Franchise agreement
This agreement is made on 15 June 2028 between:
- Daily Press Coffee Pty Ltd, of 40 Quay Street, Brisbane QLD 4000, Australia (the "Franchisor"); and
- Harbour Beans Pty Ltd, of 7 Market Row, Fremantle WA 6160, Australia (the "Franchisee").
1. Background and definitions
1.1 The Franchisor has developed a system for running a business, with its own name, methods, recipes, designs, standards and know-how, and owns or has the right to license the marks used with it. The Franchisee wishes to run one outlet under that system and the Franchisor is willing to allow it, on the terms below.
1.2 In this agreement:
- "Business" means the following: A coffee shop selling coffee, tea and baked goods under the Daily Press brand, using the franchisor's recipes, menu, design and operating manual.
- "Outlet" means the Business run at the Location;
- "Location" means 12 High Street, Fremantle, or any other place that the Franchisor approves in writing;
- "System" means the Franchisor's way of running the Business, including its methods, recipes, products, menus, designs, layouts, procedures, training, standards, marketing, software and know-how, as the Franchisor may improve it;
- "Manual" means the Franchisor's operating manual and instructions for the System, in whatever form, as updated by the Franchisor;
- "Marks" means the names, logos, brands, trade dress and other marks that the Franchisor uses for the Business, whether registered or not;
- "Intellectual Property" means copyright, trade marks, designs, patents, know-how and similar rights anywhere in the world;
- "Opening Date" means 1 October 2028, or the date on which the Outlet in fact opens to the public if it is later;
- "Net Sales" means all money and the value of all goods and services received or due from sales at or from the Outlet, in any way, less value added tax or sales tax, refunds that were actually made and discounts that the Manual allows; and
- "Term" has the meaning in section 14.
2. Grant and territory
2.1 The Franchisor grants the Franchisee, for the Term, the right, and the Franchisee accepts the duty, to run the Outlet at the Location under the System and to use the Marks and the Manual for that only, on the terms of this agreement.
2.2 The grant is limited to the Outlet at the Location. The Franchisee may not run the Business from any other place, or move the Outlet, without the Franchisor's written consent.
2.3 The Franchisee's territory, and the rights that go with it, are the following:
The franchisor will not open or license another Daily Press outlet within 2 km of the location during the term.
2.4 Except as section 2.3 states, the Franchisor keeps all other rights to the System and the Marks. This includes the right to run, and to license others to run, businesses of any kind, using the System or the Marks, anywhere, including by online sales and delivery, subject to section 2.3.
2.5 The Franchisee is an independent business. It is not an agent, partner or employee of the Franchisor, and cannot bind the Franchisor or make any promise in its name. The Franchisee will make this clear to the public, to customers and to staff, in the way the Manual says, including by a notice at the Outlet. The Franchisee is solely responsible for its own staff, taxes, debts and contracts.
3. The System and the Manual
3.1 The Franchisor will give the Franchisee a copy of the Manual before the Opening Date, and will tell it about changes to the System. The Manual stays the Franchisor's property and is confidential. The Franchisee will return it, and all copies, when this agreement ends.
3.2 The Franchisee will run the Outlet in line with the System and the Manual, as they change from time to time. The Franchisor may change the System and the Manual for good business reasons, including to meet the law, to keep up with the market or to protect the brand, but a change will not oblige the Franchisee to make a major new investment unless it is needed to meet the law or the sides agree, or the change is introduced fairly over a reasonable time.
3.3 The Franchisee will run the Outlet with its best efforts, diligently, honestly and in a way that protects and improves the standing of the Marks and the System. It will employ enough trained staff, keep to the opening hours the Manual states, and be responsible for the Outlet's day-to-day management. A named manager, approved by the Franchisor, will be in charge of the Outlet's day-to-day work.
4. Fees
4.1 The Franchisee will pay the Franchisor an initial franchise fee of AUD 40,000, due on signing. The fee is not refundable once paid, unless the Franchisor is in breach of this agreement, or the law gives a right to a refund, such as a cooling-off period.
4.2 The Franchisee will pay the Franchisor an ongoing fee for the Term, on the following terms:
6 percent of monthly net sales, paid by the 10th of the next month
4.3 The Franchisee will also pay a contribution to the Franchisor's marketing fund of 2 percent of monthly net sales.
4.4 Fees are due without set-off or deduction, except as the law requires, and are payable by direct debit or another way that the Franchisor reasonably requires. They do not include value added tax or sales tax, which the Franchisee will pay in addition where it applies.
4.5 Late amounts earn interest at the rate the law allows, or at the rate that the sides agree in writing, from the due date until the day of payment. The Franchisor may apply any payment it receives first to interest, then to the oldest debt.
4.6 The Franchisor may, by 90 days' written notice, change the way fees are calculated or paid if the change is for a good business reason and applies to its franchisees generally, but not so as to raise the percentage rates stated in this agreement.