Dissecting a Franchise Agreement: Part Two | Law Firm in Metro Manila, Philippines | Corporate, Family, IP law, and Litigation

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Dissecting a Franchise Agreement: Part Two | Law Firm in Metro Manila, Philippines | Corporate, Family, IP law, and Litigation Lawyers 14/5/20, 4:16 pm

The first part of “Dissecting a Franchise Agreement” dwelled on the subject matter of the franchise agr
business format being franchised. Since a franchise agreement is usually a lengthy document, it is best th
broken down into its basic elements, to allow prospective franchisors and franchisees to understand its bare

Like any other contract, a franchise agreement involves three essential elements, namely, consent, subje
or consideration. One of the aspects of “consent” involved in a franchise agreement (https://ndvlaw.com/di
agreement-part-four/) is the consent of the franchisor, represented by his signature in the franchise agreem
consent, the franchisee is allowed by the franchisor to use his trademarks and proprietary marks subje
(https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/), the operations manual/s and materials
issued in the course of the agreement, and the know-how, trade secrets, and information learned by the f
conduct of the franchise agreement.

It must be noted that the franchisor, even after a franchise agreement (https://ndvlaw.com/dissecting-a-f
part-three/) is signed, remains the owner of the franchise. Thus, after the term of the
(https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/) expires and no renewal is granted to th

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Dissecting a Franchise Agreement: Part Two | Law Firm in Metro Manila, Philippines | Corporate, Family, IP law, and Litigation Lawyers 14/5/20, 4:16 pm

franchise agreement should prevent the franchisee from operating, engaging, or participating in any c
owner, stockholder, officer, independent contract, or employee, in any business which is similar to, or sta
the franchisor’s business.

In fact, a good franchise agreement (https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/)

legal remedies afforded to the franchisor to protect the latter in case the franchisee decides to contravene
franchise agreement. If the franchisee should decide to operate a business similar to, or competing w
business, the franchisor by virtue of the certain provisions in franchise agreement (https://ndvlaw.com/di
agreement-part-one/), should be able to immediately secure a temporary restraining order or injunction
restrain the former franchisee from continuing with his acts. This is because, at all times before, during, and
franchise agreement (https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/), the franchisor is
by the franchisee as the owner of the business format franchise. Thus, the signing of the
(https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/) does not alter the personality of the fr
absolute control over the conduct of the franchise agreement (https://ndvlaw.com/dissecting-a-franchise-ag
and even after its expiration.

Likewise, the consent involved in a franchise agreement (https://ndvlaw.com/dissecting-a-franchise-agre

that of the franchisee. Upon signing the franchise agreement (https://ndvlaw.com/dissecting-a-franchise-ag
the franchisee has essentially agreed to the terms of the franchise agreement, including payment of the stip
royalties, penalties and other assessments due to the franchisor from the franchisee. In addition to agreein
personality of the franchisor under the agreement, the franchisee’s consent also includes his agreem
remedies afforded under the franchise (https://ndvlaw.com/dissecting-a-franchise-agreement-part-three/
franchisor, including management take-overs, and summary grant of injunction.

While consent of the parties to a franchise agreement (https://ndvlaw.com/dissecting-a-franchise-agr

exhibited through their respective signatures in the agreement, the parties are not without legal recourse, i
consent was procured through fraud, mistake or duress. In such instances, the innocent party may file an a
the contract rescinded or annulled.

Let us help you. For further inquiries, you may seek legal assistance by e-mailing us a
(mailto:info@ndvlaw.com).

Nicolas & De Vega Law Offices is a full service law firm in the Philippines (https://ndvlaw.com/nicolas-de-ve
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Dissecting a Franchise Agreement: Part Two | Law Firm in Metro Manila, Philippines | Corporate, Family, IP law, and Litigation Lawyers 14/5/20, 4:16 pm

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