Franchise agreement for computer repair store

notice prior to commencing operations. In no event shall the Franchisee construct or remodel the interior or exterior of any Store operation, or make any improvements which vary from the then-current standards, plans and specifications approved by the Franchisor, without first obtaining the Franchisor's prior written approval. The Franchisee shall, at its own expense, obtain all municipal and State licences necessary to operate a “Brand name of the store” store prior to commencing business at its Store operation, and shall maintain all such licences in full force and effect during the term of this Agreement.

ARTICLE 3. TRAINING.

3.1 The Franchisee shall designate individuals (up to two (2) persons) as trainee(s) to attend the Franchisor's training at the Franchisor's Head Office at City of the Franchisor's head office or at such other training location as may be selected by the Franchisor. The Franchisor shall offer initial training programmes for the Franchisee and its employees at such times as may be selected by the Franchisor. The training fees paid by the Franchisee to the Franchisor shall include the overhead costs of training, materials and all technical training tools. The Franchisee shall bear the costs of travel, lodging and boarding, and all other expenses incurred during the course of the training provided by the Franchisor to the Franchisee. The training programme and the manner of conducting such programme shall be at the Franchisor's sole discretion and control. The training course shall be structured to provide practical training in the implementation and operation of a “Brand name of the store” store carrying out Type of repair activity offered (e.g., Computer) repair activities as described herein.

3.2 The Franchisee shall not permit any “Brand name of the store” Store to be opened or managed by any person who has not attended and successfully completed the management training course designated by the Franchisor. If the Franchisee is an individual and does not manage its “Brand name of the store” Store on a day-to-day basis, and in the event its designated “Brand name of the store” Store manager resigns or is terminated, the Franchisee shall arrange for the successor “Brand name of the store” Store manager to (i) commence the required training course within thirty (30) days of first assuming the duties of a “Brand name of the store” Store manager, and (ii) successfully complete the said course after payment of the necessary training charges as decided by the Company from time to time. If the Franchisee successfully completes the training programme, the required training course conducted at the Franchisor's facilities shall not extend beyond one (1) week. However, the course conducted at the Franchisor's facilities may require an additional twenty (20) hours of operational training at a Franchisor-approved “Brand name of the store” Store as a prerequisite.

3.3 If at any time the trainee voluntarily withdraws from, or is unable to complete, the training, or fails to demonstrate the aptitude, spirit or ability to comprehend and carry out the course of study to the reasonable satisfaction of the Franchisor, the Franchisor shall have the right to require the trainee to attend other training class(es) or to undertake additional operational training until the Franchisor is reasonably satisfied that the Franchisee's trainee has satisfactorily completed the training course, after payment of the training fees as required by the Franchisor. The Franchisee shall not open its “Brand name of the store” Store until the training has been completed to the Franchisor's reasonable satisfaction.

3.4 In the event of a sale to a third party of a “Brand name of the store” Store after opening, the transferee must be trained at the “Brand name of the store” Head Office at City of the Franchisor's head office or at such other location as the Franchisor may in its discretion determine, as a condition of the Franchisor's consent to such transfer. All tuition costs for such training shall be deemed paid upon receipt by the Franchisor of five percent (5%) of the sales price of the “Brand name of the store” store operation, due in accordance with Article 14 herein. In the event of an approved non-sale management transfer to a third party of the Franchisee's “Brand name of the store” store, the transferee shall attend the Franchisor's training at the Head Office and pay to the Franchisor the training fee, which fee shall not exceed Rs. Training fee for transfer (₹)/-. No “Brand name of the store” Store shall open or re-open until the Franchisor certifies that the transferee is approved to operate the respective “Brand name of the store” store.

3.5 Additional training sessions may be conducted at the Franchisee's request and expense, or at the Franchisor's request at the Franchisee's expense, except for the initial training course itself. The Franchisee's attendance at additional training sessions shall be mandatory if such sessions are scheduled in the Franchisee's State. For such additional training, the Franchisor shall provide the instructors and instructional materials, but the Franchisee shall arrange for transportation, lodging and boarding for itself and/or its manager. The cost shall depend upon the distance the Franchisee is required to travel and the type of accommodation chosen. In addition, the Franchisee shall attend regional meetings, when and if established by the Franchisor, and shall attend annual national conventions, when and if scheduled.

ARTICLE 4. MANUALS AND STANDARDS OF FRANCHISEE QUALITY, CLEANLINESS AND SERVICE.

4.1 STANDARDS.

In order to promote the value and goodwill of the Franchisor's Marks and the System, and to protect the Franchisor's Marks and the other “Brand name of the store” Marks and brand, the Franchisee agrees to conduct its business in accordance with the standards promulgated by the Franchisor as follows:

4.2 MANUALS.

4.2.1 In the Manuals and other publications, the Franchisor shall list the authorised products to be sold by the Franchisee, and shall promulgate standards of operation for “Brand name of the store” store operations, including standards of quality, cleanliness and service for all product line items, furnishings, interior and exterior décor, supplies, fixtures and equipment used in connection with each “Brand name of the store” store operation. The Franchisee agrees to operate its “Brand name of the store” Store in accordance with the standards, specifications and procedures set forth in the Manuals, this Agreement and the sublease for the Location. The Franchisee further agrees that changes in the menu, or in the standards, specifications and procedures, may become necessary from time to time, and agrees to accept as reasonable all modifications, revisions and additions to the Manuals as authorised by the Franchisor. The sale of any product or service at the Franchisee's Location without the Franchisor's prior written approval shall constitute a material violation of this Agreement.

4.2.2 The Manuals and all amendments to the Manuals (and copies thereof) are copyrighted and shall remain the property of the Franchisor. They are loaned to the Franchisee for the term of the Agreement and must be returned to the Franchisor upon the termination, expiration or non-renewal of the Agreement. The Manuals are highly confidential documents which contain certain trade secrets of the Franchisor, and the Franchisee shall never reveal, and shall take all reasonable precautions, both during and after the term of this Agreement, to ensure that its employees or any other party under the Franchisee's control shall never reveal any of the contents of the Manuals or any other publication, recipe or secret provided by the Franchisor, except as is necessary for the operation of the Franchisee's Store operation.

4.3 HOURS.

The Franchisor and the Franchisee agree that the hours of operation of the Franchisee's Store operation shall be, at a minimum, 10:00 a.m. to 7:00 p.m. (evening), six days per week, and the Franchisee agrees to operate its Store operation during such hours. If the Location is situated in a mall or shopping centre, the hours of such mall or shopping centre shall prevail. The Franchisee shall diligently and efficiently exercise its best efforts to achieve the maximum gross sales possible from its Location, and shall remain open for business not less than nine (9) hours per day, six days per week, unless additional opening hours are reasonably required to maximise operations and sales. If such hours are incorrect in relation to the sales potential of the Franchisee's Store operation, the Franchisor and the Franchisee shall reasonably adjust such hours by jointly establishing new hours of operation. It is acknowledged that the hours of operation of other Franchisees will vary in relation to each respective Location and to local legal restrictions, if any.

4.4 APPEARANCE.

From time to time, the Franchisee's Store operation may require a cosmetic improvement or an equipment change or addition in order to comply with the Manuals and/or to maintain proper operations, an aesthetic appearance and a professional image. Accordingly, the Franchisor may require remodelling and renovation, and modifications to existing equipment and improvements, as is reasonably necessary. The Franchisor shall not require any such work at a particular Store operation less than two (2) years after the opening of the Store operation, except: (i) for additional machinery, equipment, tools and accessories, if authorised product line preparation methods or products are developed and authorised by the Franchisor; (ii) if repairs or repainting are necessary to maintain the appearance of the interior and exterior of the Location in a clean and orderly condition satisfactory to the Franchisor; or (iii) upon the sale of the Franchisee's Store operation. Within forty-five (45) days after receipt of written notice, the Franchisee shall fully implement and complete such changes to its Store operation operating under this Agreement. The cost of additional or new introductions of machinery, equipment, tools, accessories, raw materials, packaging materials or any other material, and any renovation work, if required, shall be borne by the Franchisee.

4.5 PRODUCT LINE AND SERVICE.

The Franchisee agrees to carry out Type of repair activity offered (e.g., Computer) repair services from the “Brand name of the store” store as per the terms specified by the Franchisor in this Agreement or in the Manuals, and to follow all specifications and formulas of the Franchisor as to specifications, contents, weight and quality of the products offered and delivered to its customers from the Franchisor's Store operation. The Franchisee is permitted to sell other IT products or to carry out other activities from the store. The Franchisor may, however, disallow any other activity, or any such activity except Type of repair activity offered (e.g., Computer) repair from the “Brand name of the store” store, if any such activity is deemed to hamper or tarnish the brand value of the “Brand name of the store” store in any manner whatsoever, at the sole discretion of the Franchisor.

4.6 BOXES, STICKERS AND OTHER PACKAGING / MARKETING MATERIALS.

4.6.1 The Franchisee agrees that all authorised product line items shall be delivered to customers only after proper packaging bearing accurate reproductions of the Franchisor's Marks, as provided by the Franchisor or as approved by the Franchisor. All boxes, bags, packets, stickers and other packaging and like articles used in connection with the Franchisor's Store operation shall conform to the Franchisor's specifications, shall be imprinted with the Franchisor's Marks, and shall be purchased from the Franchisor directly or from a distributor or manufacturer approved in writing by the Franchisor, as provided in Article 8, which approval shall not be unreasonably withheld.

4.6.2 No item of merchandise, furnishings, interior or exterior décor items, supplies, marketing tools, fixtures or equipment bearing any of the Franchisor's Marks shall be used in or upon any Store operation unless the same has first been submitted to and approved in writing by the Franchisor.

ARTICLE 5. CATALOGUE, LEAFLETS, PAPER ADVERTISEMENTS, ALL OTHER MARKETING TOOLS AND MATERIALS, STATIONERY, UNIFORMS, INSPECTIONS, SIGNS.

5.1 Catalogues/Leaflets/Price Lists.

5.1.1 All products approved by the Franchisor shall be distributed under the specific name designated by the Franchisor from time to time. The Franchisor shall establish all prices for the products approved and branded by the Franchisor at its sole discretion. No standard product or service approved by the Franchisor shall be removed from the list of products and services offered from the store unless the Franchisee is so instructed by the Franchisor.

5.1.2 Such "Authorised" and/or "Approved" products shall be marketed by approved formats to be utilised in the Franchisee's Store operation. The approved and authorised format(s) may include, at the Franchisor's discretion, requirements concerning organisation, graphics, product descriptions, illustrations and any other matters (except prices) relating to the format, whether or not similar to those listed. At the Franchisor's discretion, the format(s) may vary depending upon region, market size and other factors. The Franchisor may change the format(s) from time to time or from region to region, in which case the Franchisee shall be given a reasonable time (not longer than thirty (30) days) to discontinue use of any old format(s) and to implement the use of the new format(s).

5.1.3 The Franchisee shall cease selling any previously approved product within thirty (30) days after receipt of notice that the product is no longer approved.

5.1.4 The Authorised products and services sold by the Franchisee shall be of the highest quality, and the raw materials and composition and specifications thereof shall comply with the instructions and guidelines provided by the Franchisor or contained in the Franchisor's Operations Manual, and with the further requirements of the Franchisor as communicated to the Franchisee from time to time.

5.2 COMPLIANCE.

The Franchisee shall operate its Store operation as a clean, orderly, lawful and respectable place of business in accordance with the Franchisor's business standards and merchandising policies, and shall comply with all applicable ordinances, laws, statutes and regulations governing the operation of such premises, including all disability requirements. The Franchisee shall not permit any Location or any part of a Location to be used for any immoral or illegal purpose.

5.3 SIGNS, DESIGNS AND FORMS OF PUBLICITY.

5.3.1 The Franchisee shall maintain a suitable sign or awning at, on or near the front of the Location, identifying the Location as a "“Brand name of the store” Store". Such sign shall conform in all respects to the Franchisor's requirements and to the layout and design plan approved for the Location, except to the extent prohibited by local legal restrictions.

5.3.2 No exterior or interior sign, or any design, advertisement, internet address, "web page" or world wide web home page, or form of publicity, including its form, colour, number, location and size, shall be used by the Franchisee or any Association (as defined below) unless first submitted to the Franchisor and approved in writing (except with respect to prices). Any request by the Franchisee for such approval shall be duly submitted in duplicate to the Franchisor. The Franchisor shall respond to such request within thirty (30) days of its receipt. Whenever the Franchisee elects to utilise, in the form supplied, advertising provided by the Franchisor or any promotional item specifically approved by the Franchisor, no further approval for the use of such material shall be required. Upon written notice from the Franchisor, the Franchisee shall discontinue and/or remove any objectionable advertising materials or any other materials which are not, in the Franchisor's sole discretion, suitable for display.

5.4 UNIFORMS AND EMPLOYEE APPEARANCE.

The Franchisee shall ensure that all employees, while working in the Store operation: (i) wear uniforms of such colour, design and other specifications as the Franchisor may designate from time to time; and (ii) present a neat and clean appearance. If the type of uniform utilised by the Franchisee is removed from the list of approved uniforms, the Franchisee shall have thirty (30) days from receipt of written notice of such removal to discontinue the use of its existing inventory of uniforms and to implement the approved type of uniform.

5.5 MACHINES OR OTHER MECHANICAL DEVICES.

The Franchisee shall not permit any machine or other mechanical device to be installed or maintained at its Location which can be used to the detriment of, or in competition with, the business of the Franchisor, without the Franchisor's prior written approval.

5.6 INSPECTION.

5.6.1 The Franchisor's authorised representatives shall have the right to enter the Franchisee's entire Store area during business hours, without disrupting the Franchisee's business operations, for the purposes of examining the same, conferring with the Franchisee's employees, inspecting and checking operations, furnishings, interior and exterior décor, supplies, fixtures and equipment, and determining whether the business is being conducted in accordance with this Agreement, the System and the Manuals.

5.6.2 In the event any such inspection indicates any deficiency or unsatisfactory condition with respect to any matter required under this Agreement or the Manuals, including but not limited to quality, cleanliness, service, health and the authorised product line, the same may be treated as a violation of the terms and conditions of this Agreement. The Franchisor may notify the Franchisee in writing of the Franchisee's non-compliance with the Manuals, the System or this Agreement. The Franchisee shall have three (3) days after receipt of such notice, or such other greater period as the Franchisor may in its sole discretion provide, to correct or repair such deficiency or unsatisfactory condition, if it can be corrected or repaired within such period. If not, the Franchisee shall, within such period, commence such correction or repair and thereafter diligently pursue the same to completion.

ARTICLE 6. ADVERTISING.

All local-level advertising and marketing activities shall be carried out by the Franchisee at its own expense, and the Franchisor shall not, under any circumstances, be obligated to contribute to any national or local advertising fund, programme or other organisation any advertising fees or contributions. For any national advertising and branding campaign, the franchisees shall contribute upon mutual consent, depending upon a case-to-case basis.

ARTICLE 7. COMPANY MARKS AND ADDITIONAL MARKS.

7.1 The licence and related rights to use the System, the Manuals, the Franchisor's Marks and any other proprietary products granted under this Agreement apply only to the Franchisee's Store Operation at the Location, and to no other place, except in the event of a relocation approved in writing by the Franchisor. This Agreement does not authorise the use of mobile vending vehicles, carts, kiosks or any other non-traditional delivery systems without the prior approval of the Company; any such unauthorised use shall be treated as a violation of the terms and conditions of this Agreement.

7.2 Except within a radius of Exclusive territory radius (kms) kms of the Franchisee's store, which constitutes the exclusive Territory of the Franchisee under this Agreement, the Franchisee shall not, in any manner, interfere with or attempt to prohibit the use of the Franchisor's Marks and/or the System by any other Franchisee of the Franchisor, any other distribution points, or any other system used to distribute “X Y Z” authorised or branded products. Provided that, in accordance with the terms of this Agreement and for so long as this Agreement remains in force, the Franchisor shall not appoint any other Franchisee within a radius of Non-competition radius for other franchisees (kms) kms from the Franchisee's store.

7.3 The Franchisor may, from time to time and in the Franchisor's sole discretion, obtain additional trademark and/or service mark rights in words and/or designs. Upon any such occurrence, the Franchisor may license the Franchisee to use such trademarks or service marks by giving written notice to the Franchisee that such marks now form part of the Franchisor's Marks. The term of such licence shall be coextensive with the term of this Agreement or as otherwise determined by the Franchisor, and shall be subject to all restrictions relating to the use of such rights as set out in this Agreement and in the notice granting the Franchisee the licence.

7.4 The Franchisor is not obliged, under this Agreement or otherwise, to protect the Franchisee's right to use the trademarks, service marks and the like, or to protect the Franchisee against claims of infringement or unfair competition in respect of the trademarks/service marks.

ARTICLE 8. DISTRIBUTION, MANUFACTURE, AND PURCHASE OF EQUIPMENT, SUPPLIES, AND OTHER PRODUCTS.

The Franchisee agrees to use only raw materials, components and processes supplied or approved by the Franchisor while repairing Computers. The Franchisee further agrees to purchase the Raw Materials and Components required for repairing a Computer only from the Franchisor, or as defined below, manufactured in accordance with the Franchisor's specifications by approved manufacturers, distributed by approved distributors, and sold to the Franchisee as follows:

8.1 DEFINITIONS.

8.1.1 For the purposes of this Agreement, a "distributor" is defined as any entity, other than a manufacturer, which directly or indirectly delivers raw materials to the Franchisee. A "manufacturer" is defined as the entity which manufactures and/or sells the Raw Materials to a distributor. "Raw Materials" means all products purchased from the Franchisor or distributors, and/or manufactured or sold by manufacturers or production entities, which are used in the creation of Authorised Products. Raw Materials, Components and Spares include, but are not limited to, Computer LCD screens, Computer adapters, Computer batteries, Computer keypads, Computer motherboards, Computer motherboard components and chips, Computer hinges, Computer inverters, Computer mouse pads, and the like. "Authorised" means approved by the Franchisor in accordance with the procedures established under this Agreement.

8.2 DISTRIBUTORS.

8.2.1 The Franchisee acknowledges that, from a cost and service perspective, it is generally impracticable to have more than one distributor in the market area of the Franchisee's Store Operation, and that, in order to obtain the lowest distribution costs, all regional Franchisees should purchase only from a single authorised “X Y Z” distributor. The Franchisee agrees to purchase all equipment, supplies, Raw Materials and other products and materials necessary for any Computer repair activity only from the Franchisor itself, from Authorised Distributors, and from other authorised sources which demonstrate, to the continuing reasonable satisfaction of the Franchisor, the ability to meet the Franchisor's then-current standards and specifications for such items; which possess adequate quality controls and the capacity to supply the Franchisee's needs and the needs of all other Franchisees promptly and reliably; which demonstrate the ability and willingness to work with the Franchisor to provide the assistance required by such Franchisees in the region and by all other Franchisees; which agree to distribute all authorised “X Y Z” products; which comply with the Franchisor's reasonable requirements; and which have been approved in writing by the Franchisor and not thereafter disapproved.

8.2.2 If the Franchisee desires to purchase any items from an unapproved distributor whom the Franchisee wishes to become an Authorised Distributor, the Franchisee shall first submit a written request, in duplicate, for such approval to the Franchisor, accompanied by a similar written request for approval from the proposed distributor. The Franchisor shall have the right to require the proposed distributor to provide reasonable financial, operational and economic information regarding its business, and to permit the Franchisor's representatives to inspect the proposed distributor's facilities and to establish economic terms, delivery, service and other requirements consistent with the other distribution relationships for other Store operations. The proposed distributor shall pay to the Franchisor, in advance, all of the Franchisor's reasonable costs incurred in reviewing the distributor's application to service the Franchisee, as well as all current and future reasonable costs relating to the inspection and re-inspection of the distributor's facilities, equipment and Raw Materials in the distributor's possession at any time. The Franchisor may revoke its approval upon the distributor's failure to continue to meet any of the Franchisor's criteria.

Nothing in this Article shall oblige the Franchisor to approve any distributor. Upon receipt by the Franchisor of the Franchisee's and the proposed distributor's request for approval in full compliance with this Article, the Franchisor shall notify the Franchisee of its decision within 60 days of receipt thereof. In the event that the Franchisee uses an alternate approved distributor in place of the recommended distributor, the Franchisee and all other Franchisees shall, as a condition thereof, authorise the alternate distributor to provide the Franchisor with duplicate purchase invoices for the Franchisor's records and inspection purposes, and otherwise to comply with the Franchisor's reasonable requests.

8.3 MANUFACTURERS.

8.3.1 The Parties agree that the Franchisor's product specifications and quality control system constitute highly confidential information and trade secrets of the Franchisor. In order to (i) achieve appropriate pricing, (ii) obtain “X Y Z” authorised Raw Materials for the Franchisee, and (iii) establish consistent uniformity of “X Y Z” products, the Franchisee acknowledges that purchase by all Stores or regional Franchisees of the raw materials, components and spares required for Computer repair from the Franchisor itself or from approved manufacturers is a necessity. Having regard to the importance of the quality and uniformity of products and services, and the significance of product specifications and quality control in the preparation of Authorised Products and the rendering of services to achieve and maintain such quality and uniformity, it is to the mutual benefit of the Parties that the Franchisor closely control the production and distribution of the Raw Materials, Components and Spares used by the Franchisee to repair any Computer. Similar considerations may also apply to other products which the Franchisor may develop or introduce in the future. The Franchisee therefore agrees to purchase the Raw Materials, Components and Spares required for Computer repair only directly from the Franchisor itself, or from products manufactured in accordance with the Franchisor's specifications and quality standards by approved manufacturers who demonstrate, to the continuing reasonable satisfaction of the Franchisor, the ability to meet the Franchisor's then-current standards and specifications for such items; who possess adequate quality controls and the capacity to meet the needs of the Franchisee, all other Franchisee stores or distributors in a given region or territory promptly and reliably; who demonstrate the ability and willingness to work with the Franchisor and to provide the assistance required by the “X Y Z” system; and who have been approved in writing by the Franchisor and not thereafter disapproved.

8.3.2 If the Franchisee desires to purchase any items from an unapproved manufacturer, and the Franchisee wishes such manufacturer to become an authorised manufacturer, the Franchisee shall first submit a written request, in duplicate, for such approval to the Franchisor, accompanied by a similar written request for approval from the proposed manufacturer. The Franchisor shall have the right to require that the proposed manufacturer provide reasonable financial, operational and economic information regarding its business, and that the Franchisor's representatives be permitted to inspect the proposed manufacturer's facilities and establish economic terms, delivery, service and other requirements consistent with the other manufacturing relationships for other Franchisee stores. The proposed manufacturer shall pay to the Franchisor, in advance, all of the Franchisor's reasonable costs in reviewing the application of the manufacturer to service the Franchisee, as well as all current and future reasonable costs related to inspecting and re-inspecting the manufacturer's facilities, equipment and Raw Materials at any time. The Franchisor may revoke its approval upon the manufacturer's failure to continue to meet any of the Franchisor's criteria. Nothing in this Article shall require the Franchisor to approve any manufacturer. Upon receipt by the Franchisor of the Franchisee's and the proposed manufacturer's request for approval in full compliance with this Article, and upon completion of all inspections required by the Franchisor to evaluate the manufacturer, the Franchisor shall notify the Franchisee of its decision within 60 days after the completion of such application and inspections. If an alternate approved manufacturer, other than the recommended manufacturer, is used by the Franchisee, then, as a condition thereof, the Franchisee and all other Franchisees shall authorise the alternate manufacturer to provide to the Franchisor duplicate purchase invoices for the Franchisor's records and inspection purposes, and to otherwise comply with the Franchisor's reasonable requests.

8.4 PURCHASE OBLIGATIONS.

The Franchisee agrees to purchase the following items from the Franchisor himself, or from an approved distributor or manufacturer designated by the Franchisor:

8.4.1 All Computer components, raw materials and spares required for repair or replacement in a Computer, including LCD screens, keyboards, motherboards, inverters, hinges, jacks and other components and spares. The Franchisor reserves the right to authorise exceptions as circumstances warrant.

8.4.2 All Branded "X Y Z" Products bearing the Franchisor's Marks. The Franchisor has a long-term strategic plan to create an additional profit centre for the Franchisee and itself through the sale of "X Y Z" branded products in Stores, shopping malls, cineplexes, grocery stores, etc. To accomplish this goal, the Franchisor intends to develop such products. To effectuate this long-term strategy, the Franchisee agrees to cooperate with the Franchisor with respect to the purchase, display and sale of any Branded Products authorised for sale by the Franchisor. The Franchisee consents to the receipt by the Franchisor of licensing fees from manufacturers who manufacture Branded Products, which shall compensate the Franchisor for such use of the Franchisor's Marks.

8.4.3 Certain "X Y Z" standard exterior and interior signs. These signs require the prior fabrication of sign moulds or advance production in quantity in order to be either affordable or promptly available. If the Franchisor has entered into an agreement with approved sign manufacturer(s), granting rights to use the Franchisor's Marks in connection with the signs and to sell such signs to "X Y Z" Franchisees, the Franchisee agrees to purchase its signs from such authorised sign manufacturer(s).

8.4.4 The Franchisee agrees that, at such times as the Franchisor establishes a regional or national purchasing programme for any of the Raw Materials which may benefit the Franchisee by way of reduced price, lower labour costs, production of improved Authorised Product(s), increased reliability in supply, improved distribution, Raw Material cost control (that is, the establishment of consistent pricing for reasonable periods to avoid market fluctuations), improved operations by the Franchisee, or other tangible benefits to the Franchisee, the Franchisee shall participate in such purchasing programme in accordance with the terms thereof.

ARTICLE 9. CONTINUING FRANCHISE FEES, REPORTS, BOOKS AND RECORDS.

9.1 CONTINUING FRANCHISE FEES.

9.1.1 The Franchisee shall pay to the Franchisor, monthly, during the term of this Agreement and any renewals or extensions thereof, a royalty of 16% on the service charges raised on the total number of Computers repaired by the Franchisee during a month. If only inspection charges are levied by the Franchisee and no repair work has been carried out, no royalty shall be charged by the Franchisor from the Franchisee. For the purposes of this Agreement, "Computer repair" means both hardware and software repair done by the "X Y Z" Store, whether on a cash or credit basis (and, if on credit, whether or not payment is received therefor), in respect of all Computers repaired in or from each of the Franchisee's Stores, excluding sales taxes and/or any other taxes applicable.

9.1.2 At the Franchisor's request, the Franchisee shall promptly execute or re-execute, within five (5) days of the Franchisor's request, and deliver to the Franchisor, appropriate pre-authorized cheque forms or such other instruments or drafts as are required by the Franchisor's bank, payable against the Franchisee's bank account, to enable the Franchisor to electronically collect the franchise fees under the terms of this Agreement by way of a draft on the Franchisee's account through electronic withdrawal. At the Franchisor's request, the Franchisee shall, within 5 days of such request, promptly perform such acts as may enable the Franchisor or its designee to connect its computers to the Franchisee's computer(s) or the Franchisee's POS System, so that the Franchisor or its designee may electronically obtain statistical information regarding the Franchisee's business activities as the Franchisor may, in its sole discretion, request. The Franchisee agrees not to disconnect the Franchisor or its designee from such connection or phone line at any time, for any reason, without the Franchisor's prior written approval. The Franchisee specifically authorises the Franchisor to either "upload" or "download" information into and from, or to, its computers, cash registers or other such devices, as permitted by law, insofar as it relates to the Store operation, by internet, intranet and other networks, or by such other means as may become available.

9.1.3 The Franchisee shall report its gross sales by telephone within three (3) days after the end of each month, or at such other times as may be established by the Franchisor in its sole discretion. The Franchisee shall submit written weekly summaries showing the results of its operations by the following Saturday. If the Franchisee fails to report its sales on a timely basis, the Franchisor may estimate the amount of the Franchisee's sales. The Franchisor shall thereafter deposit or transfer the reported amounts, or, in the absence of a report, the estimated amounts due, into its own account, using the Store Franchisee's pre-authorized cheques or other instruments. If any draft, electronic or otherwise, remains unpaid owing to insufficient funds or otherwise, the Franchisee shall pay the Franchisor's expenses arising from such non-payment, including bank fees in an amount of at least Rs 500/-, hourly staff charges arising from such default, and any other related expenses incurred by the Franchisor. By the 5th day of each month, the Franchisee shall pay to the Franchisor any sums unpaid for the prior month, to adjust for sales owed for any partial week or sales that were unpaid, improperly recorded or not credited in the Franchisee's books and records.

The Franchisee hereby agrees to pay any sales, use or other tax now or hereafter imposed on the franchise fees, advertising fees, or any additional rental collected under the sublease for the Location, by any federal, state or local governmental authorities. The Franchisor may, at its sole discretion, collect such taxes in the same manner as the franchise fees are collected hereunder, and if the Franchisor collects such taxes, it shall promptly remit the tax collections to the appropriate governmental authority.

9.2 REPORTS AND INSPECTION OF RECORDS.

9.2.1 The Franchisee shall submit to the Franchisor a quarterly Profit and Loss Statement, signed and certified by the Franchisee. The Profit and Loss Statement shall be prepared in accordance with generally accepted accounting principles and shall set out the Franchisee's sales, expenses and financial position with respect to the Franchisee's Store Operation. The Franchisor reserves the right to require such further information concerning the Franchisee's Store Operation as the Franchisor may, from time to time, reasonably request.

9.2.2 Upon ten (10) days' prior written notice, the Franchisor, its agents or representatives may audit the Franchisee's books and records in accordance with generally accepted standards established by certified public accountants. In connection with such audit(s) or other operational visits, the Franchisee agrees to retain its cash receipts records, weekly and monthly control forms, and accounts payable records, including all payments made to the Franchisee's suppliers in the course of its Store Operation, at the Store premises or at its business office for a period of three (3) years after their due date, and such records shall be made available for examination by the Franchisor or its representative(s) at the Franchisor's request. Without any prior written notice, the Franchisor, its agents or representatives may inspect the Franchisee's entire Store Operation and the Franchisee's daily, weekly and monthly statistical information, or any other information required under the Operations Manual. The Franchisee shall make such information available for such inspections, in recognition of the fact that an operational inspection cannot be effective without a review of essential statistical information.

9.2.3 If any audit or other investigation reveals an under-reporting or under-recording error of five (5%) percent or more, then, in addition to any other sums due, the expenses of the audit/inspection shall be borne and paid by the Franchisee as billed by the Franchisor, together with interest at the highest compound rate permitted by the law of the jurisdiction in which the Store Operation is located, but not exceeding fifteen (15%) percent per annum.

9.2.4 The Franchisee acknowledges that the Franchisor's Operations Department regularly reviews ongoing operations at the Store Operation to ensure consistency of products and services and compliance with the Manuals and this Agreement. The Franchisee therefore agrees to promptly complete and submit all forms requested by the Franchisor's Operations Department, whether on a daily, weekly or monthly basis. Non-compliance with this obligation shall constitute a material violation of this Agreement.

ARTICLE 10. COVENANT REGARDING OTHER BUSINESS INTERESTS.

10.1 For the purposes of this Article only, "Franchisee" shall mean and include the individual Franchisee; the Franchisee's spouse and children; the Franchisee's shareholders, officers and directors, if the Franchisee is a company; and any one or more partners or participants in the Franchisee, if the Franchisee is a partnership or joint venture.

10.2 The Franchisee acknowledges that the "Name of the franchisor's system" System is unique and distinctive and has been developed by the Franchisor at great effort, time and expense, and that the Franchisee has regular and continuing access to valuable and confidential information, training and trade secrets relating to the "Name of the franchisor's system" business. The Franchisee acknowledges its obligation to keep such information confidential as set forth herein. The Franchisee therefore agrees as follows:

10.2.1 During the term of this Agreement, except with the Franchisor's prior written consent, the Franchisee shall not, in any capacity whatsoever, whether directly or indirectly, individually or as a member of any business organisation, engage in the business of computer repair and computer parts and components, or any other item authorised by the Franchisor, whether presently or in the future approved by the Franchisor for use in the Franchisee's Store Operation, nor hold any employment or interest in any firm engaged in the production or sale of such products.

10.2.2 Upon the termination, expiration or non-renewal of this Agreement, or if the Franchisee assigns or transfers its interest herein to any person or business entity, or if any person identified in the first paragraph of this Article terminates its relationship with the Franchisee, then for a period of three (3) months thereafter such Franchisee shall not, in any capacity whatsoever, whether directly or indirectly, individually or as a member of any business organisation, engage in the production or sale at retail of any product of the "Name of the franchisor's system" type, nor hold any employment or interest in any firm engaged in the production or sale at retail or wholesale of any such products, at a site within a radius of five (5) kms of any of the Franchisee's former Store Operation, or within five (5) kms of any other Store Operation or Distribution Point then existing, unless the Franchisor gives its prior written consent. If the Franchisee violates the terms of this paragraph, the Franchisee shall pay to the Franchisor, as liquidated damages, an amount equal to Liquidated damages amount per month per month for each month during which this covenant is violated, together with eight (8%) percent of the gross sales achieved at the site during the continuation of such violation.

10.2.3 In the event that any portion of the above covenants violates any law applicable to the Franchisee, or is held invalid or unenforceable in a final judgment to which the Franchisor and the Franchisee are parties, then the maximum legally permissible restriction shall control and bind the Franchisee. The Franchisor may, at any time, unilaterally reduce the scope of any part of the above covenants, and the Franchisee shall comply with any such reduced covenant upon receipt of written notice.

10.3 The provisions of this Article shall not limit, restrain or otherwise affect any right or cause of action which may accrue to the Franchisor for any infringement of, violation of, or interference with, this Agreement, or the Franchisor's Marks, System, trade secrets, or any other proprietary aspect of the Franchisor's business.

ARTICLE 11. INTERFERENCE WITH EMPLOYMENT RELATIONS.

Without the Franchisor's prior written consent, during the term of this Agreement, the Franchisee shall not employ, or seek to employ, directly or indirectly, any person serving in an executive, managerial or operational position who is, at the time, or was at any time during the prior six (6) months, employed by the Franchisor or any of its subsidiaries. Any request for the Franchisor's consent shall be sent in duplicate and addressed in writing to the Franchisor.

ARTICLE 12. SUB-FRANCHISORS, SALESMEN.

Inasmuch as this Agreement has not been executed by the Franchisee at the office of the Franchisor, the Franchisor requires certain assurances that this Agreement has been executed in accordance with applicable laws, rules and regulations. Accordingly, in order to induce the Franchisor to execute this Agreement, the Franchisee agrees to execute this Agreement and acknowledges that the Franchisor is relying upon the acknowledgments, representations and commitments of the Franchisee that no other salesman, staff member, entity or associate of the Franchisor has met with the Franchisee regarding this franchise sale, or the offer and acceptance thereof, other than those set forth therein. The Franchisee shall identify all salespersons involved in the sale, negotiation and execution of this Agreement and shall identify the sub-franchisor. The Franchisor shall be entitled to rely upon the acknowledgements, representations and commitments of the Franchisee, and the Franchisee shall be bound by their contents.

ARTICLE 13. LOCAL MARKETING MANUAL.

The Franchisee acknowledges that the Franchisor's local marketing manual and other marketing and advertising materials emphasise the implementation of marketing efforts within a radius of … kms from the Franchisee's store. Such references, suggestions and emphasis do not grant to the Franchisee a protected market or any other exclusive right within such marketing area, and the Franchisee shall restrict its marketing activities to the area within a radius of Marketing restriction radius (kms) kms from the Franchisee's store.

ARTICLE 14. NATURE OF INTEREST AND TRANSFER.

14.1 GENERAL PROVISIONS.

14.1.1 This Agreement shall enure to the benefit of the successors and assigns of the Franchisor. The Franchisor shall have the right to transfer or assign this Agreement to any person or legal entity that assumes its terms and agrees to comply with the Franchisor's obligations contained herein. The Franchisor shall have no liability for the performance of any obligations contained in this Agreement after the effective date of such transfer or assignment.

14.1.2 The rights and duties created by this Agreement are personal to the Franchisee. Accordingly, except as otherwise permitted herein, neither the Franchisee nor any person holding an interest in the Franchisee shall, without the Franchisor's prior written consent, directly or indirectly sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any direct or indirect interest in this Agreement or, where the Franchisee is a partnership, joint venture, or company, any direct or indirect interest in the Franchisee. Any such purported assignment, whether occurring by operation of law or otherwise and made without the Franchisor's prior written consent, shall constitute a default of this Agreement by the Franchisee and shall be null and void. Except where the Franchisee is advertising to sell its Store Operation pursuant to the terms hereof, the Franchisee shall not, without the Franchisor's prior written consent, offer for sale or transfer, at public or private auction, or advertise publicly for sale or transfer, the furnishings, interior and exterior decor items, supplies, fixtures, equipment, the Franchisee's sublease, or the real or personal property used in connection with the Franchisee's Store Operation.

14.2 CONSENT TO TRANSFER.

In respect of all proposed transfers or assignments of this Agreement, transfers of more than 51% of the outstanding and issued stock of the Franchisee by one or more transfers, and any transfer which, directly or indirectly, effectively changes the management control of the Franchisee, the Franchisor will not unreasonably withhold its consent to any transfer or assignment which is subject to the restrictions of this Article; provided, however, that the Franchisor shall not be required to give its consent unless all of the following conditions are met prior to the effective date of the assignment:

14.2.1 Upon the execution of this Agreement, upon each direct or indirect transfer of an interest in this Agreement or in the Franchisee, and at any other time upon the Franchisor's request, the Franchisee shall, within five (5) days prior to such transfer or at such other time as the Franchisor may request, furnish the Franchisor with an estoppel agreement disclosing any and all causes of action, if any, that the Franchisee may have against the Franchisor, or confirming that none exist, together with a list of all shareholders or partners having an interest in this Agreement or in the Franchisee, the percentage interest of each such shareholder or partner, and a list of all officers and directors, in such form as the Franchisor may require.

14.2.2 The Franchisee's written request for the transfer of either a partial or whole interest in this Agreement or in the Franchisee's Store Operation must be accompanied by an offer to the Franchisor of a right of first refusal at the same price offered by any bona fide buyer, less five (5%) percent. The Franchisor shall have the right and option, exercisable within fifteen (15) days after receipt of such written notification, to send written notice to the Franchisee or such person that the Franchisor or its third-party designee intends to purchase the interest proposed to be transferred, on the same terms and conditions offered by the third party. If the Franchisor accepts such offer, the five (5%) percent transfer/administrative fee due from the Franchisee in accordance with Article 3 shall be waived by the Franchisor. Any material change in the terms of an offer prior to closing shall cause it to be deemed a new offer, subject to the same right of first refusal by the Franchisor, or its third-party designee, as in the case of the initial offer. The Franchisor's failure to exercise such option shall not constitute a waiver of any other provision of this Agreement, including any of the requirements of this Article with respect to the proposed transfer.

14.2.3 The Franchisee is not in default under the terms of this Agreement, the Manuals, or any other obligations owed to the Franchisor, and all of its then-due monetary obligations to the Franchisor have been paid in full.

14.2.4 The Franchisee and its shareholders or members, where the Franchisee is a company, have executed a general release under seal, in a form prescribed by the Franchisor, of any and all claims against the Franchisor, its affiliates, subsidiaries, shareholders, directors, officers, sub-franchisors, and employees.

14.2.5 The transferee/assignee has demonstrated to the Franchisor's satisfaction that it meets all of the Franchisor's then-current requirements for new Franchisees or for holders of an interest in a franchise, including, without limitation, possession of good moral character and reputation, satisfactory credit ratings, acceptable business qualifications, and the ability to fully comply with the terms of this Agreement.

14.2.6 The transferee/assignee has assumed this Agreement by a written assumption agreement approved by the Franchisor, or has agreed to do so at closing, and at closing executes an assumption agreement approved by the Franchisor.

14.2.7 The transferee/assignee, its manager, or other employees responsible for the operation of the Store Operation have satisfactorily completed the Franchisor's training programme.

14.2.8 The transferee/assignee executes such other documents as the Franchisor may require, including a replacement franchise agreement on the then-standard franchise agreement form used by the Franchisor, in order to assume all of the obligations of this Agreement, to the same extent and with the same effect as previously assumed by the assignor.

14.2.9 Upon completion of the Franchisee's sale transaction, the Franchisee shall pay to the Franchisor an administrative/transfer fee of five percent (5%) of the gross selling price of the Franchisee's Store Operation or, in the event of a non-sale management transfer, a fee of Rs. Fee amount for non-sale management transfer to cover the Franchisor's training expenses. This five percent (5%) administrative transfer fee shall not be payable in respect of any transfer which (together with all other related previous, simultaneous, or proposed transfers) does not result in a transfer of control of the Franchisee.

14.2.10 The Franchisee's rights may pass to the Franchisee's next of kin or legatee if they assume the Franchisee's obligations and attend and complete the Franchisor's training programme. Upon the Franchisee's disability, the Franchisee may sell the franchise or retain it, provided it is operated by trained personnel.

14.2.11 The Franchisor's consent to a transfer shall not constitute a waiver of any claims it may have against the transferring party arising out of this Agreement or otherwise.

14.2.12 If the Franchisee is an individual, the Franchisor hereby consents to the assignment of this Agreement and any and all obligations referable thereto, without any fee being charged by the Franchisor, to a corporation principally owned by the Franchisee within ninety (90) days after the date hereof. Upon such assignment and assumption by the corporation, together with delivery of the executed originals thereof to the Franchisor, the individual Franchisee shall be released from any and all personal liability.

ARTICLE 15. TERM, DEFAULT AND TERMINATION.

15.1 TERM.

15.1.1 Provided the Franchisee is not in default of the terms and conditions contained in the Location sublease and this Agreement, this Agreement shall continue for a period of 5 (five) Initial term of the agreement in years or for any longer period coterminous with the term of the Location sublease.

15.1.2 The Franchisee may renew the rights granted by this Agreement for four (4) additional terms of five (5) years each, subject to the following conditions:

15.1.2.1 The Franchisee gives the Franchisor written notice of the Franchisee's election to renew not less than six (6) and not more than twenty-four (24) months before the end of the then-current term;

15.1.2.2 The Franchisee is not in default of any provision of this Agreement or any amendments to this Agreement, the Location sublease, the Manuals, or any monetary obligation owed to the Franchisor or its affiliates; and

15.1.2.3 At the Franchisor's request, the Franchisee shall undertake and complete the reasonable renovation or modernisation of its Store Operation.

15.1.2.4 The Franchisee shall execute the Franchisor's then-current franchise agreement and related agreements.

15.2 DEFAULTS WITHOUT OPPORTUNITY TO CURE.

The Franchisee shall be in default, and the Franchisor may, at its option, upon fifteen (15) days' written notice to the Franchisee, terminate this Agreement and all rights granted by it, whereupon the deposit money shall stand forfeited, without affording the Franchisee any opportunity to cure the default, upon the occurrence of any of the following events:

15.2.1 The Franchisee knowingly or intentionally maintains false books or records, or submits any false report or payment to the Franchisor;

15.2.2 The Franchisee's conduct of the Store operation licensed pursuant to this Agreement is so contrary to this Agreement, the System and the Manuals as to constitute an imminent danger to the Franchisor and its brand (for example, the selling of spurious products or the continued use of inferior-quality raw materials not authorised by the Franchisor despite the Franchisee's knowledge of such condition), or the regular selling of unauthorised products to the public after notice of default, and the continued sale of such products whether or not the Franchisee has cured the default after one or more notices;

15.2.3 The conviction of the Franchisee, or of its controlling or operating shareholders or members (if the Franchisee is a limited liability company), or of the Franchisee's partners (if the Franchisee is a partnership, excluding non-managing partners), of a felony, or of a crime involving moral turpitude, or of any other crime or offence that is reasonably likely, in the sole reasonable opinion of the Franchisor, to adversely affect the System, the Franchisor's Marks, the goodwill associated with the System, or the Franchisor's interest in each of them;

15.2.4 The Franchisee's intentional disclosure or use of the contents of the Manual, trade secrets, or confidential or proprietary information provided to the Franchisee by the Franchisor, in violation of this Agreement, excluding acts of independent employees or others not under the Franchisee's control; or

15.2.5 The Franchisee repeatedly commits defaults under any provisions of this Agreement on three (3) or more occasions in any twelve (12) month period, or on sixteen (16) or more occasions in any consecutive twenty-four (24) month period, even if the Franchisee has cured each such prior default, and even if the Franchisee would otherwise be given an opportunity to cure the current default.

15.2.6 The Franchisee, without the Franchisor's consent, ceases to operate or otherwise abandons its Store operation, or, upon destruction of its Store Operation, fails to rebuild and resume operation within a reasonable time. Cessation of business shall not constitute a default under this Agreement if caused by the expiration of a Location lease pursuant to its terms at execution, by natural, governmental or supplier-related causes beyond the Franchisee's control, or where the failure to rebuild following destruction of the Store Operation is prohibited by law or by the Location lease. In the event of termination pursuant to this sub-clause 15.2.6, the written notice period shall commence five (5) days from the date the Franchisor sends written notice to the Franchisee. At the expiration of this time period, this Agreement shall be deemed terminated. For the purposes of this Article, ceasing to operate or otherwise abandoning the Store operation shall be defined as the Franchisee's failure to open its Store Operation for business for five (5) consecutive days.

15.3 DEFAULTS WITH OPPORTUNITY TO CURE.

15.3.1 Except as otherwise provided in this Agreement, the Franchisee shall have ten (10) days after the Franchisor's written notice of default within which to remedy any default under this Agreement and to provide evidence of such remedy to the Franchisor. If any such default is not cured within that time period, or such longer period as applicable law may require, the Franchisor may, at its option, terminate this Agreement and all rights granted by it, by sending a five (5) day written notice of cancellation of this Agreement to the Franchisee. Upon the expiration of such five (5) day period, this Agreement shall end and expire as if it were the day fixed for termination of this Agreement.

15.3.2 The Franchisee shall be in material default under this Article for any failure to comply with any of the requirements imposed by this Agreement. Such material defaults shall include, without limitation, the occurrence of any of the following events:

15.3.2.1 The Franchisee's failure, refusal or neglect to promptly pay any money owed to the Franchisor, its subsidiaries or affiliates, when due, or to submit the financial or other information required by the Franchisor under this Agreement.

15.3.2.2 The Franchisee's failure to maintain the standards specified by the Franchisor in the Manual or otherwise.

15.3.2.3 The Franchisee's failure, refusal or neglect to obtain the Franchisor's prior written approval or consent as required by this Agreement.

15.3.2.4 The Franchisee's misuse or unauthorised use of the Franchisor's Marks, or other material impairment of the goodwill associated therewith or of the Franchisor's rights therein.

15.3.2.5 The Franchisee's commencement or conduct of any business operation, or marketing of any product, under a name or mark which, in the Franchisor's reasonable opinion, is confusingly similar to the Franchisor's Marks.

15.3.2.6 The Franchisee's default, without cure after the applicable grace period, under any lease, sublease, sub-sublease, mortgage or deed of trust covering the Location.

15.3.2.7 The Franchisee's default in the performance of any term, condition or obligation in the payment of any indebtedness to its landlord or sub-landlord, distributors or suppliers, or others, arising out of the purchase of inventory or supplies, or the purchase or lease of equipment for the operation of its Store operation, and, if any such default is not cured within thirty (30) days after written notice by the Franchisor to the Franchisee, unless the Franchisee is determined by a court of competent jurisdiction to be not in default.

15.4 In the event of a default by the Franchisee, all of the Franchisor's costs and expenses arising from such default, including reasonable legal fees and reasonable hourly charges of the Franchisor's administrative employees, shall be paid to the Franchisor by the Franchisee within five (5) days after cure.

15.5 All disputes between the Franchisor and the Franchisee shall be subject to the jurisdiction of the courts at City having exclusive jurisdiction over disputes only.

15.6 Non-enforcement by the Franchisor of any violation of the terms of this Agreement by the Franchisee shall not constitute a waiver of such violation by the Franchisor, nor shall the Franchisor be deemed to have waived any of its rights to enforce compliance by the Franchisee with such breach or any other breach of this Agreement.

ARTICLE 16. RIGHTS AND OBLIGATIONS UPON TERMINATION.

Upon the termination of the Franchisee's rights granted under this Agreement (whether during the term of the Agreement or at its conclusion), the following shall apply:

16.1 Upon termination of this Agreement by lapse of time or by default, the Franchisee's right to use the Franchisor's Marks, or any other mark, insignia or slogan distributed by or used in connection with the Franchisor, or any confusingly similar trademark, service mark, trade name or insignia, shall cease. The Franchisee shall immediately discontinue use of the Franchisor's Marks, System and colour scheme. The Franchisee shall, at its own cost, make cosmetic changes to its Store operation so as to remove the Franchisor's proprietary designs, including, but not limited to, the removal from the Location of all “Franchisor's brand name” identifying materials and distinctive “Franchisor's brand name” finishes, tile walls, interior wall coverings and colours, exterior finishes and colours, signage and “Franchisor's brand name” counter equipment (which shall be deemed proprietary to the Franchisor), as the Franchisor may reasonably direct.

16.2 The Franchisor may retain all fees and deposits paid pursuant to this Agreement in the event of termination of this Agreement due to a violation of any of the terms and conditions of this Agreement or of the Manuals.

16.3 Any and all obligations of the Franchisor towards the Franchisee under this Agreement shall immediately cease and terminate.

16.4 Any and all rights of the Franchisee under this Agreement shall immediately cease and terminate.

16.5 In no event shall the termination or expiration of this Agreement affect the Franchisee's obligations to take, or to abstain from taking, any action in accordance with this Agreement. The provisions of this Agreement which constitute post-termination covenants and agreements, including the obligation of the Franchisor and the Franchisee to arbitrate any and all disputes, shall survive the termination or expiration of this Agreement.

16.6 The Franchisee acknowledges and agrees that all rights in and to the Franchisor's Marks, and the use thereof, shall be and remain the property of the Franchisor.

16.7 If the Franchisee has registered any of the Franchisor's Marks or the name "Franchisor's trade name registered by the Franchisee" as part of the Franchisee's assumed, fictitious or corporate name, the Franchisee shall promptly amend such registration so as to delete the Franchisor's Marks therefrom.

16.8 The Franchisee shall immediately pay any and all amounts owing to the Franchisor, its subsidiaries and affiliates.

16.9 The Franchisor shall have the option, exercisable by written notice within fifteen (15) days after the termination of this Agreement, to take an assignment of all telephone numbers (and associated listings) pertaining to the Franchisee's Store Operation. The Franchisee shall not be entitled to any compensation from the Franchisor if the Franchisor exercises this option.

ARTICLE 17. SOLE OBLIGATIONS OF FRANCHISOR.

17.1 The Franchisor has obligated itself to provide specific services to the Franchisee. The Franchisor also provides other voluntary services at its sole discretion. The Franchisor and the Franchisee agree that the following are the only required obligations of the Franchisor:

17.1.1 To approve the Location of the Franchisee.

17.1.2 To reasonably assist the Franchisee with any operational problem encountered by the Franchisee, after the Franchisee has given notice to the Franchisor, in duplicate, of the Franchisee's problem and the type of assistance required. At no time shall reasonable assistance be interpreted as requiring the Franchisor to pay any money to the Franchisee. The Franchisor, in its sole discretion, may provide any assistance at the Franchisor's designated office or at the location of the Franchisee, at a time to be determined by the Franchisor.

17.1.3 To reasonably administer the advertising programme. The Franchisee acknowledges that, pursuant to the advice of advertising and marketing professionals, advertising collections may at times be aggregated until sufficient revenues are accumulated to commence or complete an advertising or marketing programme.

Reasonable administration shall be deemed to mean good faith attempts to utilise the advertising funds in accordance with the advice and suggestions of the advertising and marketing staff, or of outside advertising and/or marketing companies, consultants or other entities retained for such purpose.

17.1.4 To supply to the Franchisee a set of standard decor and layout plans, and thereafter to approve the initial decor and layout of the Franchisee's Store Operation.

17.1.5 To loan to the Franchisee a copy of its Manuals, or CDs thereof, containing mandatory and suggested specifications, standards and procedures. The Manuals are confidential and remain the property of the Franchisor.

17.1.6 To train the Franchisee in accordance with Article 3 herein, and to provide representatives of the Franchisor to assist in opening the Store Operation.

17.2 The Franchisor shall not, and cannot, be held in breach of this Agreement unless (i) the Franchisor has received notice of any alleged breach from the Franchisee, in duplicate, by registered mail, and (ii) the Franchisor has failed to remedy such breach within a reasonable period of time after such notice, which period shall not be less than thirty (30) days. This is a material term of this Agreement and may not be modified or changed by any arbitrator in an arbitration proceeding, or otherwise in any court of competent jurisdiction.

ARTICLE 18. POINT OF SALE SYSTEM, COLLECTION OF DATA.

18.1 This Agreement and the Manuals require the submission of weekly statistical control forms, as well as other financial, operational and statistical information required by the Franchisee and the Franchisor, in order to: (i) assist the Franchisee in the operation of its Store Operation in accordance with the System; (ii) allow the Franchisor to monitor the Franchisee's gross sales, purchases, costs and expenses; (iii) enable the Franchisor to develop chain-wide statistics which may improve bulk purchasing; (iv) assist the Franchisor in the development of new authorised products or the removal of existing unsuccessful Authorised Products; (v) enable the Franchisor to refine existing Authorised Products; (vi) generally improve chain-wide understanding of the System; and (vii) obtain new types of information unknown at this time (collectively, the "Information"). To achieve these results, cash collection and data processing systems are necessary.

18.2 The Franchisee agrees to purchase and use the point of sale cash collection and data processing system (the "POS System"), and only such specified software as is authorised by the Franchisor, as specified by the Franchisor in writing. The POS System includes a PC-based cash register, register tape printer, magnetic stripe reader, cash drawer, defined Franchisor polling and register software, and telecommunications equipment.

18.3 The Franchisee agrees to (i) connect the POS System to the Franchisee's telephone line(s); (ii) maintain the same in good working order; and (iii) not disconnect any POS System connection or telephone line at any time, for any reason, without prior written approval. The Franchisee agrees, at the Franchisor's request, to maintain membership in a designated third-party network (such as CompuServe, AOL, Prodigy, etc.) for the purpose of implementing, transmitting, collecting and maintaining any Information or data exchange system. The Franchisee specifically authorises the Franchisor to "upload" or "download" information to and from its computers, cash registers or other such devices, as permitted by law, as it relates to the Store Operation, by internet, intranet and other networks, or by other means as may become available.

18.4 The third-party supplier of the POS System shall provide 24-hour telephone support and annual maintenance for any upgrades and enhancements that it makes to the required POS System software. The Franchisor may cancel this service upon thirty (30) days' written notice to the Franchisee, and may resume such services at any time with any supplier chosen by the Franchisor. The Franchisor may revise the POS specifications, and the Franchisee may be required to upgrade or update its POS System recording system. Upon the Franchisor's request, the Franchisee shall apply for and maintain debit cards, credit cards or other non-cash payment systems to enable customers to purchase products through such procedures. There is no contractual limitation on the Franchisor's right to receive information through the POS System.

ARTICLE 19. RELATIONSHIP OF PARTIES, DISCLOSURE.

19.1 The Franchisor and the Franchisee are not, and shall not be considered, joint ventures, partners or agents of each other, or anything other than Franchisor and Franchisee, and neither party shall have the power to bind or obligate the other, except as specifically set forth in this Agreement. The Franchisor and the Franchisee agree that the relationship created by this Agreement is not a fiduciary relationship. The Franchisee shall not, under any circumstances, act or hold itself out as an agent or representative of the Franchisor. The Franchisee agrees to indemnify and hold the Franchisor harmless from any claims, demands, liabilities, actions, suits or proceedings asserted by third parties arising out of the operation of the Franchisee's Store Operation or the Franchisee's breach of any of the terms of this Agreement. The Franchisor agrees to indemnify and hold the Franchisee harmless from any claims, demands, liabilities, actions, suits or proceedings asserted by third parties and arising out of the Franchisor's operations, unless caused by the Franchisee.

19.2 As delivered to the Franchisee as described above, the Franchisee acknowledges that the Franchisor has entered into certain sub-franchise agreements with sub-franchisors and/or area developers in certain areas and territories. Pursuant to these agreements, the sub-franchisors of the Franchisor are obligated to provide certain sales, operational and support services to the Franchisor. The Franchisee acknowledges that the relationship between the Franchisor and all of its sub-franchisors and/or area developers is strictly contractual, and that no sub-franchisor and/or area developer is an agent of the Franchisor. Accordingly, the Franchisee acknowledges and agrees that any past, current or future sub-franchisor is not the actual, express or implied agent of the Franchisor, and has no power or authority to: (i) act on behalf of the Franchisor; (ii) enter into or execute any agreement on behalf of the Franchisor; (iii) make any representation or promise on behalf of the Franchisor; or (iv) bind the Franchisor in any manner whatsoever. Unless otherwise specifically agreed in writing, the Franchisor expressly disavows any acts by others, including sub-franchisors, which purport to bind the Franchisor in any manner. The Franchisee agrees to waive any claim or defence in any litigation or arbitration proceeding that a sub-franchisor is the express or implied agent of the Franchisor. The Franchisee further agrees that any attempt to raise, assert or justify such claim or defence in any proceeding shall constitute a material default of this Agreement.

ARTICLE 20. DISPUTE RESOLUTION: ARBITRATION AND LEGAL PROCEEDINGS.

20.1 The Franchisor and the Franchisee acknowledge that disputes or disagreements may arise during the term of this Agreement and any renewals thereof. All disputes shall be subject to the exclusive jurisdiction of the courts at Governing city for jurisdiction and governing law only.

20.4 Except as otherwise provided, each party shall bear its own attorney's fees, expert witness fees and other court costs incurred in connection with any legal action or arbitration between the Franchisor and the Franchisee. In no event shall the material provisions of this Agreement, including, but not limited to, the method of operation, the Authorised Product line or the monetary obligations specified in this Agreement, any amendments to this Agreement or in the Manuals, be modified or changed by the arbitrator at the arbitration hearing.

ARTICLE 21. EXECUTION, REQUESTS, CONSENTS AND WAIVERS.

21.1 This Agreement takes effect upon its acceptance and execution by the Franchisee and the Franchisor, and shall be governed by and construed in accordance with the laws of Governing city for jurisdiction and governing law, Governing state, India. The Franchisor will consider written requests by the Franchisee for the Franchisor's consent to a waiver of any obligation imposed by this Agreement. The Franchisee agrees, however, that the Franchisor is not required to act uniformly with respect to waivers, requests and consents, as each request will be considered on a case-by-case basis, and nothing shall be construed as requiring the Franchisor to grant any such request. Any waiver granted by the Franchisor shall be without prejudice to any other rights the Franchisor may have, shall be subject to continuing review by the Franchisor, and may be revoked, in the Franchisor's sole discretion, at any time and for any reason, effective upon ten (10) days' prior written notice to the Franchisee. The Franchisor makes no warranties or guarantees upon which the Franchisee may rely, and assumes no liability or obligation towards the Franchisee by providing any waiver, approval, consent, assistance or suggestion to the Franchisee in connection with this Agreement, or by reason of any neglect, delay or denial of any request.

21.2 Unless otherwise provided, whenever this Agreement requires the Franchisee to obtain the Franchisor's prior written consent, the Franchisee shall duly address its written request for such consent, in duplicate, to the Franchisor or to such other persons as the Franchisor may designate in writing. The Franchisor will thereafter consider such request and advise the Franchisee of its decision, in writing, within forty-five (45) days. The Franchisor's failure to advise the Franchisee shall constitute the Franchisor's consent to such request. The forty-five (45) day period shall not, however, begin to run until the Franchisee has provided the Franchisor with all information and documentation requested by the Franchisor. Neither the Franchisee nor the Franchisor shall be deemed to have waived or impaired any right, power or option reserved under this Agreement, including, without limitation, the right to demand strict compliance with every term, condition and covenant herein, or to declare any breach thereof a default and to terminate this Agreement prior to the expiration of its term, by virtue of any custom or practice of the parties at variance with the terms hereof; by any forbearance, delay, failure or omission to exercise any right, power or option, whether of the same, similar or different nature, against the Franchisor, the Franchisee or any other franchisee; or by the acceptance of any payments due after any breach of this Agreement.

ARTICLE 22. MISCELLANEOUS PROVISIONS.

22.1 This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be deemed an original, and all such counterparts together shall constitute one and the same instrument.

22.2 This Agreement contains the entire agreement between the parties and cannot be modified, changed or amended except in writing and signed by both parties.

22.3 There is no other agreement, representation or warranty made by the Franchisor or by any other entity or person associated with the Franchisor other than as contained in this Agreement. This Agreement is not subject to or conditioned upon the obtaining of a Location for the Franchisee's Store operation.

22.4 Except as otherwise provided, each party shall bear its own attorney's fees arising from the negotiations and execution, or lack of execution, of this Agreement, and any expert witness fees and other court costs incurred in connection with any violation of this Agreement.

22.5 Each article, paragraph, subparagraph, term and condition of this Agreement shall be considered severable. If, for any reason, any portion of this Agreement is determined to be invalid or in conflict with any law or rule in a final ruling issued by any court, agency or tribunal of valid jurisdiction in a proceeding to which the Franchisor is a party, that ruling shall not affect the validity or enforceability of any other portion of this Agreement.

22.6 All notices to the Franchisor required by the terms of this Agreement, unless otherwise provided, shall be sent by certified or registered post or by overnight delivery service, addressed to the parties as set forth in this Agreement, or at such other address as the Franchisor may designate. All notices to the Franchisee required by the terms of this Agreement shall be sent by certified or registered post or by overnight delivery service, addressed to the Franchisee at the Location, or at such other or additional address as the Franchisee may designate in writing. If the Franchisee refuses acceptance of any certified, registered or overnight delivery, acceptance shall be deemed to have occurred forty-eight (48) hours after rejection of such notice.

22.7 The Franchisee acknowledges that the evolution of the System requires the development of "Brand name of the System" Stores and other distribution points and branded products.

22.8 For the purpose of this Article, a co-brand shall be defined as an independent operating system owned by another entity (not the Franchisor) that is incorporated as an operational part within the Franchisee's Store operation. Subject to the Franchisor's prior written approval, the Franchisee may install approved co-branding marketing systems to be operated in conjunction with the Franchisee's Store operation. The Franchisor shall not be required to approve any co-branding marketing system unless the Franchisor has recognised that co-branding system as an approved co-brand for operation within its Store operation, either nationally or regionally. Inasmuch as the Franchisee and its employees will be incorporating the co-brand within the Store operation, all sales of the co-brand shall be included within the definition of "gross sales" as defined in Article 9 herein, and the Franchisee shall pay to the Franchisor franchise and advertising fees for such sales.

The Franchisee shall not operate or associate with any other brand or franchise business in a manner designed to evade payment of royalty and advertisement expenses payable under this Agreement.

In the event of the death of the Franchisor, the survivor or survivors shall continue to exercise all rights and remain liable for all obligations imposed under this Agreement. The legal representative(s) of the deceased, duly appointed by a civil court, shall, upon giving a discharge to the creditors in terms of this Agreement, be entitled to revoke or give effect to the provisions contained in the earlier clauses of this Agreement. Upon an application being made by any person claiming to be the legal representative or representatives of the deceased, such representative(s) may be permitted to execute the aforesaid Agreement and continue the said Agreement in accordance with its terms and conditions. The Franchisee and the Franchisor acknowledge that any dispute whatsoever arising from time to time, as stated above, shall be resolved accordingly, and the legal representative(s) of the deceased shall be bound by the aforesaid matters in the usual course.

IN WITNESS WHEREOF, the parties hereto have set and subscribed their hands and seals on the day, month and year first above written.

Signed, Sealed & Delivered at Place of execution of the agreement in the presence of:

FRANCHISOR

FRANCHISEE