Franchise Agreement




DOWNLOAD ELIQUOR FRANCHISE AGREEMENT – 2017

DISCLOSURE:

On entering into this Agreement or any other agreement or transaction with ELIQUOR during the term of any continuation of it, to make full disclosure of all material circumstances and of everything known to it in respect of the subject matter of the contract, agreement or transaction which would be likely to influence the conduct of ELIQUOR including in particular the disclosure of other agencies, franchises or outlets in which the FRANCHISEE is interested, directly or indirectly.

FORCE MAJEURE:

In the event of the parties been delayed or hindered in or prevented from fulfilling any terms of this Agreement by any cause whatsoever which is beyond the immediate control of the parties, including but not limited to any strike, lock-out, labour dispute, war, riot, civil commotion, delay in transport, any order or regulation of any Government or other lawful authority, act of God, shortage of material, breakdowns in machinery or failure of any source of supply, then no right of action shall there by arise or accrue against one Party in favour of the other Party for damages or otherwise. The fact that a labour dispute could be resolved by the Party involved acceding to the demands made of it shall not make it a circumstance within the reasonable control of the Party. Any inability to meet a payment due by either Party to the other because of lack of funds shall in no circumstances be treated as an event of force majeure.

1. INTERPRETATION:

 

In this agreement and in all/any annexure to this agreement (other than documents/accounts prepared before the date of signature of this agreement):-

 

1.1           Clause headings are for convenience and are not to be used in its interpretation;

1.1.1        Unless the context indicates a contrary intention and expressions which denotes:

1.1.1.1     Any gender includes the other gender;

1.1.1.2     A natural person includes a juristic person and vice versa;

1.1.1.3     The singular includes the plural and vice versa;

1.1.1.4     Words importing natural persons shall include a reference to bodies, corporate and other legal personae and vice versa;

1.1.1.5     A reference to a party in a document includes that party’s successors and permitted assigns;

1.2           In this agreement the following expressions bear the meanings assigned to them below and cognate expressions bear corresponding meanings:

1.2.1        “The/this agreement” means the agreement as set out herein together with all appendices hereto (if applicable)

1.2.2        Any reference to an enactment is to that enactment as at the date of signature hereof and as amended or re-enacted from time to time;

1.3           Where the day on or by which anything is to be done is not a business day, it shall be done on or by the first business day thereafter;

1.4           When any number of days is prescribed in this agreement, same shall be reckoned exclusively of the first and inclusively of the last day, unless the last day falls on a Saturday, Sunday or Public Holiday, in which case, the last day shall be the next succeeding day which is not a Saturday, Sunday or Public Holiday;

1.5           A reference to a document includes an amendment or supplement to, or replacement or notation of that document;

1.6           The captions appearing in this agreement are for reference purposes only and shall not affect the interpretation hereof;

1.7           If any provision is a definition (or under this heading “Interpretation” and/or any other heading in this agreement) and is a substantive provision conferring rights or imposing obligations on any party, notwithstanding that it is only in the definition (or such other clause) effect shall be given to it as if it were a substantive provision in the body of the agreement;

1.8           Where figures are referred to in numerals and words, if there is any conflict between the two, the words shall prevail.

 

2. DEFINITIONS:

 

In this agreement, unless the context otherwise requires, the following words and expressions shall have the meanings assigned to them hereunder:

 

2.1           “effective date accounts” shall mean the financial statements of the FRANCHISEE for the period ending on the day immediately preceding the effective date;

2.2           “the Act” shall mean the Companies Act, No. 61 of 1973, as amended;

2.3           “the business” shall mean the business conducted at the premises as constituted by the sale assets and the leased assets;

2.4           “closing date” shall mean the first business day after the fulfilment (or waiver) of the last of the conditions, or such other date as may be mutually agreed amongst all of the parties in writing;

2.5           “condition” shall mean the suspensive condition to which this agreement is subject as set forth in clause 7 below;

2.6           “debtors” shall mean the claims against the debtors of the business as at the effective date (if applicable);

2.7           “effective date” shall mean the date on which this agreement is signed by both parties;

2.8           “fixed assets” shall mean the fixtures and fittings, furniture and office equipment of the business as set out in the schedule of the floor plan attached hereto as Annexure “A”;

2.9           “goodwill” shall mean the goodwill of the business;

2.10         “law” shall mean to take particular care to comply fully with the requirements of all relevant laws and regulations, including, but not limited to those in terms of the National Consumer Protection Act 68 of 2008, Companies Act 71 of 2008, Labour Relations Act 66 of 1995, Occupational Health and Safety Act 85 of 1993, Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972, National Water Act 36 of 1998, any similar amending or supervening legislation or regulation;

2.11         “leased assets” shall mean the assets held by the FRANCHISEE, as supplied by supplier, as at the effective date, in terms of lease, instalment, sale, rental or credit agreements (when and/if applicable);

2.12         “marks and intellectual property” shall mean the patents, trademarks, trade and business names, logos, colour schemes, symbols, emblems, insignia, fascia, slogans, copyrights, know-how, information, drawings, plans and other identifying materials whether or not registered or capable of registration and all other proprietary rights whatsoever owned by or available to ELIQUOR adopted or designated now or at any time hereafter by ELIQUOR for use in connection with the business, brands and designs exclusively owned by the FRANCHISOR and whether registered or not and used in connection with the business;

2.12         “name/s” shall mean ELIQUOR/ELIQUOR™”

2.13         “nominated principal” shall mean where the FRANCHISEE is a separate legal entity, the person (approved by ELIQUOR) to represent the FRANCHISEE in its dealings with FRANCHISOR and where the FRANCHISEE is not a legal entity, the person, approved in writing, to manage the businesses and to represent the FRANCHISEE in its dealings with FRANCHISOR or the person designated by FRANCHISOR to manage the businesses on the FRANCHISEE’s behalf in terms of this Agreement;

2.14        “premises” shall mean the premises of trade _________________________________­­__

ADDRESS OF PREMISES OF TRADE

forming part of the property currently utilised for the operation of the businesses together with other improvements thereon;

2.15         “prime rate” shall mean the publicly quoted basic rate of interest per annum, at which commercial banks lend on overdraft to its ordinary clients compounded monthly in arrear and calculated on a three hundred and sixty five (365) day year (irrespective of whether a leap year or not);

2.16         “products” shall mean all products approved by ELIQUOR to be stocked and sold in the businesses

2.17        “FRANCHISEE” shall mean _________________________________________________

APPLICANT BUYING INTO THE CONCEPT

2.18         “retail systems” shall mean the comprehensive and distinctive system for the retailing of a full range of products, the retailing of an extensive range of liquor/convenience items and provision of goods related facilities and utilising and comprising the Intellectual Property and certain standard operational procedures (including but not limited to specify layout, fitting out and operation of outlets and other related facilities) confidential information, plans, directions, specifications, standards, methods, management and advertising techniques, business stationary and identification schemes, including the distinctive colour scheme and branding peculiar to the ELIQUOR brand, commonly known as the ELIQUOR Visual Retail Image, computer operating software, insignia, parts of which are contained in the manuals;

2.19         “sale assets” shall mean collectively the debtors, fixed assets, marks, stock, and goodwill;

2.20         “sale liabilities” shall mean the liabilities of the FRANCHISEE as at the effective date, including any liability for taxation of whatsoever nature;

2.21         “the FRANCHISOR” shall mean “ELIQUOR”

2.22         “franchise fees” shall mean the fees set out in clauses 4.5 and 25.3 at R3000,00 per month, payable on a monthly basis by the FRANCHISEE to the FRANCHISOR in consideration for fees payable in respect of the operation of the liquor retail store in respect of turn-over;

2.23         “training manuals and/or modules” shall mean any policy and procedure manuals, modules and instructions (including without limitation any relating to Brand and/or Visual Identity) any information produced by ELIQUOR and/or any service provider which may require amendment from time to time for operational purposes;

2.24         “signature date” shall mean the date of signing of this agreement by the last signing party hereto;

2.25         “stock” shall mean all the stock of the business as at the effective date, including goods in transit (being stock purchased by the FRANCHISEE prior to the effective date, but not yet delivered to the premises as at the effective date);

2.26         “VAT” shall mean Value Added Tax;

2.27         “VAT Act” shall mean the Value Added Tax Act, No 89 of 1991, as amended;

2.28         “Trading date” shall mean the date on which the business starts to trade;

2.29         “variation” shall mean no amendment or variation of any provisions of this Agreement shall be valid and binding unless recorded in writing, and signed by both parties hereto or by the party against whom the amendment is sought to be enforced;

2.30         “waiver” shall mean that no failure by either party given to it hereunder or to insist upon strict compliance by the other party with any obligation or condition hereof and no practice of the parties at variance with the terms hereof shall constitute a waiver of any of the party’s rights hereunder.

 

3. SALE:

 

Whereas the FRANCHISOR, “ELIQUOR™”, is the intellectual property inventor of a concept of setting up liquor stores operating under the style and business name “ELIQUOR™”, hereinafter referred to as the “business” and the FRANCHISEE is desirous to buy into the concept and to set up a liquor store under this concept on the terms and conditions as set out herein, the Parties agree as follows:

3.1           The FRANCHISOR hereby sells to the FRANCHISEE which hereby purchases the business into the concept and to set up a liquor store under this concept as per “store layout plan”;

3.2           The purchase is:

3.2.1        Effective with effect from the effective date, being the date on which the agreement has    been signed by both parties; and

3.2.2        Subject to the timorous fulfilment or waiver of the condition.

3.3           The parties agree that:

3.3.1        The business comprises an “enterprise” as defined in Section 1 of the VAT Act; and

3.3.2        The enterprise is now, and on the effective date will be, an “income earning activity” within the meaning of Section 11(e)(i)(aa) of the VAT Act.

3.4           It is recorded that the purchase price specified in clause 4 below, has been calculated and specified on the basis that the sale of the business excludes VAT, subject to the provisions herein below. The parties acknowledge that if the sale does not fall within the provisions of such Section, certain components forming the subject matter of the sale will fall to be charged with VAT at the rate in force as at the effective date. The parties accordingly agree, that in such event, and in order to comply with the provisions of Section 6 of the VAT Act, the purchase price and the allocations thereof as set out in 4 below, shall be increased by the rate of VAT at 14% in terms of Section 11(1)(e) of the VAT Act or at the rate applicable on the effective date on each VAT able component of the assets comprising the business and the purchase price shall be deemed to have been varied accordingly.

3.5           Pursuant to afore going, each of the FRANCHISOR and the FRANCHISEE hereby warrants that they are, or by the closing date will be, registered as a vendor for VAT purposes. Accordingly, this agreement shall be deemed to constitute a valid tax invoice for the items set out in clause 4 below for the purposes of VAT.

3.6           The FRANCHISEE shall give not less than 30 (thirty) day’s prior notice to ELIQUOR of any of the following:

3.6.1        Any proposed change in its registered office or address;

3.6.2        Any change in the name of the FRANCHISEE if applicable, provided that any such changes shall not in any way impair the FRANCHISEE’s liability to ELIQUOR under the Agreement;

3.7           If the FRANCHISEE is a company, closed corporation or business trust, this Agreement shall be of no force or affect unless and until every shareholder or member or trustee of the FRANCHISEE has signed the “Undertaking”;

3.8           If the FRANCHISEE is a company, closed corporation or business trust, ELIQUOR may at any time by delivering written notice to that effect to the FRANCHISEE terminate this Agreement upon one calendar months’ notice to the FRANCHISEE if control of the FRANCHISEE, change hands at any time without ELIQUOR’s prior written approval, which approval shall not be unreasonable withheld;

3.9           If the FRANCHISEE is a partnership:

(a)           the liability arising there under shall be joint and several between the partners:

(b)           the partners shall not allow any proposed change of the existing partnership, without ELIQUOR’s prior consent;

(c)           nothing herein shall prejudice ELIQUOR’s rights against any outgoing or retired partner at any time whatsoever;

3.10         On the death or mental incapability of the FRANCHISEE, ELIQUOR may approve the transfer of the business to any of the beneficiaries of the FRANCHISEE, in the case of death, or, in the case of physical or mental incapability, to the FRANCHISEE’s curator or such other person, provided ELIQUOR approves of such person and such person agrees in writing to be bound by the terms and conditions of this Agreement. Pending such transfer, ELIQUOR will be entitled to require that a Nominated Principal designated by ELIQUOR in writing be appointed to manage on behalf of the FRANCHISEE on terms and conditions acceptable to ELIQUOR;

3.11         If ELIQUOR does not approve the transfer of the businesses as envisaged above, then this Agreement shall terminate and the provisions of breach and termination shall then apply. ELIQUOR however agrees that it will not withhold its approval unreasonably;

3.12         If the FRANCHISEE for any other reason, as those above, does not remain in effective control of the business, ELIQUOR may terminate this Agreement forthwith in its reasonable discretion and the provisions above shall the apply;

 

4. PURCHASE PRICE:

 

The purchase price of the business is R 330,000.00 (Excluding VAT and Excluding Trading stock).

 

All payments shall be paid into the business account of eLiquor™ as follows:

CONTACT TO CONFIRM BANKING DETAILS OF YOUR PROVINCE.
FRANCHISEE will forward payment according to the terms as set out hereunder to ELIQUOR as soon as contract is validated by acceptance and signature of this agreement by both parties and payment of the deposit (4.1) has been affected.

 

4.1           Deposit: R 100,000.00 (Excluding VAT) on signature of the agreement;

4.2           Before commencement of the installation of the shop fittings and fixtures;

Week 1: R 150,000.00 (Excluding VAT);

4.3           Before POS (Point of sale is delivered and installed);

Week 2: R 60,000.00 (Excluding VAT);

4.4           Before CCTV Cameras is delivered and installed;

Week 3: R 20,000.00 (Excluding VAT);

4.5           As from the date of the commencement of trading, an on-going franchise fee of R 3000, 00 (Three Thousand Rands) per month, will be paid to the FRANCHISOR. Franchise fees is payable monthly.

4.6           As from the date of the commencement of trading, an on-going advertising fee of R 1000, 00 (One Thousand Rand) per month, will be paid to the FRANCHISOR. Advertising fees is payable monthly.

 

5. DRAWING AND SIGNING OF CONTRACTS:

 

If FRANCHISEE wishes to use a legal expert to finalize or sign this agreement, then these legal costs shall be paid by the FRANCHISEE. Cost of the preparation and drawing of this agreement has been paid to a registered legal Attorney.

 

6. EXPENSES:

 

Expenses for the account of the FRANCHISEE will be as follows (Unforeseen expenses excluded):-

6.1           Contract and legal expenses as set out in paragraph 31 below;

6.2           Water and electricity and connection fees in respect thereof;

6.3           Rental and deposit in respect thereof;

6.4           Plumbing in respect of the set-up of the store;

6.5           Electrical work in respect of the set-up of the store;

6.6           Any structural changes which might be necessary to the premises;

6.7           All trading licenses/liquor license and fees in respect thereof as required by South African Government and/or the local municipality and all regional service council levies due for all relevant periods;

6.8           The FRANCHISEE shall have a permanent ADSL line installed on his/her cost to ensure accessibility via e-mail;

6.9           The FRANCHISEE shall have a security system installed by a reputable Security Company on his/her own account.

 

7. CONDITIONS / PROTECTION OF INTELLECTUAL PROPERTY:

 

Appointment of FRANCHISEE is subject to, that the FRANCHISEE performing the requirements of this Agreement, ELIQUOR grants to the FRANCHISEE the exclusive right to conduct business at the premises approved to use, use of the supplied ELIQUOR equipment, the Intellectual Property relating to the business and the manuals and modules, all in accordance with the ELIQUOR Agreement. ELIQUOR reserves the right to grant similar rights to other persons or entities in respect of the operation of further business opportunities. Unless otherwise specified in this Agreement, the FRANCHISEE is not an agent of ELIQUOR and the FRANCHISEE has no right or authority to bind ELIQUOR or to pledge ELIQUOR’s credit except as may be provided for in this Agreement.

 

Neither the FRANCHISEE nor the FRANCHISEE’s staff is employees of ELIQUOR. Notwithstanding this, ELIQUOR has the right to verify the FRANCHISEE’s compliance with labour, taxation and other laws and regulations, provided that this shall not relieve the FRANCHISEE of its sole and exclusive responsibility for due compliance.

7.1           The transaction set out in clause 3 supra is subject to the suspensive condition that:

7.1.1        The FRANCHISEE has the obligation to source and ascertain 3 (three) potential, available properties, after which these premises are subject to the FRANCHISOR’s approval;

7.1.2        The FRANCHISEE shall obtain security of tenure with regard to the premises;

7.1.3        The FRANCHISEE shall obtain insurance on the business and the FRANCHISEE shall be liable to pay the monthly premiums in respect thereof;

7.2           Each of the parties shall use its respective best endeavours to procure the fulfilment of the condition. If, despite such endeavours, the condition is not fulfilled (or waived) by or by such extended date as the parties hereto may agree in writing on the basis that no party shall unreasonably withhold its consent   to   an   extension, then the FRANCHISEE has the right to cancel this agreement, and herewith agrees to an agreement cancellation fee of R30 000, 00 (Thirty Thousand Rand).

 

The FRANCHISEE acknowledges that the clientele and all other rights in and associated with the Intellectual Property and the ELIQUOR outlets business model vest absolutely in ELIQUOR and that the FRANCHISEE has no claims of any nature to any element of the Intellectual Property.

The FRANCHISEE hereby agrees:

7.4           Not to cause or permit anything which may damage, threaten or endanger the Intellectual Property or other Intellectual Property belonging to ELIQUOR and/or its affiliates title to it or assist or allow others to do so;

7.4.1        To notify ELIQUOR of any suspected infringement of the Intellectual Property or other Intellectual Property of ELIQUOR and/or its affiliates;

7.4.2        To take such reasonable action as ELIQUOR shall direct, at the expense of ELIQUOR, in relation to such infringement;

7.4.3        To only affix such notices to the ELIQUOR’s products or their packaging or advertising associated with the business as ELIQUOR shall direct;

7.4.4        To compensate and indemnify ELIQUOR and/or its affiliates for any use by the FRANCHISEE of the Intellectual Property otherwise than in accordance with this Agreement;

7.4.5        To indemnify ELIQUOR and/or its affiliates for any liability incurred to third parties for any use of the Intellectual Property otherwise than in accordance with this Agreement;

7.4.6        on termination of this Agreement forthwith to cease to use the Intellectual Property;

7.4.7        Not to tamper with any markings or name plates or other indications, of the source of origin, of the ELIQUOR’s products, this may be placed on products by ELIQUOR;

7.4.8        Not to use the Intellectual Property otherwise than as permitted by the Agreement;

7.4.9        Not to use any name or mark similar to or capable of being confused with the trade names or the trademarks or other Intellectual Property, in the businesses;

7.4.10      not at any time attack or challenge the right of ELIQUOR to the Intellectual Property or to induce or procure any other person to attack of challenge such rights;

7.4.11      not to use the Intellectual Property except directly in the business;

7.4.12      to use the trade names in the business as its only trade names;

7.4.13      to display such notices concerning the Intellectual Property or the relationship between the parties on its stationary and at the premises as is stipulated in the manuals from time to time;

 

 

8. PURCHASE CONSIDERATION:

 

8.1           The purchase consideration for the sale of the business is the shop layout as per ELIQUOR profile including all the fixtures as per the said profile; and

8.2           Stock valued +/-R 120,000.00 (Excluding Vat); is excluded in purchase price of R 330 000, 00 (Excluding Vat).

8.3           Pending payment of the balance of the purchase consideration, ownership in and to the sale assets will remain vested in the FRANCHISOR.

 

9. STOCK COUNTS (IN EVENT OF HANDOVER):

 

On the day immediately preceding the effective date, or on such other day as the parties may mutually agree in writing, the parties will conduct a physical count of the stock mentioned in paragraph 8 supra in accordance with the following provisions:

9.1           Each of the parties will be entitled to appoint one or more representatives to be present at the stock count;

9.2           Within seven (7) days of completion of the stock count, a certificate reflecting the stock count shall be prepared and initialled by the parties;

 

10. POSSESSION, OWNERSHIP AND CONTROL:

 

10.1         On the trading date:

10.1.1      The FRANCHISOR will place the FRANCHISEE in possession of the business at the premises; and

10.1.2      The risk in, benefit to and control of the business and the sale assets will pass to the FRANCHISEE;

10.1.3      Accordingly, with effect from the effective date but subject to clause 10.2 below, the FRANCHISEE hereby accepts delivery of the business and the sale assets;

10.2         Ownership in and to the business and the sale assets shall pass to the FRANCHISEE upon payment in full of the whole of the purchase consideration.

10.3         The parties shall use their respective best endeavours to procure whatever consents, if any, may be required for the passing of the rights and obligations in terms hereof. If and insofar as such consents cannot be obtained, then that fact shall not as between the FRANCHISOR and the FRANCHISEE, negate the provisions hereof, but the FRANCHISOR and the FRANCHISEE shall act in all respects as if such rights and obligations had passed accordingly and the FRANCHISOR shall continue, as against all affected third parties, to hold such rights and be liable for such obligations, for the benefit and risk of the FRANCHISEE and, as regards liabilities, under indemnity from the FRANCHISEE.

10.4         The right granted to the FRANCHISEE to operate the business, shall extend only to the premises and the FRANCHISEE agrees that it will not make any use of nor permit or authorise any use directly or indirectly of the ELIQUOR outlet or the Intellectual Property except in terms of this Agreement, nor will it knowingly offer or provide any information or assistance concerning the ELIQUOR outlet or the Intellectual Property to any other person, company or entity, except if expressly requested to do so by ELIQUOR.

10.4.1      In respect of signage, to exhibit at the premises and to obtain and maintain at the FRANCHISEE’s cost and expenses, where necessary, consents and licences, and to keep illuminated where appropriate a ELIQUOR or other identification sign in respect of the Intellectual Property which will be provided on loan and erected and maintained by ELIQUOR and to exhibit such other signs and advertising matter as may be required from time to time by ELIQUOR and not to erect, exhibit nor display any signs on the premises or on the ELIQUOR equipment save with ELIQUOR’s prior written consent and only on terms and conditions acceptable by ELIQUOR.

10.5         The right hereby granted shall not create in the FRANCHISEE’s favour any tenancy or any right in the nature of tenancy and without limiting the generality of the foregoing, the Retail Licence shall not confer on the FRANCHISEE any right to exclude from the premises, ELIQUOR, its employees or agents or any person authorised by ELIQUOR. ELIQUOR and/or its authorised agents shall be at liberty to enter upon the premises at any reasonable time and upon reasonable notice, to enter upon the premises and so have access to all equipment and records of the business for the purposes of ascertaining whether the provisions of this agreement are being complied with.

10.5.1      In respect of compliance with the Law, to take out and timorously renew at the FRANCHISEE’s cost all licences and permits necessary for the operation of the business from the premises and generally to comply with all statutes, bylaws, regulations and requirements of any government or other competent authority relating to the FRANCHISEE and the conduct of the business as well as any conditions of title pertaining to the property and in respect of the accounts and records of the business, to maintain at the premises in a form approved by ELIQUOR, full and accurate books of accounts of the business shall keep detailed management and accounting records pertaining to profit and loss accounts, all supporting invoices, delivery notes and vouchers, to use the management account systems and other financial systems and software specified by ELIQUOR, to permit ELIQUOR or its duly authorised agent either electronically or otherwise during business hours to inspect such accounts and records and to take copies thereof at the expense of ELIQUOR. If required by ELIQUOR, to allow ELIQUOR or its agent to audit the FRANCHISEE’s books, accounts, computer systems and records in order to verify all information provided to ELIQUOR, cost of any such audit shall be borne by ELIQUOR, unless there is a discrepancy of 5% (Five per cent) with the report provided by the FRANCHISEE to ELIQUOR, in which case the FRANCHISEE will bear such costs. At the FRANCHISEE’s cost, to procure that annual audited financial statements in respect of the business are prepared and sent to ELIQUOR, in a format specified by ELIQUOR by no later than 120 (one hundred and twenty) days after the financial year end for such business.

10.6         The FRANCHISEE acknowledges that the right to use the Intellectual Property is subject to the provisions, that, the Intellectual Property is and will remain the property of ELIQUOR or any other person from whom ELIQUOR has acquired the right to use this. ELIQUOR shall install on the premises all trademarks, logos and signage lighting considered appropriate by ELIQUOR for the image of the ELIQUOR outlet. ELIQUOR may at any time install additional or substituted trademarks and may remove and/or replace any of the trademarks or other aspects of the Intellectual Property which ELIQUOR reasonably consider necessary or desirable for the image of the ELIQUOR outlet. The FRANCHISEE will use its best endeavours to protect the Intellectual Property and in particular to comply with all the requirements of this Agreement in the best interest of both ELIQUOR and FRANCHISEE.

10.7         In respect of Health, Safety, Security and Environmental, to operate the business in a proper and safe manner, having regards to the products handled and stored, do all things reasonable necessary to ensure that the operation of the business does not cause or is likely to cause injury to persons or property.

10.7.1      To comply with all the requirements and carry out all prescribed checks in respect of health, hygiene, safety and environmental matters as prescribed by Law, as amended from time to time, the FRANCHISEE acknowledges that he is familiar with the Law pertaining thereto.

10.7.2      To ensure that adequate fire fighting equipment is installed on the premises and is regularly serviced, in order to maintain good working order and conditions and to replace any such equipment if it becomes missing. To ensure that the FRANCHISEE’s staff are at all times properly trained in, are aware of and comply with health, hygiene, safety, security en environmental standards prescribed by Law, to permit ELIQUOR to enter the premises and inspect the safety standards and procedures at any time and the level of compliance of the standards and procedures with ELIQUOR’s standard and procedures.

10.7.3      “To follow any recommendation or instruction made by ELIQUOR in regard to safety standards and procedures, as contained in a “Health and Safety Security and Environmental Audit for ELIQUOR outlets” compiled by ELIQUOR a copy of which report shall be handed to the FRANCHISEE or his representative.

10.7.4      To take particular care to comply fully with the requirements of all relevant laws and regulations, included, but not limited to those in terms of the Occupational Health and Safety Act 85 of 1993, as amended, the National Environmental Management Act 107 of 1998, as amended, The National Water Act 36 of 1998, as amended, any similar, amending or supervening legislation or regulation, and the appointment of the necessary safety representative and to allow ELIQUOR to conduct HSSE audits at the premises and to fully co-operate with ELIQUOR in this regard.

 

11. WARRANTIES:

 

FRANCHISEE to ensure that adequate financial resources are available to the ELIQUOR outlet by way of working capital and otherwise to ensure that the FRANCHISEE is able to fulfil all the obligations herein contained and to pay all expenses of and incidental to the conduct of the business.

11.1         The FRANCHISOR hereby gives and makes to the FRANCHISEE the warranties and representations set out below on the basis that:

11.1.1      The FRANCHISOR acknowledges that this agreement is entered into by the FRANCHISEE relying on each of such warranties and representations; and

11.1.2      The FRANCHISEE will not be entitled to cancel this agreement as a consequence of the breach of any of such warranties or representations, unless the breach is a material one which goes to the root of this agreement and is incapable of being remedied by the payment of monetary compensation or otherwise, or if so capable of being remedied, the FRANCHISOR fails so to remedy the breach within thirty (30) days of receipt of written notice calling upon it so to do.

11.2         If any dispute shall arise as to whether:

11.2.1      Any breach is a material breach which goes to the root of the agreement; or

11.2.2      The breach is incapable of being remedied by the payment of monetary compensation or otherwise; or

11.2.3      If it is capable of being remedied by the payment of monetary compensation or otherwise, whether the FRANCHISOR has failed to do so within the specified period, then such dispute shall be referred for determination, mutatis mutandis, in accordance with the provisions of 13 below.

11.3         The FRANCHISOR warrants that:

11.3.1      It is the sole and beneficial owner of the business and is entitled to sell and pass ownership of the business and the sale assets to the FRANCHISEE;

11.3.2      Save as may be specifically set out herein, none of the sale assets are, or as at the closing date will be, subject to any lien, hypothec or encumbrance and the FRANCHISOR is able to give free and unfettered title thereof to the FRANCHISEE;

11.3.3      No person has, nor will any person on the effective date have, any option or right to acquire any of the sale assets or any other assets of the business other than in the ordinary and normal course of business;

11.3.4      The FRANCHISOR is not in default of any material obligation affecting the business, whether under this agreement or under any legislation;

11.3.5      No person who has any claim in connection with the business, has instituted proceedings in a division of the High Court and/or in any Magistrate’s Court having jurisdiction, nor is the FRANCHISOR aware of any circumstances which may give rise thereto;

11.3.6      All of the fixed assets comprising the business will be in good and proper working order;

11.3.7      All of the marks used in the business have been disclosed to the FRANCHISEE and ELIQUOR agrees to the usage thereof, whilst trading under this agreement.

11.4         The FRANCHISEE confirms that he/she is fully aware that the name ELIQUOR is a name               that is and will be used for a series of similar stores bearing the name.

11.4.1      The FRANCHISOR agreed not to enact any similar business by the same and/or other name based on the same principal within 5 kilometres from the business premises of the FRANCHISEE’s business by the name of ELIQUOR;

11.4.2      To the best of the FRANCHISOR’s knowledge and belief, the use of the name/s does not infringe, nor will it infringe any rights of any third party;

11.4.3      No other person has the right to exploit the rights attaching to the name/s accept the FRANCHISOR and on the concept as set out in paragraph 3;

11.4.4      Between the effective date and the closing date, the FRANCHISOR will not bind the business to any agreement of any nature whatsoever, other than in the ordinary and regular course of business;

11.4.5      All amounts owing by the FRANCHISOR in respect of VAT payable for transactions concluded by or on behalf of the business and effective date will have been paid and the FRANCHISOR hereby indemnifies the FRANCHISEE against any liability arising in respect thereof;

11.4.6      To the best of the FRANCHISOR’s knowledge and belief, the FRANCHISOR has disclosed to the FRANCHISEE all material facts and circumstances which are or might be material to a purchaser of the business;

11.4.7      The tangible assets of the business will be fully insured by the FRANCHISEE against all risks and such insurance will not expire until a period being at least 30 (thirty) days after the closing date;

11.4.8      There are no liabilities of the FRANCHISOR, actual or contingent or conditional, which are not disclosed in connection with the business.

 

12. STAFF AND CLOTHING / MANAGEMENT OF THE BUSINESS:

 

The FRANCHISEE undertakes to ELIQUOR, to employ sufficient, properly trained staff throughout the term of this agreement to enable the FRANCHISEE properly and efficiently to discharge the obligations in terms hereof in an efficient and friendly manner to the high standards and satisfaction of ELIQUOR, to ensure that all staff and other persons required for the operation of the business have been employed in accordance with the efficient recruitment of staff and have completed all training required in terms of this agreement, to document all conditions of employment including grievance and disciplinary procedures in writing and to act strictly in accordance therewith, to observe minimum wage standards and to remunerate all employees in accordance with applicable legislation in respect of minimum wage standards, including, without limitation bargaining council and collective agreements and to negotiate with them in this regard if necessary in order, to ensure as far as it is reasonably possible that the business are operated by a stable and motivated staff complement.

If the FRANCHISEE is an individual, to personally conduct the business during normal trading hours as specified in this agreement and outside these hours to keep a suitably qualified person acceptable to ELIQUOR in charge of the premises and the business, if the FRANCHISEE is a juristic person, to keep the Nominated Principal in charge of the premises and the business at all times, who will then have the full power and authority to represent the FRANCHISEE and to enter into transactions with ELIQUOR on behalf of the FRANCHISEE, to ensure that the Nominated Principal completes the training required in terms of the prescribed manuals/modules, to procure that the Nominated Principal manages the business efficiently and effectively so as to ensure fulfilment and adherence by the FRANCHISEE of its obligations in terms of this agreement, it being acknowledged by the FRANCHISEE that it remains fully responsible and accountable for adherence to its obligations in this agreement. If the employment or service of any Nominated Principal in operating the business should terminate for any reason, including death or physical incapacity, to ensure the a replacement acceptable to ELIQUOR (acceptance to be in writing) is appointed within 60 days thereafter, provided that in the interim period nothing shall relieve the FRANCHISEE from at all times adhering to its obligations in terms of this agreement. During periods of necessary absence from the business by the FRANCHISEE and/or the Nominated Principal to ensure that a competent authorised representative acceptable to ELIQUOR is placed in charge of the business and to notify ELIQUOR of the fact that such person is in charge of the business. If required by ELIQUOR to appoint a Nominated Principal designated by ELIQUOR in writing in order to manage the business on behalf of the FRANCHISEE during the period between such time as the FRANCHISEE received notification of termination of any right of occupation of the premises for any reason and the time that the FRANCHISEE actually vacates the premises. To ensure that the manager in charge of the business on a day-to-day basis wears the uniform prescribed by ELIQUOR at all times while on duty. And so to ensure that such uniform is at all times clean and neat in appearance.

12.1         The FRANCHISEE hereby undertakes to ensure that all staff members are fully dressed and trained to maintain excellent service;

12.2         To offer contracts of employment to all members of staff in accordance with all labour legislation current and in future, when employing and managing staff; and

12.2.1      To ensure that all employees will wear the promotional brand clothing supplied free of cost by the various suppliers for the periods as negotiated by the said suppliers.

 

13. INSOLVENCY ACT PROVISIONS:

 

13.1         The parties agree that notice of this transaction will not be published as contemplated in Section 34 of the Insolvency Act 1936 (“the Act”).

13.2         The FRANCHISOR indemnifies the FRANCHISEE against any loss or damage which the FRANCHISEE may suffer as a result of notice of this transaction not being published in terms of the Act.

13.3         The FRANCHISEE shall have no duty to resist any proceedings to attach or to take possession of any of the sale assets by any person against whom this transaction is void in terms of the Act as a consequence of notice of this transaction not having been published as aforesaid; provided that the FRANCHISEE shall be obliged to give written notice to the FRANCHISOR as soon as it becomes aware of any such proceedings.

13.4         If the FRANCHISEE gives notice to the FRANCHISOR in terms of clause 13.3, then the FRANCHISOR shall within fourteen (14) days of receipt by it of such notice, procure that the sale assets concerned are released from attachment and returned to the FRANCHISEE. If the FRANCHISOR shall fail to procure such release and return, then the FRANCHISOR shall within seven (7) days from the expiry of the fourteen (14) day period aforesaid, replace the attached assets and pay to the FRANCHISEE whatever damages it may have suffered as a result of such attachment and/or pay to the FRANCHISEE the replacement value of such assets and such damages as the FRANCHISEE may have suffered as a result of such attachment.

 

14. DISPUTE RESOLUTION:

 

14.1         If any dispute shall arise in respect of any provision contained in this agreement, then such dispute shall:

14.1.1      If it shall be of a legal nature, be referred to a senior partner having not less than ten (10) years’ experience in commercial law of any of the larger law firms in; and

14.1.2      If it shall be of an accounting nature, be referred to a senior partner of any of the international firms of accountants practicing in, who shall act as an expert and who, in determining such dispute shall, if he deems it necessary, be entitled to receive oral or written representations from the parties and whose decision shall be final and binding upon the parties and, in the absence of manifest error, not be subject to review.

14.2         The parties shall jointly nominate the expert provided that if the parties shall be unable to agree either on the category in which the dispute falls or on the identity of the expert, within seven (7) days of the nomination being called for in writing, then the expert shall be nominated by the President for the time being of the Law Society of or its successor in title or the Executive Director of the South African Institute of Chartered Accountants or its successor in title, as the case may be.

14.3         It is the intention of the parties that any dispute referred to an expert in terms of this clause 14 shall be resolved within twenty one (21) days of the date of the expert being nominated. Accordingly, if the expert shall be unable to resolve the dispute within such period, then the party raising the dispute shall be entitled to terminate the mandate of the expert and institute proceedings in respect of the dispute in any competent Court having jurisdiction.

14.4         The provisions of this clause 14 shall not preclude either party from approaching any Court of competent authority for an interdict or other injunctive relief or an urgent nature.

 

15. BREACH:

 

Should:

(i)            The FRANCHISEE fails to pay timorously and in full any amount due to ELIQUOR in terms of this Agreement or breach the provisions of Clause 15;

(ii)           The FRANCHISEE commit any breach or permit the commission of any breach of any other term of this Agreement and fail to remedy this within 20 (twenty) days of receiving written notice from ELIQUOR calling on it to do so;

(iii)          The FRANCHISEE commits an act of insolvency;

(iv)          The FRANCHISEE fail to satisfy a default judgement within 10 (ten) days of it being entered against it;

(v)           The FRANCHISEE fail to satisfy any other judgement or to take it on appeal or review within 21 (twenty one) days of it being entered against it;

(vi)          The FRANCHISEE compromise or attempt to compromise any of its liabilities with its creditors generally or any class of its creditors;

(vii)         The FRANCHISEE’s tenancy or ownership of either the premises or any other portion of the property, terminated for any reason in terms of the Agreement relating thereto;

(viii)        Should any of the schedules to this Agreement terminate because of a breach thereof by the FRANCHISEE or if unlawfully cancelled by the FRANCHISEE, it is withdrawn or is not executed or cancelled by the FRANCHISEE and/or any signatory other than ELIQUOR thereto;

(ix)          The FRANCHISEE be convicted of any offence under the Criminal Procedure Act 51 of 1977, as amended, and/or attempt to or commit, in the reasonable opinion of ELIQUOR, any such offence in its business dealings with ELIQUOR;

then in any of those events ELIQUOR shall immediately be entitled to any or all of the following remedies, without prejudice to its other rights in terms of this Agreement:

(a)           To require the FRANCHISEE, on written notice, to pay immediately all amounts due to ELIQUOR by the FRANCHISEE;

(b)           to require the FRANCHISEE to sell the business to a FRANCHISEE accredited by ELIQUOR in terms of its then prevailing criteria for assessing FRANCHISEE;

(c)           to cancel this Agreement on written notice to the FRANCHISEE without prejudice to the accrued claims of either party or to any claim that ELIQUOR may have for damages arising out of such breach or premature cancellation of this Agreement or otherwise;

(d)           to require the FRANCHISEE to cease the operation of the business or any part of the business and to cease supplying the FRANCHISEE with supplies under the supplier Agreement, until the particular breach has been remedied;

 

If and/or above has been invoked and if the FRANCHISEE for whatever reason disputes ELIQUOR’s rights to lawfully cancel this Agreement, then the FRANCHISEE agrees that pending resolution of such dispute as provided or otherwise, he shall cease operating the business and ELIQUOR shall be entitled to appoint a Nominated Principal designated by it in writing and at the FRANCHISEE’s cost to manage on behalf of the FRANCHISEE on terms and conditions stipulated by ELIQUOR pending the resolution of the said dispute. If the said dispute is resolved in the FRANCHISEE’s favour, ELIQUOR shall withdraw the Nominated Principal so appointed by it, refund the FRANCHISEE’s costs referred to in this clause in respect of such Nominated Principal and the FRANCHISEE shall be reinstated to operate the business;

The termination of this Agreement will not relieve the FRANCHISEE of any obligation under this Agreement which is expressed to continue or is capable of continuing after the termination of the Agreement.

 

The parties hereby agree that should ELIQUOR exercise its rights in terms of this Agreement and similar rights in terms of the schedules hereto and:

(a)           require the FRANCHISEE, on written notice, to pay immediately all amounts due to ELIQUOR by the FRANCHISEE whether or not they are then payable;

(b)           to require the FRANCHISEE to sell the business to a FRANCHISEE accredited by ELIQUOR in terms of its then prevailing criteria for assessing FRANCHISEE;

(c)           cancel that Agreement on written notice to the FRANCHISEE without prejudice to the accrued claims of either party or to any claim that ELIQUOR may have for damages arising out of breach or the premature cancellation of that Agreement or otherwise; and/or

(d)           require the FRANCHISEE to cease the operation of the business or any part of the business in respect of that Agreement and to cease supplying the FRANCHISEE with supplies under the ELIQUOR Supplier Agreement, until the particular breach has been remedied.

Then in any of those events ELIQUOR shall immediately be entitled to exercise and implement similar rights as listed above in terms of other FRANCHISEE Agreement/s it has in place with the FRANCHISEE, notwithstanding the fact that the FRANCHISEE may not in any way have breached any of its obligations in respect of the said other Agreements;

Notwithstanding the abovementioned rights, ELIQUOR will endeavour, as far as reasonable possible, in the event of a breach of this Agreement by the FRANCHISEE giving rise to the remedies set out above to afford the FRANCHISEE the opportunity to sell the business/es in the manner set out below;

In the event that ELIQUOR gives notice to the FRANCHISEE that it requires the FRANCHISEE to sell the business in the manner contemplated above, the FRANCHISEE must conclude a Deed of Sale within a period of 60 (sixty) days from receipt of such notice, unconditional but for the obtaining, by the new FRANCHISEE, of a retail license issued by the applicable Department of Law, or an institution that succeeds it insofar as the issuing of rental licenses for the operation of the business for the retail of products is concerned;

In order to give effect to ELIQUOR’s general rights and duties under this Agreement, the FRANCHISEE shall not conclude a sale of business Agreement with a new FRANCHISEE without the prior written approval of ELIQUOR;

Notwithstanding herein contained shall preclude ELIQUOR from invoking the provisions at any time during or after this process. In the event that ELIQUOR terminates the Agreement, ELIQUOR may offer to the FRANCHISEE, from the proceeds of any FRANCHISE fees, entry fee or like payment by the new FRANCHISEE taking over the business an amount in respect of compensation for the value of the business, less any claim that ELIQUOR may have for damages arising out of the breach or premature cancellation of this Agreement or otherwise as compensation for the value of the business.

15.1         Subject to Clause 15.2 below, should any party breach any of its obligations in terms hereof and persist in such breach for a period of seven (7) days after written notice will have been given to it by the other party, the aggrieved party shall be entitled without prejudice to any rights which it may have in terms hereof or at law, to:

15.1.1      Obtain an order for specific performance and damages; or

15.1.2      Cancel this agreement and claim damages.

15.2         Notwithstanding anything to the contrary contained in clause 14 above, the parties agree that no party shall be entitled to cancel this agreement unless the breach complained of is a material breach going to the root of the contract and is incapable of being remedied by the payment of monetary compensation or otherwise or if so capable of being remedied, the defaulting party fails so to remedy the breach within thirty (30) days of receipt of written notice calling upon it so to do. If any dispute shall arise as to whether:

 

15.2.1      Any breach is a material breach which goes to the root of the contract; or

15.2.2      The breach is incapable of being remedied by the payment of monetary compensation or otherwise; or

15.2.3      If it is capable of being remedied by the payment of monetary compensation or otherwise, whether the defaulting party has failed to do so timorously, then such dispute shall be determined, mutatis mutandis, in accordance with the provisions of clause 14 above.

15.3         Any amount falling due for payment by any party in terms of or pursuant to this agreement including any amount which may be payable as damages shall bear interest thereon, at the prime rate, and reckoned from the due date for payment (or, in the case of any amount payable by way of damages, with effect from the date upon which those damages are sustained) to the actual date of payment thereof, both dates inclusive.

15.4         All costs, charges and expenses of whatsoever nature which may be incurred by any party in enforcing its rights in terms hereof including, without limitation, legal costs on the scale as between attorney and own client and collection commission, irrespective of whether any action has been instituted shall be recoverable from the party against which such rights are successfully enforced.

 

16. ADDRESSES AND NOTICES:

 

16.1         For the purpose of this agreement, including the giving of notices in terms hereof and the serving of legal process, the parties choose domicilium citandi et executandi (“domicilium”) as follow:

 

16.1.1    The FRANCHISEE at: _____________________________________________________;

 

16.1.2    The FRANCHISOR at: _________________________________________________________;

 

16.2         A party may at any time change its domicilium by notice in writing, provided that the new domicilium is in the Republic of South Africa and consists of, or includes, a physical address at which process can be served.

16.3         Any notice given in connection with this agreement may be delivered by hand; or be sent by prepaid registered post; to the domicilium chosen by the party concerned. Any notice or process delivered on any party in connection with any matter or subject arising out of this agreement or any notice shall be deemed to have been delivered if handed to any responsible person at the domicilium chosen by any party and it shall not be necessary to hand such process or notice to any party personally.

16.4         A notice given as set out above shall be presumed to have been duly delivered:

16.4.1      on the date of delivery if delivered by hand;

16.4.2      On the fourth day from the date of posting including the date of posting if posted by pre-paid registered post from within the Republic of South Africa; and

16.4.3      On the fourteenth day from the date of posting including the date of posting if posted from outside the Republic of South Africa.

 

17. ASSISTANCE / ADVERTISING / PROMOTIONS:

 

The FRANCHISOR shall provide the FRANCHISEE with reasonable assistance and advice in relation to the operation of the business, including administration, marketing and merchandising, product sourcing, choice of products, training, human resources and control of operations. FRANCHISOR shall consult FRANCHISEE as part of the FRANCHISEE’s annual business plan, to set key targets in respect of the business, provided that the content of FRANCHISEE shall not be construed as a representation or warranty by ELIQUOR, either express or implied, as so far the actual or likely profitability of the business:

17.1         Have the shop fitting done by a reputable shop fitter;

17.2         Negotiate access to reputable suppliers in liquor market;

17.3         To order stock based on proven rate of sale (minimizing expense of slow moving stock);

17.4         Arrange for monthly promotions, to local, regional and national outlets in respect of any or all outlets of ELIQUOR and so to provide the FRANCHISEE with the appropriate advertising and promotional material, provided that ELIQUOR may specify the terms and prices of any such promotion, in conjunction with the said suppliers and to the extent permitted by law, creating excitement and to increase turnover, to join in any promotion arranged by ELIQUOR when required and to keep such quantities of stock as ELIQUOR may determine of promoted goods for such purposes, to sell, for the duration of any special promotion agreed to by ELIQUOR and FRANCHISEE, any of the products forming part of such promotion on the terms and conditions laid down by ELIQUOR provided that such terms and conditions are lawful, not to conduct other promotions and advertising of whatsoever nature without ELIQUOR’s prior written consent nor to allow anyone to conduct marketing research in respect of the business, the premises and/or supplier products without ELIQUOR’s prior written consent;

17.5         Provide the FRANCHISEE with up to date merchandising tips and techniques as per brand owner research and company agreed planograms;

17.6         (Additional) arrange for a merchandising team to implement new layouts or changes to planograms;

17.7         (Additional) A Stock take team shall do the complete stock count including expired stock, to ensure rotating of stock and compare actual stockholding with stockholding on the system to project store shrinkage and identify “high risk” items for daily monitoring ;

17.8         Introduce the FRANCHISEE to a fully functional POS (Point of Sale) system assisting in technical advice;

– Inventory;

– Suppliers (Creditors);

– Printing labels;

– Store promotion reports;

– ECR (Electronic cash register), including back office system.

 

18. TRADING HOURS:

 

The FRANCHISEE shall keep the ELIQUOR store open as per South African Government legislation.

 

19. TRAINING:

 

The FRANCHISOR shall arrange for training of the FRANCHISEE by a reputable and experienced liquor store retailer, to ensure that all staff and replacements for such staff who are required under the terms of this agreement to undergo training in the ELIQUOR outlet, are trained in that system and any improvements or modifications thereto, to procure the attendance at a time and place specified by ELIQUOR of the nominated principal and/or the FRANCHISEE’s staff, for training in the business and the ELIQUOR requirements, and to pay the cost of such training in accordance to ELIQUOR standards rates and the cost of any travel and subsistence incurred in connection therewith and the salaries of such persons, to ensure that premises do not open for business until nominated principal and all staff have undergone, completed and passed all training and not to allow any replacement staff to perform any duties until such time as the FRANCHISEE has trained such replacement staff in accordance with specifications laid down in the ELIQUOR requirements, to hold regular training and assessment sessions at the premises for all the employees of the ELIQUOR outlet to ensure their competence in their allocated duties, to ensure that all staff undergoes such periodic retraining as may be required in order to achieve and enhance high standards and service.

 

ELIQUOR undertakes to the FRANCHISEE and agreed employees at the cost of ELIQUOR initial training in the ELIQUOR outlet, so that the FRANCHISEE can meet performance standards and train its employees, to provide the FRANCHISEE and agreed employees during this Agreement with further training as and when ELIQUOR and the FRANCHISEE deem necessary to enhance their knowledge or concerning new business developments, for which the FRANCHISEE shall be charged an amount stipulated by ELIQUOR.

 

20. TERMINATION AND INDEMNITY:

 

If at any stage after store is operating, or for any reason whatsoever the FRANCHISEE wishes to terminate the “ELIQUOR” FRANCHISE AGREEMENT, he/she is entitled to do so in writing subject to the conditions and in conclusion with paragraph 21 below, and/or:

 

Upon termination of this Agreement, due to FRANCHISEE’s breach, of any other FRANCHISEE’s Agreement in place between ELIQUOR and the FRANCHISEE, which breach arises from the circumstances of this Agreement, all other Agreements which the FRANCHISEE may have in place with ELIQUOR in respect of other ELIQUOR outlets, shall simultaneously terminate with immediate effect.

 

Procedure upon the termination of this Agreement for any reason, the FRANCHISEE shall, unless otherwise notified by ELIQUOR in writing:

 

immediately pay to ELIQUOR R30 000,00 in respect of cancellation of agreement and to any supplier/s in respect of the ELIQUOR outlet, the full amount of all monies then due together with any interest thereon up until the date of payment.
(b)   immediately cease to operate the business and to use the ELIQUOR outlet and shall not thereafter hold itself out in any way as a FRANCHISEE or agent of ELIQUOR and refrain from any action that would or may indicate any relationship between it and ELIQUOR except as otherwise authorised in writing to ELIQUOR;

(c)   Immediately cease to use in any way whatsoever any and all of the Intellectual Property;

(d)   return to ELIQUOR all signs, advertising, publicity and promotional materials, stationary, invoices, forms, specifications, designs, records, data, samples, models, programmes and drawings pertaining to or concerning the business or the ELIQUOR business or bearing any of the Intellectual Property;

(e)           Furnish ELIQUOR with a complete and accurate up-to-date stock check with estimate of turnover of the business to such termination date;

(f)            Return to ELIQUOR all copies of manuals/modules whether current or not;

(g)           return all the items of ELIQUOR equipment held on loan or hire in the same good, working order and repair, fear wear and tear accepted;

(h)           Allow ELIQUOR to take over all products on hand at the estimate market value;

(i)            Procure or facilitate the transfer of the telephone/s and facsimile and electronic mail numbers of the business to such person/s as ELIQUOR directs;

(j)            Immediately vacate the premises and remove there from all items and goods belonging to him or in his custody. Should he fail to do so, ELIQUOR shall have the right to sell or otherwise dispose of the outgoing FRANCHISEE’s items or goods or to procure that the new FRANCHISEE purchases the said items or goods. The proceeds of such sale or disposal, less the reasonable cost thereof, shall, subject to ELIQUOR’s right of set-off, be due to the outgoing FRANCHISEE. ELIQUOR shall be entitled to purchase such items or goods or any of them at fair market value.

 

Existing rights of the termination of the Agreement shall be without prejudice to the accrued rights of the parties and any provision hereof which relates to or governs the acts of the parties hereto subsequently to such termination hereof, shall remain in full force and effect and shall be enforceable notwithstanding such termination;

 

The termination of this Agreement shall automatically and simultaneously result in the termination of all those applicable schedules which constitute agreements.

 

The FRANCHISEE hereby undertakes to fully and effectively “indemnify” ELIQUOR and at all times keep ELIQUOR indemnified after as well as before the termination hereof for and against all actions, suits, claims, demands, fines, penalties and other proceedings whatsoever made or brought against ELIQUOR or the FRANCHISEE, or both of them, or suffered by ELIQUOR arising:

 

by reason of the occupation of the premises including condition, maintenance, use of operation thereof;
by reason of the maintenance, use and operation of the ELIQUOR equipment;
out of or in connection with any circumstances, act or event whatsoever now or hereafter existing, done or occurring in or around the products and/or the supplier equipment of ELIQUOR, unless otherwise specified in this Agreement;
out of or in connection with the use, misuse or disclosure of the Intellectual Property, manuals or modules of ELIQUOR, or any part thereof;
out of the acts or omission of the FRANCHISEE in the conduct of the business; or
from any breach by the FRANCHISEE of this Agreement

 

Provided that FRANCHISEE shall not be liable to indemnify ELIQUOR in respect of damages or loss arising as a result of any wilful act or gross negligent act on the part of ELIQUOR or those for whose acts ELIQUOR is liable.

 

The FRANCHISEE shall have no claim of any nature whatsoever against ELIQUOR for damages, remissions of rent or otherwise, other than as specifically provided for in this Agreement or the schedules hereto, unless any such claim arises from any wilful act or gross negligent act on the part of ELIQUOR or those for whose acts ELIQUOR is liable.

 

21. TRADING TERMS:

 

21.1         If the FRANCHISEE wish to end the agreement with ELIQUOR the FRANCHISEE can offer termination in writing and agree to hand over the business/shop/store to ELIQUOR, who will have the first and primary right and offer to take over existing business/shop/store and continue trading. The FRANCHISEE shall offer ELIQUOR, the first right and option to commence trading in the said store. Business will be validated, advertised and sold for 3 (three) months turnover. The FRANCHISEE herewith agrees to pay 10% (Ten Per cent of value of Sale) as commission to the FRANCHISOR. The FRANCHISEE herewith agree that said payment (Commission) can be deducted from full and final payment of Sale of Outlet.

21.2         As soon as legal registration is completed, of new take-over FRANCHISEE, A full stock taking will be executed by an independent stock-take company and ELIQUOR will nominate a FRANCHISEE until legal documentation has been handled and completed. The FRANCHISEE permits herewith ELIQUOR or its authorized representative/s to trade under the current legal entity until all legal matters has been resolved and all de-registration and new appointed FRANCHISEE registrations are complete.

21.3         Once such registration is done the FRANCHISEE will be fully paid for stock value at the time of the handover as well as for the value of outlet, less 10% Sale commission, taken over by the new FRANCHISEE.

21.4         The FRANCHISEE shall not use any name that refers to, directly or indirectly, associated with and/or to ELIQUOR and/or logo thereof, after a take-over by a new FRANCHISEE;

21.5         In the event of a take-over by termination of this agreement, the FRANCHISOR and/or new FRANCHISEE will have a 90 (ninety) days take-over period and the FRANCHISEE will not withheld written permission to the new FRANCHISEE or to the FRANCHISOR to trade under his/her license.

21.6         ELIQUOR in its sole discretion will hand out a warning on non-compliance, for whatever reason, that might damage the company reputation in whatever way or manner and has the full right to de-brand the store after 3 non-compliant warnings. In such an event the FRANCHISEE will immediately be released from any ELIQUOR supplier agreements

 

22. STORE AND INSURANCE:

 

22.1         The FRANCHISEE shall not to use any in-store design, clothing (uniforms), uniquely designed for/by ELIQUOR for any other purpose;

22.2         All furniture and fixtures, sold back to ELIQUOR, will be calculated at current market value;

22.3         FRANCHISEE shall at all times adhere to merchandising and planograms, as agreed to by and with ELIQUOR;

22.4         FRANCHISEE shall at all times ensure, that staff is customer service orientated and rewarded according to performance;

22.5         Due to high standards of customer service, the FRANCHISEE hereby agrees to advertise his/her personal mobile number, visible to all customers, for direct access to yourself, for any complaint/s whatsoever and also agree to forward follow-up communication, in whatever form, regarding any customer complaint/s to: info@eliquorfranchise.co.za;

22.6         The FRANCHISEE hereby agrees to participate in all in-store promotions and that all staff will wear promotional uniforms to maximize in-store brand activation;

22.7         The FRANCHISEE is strictly to adhere to company policy of open windows, enabling and widening product visibility for passer-by consumers, thus no foreign signage or unauthorized branding, of whatever kind, is allowed;

22.8         The FRANCHISEE will be required to participate, in store revamps, following consumer trends, if needed;

22.9         Pricing – The FRANCHISEE will adhere to a strict policy of clear, visible pricing of all merchandize on display and ensure NO handwritten pricing;

22.10       All ELIQUOR retail systems and/or contracted retail systems shall be accessible to the FRANCHISOR at any given time, allowing to generate any reports, of whatsoever kind, which is inter alia needed in an event of negotiating deals with suppliers;

22.11       The FRANCHISEE agrees to forward any special report requests timorously;

22.12       All trading techniques, merchandising, marketing, store design, training material, stock control systems, pricing structure and/or any control system of whatever nature, remains the sole property of ELIQUOR and shall not at any given time change hands, unless the company, ELIQUOR, is legally sold on the terms and conditions as mentioned supra;

22.13       The staff shall wear uniforms / Supplier branded uniforms, name badges;

22.14       In store Point-of-sale and back-office systems, will be a rental/lease agreement, with a maintenance contract, which will be the sole liability of the FRANCHISEE, due to constant upgrade of electronic systems and bank agreements on terminals;

22.15       All invoices, price negotiations, discount negotiations, terms and conditions negotiated with any supplier, remains private and confidential to ELIQUOR as their exclusive right;

22.16       The FRANCHISEE to adhere to the policies and procedures of any Keyless Banking and Cash Management Systems for the safety of FRANCHISEE, its staff and customers, to adhere to the requirements laid down by ELIQUOR “Use of Force Policy” and ensure that its terms and conditions are implemented on the premises.

22.17       The FRANCHISEE to adhere not to display of any foreign or discriminatory signs or practice discrimination on the premises in any form.

22.18       All electricity, plumbing and air conditioning equipment, maintenance and repairs, due to inability to estimate these expenses, in the global lay-outs, are for the expense of the FRANCHISEE.

 

Furthermore to this agreement, maintenance and repairs obligations shall be at the FRANCHISEE cost and whether or not the work required is performed by approved contractors, for purpose of amongst other things standards and requirements, to ensure that the work done complies, both in respect of its execution and work-product with ELIQUOR’s standards and requirements;

 

22.19       To at all times keep the interior and exterior of the premises, including but not limited to, all fittings and fixtures, tiling, doors, windows and other fittings, plate glass, locks, keys, electric light globes, fluorescent tubes, starters. ballasts, water taps, and all electrical, drainage and sanitary works on the premises, in first class good and where appropriate, good working order and condition, fair wear and tear not excluded and to replace any of the same which have been damaged, lost or which for any reason cease to work efficiently and to wash down all exterior walls and other washable surfaces as and when necessary or as and when directed by ELIQUOR in its reasonable discretion;

22.19.1    To keep the ELIQUOR signage properly illuminated, it being recorded that the ELIQUOR         branded lighting being obliged to report malfunctioning or failure and be repaired;

22.19.2    To paint the interior of the premises, when ELIQUOR considers it necessary to such specifications as ELIQUOR may from time to time direct, provided that this obligation shall not be construed as compelling the FRANCHISEE to repaint the interior in order to implement a ELIQUOR decision to change the colours thereof and to keep the roof of the premises, all gutters, down pipes and drains maintained, free of litter, leaves or obstructions at all times;

22.19.3    To keep the premises free of litter/refuse, with attention to the entrance area, stock room and office facility and to keep the premises well-tended and to provide refuse bins in adequate numbers at suitable points on the premises and to remove refuse daily and from the premises at least once a week;

22.19.4    To keep toilet facilities maintained and equipped at all times in a clean, sanitary and spotless condition, ensuring that all of the plumbing, taps, hooks, towels, soap dispensers, other equipment, fittings, fixtures and the like therein are at all times in good working order and condition;

Not to do or cause or allow to be done any act or thing which may cause a nuisance at the premises or which might or could create any danger to any person at the premises;

22.19.5    To comply with all maintenance obligations as may be contained in this agreement and to generally employ a duty of care in respect of the premises and equipment consistent with that which would be expected of a reasonable business person in relation to the premises and equipment utilised in the operation of the business;

Regarding equipment and unless the FRANCHISEE notifies ELIQUOR in writing to the contrary within 30 (thirty) days after the commencement date of trading, that the equipment is not in good, working order, the contractor/supplier shall be obliged to repair the agreed defect as soon as reasonable possible, whereas the FRANCHISEE not notifies ELIQUOR in writing to the contrary, acknowledges that at the commencement date of retail of the business, that all equipment to be in good, working order.

22.20       ELIQUOR may at any time install, replace remove, maintain, modernise, adapt, recite or otherwise deal with the ELIQUOR equipment at the premises as it sees fit;

22.20.1    The ELIQUOR equipment shall be used solely for the storage, display, dispensing and monitoring of products, which shall be used solely for the purposes for which they are designed.

 

The FRANCHISEE shall at all times:

 

22.21       Keep the ELIQUOR equipment clean and tidy and to use the ELIQUOR equipment strictly in accordance with its instruction for use;

22.21.1    Promptly notify ELIQUOR of any of the ELIQUOR equipment which is damaged, destroyed, lost, stolen, shabby in appearance or which for any reason ceases to work properly and to immediately cease using any ELIQUOR equipment which is damaged to the extent that it is in any way dangerous to use;

22.21.2    Ensure to carrying out at the FRANCHISEE’s cost, of routine maintenance and servicing of the air conditioning equipment and any fire equipment at regular intervals as recommended by the manufacturer of the relevant ELIQUOR equipment, by a contractor approved by ELIQUOR, provided that, in the case of air conditioning units installed in the ELIQUOR outlet and office area, the FRANCHISEE shall be responsible for the installation, repair and replacement of these units, except where the units were previously installed by the Landlord, in which case the Landlord will be responsible for the repair and replacement of these units.

22.22       Promptly allow ELIQUOR approved contractors, to repair to ELIQUOR’s satisfaction and at the cost of the FRANCHISEE / Warranty / Insurer, which cost shall be limited to the amount insured for in terms of lost, damaged or destroyed, as a result of the act of a third party, as a result of fire, flood, earthquake, subsidence, rain, wind, hail or lightning, to the equipment. The FRANCHISEE shall be liable in the event that such damage or destruction was caused wilfully, or through the gross negligence of the FRANCHISEE.

22.23       The FRANCHISEE shall not be entitled to reposition, add to, omit anything from, modify or recalibrate any of the ELIQUOR equipment without ELIQUOR’s prior written consent in each instance. The FRANCHISEE shall also not be entitled to affix or in any way connect any electronic or other equipment to any of the ELIQUOR equipment, particularly ELIQUOR electronic equipment, without ELIQUOR’s prior written consent. ELIQUOR shall be entitled to withdraw any on reasonable grounds, any such approval at any time on written notice to the FRANCHISEE, without being obliged to compensate the FRANCHISEE in any way.

22.24       The FRANCHISEE may at any time request ELIQUOR to test any of the ELIQUOR equipment which the FRANCHISEE suspects to be defective, provided that the FRANCHISEE has satisfactorily kept adequate stock and sales records as provided for in this Agreement and has conducted all the tests required in terms of this Agreement, then ELIQUOR shall pay the costs of such test, failing which the FRANCHISEE shall pay the costs of such test.

22.25       The FRANCHISEE undertakes at the FRANCHISEE’s expense to take out the following insurance cover with an insurance company approved by ELIQUOR in writing and to maintain the same force for the duration of the Agreement:

(a)           In respect of the premises and permanent structure if applicable;

(b)           In respect of approved suppliers ELIQUOR equipment, cover against damage and destruction, on a “First-Loss basis”;

(c)            In respect of the point of sale and back office equipment;

(d)           Glass cover, in the sense that this term is commonly understand in the short-term insurance industry;

(e)           Public liability Insurance with a limit of indemnity;

(f)            The Parties record that insurance against loss of profit will be in the discretion of the FRANCHISEE.

 

Any such insurance taken out by the FRANCHISEE shall fully cover its liabilities under this Agreement and shall note the interest of ELIQUOR and shall be endorsed such that the underwriters waive their rights of resources on ELIQUOR, its personnel and/or agents;

The FRANCHISEE shall provide ELIQUOR with copies of the relevant policies within 30 (thirty) days of date of signature of this Agreement, and furthermore shall provide ELIQUOR with premium receipts, upon request from time to time by ELIQUOR;

 

If the FRANCHISEE fails promptly to acquire and maintain any of the above insurance cover in force   ELIQUOR may do so and charge and recover from the FRANCHISEE the actual costs of doing so.

 

23. SUPPLIER EQUIPMENT:

 

23.1         Agrees that all supplier supplied fridges, fittings and fixtures, remains the sole property of the relevant supplier and may never be removed from the store / premises on which the business is conducted.

 

24. SUPPLIERS CONDITIONS:

23.2         The FRANCHISEE agree to pay all ELIQUOR’s approved creditors timorously as by agreement.

23.3         Agrees to use ELIQUOR listed suppliers only:

(a) Thus he/she will not pay more than prices negotiated

(b) Building relationship trust and loyalty with suppliers

23.4         ELIQUOR will be informed promptly in writing via E-mail, of any short delivery of merchandising, as soon as possible after receiving and delivering of ordered goods.

 

25. FRANCHISE AND ADVERTISING FEES:

 

The FRANCHISEE will conduct the liquor store business outlet defined as the ELIQUOR in accordance with the terms and conditions herein contained and will pay to ELIQUOR, the amounts set out in paragraphs 4.5 and 25.3 in consideration for the operation of the business as the FRANCHISEE receives direct or indirect benefit from the suppliers. The benefit is negotiated by ELIQUOR in order to mitigate the cost of stock purchases by the FRANCHISEE.

ELIQUOR shall be entitled to set off against any monies due by ELIQUOR to the FRANCHISEE all indebtedness, including damages and/or interest, of the FRANCHISEE to ELIQUOR, whether under this Agreement of otherwise. If such indebtedness is not liquidated, ELIQUOR shall be entitled to set of such amount due by ELIQUOR to the FRANCHISEE as ELIQUOR in its discretion considers be the value of such un-liquidated indebtedness, without prejudice to the rights of the FRANCHISEE to have the amount determined by Agreement, or otherwise. If after such set off, the indebtedness is determined in an amount different to that assessed by ELIQUOR, the party to whom the money is owed shall be entitled immediately to recover it from the other.

25.1         All paper and data-costs in processing of debit/credit cards will be for the FRANCHISEE’s expense;

25.2         The FRANCHISEE agrees to pay an initial project management fee of R 0.00 to ELIQUOR;

25.3         To pay franchise fees of R 3000, 00 (Three Thousand Rands) per month to ELIQUOR;

25.4         Any rebates negotiated and/or whatsoever paid to any ELIQUOR outlet, due to outstanding performance, remains private and confidential and the company. ELIQUOR, is not at any given time, under any obligation, whatsoever, to declare the above to any 3rd party;

25.5         Franchise fees is payable monthly;

25.6         As part of pricing strategy the FRANCHISEE agrees to adhere to ELIQUOR promotions;

25.7         The FRANCHISEE shall not be liable to pay franchise fees as meant in paragraphs 4.5 and 25.3 on the items mentioned in 25.6.

25.8         To pay monthly advertising fees of R 1000, 00 (One Thousand Rand) to ELIQUOR.

25.9         The FRANCHISEE shall be liable to pay R 1000, 00 (One Thousand Rand) advertising fees as meant in paragraphs 25.8 on the items mentioned in 25.6.

 

 

26. SERVICE STANDARDS / RESTRICTIONS / CPA PROVISIONS:

 

The FRANCHISEE acknowledges that it is of fundamental importance to success of the business and the protection of the clientele attaching to the Intellectual Property and the ELIQUOR outlets, that service standards of the highest level are maintained by the FRANCHISEE in all respects of the business and at all times.

 

The FRANCHISEE accordingly undertakes:

26.1         To operate the business strictly in accordance with the ELIQUOR standards and this Agreement and strictly in accordance with the provisions of the manuals, including the standards of service, merchandising and hygiene set out therein and not at any time to use any additional name or symbol without prior consent in writing by ELIQUOR;

26.2         To ensure that the business conforms with ELIQUOR standards with regards to quality, service and cleanliness, the FRANCHISEE acknowledges that such conformity is of the utmost importance with the successful operation of the business and the protection of the clientele attaching to the Intellectual Property and this Agreement and not to omit to do any act or thing which may in the reasonable opinion of ELIQUOR being the ELIQUOR outlet or the Intellectual Property into disrepute or which may in the reasonable opinion of ELIQUOR damage or conflict with the interest of the business or the other ELIQUOR outlets of  ELIQUOR;

26.3         To comply with all advice and instructions given by ELIQUOR with regard to the operation of the business and to diligently carry on the business and so use best endeavours to promote and increase the business and to co-operate with ELIQUOR and the other outlets of ELIQUOR in this regard and not to conduct or carry on any business of any nature other than the businesses without the prior written consent of ELIQUOR;

26.4         To ensure that all of the FRANCHISEE’s employees at all times, wear the relevant uniforms, to specification of ELIQUOR, prescribed in terms thereof and to ensure that they are kept neat and in good state and cleanliness and repair and that the applicable name badges are worn and displayed, always while on duty and to wear only those uniforms designated to their relevant and specific functions;

26.5         To present a neat and clean appearance and render competent, sober, prompt and courteous service to customers of the business and to comply with any and all directions of ELIQUOR relating to dress and appearance;

26.6         To co-operate with ELIQUOR at all times in maintaining stock of all appropriate products and to endeavour at all times to maximise sales thereof;

26.7         To ensure that access to the business shall at all times be and remain free and unobstructed, that visibility thereof shall remain unobstructed and that no vehicles other than those of FRANCHISEE, staff and customers shall be allowed to park on the demarcated areas, nor shall any machinery, equipment or rubble/refuse be allowed or sustained on the demarcated areas;

26.8         To permit the installation, on such terms as ELIQUOR may reasonably require, of electronic equipment in such position on the premises as ELIQUOR decide;

26.9         The FRANCHISEE agree:

26.9.1      Not to commence operating the business until ELIQUOR has approved the premises and the construction and conversion thereof, where applicable and not to operate the business or any part of the ELIQUOR outlet at any location other than the premises, without the prior approval in writing of ELIQUOR and not to alter, obliterate or conceal in any way the appearance of the premises or building therein, and not to alter or convert the premises or the internal layout thereof or the fixtures and fittings therein nor install any equipment nor alter, erect or display any sign or other medium of advertisement whether inside or outside the premises without every case seeking and obtaining the prior consent in writing of ELIQUOR, and each such alteration, conversion, erection or installation shall be carried out only in accordance with plans and specifications previously submitted to and approved by ELIQUOR and not to introduce any improvement, addition or modification of or to the ELIQUOR concept into the business without the prior written consent by ELIQUOR to do so. Any permitted improvements or modification of or to the ELIQUOR concept or outlets shall vest in ELIQUOR absolutely;

26.9.2      That the rights and the obligations of the FRANCHISEE in terms of this Agreement is personal, and may therefore, not cede, assigned, let or otherwise disposed of in any manner whatsoever without the prior written consent of ELIQUOR, in particular, the FRANCHISEE shall not sell, cede, transfer, let or permit anyone else to use the business, the premises, the Agreement or the Intellectual Property without the prior consent of ELIQUOR;

26.9.3      Not to permit or require any person in the operation of the business until such person has signed a non-competition and confidentiality undertaking with FRANCHISEE;

26.9.4      Not to cause or permit to subsist any circumstances which may constitute a breach or result in a repudiation of any insurance policy maintained whether by ELIQUOR or the FRANCHISEE in connection with the premises or the business carried out therein;

26.9.5      Not to use or publish any advertisement, signs, directory entries or other forms of publicity whether or not relating in whole or not to the business or display the same on or at the premises unless the same shall have first been submitted to and approved by ELIQUOR;
Not to appoint any contractor or third party who has not been approved by ELIQUOR prior to such appointment to carry out any work whatsoever on the premises or any part thereof.

 

OTHER CPA PROVISIONS

 

26.10       The CPA requires that the following principles to be incorporated into this Agreement:

26.10.1    The general principles of honesty, fairness, reasonability and equity must guide the interpretation of this Agreement and the relationship between the parties;

26.10.2    The FRANCHISOR undertakes that it will prevent the unreasonable overvaluation of fees, prices or other direct or indirect consideration, payable by the FRANCHISEE;

26.11       The parties undertake that they will use their best endeavours to prevent:

26.11.1    Conduct which is unnecessary and unreasonable in relation to the risks to be incurred by one party; and

26.11.2    Conduct that is not reasonably necessary for the protection of the legitimate business interest of the FRANCHISOR, FRANCHISEE or the system.

26.12       Any provisions in this Agreement, which is in conflict with CPA Regulation is void to extend of such a conflict.

 

SCHEDULES

 

The parties acknowledge that certain of the schedules are agreements themselves and are binding on them once initialled by them.

 

APPLICABLE LAW

 

This Agreement shall be interpreted in accordance with the laws of the Republic of South Africa.

 

27. RESTRAINT OF TRADE AND CONFIDENTIALITY:

 

In consideration of the grant of the right referring to in Clause 10 above the FRANCHISEE hereby agrees and undertakes not during the time of being a ELIQUOR outlet, without the prior consent of ELIQUOR, which consent will not be unreasonably withheld, to be concerned or interested in any capacity whatsoever, either directly or indirectly, in any business or undertaking of any kind which is similar to, or competes with the businesses not for 12 (twelve) months after the termination of this Agreement anywhere within 5 (five) kilometre radius of the premises, without the prior consent in writing of ELIQUOR to be concerned or interested in any capacity whatsoever, either directly or indirectly, in any business or undertaking which is connected with the supply of goods, products and services which are similar to the ELIQUOR outlet business or otherwise to damage the clientele which is attaches to the Intellectual Property and to the ELIQUOR brand.

The FRANCHISEE undertakes that for the period of 6 (six) months after termination for any reason of this Agreement, whether itself or together with any other person or entity, in any capacity whatsoever save as authorised hereunder, directly or indirectly, not to employ or to seek to employ any person who is at that time or has at any time in the previous 2 (two) years been employed by ELIQUOR nor otherwise, directly or indirectly, induce or seek to induce any such person to leave such employment and not to solicit customers of the business nor divert or seek to divert any customer from  ELIQUOR or any other FRANCHISEE or agent of ELIQUOR. The FRANCHISEE further undertakes to procure that all business partners and nominated principals of the FRANCHISEE shall give similar undertakings to those given by the FRANCHISEE in this clause and/or any other clauses attached hereto.

To supply to ELIQUOR information which may come into its possession which may assist ELIQUOR to effect sales or other dealings for the business or in the products sold by ELIQUOR outlets, to pass on any information to ELIQUOR which may prejudice or adversely affect sales of products of the business in any way and/or the ELIQUOR outlet.

The FRANCHISEE hereby acknowledges that the manuals and all other information and knowledge relating to the ELIQUOR outlet are of strictly confidential nature and accordingly the FRANCHISEE undertakes that it will not and it will procure that no other person shall at any time without the prior written consent of ELIQUOR whether before or after termination of this Agreement, divulge or use, whether directly or indirectly, for its own benefit or that of another person, firm or company any such information or knowledge relating to the ELIQUOR concept, Intellectual Property and manuals which may be communicated to or otherwise acquired by the FRANCHISEE, its agents or staff.

27.1         The FRANCHISEE acknowledges that in the course of his/her being in position to gain access to the names of customers and suppliers with whom ELIQUOR does business whether embodied in written form or otherwise;

27.2         In the course of his/her trading duties, he will acquire considerable know-how in and concept and/or techniques of ELIQUOR relating to inter alia, the marketing and sale of goods;

27.3         In the course of his/her involvement with ELIQUOR, he/she will have the opportunity of forging personal likes with customers and suppliers of ELIQUOR;

27.4         In the course and scope of his/her involvement with ELIQUOR, he/she will generally have the opportunity if learning and acquiring trade secrets, business connections and other confidential information pertaining to the business of ELIQUOR;

27.5         The FRANCHISEE acknowledges that the only effective and reasonable manner in which the rights of ELIQUOR in respect of its business secrets, customer connection and supplier connection can be protected is in terms of the restraints imposed upon the FRANCHISEE in terms of this Agreement;

27.6         The FRANCHISEE acknowledges that upon him/her ceasing to be trading under the concept of ELIQUOR, he/she will be able to obtain employment or to trade in a field totally unrelated to the business or activities of ELIQUOR;

27.7         The FRANCHISEE shall not, in the territory within 50 kilometres radius and during the restraint period of 2 (two) years, whether as proprietor, partner, director, shareholder, member, employee, consultant, contractor, financier, agent, representative, assistant or otherwise, and whether for reward or not, directly or indirectly carry on or be interested or engaged in or concerned with or employed by any company, close corporation, firm, undertaking or concern carried on in the territory which performs or the same or similar business as ELIQUOR;

27.8         The FRANCHISEE undertakes that neither he nor any company, close corporation, firm undertaking or concern in or by which he is, directly or indirectly, interested or employed will, with the territory and restraint period and whether for reward or not, directly or indirectly :

27.8.1      Encourage or entice or incite or persuade or induce any employee of ELIQUOR to terminate his/her employment with ELIQUOR; or

27.8.2      Furnish any advice or information to any customer/supplier that he intends to or will, directly or indirectly, be interested or engaged in or concerned with or employed by any entity in the territory which offers or performs similar business after the expiry of the restraint period; or

27.8.3      Furnish any information or advice to any customer/supplier or use any other means to take any other action which is directly or indirectly designed, or in the ordinary course of events calculated, to result in such customer/supplier/franchisee terminating its association with ELIQUOR or attempt to do so.

27.9         The FRANCHISEE further undertakes that neither he nor any company, undertaking or concern in or by which he is, directly or indirectly, interested, engaged, concerned or employed in similar or the same business will during the restraint period, directly or indirectly, whether as proprietor, partner, director, shareholder, employee, consultant, contractor, financier, agent, representative, assistance or otherwise in the territory and whether for reward or not:

27.9.1      Solicit orders from prescribed suppliers;

27.9.2      Canvass business in respect of customers or suppliers;

27.9.3      Sell or otherwise supply any sell information to customers;

27.9.4      Purchase or attempt to purchase prescribed suppliers;

27.9.5      Solicit appointment as a distributor, licensee, agent or representative of any prescribed supplier;

27.9.6      Attempt to do any of the above.

27.10       Each of the undertakings set out in this clause (including those appearing in a single clause) is severable, inter alia, as to:

27.10.1    Nature of interest, or activity;

27.10.2    The categories of persons falling within the definition of customers/suppliers;

27.10.3    The categories of services falling within the definition of prescribed services;

27.10.4    The individual cities, towns and/or states which are defined in the territory;

27.10.5    Each year or month forming the restraint period and are acknowledged to be reasonably required for the protection of ELIQUOR and are generally fair and reasonable.

27.11       Each of the undertakings set out in this clause are given to ELIQUOR and may be enforced against the FRANCHISEE either individually or collectively by ELIQUOR or any of its shareholders on its behalf (if applicable).

27.12       The FRANCHISEE acknowledges that ELIQUOR will suffer financial harm and loss if he/she breaches any of the provisions of this clause. Upon the breach of any of the provisions of this clause, ELIQUOR or any of its shareholders whether individually or collectively (and without the board’s authority)(where and when applicable) shall be entitled to enforce the restraint (on behalf of ELIQUOR if necessary) and to claim such damages as it may have suffered pursuant to or arising from such breach.

 

28. ENTIRE AGREEMENT:

 

This agreement constitutes the entire agreement between the parties and supersedes oral or written understanding or agreement/s of any kind relating to the business, the premises or the subject matter hereof, with regard to the matters dealt with herein and no representations, terms, conditions or warranties express or implied not contained in this agreement shall be binding on the parties. The parties agree that neither of them have been induced to enter into this agreement based on any representation made by the other party, other than the representations recorded herein. Without prejudice to its rights contained in this agreement, to at all times adhere to and apply its business principals, the full details of which are contained in the manuals, whilst in every respect retaining the right to fully and strictly apply all of the provisions of the agreement.

 

29. VARIATION AND CANCELLATION:

 

No agreement varying, adding to, deleting from or cancelling this agreement, and no waiver whether specifically, implicitly or by conduct of any right to enforce any term of this agreement, shall be effective unless reduced to writing and signed by or on behalf of the parties. It is recorded that there exists no collateral and/or other agreements and that this is the sole agreement entered into by and between the parties.

 

 

30. INDULGENCES:

 

No indulgence granted by a party shall constitute a waiver of any of that party’s rights under this agreement; accordingly, that party shall not be precluded as a consequence of having granted such indulgence, from exercising any rights against the other which may have arisen in the past or which may arise in the future.

 

31. LEGAL COSTS:

 

If FRANCHISEE wishes to use a legal expert to finalize or sign this agreement, then these legal costs shall be paid by the FRANCHISEE. Cost of the preparation and drawing of this agreement has been paid to a registered legal Attorney.



This Post Has Been Viewed 5,403 Times