Franchise Proposal Template

FRANCHISE PROPOSAL TEMPLATE

Parties and Proposal Date

This Franchise Proposal is submitted by Franchisor: and addressed to Prospective Franchisee: .

Proposal Date: ,

Recitals

WHEREAS, Franchisor owns and operates the system and trade name identified as (the "System"), including associated trademarks, service marks, procedures, and operational standards; and

WHEREAS, Prospective Franchisee desires to obtain the right to establish and operate a franchised business using the System within a defined territory on the terms set forth in this Proposal and subject to execution of a formal Franchise Agreement; and

WHEREAS, the parties desire to record the principal business terms for the proposed franchise grant and to use this Proposal as the basis for negotiating and preparing a definitive Franchise Agreement.

Proposal Summary

Scope of Work

The Franchisee will operate the franchised business consistent with the System standards and the terms of the subsequently executed Franchise Agreement. The substantive operational responsibilities include site selection, build-out, hiring and training, inventory procurement, day-to-day operations, customer service, accounting, and reporting obligations.

Fees and Payment Terms

Initial Franchise Fee: payable as follows:

Ongoing Royalty Fee: of gross sales, payable monthly. Marketing Fund Contribution: .

Late Payment and Interest: All amounts not paid when due shall accrue interest at the rate of per month (or the maximum permitted by law, if lower). Franchisee shall also be responsible for reasonable collection costs, including attorneys' fees, incurred by Franchisor to collect past due amounts.

Training and Support

Franchisor will provide initial training and ongoing support as described below. Training dates, location, and any trainee fees will be set forth in the Franchise Agreement.

Term and Termination

Proposed Term: This Proposal contemplates an initial term of years.

Proposed Effective Date:

Termination for Cause: Either party may terminate the Franchise Agreement for material breach by the other party if such breach is not cured within days after written notice. Termination for Convenience: Franchisor may terminate only as expressly provided in the Franchise Agreement.

Confidentiality

Each party acknowledges that in connection with the evaluation and performance of this Proposal it may receive Confidential Information of the other party. "Confidential Information" includes system manuals, financial projections, pricing, trade secrets, business plans, customer lists, and other non-public information. Each party shall: (a) use Confidential Information solely to evaluate and perform the obligations contemplated by this Proposal and any subsequent Franchise Agreement; (b) restrict disclosure to its employees, advisors, and representatives who have a need to know and who are bound by confidentiality obligations at least as protective as those set forth herein; and (c) protect Confidential Information with at least the same degree of care it uses to protect its own confidential information, but in no event less than reasonable care.

Exceptions: Confidential Information does not include information that is or becomes publicly available through no breach of this obligation, independently developed without use of Confidential Information, or rightfully received from a third party without restriction. The confidentiality obligations shall survive termination of negotiations and any Franchise Agreement for a period of five (5) years, except that trade secrets shall be protected for the period permitted by applicable law.

Governing Law; Dispute Resolution

This Proposal and any subsequent Franchise Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles. The parties agree that equitable relief, including injunction, shall be available to prevent breaches of confidentiality and misuse of intellectual property.

Additional Terms

Assignment: Neither party may assign its rights under this Proposal without the prior written consent of the other party, except that Franchisor may assign to an affiliate or successor in connection with a sale of substantially all of its assets or a corporate restructuring.

Amendment and Waiver: Any amendment to this Proposal must be in writing and signed by both parties. No waiver shall be effective unless in writing and signed by the waiving party.

Entire Agreement

This Proposal constitutes the complete statement of the principal business terms between the parties regarding the subject matter hereof. Except as expressly provided herein, this Proposal does not create any binding franchise grant; rather, it sets forth the parties' mutual understanding and will be superseded by a definitive Franchise Agreement executed by the parties. Notwithstanding the foregoing, Sections entitled Confidentiality, Governing Law, and any obligations to pay fees accepted hereunder shall be binding unless and until superseded by a definitive agreement.

Acceptance

To indicate acceptance of the terms of this Proposal, the parties should execute below. Execution by both parties shall evidence agreement to proceed with preparation of a definitive Franchise Agreement reflecting these terms and other customary provisions.

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