Confidential Information from the premises
of the Franchisee without the prior written consent of the Franchisee.
66
2.4 REPRODUCTION PROHIBITED
The Service Provider will not appropriate, copy, memorise or in any
manner reproduce any of the Confidential Information unless directed by
the Franchisee.
2.5 RETURN OF CONFIDENTIAL INFORMATION
The Service Provider will return all Confidential Information in the
possession or under the control of the Service Provider on the earlier
of the request by the Franchisee or Termination.
2.6 PERMITTED DISCLOSURES
Nothing in this Agreement will obligate the Service Provider to
maintain any Confidential Information in confidence which is:
(a) required to be disclosed pursuant to a lawful order of any
court or government authority;
(b) in the public domain at the time the Service Provider receives
it.
3. TITLE TO BUSINESS SYSTEM
3.1 PROPERTY
The Service Provider acknowledges that the Business System, the
Confidential Information and any goodwill attached to them is the
property of ZLand or the grantor of such rights to the Franchisor.
3.2 INVENTIONS AND MODIFICATIONS
Any Inventions or Modifications developed or created by the Service
Provider, whether solely or jointly with others, in the course of
providing the Services are the property of ZLand.
3.3 DISCLOSURE
The Service Provider will promptly disclose in writing all Inventions
and Modifications to the Franchisor.
3.4 ASSIGNMENT
The Service Provider assigns all of its right, title and interest in
and to the Inventions and Modifications, including without limitation
all intellectual property rights, to ZLand or its nominee. The
Franchisee will execute all documents required by ZLand or the
Franchisee and take such other actions as ZLand or the Franchisee may
reasonably require to effect such assignment.
67
4. RESTRAINTS
4.1 NON-SOLICITATION
The Service Provider covenants that neither it nor, if a body
corporate, its directors, officers or shareholders, will solicit,
canvass or endeavour to obtain contracts or arrangements with current
or past customers or prospective customers of ZLand or the Franchisee,
directly or indirectly, for a period of 2 years from the date of
Termination without the prior written consent of ZLand or the
Franchisee. In this clause, any reference to "customer" or "prospective
customer" means a person with whom ZLand or the Franchisee has carried
on substantial negotiations or discussions at any time during the 12
months prior to date of Termination.
4.2 NON-ENTICEMENT
The Service Provider covenants that neither it nor, if a body
corporate, its directors, officers or shareholders, will entice or
attempt to entice, directly or indirectly, for a period of 2 years from
the date of Termination, any person who was:
(a) an employee, agent or contractor of ZLand or the Franchisee;
or
(b) at any time prior to the date of Termination an employee,
agent or contractor of ZLand or the Franchisee,
from continuing in its relationship with ZLand or the Franchisee,
without the prior written consent of ZLand or the Franchisee.
4.3 INDEPENDENT RESTRAINT
Each of the covenants constitutes an independent and separate restraint
imposed on the Service Provider under this Agreement.
4.4 RESTRAINTS REASONABLE
The Service Provider acknowledges that the restraints contained in this
Agreement are reasonable having regard to the nature of the
Franchisee's legitimate business interest in the Franchised Business.
4.5 VALIDITY
If any of the restraints contained this clause is or will become
unenforceable, the validity and enforceability of the other restraints
imposed will not be affected and will remain binding on the Service
Provider.
5. BREACH
In the event of a breach or threatened breach of the terms of this
Agreement by the Service Provider ZLand or the Franchisee may:
(a) obtain an injunction restraining the Service Provider from
committing any breach of this Agreement without showing or
proving any actual loss sustained by ZLand or the Franchisee;
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(b) bring a claim for damages for any loss suffered, either
directly on indirectly, by ZLand or the Franchisee as a
consequence of any such breach; or
(c) both (a) and (b).
6. INDEMNITY
The Service Provider will indemnify ZLand and the Franchisee for any
loss or damage suffered by ZLand or the Franchisee from any breach of
the Service Provider's obligations or undertakings including without
limitation all damages, liability, losses, claims and expenses
(including legal expenses).
7. OBLIGATIONS SHALL SURVIVE
The obligations of the Service Provider in this Agreement will continue
in full force and effect for 2 years after the date of Termination.
8. RIGHTS
This Agreement not be construed as granting the Service Provider any
rights to the Business System, the Confidential Information or the
Franchised Business unless specifically agreed by the parties in
writing.
EXECUTED in SYDNEY ON __________________ 2000.
ZLAND AUSTRALIA PTY LIMITED )
)
EXECUTED by ZLAND AUSTRALIA PTY ) _______________________________
LIMITED ACN 085 819 067 by: ) Sole Director and Secretary
)
) _______________________________
) Name (BLOCK LETTERS)
)
THE FRANCHISEE
EXECUTED by ________________ ACN )
_________________________________ by: )
)
)
_________________________________ ) ______________________________
Director ) Secretary
)
)
_________________________________ ______________________________
Name (BLOCK LETTERS) Name (BLOCK LETTERS)
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THE SERVICE PROVIDER (IF A COMPANY) )
EXECUTED by ___________________________ ACN ) ______________________________
____________________________________ by: ) Sole Director and Secretary
)
) ______________________________
) Name (BLOCK LETTERS)
THE SERVICE PROVIDER (IF AN INDIVIDUAL)
SIGNED by _______________________________ in )
the presence of: ) ______________________________
)
)
____________________________________________ )
Signature of witness )
)
____________________________________________ )
Name of witness - please print )
)
)
____________________________________________ )
Address of witness )
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SCHEDULE 1
Item 1: The Franchisee
Item 2: The Service Provider