Fillable Printable Master Franchise Agreement

Master Franchise Agreement

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MASTERFRANCHISEAGREEMENT

FOR CANADA

THIS AGREEMENT is made and entered into on [franchise agreement date] by and between [Franchisor]

(“[Franchisor]”), a corporation organized under the laws of the Province of [province], and [MASTER

FRANCHISEE], a company incorporated under the laws of the Province of [province] (“Master

Franchisee”).

WHEREAS:

[Franchisor], as the result of the expenditure of time, skill, effort, and money, has developed and

owns a unique and distinctive system relating to the establishment and operation of [description

of franchise business], [using the unique operating system and tools developed and maintained

by [Franchisor] to [description] and using the proprietary software program designed by

[Franchisor] and made available to its franchisees to assist in the management of the franchise

business (“System”);

The distinguishing characteristics of the System include without limitation a distinctive design

and layout, and training management, and promotional assistance, in connection with the

establishment and ongoing operation of [franchise business] Centres, all of which may be

changed, improved, and further developed by [Franchisor] from time to time;

[Franchisor] identifies the System, in the Province(s) of [provinces] (“Territory”), by means of

certain trade names, trademarks, logos, and indicia of origin, including the mark [TRADE

MARK]and such other trade names and trademarks as are now designated or may hereafter by

designated by [Franchisor] in writing, for use in connection with the System (“Proprietary

Marks”);

Master Franchisee wishes to obtain the right and license to use the Proprietary Marks and the

exclusive right to grant franchises to other persons (“Franchisees”) to establish and operate

[franchise business] Centres using the Proprietary Marks and System (“[Franchisor] Centres) in

the Territory; and wishes to receive the training and other assistance provided by [Franchisor] in

connection therewith; and

Master Franchisee understands and acknowledges the importance of [Franchisor]‘s high

standards of quality, appearance, and service, and the necessity of operating the [Franchisor]

Centres in conformity with [Franchisor]‘s standards and specifications.

NOW, THEREFORE, the parties agree as follows:

1. GRANT

1.1[Franchisor] grants to Master Franchisee the right, in the Territory, and Master Franchisee

accepts the obligations, pursuant to the terms and conditions of this Agreement, and in accordance with

the development schedule described in Section 2.3 hereof:

(a)The right and license to use the Proprietary Marks in connection with the business to be

conducted by Master Franchisee pursuant to the provisions of this Agreement: and

(b)To license Franchisees (“FRANCHISEE(S)”) to establish and operate Franchised Centres

pursuant to a separate Franchise Agreement for each such Franchised Centre unit as

described in Section 2 hereof. Master Franchisee owned centres, and Franchised Centres

shall be referred to collectively in this agreement ([Franchisor] Centre(s)”); and

1.2Except as otherwise described in Section 2.8 hereof, neither [Franchisor] nor any affiliate of

[Franchisor] shall establish or operate, or franchise any entity to establish or Operate, a business using the

Proprietary Marks and System at any location within the Territory.

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2.7Master Franchisee’s failure to adhere to the Development Schedule shall result in a loss of the

exclusivity provided in Section 1.3 hereof. In such event [Franchisor] shall thereafter have the right itself

to establish and operate, or to grant others the right to establish and operate, [Franchisor] Centres under

the System and the Proprietary Marks in the Territory, provided however that this Agreement shall

otherwise continue in effect and Master Franchisee’s other rights and obligations hereunder shall remain

in full force and effect.

3. FEES

3.1

Master Franchisee shall pay to [Franchisor] an initial Master Franchisee fee of [franchise fee]

Dollars ($ ) payable as follows:

Dollars ($ ) upon the execution of each Franchise

Agreements with [Franchisor] Centre franchisees, until the full [franchise fee] Dollars ($

) is paid.

3.2

In addition to the fees described in Section 3.1, Master Franchisee shall pay [Franchisor]:

percent ( %) of each and every initial franchise fee paid by each

Franchisee to Master Franchisee shall be paid to [Franchisor] uponthe execution of each

Franchise Agreement for each [Franchisor] Centre except for the initial Pilot Centre for which no

portion of the initial franchise fee shall be payable to [Franchisor].

3.3Master Franchisee shall pay to [Franchisor] monthly, during the term hereof, an ongoing royalty

fee in the amount of percent ( %) of the Gross Sales of all [Franchisor] Centres subject

to Section 13.3 hereof. [Franchisor] shall receive and account for all royalties from all Franchisees and

retain its percent ( %) and forward the balance, representing percent (

%) of Gross sales, to the Master Franchisee’s bank account via automatic electronic transfer.

3.4

Master Franchisee shall require all Franchisees to pay a royalty of percent ( %)

of Gross Sales at any Franchised Centre and the Pilot Centre, directly to [Franchisor].

3.5“Gross Sales” shall mean revenue from the sale of all products and services and all other income

or consideration of every kind and nature, received by the [Franchisor] Centres, as appropriate, whether

for cash or credit and regardless of collection in the case of credit, less: (i) any sales taxes or other taxes

collected by Franchisees from its customers and thereafter paid directly to the appropriate taxing

authority.

3.6Master Franchisee shall, during the term hereof cause Franchisees and the Pilot Centre to pay

percent ( %) into the national advertising fund. Such fund will be managed on behalf of all

Franchisees by [Franchisor].

3.7All payments by Master Franchisee to [Franchisor] shall be made without any deduction for any

taxes, except that Master Franchisee shall in a timely fashion deduct and pay to the appropriate taxing

authorities, on behalf of [Franchisor], any amount which Master Franchisee is required to withhold under

any laws in the Territory on payments made by Master Franchisee to [Franchisor] Master Franchisee

shall transmit, in a timely fashion to [Franchisor] official receipts for payment of all taxes withheld. If

Master Franchisee fails to withhold or pay such taxes, it shall indemnify [Franchisor] for the full amount

of such taxes and for any loss or liability occasioned by Master Franchisee’s failure to withhold as

required by law, including,but not limited to, anypenalties, interest, and expenses incurred by

[Franchisor]. All other taxes imposed on payments by Master Franchisee to [Franchisor], including, but

not limited to, value-added taxes, consumption taxes, and sales taxes, which may be imposed now or in

the future under the laws of the Territory or any taxing authority therein, shall be Master Franchisee’s

sole responsibility, and Master Franchisee shall transmit such taxes to the appropriate fiscal authorities.

Such taxes shall not affect Master Franchisee’s obligation to make payments to [Franchisor] as required

under this Agreement.

3.8

In the event that any governmental authority having jurisdiction in the Territory imposes

restrictions on the transfer of funds or currency to places outside of the Territory, [Franchisor], in its sole

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1.3Master Franchisee expressly acknowledges and agrees that the rights granted hereunder are non-

exclusive. [Franchisor] shall retain the right among others, for itself or through any affiliate, and in any

manner and on any terms and conditions [Franchisor] deems advisable, and without granting Master

Franchisee any rights therein:

(a)To own acquire, establish and/or operate, and license others to establish and operate,

businesses using the Proprietary Marks, or other Proprietary Marks, and System outside

the Territory (which business may solicit customers inside the Territory);

(b)To own, acquire, establish and/or operate, and license others to establish and operate,

businesses under other Proprietary Marks, or other systems, provided such businesses

are not similar to or related to the business carried out at the [Franchisor] Centres, at any

location within or outside the Territory; and

(c)To sell or distribute, at retail or wholesale directly or indirectly, or license others to sell or

distribute, any products which bear any Proprietary Marks, including the Proprietary

Marks, outside the Territory.

(i)In the event that [Franchisor] wishes to sell or distribute products which bear

any of the Proprietary Marks within the Territory through channels of

distribution that are different from [Franchisor] Centres, [Franchisor] shall so

advise Master Franchisee, and [Franchisor] and Master Franchisee agree that

they will in good faith negotiate the manner in which such products may be sold

or distributed in [province(s)] and an equitable apportionment of the benefits

resulting from the sale and distribution of such products.

2. TERM, RENEWAL AND DEVELOPMENT OF THE TERRITORY

2.1

Except as otherwise provided herein, the term of this Agreement shall commence on the Effective

Date described in Section 21 hereof and shall expire ten (10) years from the date of its execution.

2.2

Master Franchisee may, at its option renew this Master Franchise Agreement for additional terms

of ten (10) years each, subject to the following preconditions:

(a)Master Franchisee shall give [Franchisor] written notice of Master Franchisee’s election

to renew no fewer than twelve (12) months prior to the end of the then-current term;

(b)

Master Franchisee shall not be in default of any provision of this Agreement or any other

Agreement between Master Franchisee and [Franchisor] or [Franchisor]‘s affiliates and

Master Franchisee shall have complied with all such Agreements throughout the term of

this Agreement.

2.3

Master Franchisee undertakes that there shall be open and in operation no fewer than the

minimum cumulative number of [Franchisor] Centres described in the “Minimum Cumulative Number

of [Franchisor] Centres Open and in Operation” in the Development Schedule attached as Exhibit A

hereto; provided however that Master Franchisee shall have at least one (1) Master Franchisee-owned

Centre in operation for at least three (3) months prior to entering into a Franchise Agreement with any

Franchisee, unless otherwise approved by [Franchisor]. The first [Franchisor] Centre opened for business

in the Territory in accordance with the foregoing will hereinafter be referred to as the “Pilot Centre.”

2.4

Each [Franchisor] Centre, including any [Franchisor] Centre established and operated by the

Master Franchisee in accordance with the provisions of Section 1.2 hereof, shall be established and

operated pursuant to a unit franchise agreement (“Franchise Agreement”) prepared by [Franchisor].

2.5[Franchisor] shall provide Master Franchisee with an executed copy of each Franchise Agreement

within fourteen (14) days of execution.

2.6

Master Franchisee shall provide [Franchisor] with the date of opening of each [Franchisor]

Centre at least thirty (30) days prior to opening.

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discretion, shall have the option to require that Master Franchisee deposit all payments required under

this Master Franchise Agreement to a designated account in the Territory, and that payment of such

accumulated amounts be made to [Franchisor].

DUTIES OF[Franchisor]

4.1

[Franchisor] shall offer an initial training program, in [city], [province], to such individuals

described inSection 5.2 hereof. Such training shall consist of a minimum oftwo (2) weeks at

[Franchisor]‘s reasonable discretion in the areas of franchise sales and marketing, site selection, store

layout and design, store development, coordination of products and services, franchisee training and

support, and on-going marketing, merchandising and product development.

(a)[Franchisor] shall at its own cost and expense, provide on-site training of not more than

ten (10) days within the Territory at the Pilot Centre. Such training will consist of

equipment operations, marketing, store policies and daily operation.

(b)

[Franchisor], when requested by Master Franchisee and upon reasonable notice to

[Franchisor], provide an initial training program to each of the first Franchisees or

a designated employee of each such Franchisees. Such training (i) shall take place in

[city], [province], unless otherwise approved by [Franchisor]; (i) shall be for such

duration as and similar in content to the training provided to franchisees in other areas of

Canada: (iii) shall be appropriate for operations within the Territory.

(c)In the event of such training by [Franchisor], Master Franchisee shall pay [Franchisor] a

fee which has been pre-approved by [Franchisor], for providing training instructions,

and materials, All other expenses incurred during such initial training will be the

responsibility of Master Franchisee or Franchisees.

4.2[Franchisor] shall loan to Master Franchisee for the duration of this Agreement one copy of

[Franchisor]’s Operating Manual, and such other manuals as [Franchisor] may develop and issue, all of

which are collectively referred to as the “Manual”, which shall document the system.

4.3[Franchisor] shall make available, at no charge to Master Franchisee, standard plans (in the form

of “blue-line drawings”), costing and specifications provided to all franchisees for the construction of the

interior design and layout of [Franchisor] Centres.

4.4

If requested by Master Franchisee and at no cost to Master Franchisee, [Franchisor] shall offer

such assistance to Master Franchisee, as [Franchisor] deems reasonable and necessary, in selecting the

initial site for the Pilot Centre. In the event that a [Franchisor] employee is required by Master Franchisee

to provide an on-site evaluation for subsequent sites, Master Franchisee shall pay [Franchisor] a fee of

[per diem] Dollars ($ ) per day for such employees of [Franchisor] providing such site selection

assistance plus reasonable expenses, including, without limitation, the cost of transportation, meals, and

lodging. Master Franchisee acknowledges and agrees that [Franchisor]‘s approval of a site is not, and

shall not be construed as, a guarantee or assurance that such Centre will be profitable or successful.

4.5[Franchisor] shall assist in developing, at no cost to Master Franchisee, agrand opening

promotional kit consisting of a variety of items, such as a grand opening banner and camera-ready items

and slicks for Master Franchisee’s use in preparing grand opening invitations, printed materials, and

promotional flyers.

4.6[Franchisor] shall assist in the development of shipping labels and forms and other

miscellaneous supplies required in the daily operation of a [Franchisor] Centre.

4.7[Franchisor] shall provide, at no charge to Master Franchisee, such initial and continuing advise

and assistance to Master Franchisee in the operation and promotion of the business licensed hereunder as

a reasonable and appropriate.

4.8[Franchisor] shall conduct, when and as frequently as it deems advisable, inspections of the

business premises of [Franchisor] Centres in the Territory and evaluations of Master Franchisee’s

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operations, in order to assist Master Franchisee and to maintain the System’s standards of quality

appearance, and service.

4.9

[Franchisor] shall provide Master Franchisee with the name of the vendor of the computer

system and proprietary software currently used within the [Franchisor] System.

4.10

[Franchisor] shall make available to Master Franchisee, as and when developed, all new or

improved products, services, methods and procedures developed by [Franchisor] for use by its

franchisees. Moreover, Master Franchisee acknowledges that the System must continue to evolve in order

to reflect the changing market, to meet new changing consumer demands and in order to benefit from

new knowledge and experience acquired by [Franchisor] with regard to improved techniques, products

and operations of the System, Accordingly, Master Franchisee agrees that [Franchisor] may from time to

time hereafter, upon notice, acting reasonably and taking into account commercial usages and practices in

the Territory and, in particular, the impact of such changes on Franchisees, modify the System including,

without limitation, the adoption and use of new and modified products, as well as new techniques and

methodologies. Accordingly, and provided that such modifications will not result in Master Franchisee

being in conflict with or be otherwise in breach of any rule or law or statutory provisions and regulations

in force from time to time in the Territory, Master Franchisee agrees to accept, all such modifications to

the System and to implement same within the Territory within a reasonable time frame. [Franchisor]

shall have the right to modify the Manual from time to time in order to reflect such modifications to the

System.

4.11

Master Franchisee shall from time to time submit for review by [Franchisor] any modifications

which it proposes to make to the System to the extent that such modifications are necessary to comply

with applicable laws, ordinances, rules, regulations, administrative orders, decrees and policies of any

government authority within the Territory, [Franchisor] agrees to incorporate all such modifications and

to make all changes to the Manual in order to reflect each such modification to the system.

4.12In addition, Master Franchisee may, from time to time submit for review and approval by

[Franchisor] any modifications which it proposes to make to the System to the extent such modifications

may be necessary to comply with current commercial usage, custom, practice and market characteristics

within the Territory, [Franchisor] agrees toconsider each such proposed modification within a

reasonable time after there is a submission to [Franchisor]. However, Master Franchisee acknowledges

the importance of maintaining, to the extent possible, the uniformity of the System. Accordingly,

[Franchisor] shall have full discretion in approving or disapproving such proposed modification,

provided [Franchisor] exercises such discretion in good faith as set forth above and no such proposed

medications shall be effective without the prior written consent of [Franchisor]. [Franchisor] agrees to

make all changes to the Manual in order to reflect modifications to the System that it has so approved.

Master Franchisee further acknowledges and agrees that the System and Manual are and shall at all times

remain the sole and exclusive property of [Franchisor].

4.13Master Franchisee acknowledges and agrees that the System and the Manual as well as any and

all modifications made thereto by Master Franchisee are and shall at all times remain the sole and

exclusive property of [Franchisor].

4.14

[Franchisor] shall make available to Master Franchisee, as and when developed, a copy of its

advertising and promotional materials and art work on an “as is” basis.

5. DUTIES OF MASTER FRANCHISEE

5.1

Master Franchisee understands and acknowledges that every detail of the System and the

[Franchisor] Centres is essential to Master Franchisee, [Franchisor], Franchisees and other System Master

Franchisees and Franchisees in order to: (i) develop and maintain quality operating standards (ii) increase

the demand for the products and services sold by all Master Franchisees and franchisees operating under

the System; and (iii) protect [Franchisor]‘s reputation and goodwill. Master Franchisee shall maintain

[Franchisor]’s high standards with respect to facilities, services, products, and operations.

5.2

Persons designated by Master Franchisee shall attend and complete to [Franchisor]’s satisfaction,

the initial training program offered by [Franchisor] in [city], [province]. Each such person shall be fluent

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in the English language. [Franchisor] shall provide training, instructors, and other materials without

charge, and Master Franchisee shall be responsible for any and all other expenses incurred during the

initial training program.

5.3Master Franchisee shall employ a trainer fluent in the English language who shall complete, to

[Franchisor]’s satisfaction, [Franchisor]’s training program. Such trainer shall provide training to Master

Franchisee and Franchisee’s employees at such Pilot Centre or other reasonable location as Master

Franchisee shall designate. When one (1) [Franchisor] Centre has been established in the Territory,

Master Franchisee shall, at its sole cost and expense, provide equipment and commence operation of a

training program, using such trainer or replacement trainer which will obtain the same results in training

to [Franchisor]’s training program in the [city], [province], for the purpose of providing training as

required under each franchise Agreement. From time to time [Franchisor] may conduct an audit of the

Master Franchisee’s training program. If [Franchisor], in its sole and substantive judgment, determines

there are deficiencies in Master Franchisee’s training program, Master Franchisee shall take such action as

is required by [Franchisor] to correct such deficiencies, including replacing the Master Franchisee’s

trainer. Master Franchisee shall upon [Franchisor]’s request, timely furnish to [Franchisor] its training

records demonstrating compliance with the training requirements in this Section.

5.4Master Franchisee shall adapt and translate if necessary for use in the Territory materials

[Franchisor] provides to Master Franchisee, including without limitation materials provided pursuant to

Section 4.5 and 4.6 hereof.

5.5

Master Franchisee shall cause each Franchisee to use and occupy the premises of each

[Franchisor] Centre solely for the operation of the business franchised hereunder; to refrain from using or

permitting the use of any such premises for any other purpose or activity, and shall require that each

[Franchisor] Centre be open and in normal operation for at least such minimum hours and days as

[Franchisor] may specify in the Manual or otherwise in writing, and as may be required by the lease for

the premises of each [Franchisor] Centre.

5.6

To insure that the highest degree of quality and service is maintained, Master Franchisee shall

cause each Franchisee to operate their [Franchisor] Centres in strict conformity with such methods,

standards and specifications as may from time to time be prescribed in the Manual or otherwise in

writing. Master Franchisee shall cause its franchisees to refrain from: (a) deviating from such standards,

specifications, and procedures without [Franchisor]’s prior written consent; and (b) otherwise operating

in any manner which reflects adversely on the Proprietary Marks or the System.

(a)Master Franchisee shall cause each Franchisee to purchase and install, at each

Franchisee’s expense, and to maintain in sufficient supply and use at all times, only such

fixtures, furnishings, equipment signs and supplies which conform to standards and

specifications as set forth in the Manual or otherwise in writing; and to refrain from using

non-conforming items.

(b)Master Franchisee shall cause each Franchisee to sell or offer for sale only such products

and services as have been expressly approved for sale in the Manual or otherwise in

writing; shall require Franchisees to discontinue selling, any products or services which

are not provided for in the Manual and shall require [Franchisor] Centres to refrain, from

offering any unapproved products or services

(c)

Master Franchisee acknowledges and agrees that [Franchisor] may, from time to time

revise the Manual to incorporate System changes as described in Sections 4.10., 4.11 and

4.12 of this Agreement. Master Franchisee shall require all Franchisees to implement such

changes in Franchised Centres and complete their implementation within such time as

[Franchisor] may reasonably specify.

5.7Master Franchisee shall cause each Franchisee to purchase all products, equipment, supplies and

materials used or sold from suppliers (including manufactures, wholesales and distributors) who have

the ability to meet [Franchisor]‘s reasonable standards and specifications for such items; who possess

adequate quality controls and capacity to supply Master Franchisee’s needs promptly and reliably; whose

approval would enable the System, in [Franchisor]‘s reasonable opinion, to take advantage of

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marketplace efficiencies; and who have been approved by [Franchisor] in the Manual or otherwise in

writing or otherwise not thereafter disapproved.

5.8

Master Franchisee shall protect the integrityof the System and Proprietary Marks in the

Territory, including without limitation, by fulfilling all of its obligations imposed on it in its capacity as

Franchisor under each Franchise Agreement, by supervising the manner in which the Trade Marks are

used and the System is implemented and otherwise take all such steps, including, where reasonable and

appropriate, the commencement and diligent prosecution of legal proceedings at its sole cost and

expense, as may be necessary to cause each Franchised Centre in the Territory to observe and perform in

a timely fashion all of its obligations under each relevant Franchise Agreement.

5.9

Master Franchisee shall maintain a sufficient number of qualified personnel including persons

qualified and experienced to train and supervise Franchisees in the operation of a [Franchisor] Centre, as

well as office facilities, accounting services and the like, within the Territory all of which shall be devoted

to the performance of Master Franchisee’s obligations under this Agreement and to perform all of the

services required to be performed by Master Franchisee pursuant to each Franchise Agreement.

5.10Master Franchisee shall cause each [Franchisor] Centre in the Territory to be established and

operated pursuant to a Franchise Agreement previously approved by [Franchisor], including all

[Franchisor] Centres operated by an Affiliate or Master Franchisee. In the event that Master Franchisee

wishes to grant to a Franchisee the right to operate more than one [Franchisor] Centre, Master Franchisee

shall nevertheless cause each such Franchisee to enter into a Franchise Agreement for each [Franchisor]

Centre.

5.11

In dealing with Franchisees and otherwise conducting its business, Master Franchisee shall

comply with all applicable laws and regulations in the Territory, including those applicable to the

solicitation of prospective franchisees and the offering and grant of franchisees by Master Franchisee.

5.12

[Franchisor] shall have the right at all reasonable times to inspect the premises from which

Master Franchisee conducts its business. Furthermore, [Franchisor] shall have the right accompanied at

all times by Master Franchisee, to inspect [Franchisor] Centres and the equipment and fixtures therein

and the products and services being sold and generally to investigate the manner in which Franchisees

are conducting their business; in the event of any such inspections, Master Franchisee and its employees

shall cooperate fully and use its best efforts to cause Franchisees and their employees to cooperate fully

with [Franchisor].

5.13

Master Franchisee shall furnish [Franchisor] with a copy of any executed lease for each

[Franchisor] Centre within ten (10) days after execution thereof.

5.14

Master Franchisee shall furnish to [Franchisor] within three (3) days after receipt thereof, a copy

of any notice alleging Master Franchisee’s or any Franchisee’s failure to comply with any law, ordinance,

or regulation.

5.15

Master Franchisee and Franchisees shall have the right to advertise and sell all products and

services at any prices Master Franchisee or the Franchisees may determine , in the sole and absolute

discretion of each such party, and shall in no way be bound by any price which may be recommended or

suggested by [Franchisor].

5.16

In dealing with prospective Franchisees, Master Franchisee shall:

(a)

Carefully screen and evaluate prospective Franchisees pursuant to the standards prescribed

by [Franchisor]; and

(b)For each Franchisee, Master Franchisee shall, at its sole expense, fulfill all its duties, and

enforce all the terms and conditions, under each Franchise Agreement, including,

without limitation, to:

(i)Provide site selection counseling and assistance, onsite inspections, site

evaluations, and site recommendations, without any guarantee that any Centre

will be profitable or successful;

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(ii)Provide initial training required, and optional training programs, seminars and

workshops;

(iii)

Assistin review of contracts and leases, and furnish advise to Franchisee

concerning lease negotiations, if applicable;

(iv)Provide to Franchisees standard plans (in the form of “blue-line drawings”) and

specifications for the construction of the interior design and layout of the

Franchised Centre (adapted by Master Franchisee for use in the Territory as

required in Section 6.1 hereof), advise and consult with the Franchisee regarding

the construction and/or renovation of the Franchised Centre, conduct on-site

inspections during construction and/or renovation, and ensure upon completion

of construction and/or renovation that construction and/or renovation has been

completed in accordance with the plans and specifications;

(v)

Upon completion of construction and/or renovation, inspect the Franchised

Centre to confirm that it has been equipped in accordance with approved plans

and specifications;

(vi)

Provide a Manual and all updates thereto, translated into the required language

or languages of the Territory;

(vii)Furnish the grand opening promotional program and the initial set of business

forms , shipping and product labels, and other miscellaneous supplies adapted

for use in the Territory;

(viii)Provide such opening assistance, and other assistance as designated by

[Franchisor];

(ix)Visit each Franchised Centre in the Territory once each quarter during the term

of the relevant Franchise Agreement and any renewals thereof, in order to

provide continuing assistance as reasonably determined by Master Franchisee,

inspect the premises of such [Franchisor] Centre to determine whether

Franchisee’s continued operation is inconformity with [Franchisor]‘s

procedures, standards and specifications, and verify compliance by Franchisee

and Franchisee’s employees with all applicable laws, rules, regulations, and

procedures;

(x)Monitor and submit to [Franchisor], at [Franchisor]’s request, written reports on

such formsand at such times as [Franchisor] may request and, upon

[Franchisor]’s request, promptly take all steps necessary to remedy any and all

matters reasonably requested by [Franchisor] and as would a reasonable and

responsible Franchisor, including without limitation:

A.Any apparent deficiencies and problems concerning the uniformity and

quality of service provided by the Franchisee;

B.Any apparentopportunities for the Franchisee to improve its

performance;

C.Any apparent deviations from [Franchisor]’s operating procedures,

standards, and specifications provided for in the Manual or from proper

usage of the Proprietary Marks; and

Any apparent violations of applicable laws, rules or regulations.

6. CONSTRUCTION OF LEASEHOLD IMPROVEMENTS

6.1Master Franchisee shall, at its expense, modify the blue-line drawings described in Section 4.3

hereof for use in the Territory including adaptation to applicable national and local laws regulations, and

ordinances.