Memorandum of Agreement for Franchise
MEMORANDUM OF AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Memorandum of Agreement is executed and entered into by and between:
BENTEA FOOD AND BEVERAGE STORE, represented by its owner, BEN F. BANAAG, Filipino, of legal age, married to Abegail E. Banaag, and a resident of Block 15, Lot 11, Villa Paraiso, Visayan Village, Tagum City, Davao del Norte, Philippines, hereinafter referred to as “FRANCHISE HOLDER”;
-and-
GINNALYN B. TAMPUS, Filipino, of legal age, married and a resident of 148 First Avenue, Margarita Village, Bajada, Davao City, Philippines, hereinafter referred to as “FRANCHISEE”;
Collectively referred to as “the parties”,
-WITNESSETH THAT-
WHEREAS, the FRANCHISE HOLDER is engaged in the business of selling food and beverages, specifically Takoyaki and Milk tea, and is organized and registered under Philippine laws as “BENTEA’S TAKOYAKI/BENTEA FOOD AND BEVERAGE STORE”;
WHEREAS, BENTEA FOOD AND BEVERAGE STORE has attained popularity and established its reputation among the public as a business selling tasty and enjoyable snacks and refreshments which has resulted in its growth as a business enterprise;
WHEREAS, the FRANCHISE HOLDER operates and franchises others to operate a number of outlets/store for the sale of the products of BENTEA’S TAKOYAKI;
WHEREAS, the FRANCHISEE desires to franchise and operate an outlet store under the name of BENTEA’S TAKOYAKI and to sell its products in accordance with the terms and conditions of this Agreement;
WHEREAS, the FRANCHISEE understands that the success of the business contemplated by this Agreement is subject to substantial risks and depends in large part on the business ability of the FRANCHISEE to market the product as well as to actively and responsibly participate in the development and management of the franchise business;
NOW THEREFORE, for and in consideration of the foregoing premises, the parties mutually agree to bind themselves to the following terms and conditions:
A. GENERAL PROVISIONS:
1. The FRANCHISE HOLDER shall grant to the FRANCHISEE the exclusive right, license and authority to sell BENTEA’S TAKOYAKI, a product exclusively processed and produced by BENTEA FOOD AND BEVERAGE STORE;
2. The FRANCHISEE’s store where he/she will sell BENTEA TAKOYAKI shall be located at Citiscape Hotel, Ground floor, Ubalde Road, Rafael Castillo Street, Davao City;
3. The FRANCHISEE agrees to pay a one-time, non-refundable franchise fee of __________________ (Php ____________) in CASH, payable upon the signing of this Agreement;
B. OBLIGATIONS OF THE PARTIES
1. Upon payment of the franchise fee, the FRANCHISEE shall be provided by the FRANCHISE HOLDER initial raw ingredients (premix, sauce and mayonnaise) worth FIVE THOUSAND PESOS (Php 5,000), which shall include a set of equipment and utensils essential for the operation of the business;
2. Other than the equipment and utensils initially provided by the FRANCHISE HOLDER, the FRANCHISEE shall, at its sole expense, purchase all other needed furniture or equipment for the operation of the business;
3. The FRANCHISEE shall be responsible for obtaining all necessary business permits, licenses, clearances which may be required by national and local laws, ordinances, or regulations;
4. The FRANCHISEE shall at all times use its best efforts to treat and keep all information obtained by him/her regarding the business of the FRANCHISE HOLDER as confidential as possible and limit access to the ingredients, products, information to its employees on a need-to-know basis only.
5. The FRANCHISEE acknowledges that the unauthorized use or disclosure of any information he/she has obtained from the franchise of the business will cause irreparable injury to the FRANCHISE HOLDER, which the latter may demand damages therefrom;
6. The FRANCHISEE, without the FRANCHISE HOLDER’s prior written consent, shall not disclose any information (except to his/her employees) or use or permit the use of such information regarding the business (except as may be required by applicable law or authorized by this Agreement) , or copy, duplicate, record or otherwise reproduce such information, in whole or in part, or otherwise make available to any person or source not authorized in writing by the FRANCHISE HOLDER to receive such information at any time during the term of this Agreement or thereafter;
7. The FRANCHISEE shall be permitted to engage in any kind of advertising activities. However, the FRANCHISE HOLDER reserves the right to review any kind of advertisement and may request to have the same removed, replaced or modified if, in his discretion, the advertisement does not reflect the standards of BENTEA FOOD AND BEVERAGE STORE;
8. The FRANCHISEE may sell other products and/or services from other brands in their designated outlet store, provided that such products will not bear or use the name of BENTEA TAKOYAKI;
9. The FRANCHISEE shall not re-sell, re-package or distribute the raw products of BENTEA TAKOYAKI;
10. The FRANCHISEE, its employees, food handlers and agent shall not modify or alter the recipes, quality, mixture and color of the raw products;
11. The FRANCHISEE shall not assign, transfer or sub-lease, any of its rights and obligations under this Agreement except upon written notice and approval of the FRANCHISE HOLDER;
12. The FRANCHISEE shall only sell BENTEA TAKOYAKI raw products at the location herein provided. Should the FRANCHISEE intend to open a separate additional outlet store, he or she may do so provided that a separate franchise is obtained;
13. The FRANCHISEE shall paint the interior of the outlet store in the colors of matte black and matte red with matte black as the dominant color. The FRANCHISEE shall ensure that eighty (80%) of the interior of the outlet store is painted with matte black and only twenty (20%) is painted with matte red;
C. PAYMENT, PRICING OF PRODUCTS and other FEES
1. The FRANCHISE HOLDER will provide a Suggested Retail Price of ______ to the FRANCHISEE upon the execution of this Agreement;
2. The FRANCHISEE may not set a price higher or lower than that of the Suggested Retail Price without the prior notice and approval of the FRANCHISE HOLDER;
3. The FRANCHISEE’s request to increase/decrease the selling price shall be submitted to the FRANCHISE HOLDER no later than ten (10) days from the execution of this Agreement;
4. In the event of unstable pricing due to causes not within the control of the parties which includes but is not limited to inflation of prices of raw materials, the pricing will be adjusted on an “as need basis” and the parties will work together to determine a fair and equitable pricing.
5. It is mutually agreed upon by the parties that the delivery of raw products and materials shall be on a PICK-UP BASIS.
6. In the event that the FRANCHISEE is unable to pick up the raw products and materials ordered from the designated pick-up location, the FRANCHISE HOLDER may offer to deliver the same for an additional cost. The delivery fee shall take into consideration the fuel charges, the salary of the delivery staff and such other matters to be mutually agreed upon by the parties;
7. All pre-orders of BENTEA TAKOYAKI products will be called into by the FRANCHISEE by mutually agreed-upon cut-off time. Ordering deadlines may differ by location of the store and availability of raw materials;
8. All orders shall be paid in FULL upon pick-up of the products and/or delivery of the same. The Franchisee may pay the order in advance, subject to the conditions and terms agreed upon by both parties;
D. USE OF NAME, LOGO, AND COMMERCIAL MARKS
1. The FRANCHISE HOLDER solely owns the proprietary right and interests in and to the BENTEA TAKOYAKI logo and such other commercial symbols as the FRANCHISE HOLDER may from time to time authorize the FRANCHISEE to use in connection with the operation of BENTEA TAKOYAKI;
2. The FRANCHISEE shall have the right to display and use the BENTEA TAKOYAKI logo and marks, but only for use in connection with the sale of BENTEA TAKOYAKI food products which the FRANCHISEE is authorized to prepare and sell to the general public;
3. The FRANCHISEE may use the logo and marks at any location other than the location stipulated in this Agreement or for any other purpose or in any manner not herein indicated, PROVIDED, prior written notice and approval of the FRANCHISE HOLDER is obtained;
4. The FRANCHISE HOLDER may require the FRANCHISEE to discontinue the preparation, offer or sale of any product or item which, in its opinion, does not conform to the quality standards or image of the business;
5. Any and all goodwill on connection to the FRANCHISEE’s use of BENTEA TAKOYAKI marks and logo shall belong to the FRANCHISEE HOLDER;
6. The FRANCHISEE agrees that the business franchised hereunder shall be named BENTEA TAKOYAKI without any suffix or prefix attached thereto. The FRANCHISEE may place additional words, suffix or prefix in the business name at its location, PROVIDED, prior written and approval of the FRANCHISE HOLDER is obtained;
7. The FRANCHISEE agrees that in all public and private records, in its relationship with other persons or companies, and in any documents, pleading or similar document, the FRANCHISEE shall indicate clearly that the FRANCHISEE’s business is independently owned and that the operation of said business are separate and distinct from the operation of the business by the FRANCHISE HOLDER;
8. The FRANCHISEE shall not develop, create, generate, own, license or use in any manner any computer medium or electronic medium (including but is not limited to, internet homepage, facebook, Instagram, twitter, other social media accounts, email address, news group and other internet-related medium) which in any way uses or displays, in whole or in part, the business marks and logo or any words, symbols or terms confusingly similar to the business’ logo, without the FRANCHISE HOLDER’s express written consent and only in such manner and in accordance with such procedures, policies, standards and specifications as the FRANCHISE HOLDER may establish from time to time;
9. The FRANCHISE HOLDER shall have access to all accounts, books, permits and licenses of the FRANCHISEE relevant to the operation of the business, provided that the FRANCHISE HOLDER shall provide notice to the FRANCHISEE of its intention to access, examine and/or inspect the accounts, books, permits and licenses. The access and inspection of the same shall be done only during business hours.
E. WARRANTIES
1. The FRANCHISEE represents that it is experienced in and is knowledgeable of the nature and specifics of the food business.
2. The FRANCHISE HOLDER does not warrant or guaranty the success of the business. The FRANCHISEE understands that there is not, nor can there be, any assurance or guaranty of success in the franchise business and that the FRANCHISEE’s ability, attitude, participation and hard work are the primary factors in determining the franchisee’s success.
3. The FRANCHISEE warrants that in entering into this Agreement, it has not relied on any representation made by the FRANCHISE HOLDER, but rather, relied on its personal knowledge, understanding and assessment of the nature and risks of the business, except those representations made by the FRANCHISEE regarding the quality of its raw products and services;
4. The FRANCHISE HOLDER guarantees that all products are fresh and saleable upon delivery.
5. The FRANCHISE HOLDER warrants that the products has complied with all the minimum requirements for all local and national law, regulations and ordinances regarding food manufacture, operation and distribution and safety and quality standards;
6. At the time of delivery/pick up, the FRANCHISEE shall inspect the raw products. In the event that the FRANCHISEE finds that the raw products do not meet quality standards, the FRANCHISEE shall give notice to the FRANCHISE HOLDER of such defect and request for the replacement/substitution of new stocks. The notice shall only be made within the day the product was delivered. Notice beyond the grace period provided shall not be entertained.
7. The FRANCHISE HOLDER shall not be liable for any spoilage arising from the poor storage and handling of the FRANCHISEE of the products;
F. LIABILITIES
1. The FRANCHISEE hereby warrants to indemnify the FRANCHISE HOLDER from any loss, costs or expense including attorney’s fees, that may be sustained by the FRANCHISE HOLDER because of the act or omission of the FRANCHISEE arising out of the operation of the business and/or the negligent acts or omissions of its employees or agents.
2. It is mutually understood and agreed by the parties that the FRANCHISEE is and shall be an independent contractor in the operation of the franchise granted to him/her. It is expressly understood that there shall be no employer-employee relationship between the parties;
3. It is mutually understood and agreed by the parties that the FRANCHISEE is not, for any purpose, an employee or agent of the FRANCHISE HOLDER, and that all of the personnel employed by the FRANCHISEE at its designated store will be employees and agents of the FRANCHISEE and are not employees or agents of the FRANCHISE HOLDER;
4. The FRANCHISEE understands and agrees that it does not have the authority to do anything for or on behalf of the FRANCHISE HOLDER, including, but not limited to, holding itself out as an agent of the FRANCHISE HOLDER with regards to the operation and management of BENTEA TAKOYAKI;
5. The FRANCHISEE understands and agrees that it has no authority to sign contracts, enter into negotiations and agreements, purchase, acquire or dispose of any property, or incur any obligation or liability in behalf of the FRANCHISE HOLDER. Any liabilities which may be incurred by the FRANCHISEE arising from any unauthorized acts made by him/her shall be solely for the FRANCHISEE’s account;
6. The FRANCHISE HOLDER shall be free from any liability which may result from the operation and management of the FRANCHISEE of the franchise which may include any liability from its clients, the government and the like. The FRANCHISEE is solely responsible for the acts or omission of its employees regarding the operation of the business.
7. The FRANCHISE HOLDER shall likewise be free from any liability which the FRANCHISEE may incur or be liable with regards to its employees in accordance with the labor laws of the Philippines;
8. The FRANCHISEE HOLDER shall be responsible for the payment of any tax, fee, or charge imposed by the national or local government arising from his/her operation of the franchise;
9. Neither party shall be liable for the failure to perform or its delay in the performing any obligation under this Agreement if such failure or delay is resulting from fire, flood, earthquake, war, strike, lockout, power failure, major equipment breakdowns, accident, riots, acts of God, acts of the nation’s enemies, laws, orders, or at the insistence or result of any government authority or any other delay beyond each other’s reasonable control, provided that such obligation shall be performed immediately upon the termination of such cause preventing or delaying such performance;
G. TERM
1. The term of this Agreement shall commence on __________ until ______________, unless sooner terminated as provided herein;
2. Absent any written notice to terminate this Agreement by any of the Parties, this Agreement shall be deemed automatically renewed, subject to the execution of a subsequent Agreement by the Parties;
3. A renewal fee of ______________ (___________) be paid by the FRANCHISEE upon renewal of this contract;
4. Written notice by one party intending to discontinue the franchise shall be made to the other party within ten (10) days prior to the termination date as provided herein;
5. It is mutually agreed upon by both parties that either party shall have the right to terminate this Agreement only for “cause”. “Cause” is hereby defined as a material breach of this Agreement.
6. Abandonment or failure of the FRANCHISEE to operate the business for thirty (30) consecutive days or any shorter period of time after which the FRANCHISE HOLDER reasonably determines that the FRANCHISEE does not intend to continue to operate the business, unless such failure is due to fire, flood, earthquake or other similar cause beyond the FRANCHISEE’s control, shall be a valid cause for termination.
7.
H. RESCISSION CLAUSE
1. In case in the event of any material breach of any of the provisions of this Agreement, the non-breaching party may extrajudicially demand the rescission of this Agreement with the effect of its immediate termination, upon receipt of the demand letter by the guilty party, without prejudice to the right of the aggrieved party to require the payment of damages;
2. In the event of a material breach of this Agreement, when the FRANCHISE HOLDER intends to continue this Agreement, the FRANCHISEE shall be given ten (10) days, after written notice of the material breach, within which to remedy the violation and to provide evidence of such remedy to the FRANCHISE HOLDER. If the breach is not cured within the time period, or such longer time period as applicable law may require or as specified by the FRANCHISE HOLDER in the notice of default, this Agreement and all rights granted by herein shall thereupon automatically terminate without further notice or opportunity to cure;
3. All notices required under this Agreement shall be in writing and shall be either (i) served personally; (ii) sent by registered mail or (iii) by reputable delivery couriers. Notices served personally are effective immediately, and those served by mail shall be deemed effective after twenty four (24) hours upon receipt.
I. MISCELLANEOUS PROVISIONS
1. The FRANCHISE HOLDER has a distinct plan for the operation of BENTEA TAKOYAKI which includes but is not limited the formulation of its raw products, marketing strategies, introduction of new products, formulation of retail prices, distribution and expansion of the business, thus, in entering into this Agreement, the FRANCHISEE fully understands and agrees that this Agreement is conditioned upon the continued strict adherence by the FRANCHISEE to all standards, policies, procedures and requirements formulated, decided or otherwise brought to the FRANCHISEE’s attention by the FRANCHISE HOLDER for the operation, maintenance and improvement of BENTEA TAKOYAKI;
2. The FRANCHISEE understands and agrees that strict adherence to these standards, policies, procedures and requirements is essential to the expansion and growth of the business;
3. The rights and duties created by this Agreement are personal to the FRANCHISEE. The FRANCHISEE acknowledges that the FRANCHISE HOLDER has entered into this Agreement in reliance on the individual or collective character, skill, aptitude, business ability and financial capacity of the FRANCHISEE. Therefore, the FRANCHISEE shall not assign any of its rights and obligations under this Agreement except upon written notice and approval of the FRANCHISE HOLDER;
4. In the event that the FRANCHISEE assigns its rights and duties herein without notice and approval of the FRANCHISE HOLDER, the latter shall not be bound by the assignment and any or all liabilities arising therein shall be for the sole account of the FRANCHISEE;
5. In the event, any valid or applicable law of a competent governmental authority having jurisdiction over this Agreement and the parties hereto shall limit the FRANCHISE HOLDER’S right of termination hereunder or shall require longer period than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon termination required by such laws and regulations. The FRANCHISE holder shall not, however, be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or dispute relating to this Agreement or the termination thereof;
J. MODIFICATION CLAUSE
1. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees;
K. SEPARABILITY CLAUSE
1. In case any of the provisions of this Agreement is/are rendered invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby;
L. VENUE
1. This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines;
2. Any or all litigations or suits commenced arising from the provisions of this Agreement shall be brought before the courts of Tagum City who shall have exclusive jurisdiction thereof;
3. In the event of litigation, the losing party shall pay the prevailing party a reasonable sum for attorney’s fees and costs incurred in bringing or defending such action or proceeding and/or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of the litigation and shall be paid whether such action or proceeding is prosecuted to final judgment.
M. EFFECTIVITY CLAUSE
1. This Agreement shall take effect on ________ and shall remain subsisting unless sooner revoked by either party.
2. Upon the signing of this Agreement, all prior agreements, contracts, memorandum of agreement and other similar document entered and signed into by the parties shall be deemed terminated;
3. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, successors and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands this _________ at __________________, Philippines.
_________________________________
BEN F. BANAAG
FRANCHISE HOLDER/OWNER
BENTEA FOOD AND BEVERAGE STORE
Valid ID:______________________
With Marital Consent:
ABEGAIL E. BANAAG
GINNALYN B. TAMPUS
Franchisee
PASSPORT NO. P647119A
Valid until____________
SIGNED IN THE PRESENCE OF:
___________________________ ________________________
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF ___________________) S.S.
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BEFORE ME, a Notary Public for and in __________________this ____________________. Affiants personally exhibited to me the above-mentioned competent evidences of identity below their names, known to and known to be the same person who have executed the foregoing instrument and they acknowledged to me that the same are their own free and voluntary deed.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the date and place hereinabove written.
Doc. no. _____;
Page no. _____;
Book no. _____;
Series of 2021.