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NOVA Lifestyle Home Furniture Franchise Agreement

Franchise Agreement

NOVA Lifestyle Home Furniture Franchise Agreement | Document Parties: NOVA LIFESTYLE, INC. | Nova Furniture (Dongguan) Co, Ltd You are currently viewing:
This Franchise Agreement involves

NOVA LIFESTYLE, INC. | Nova Furniture (Dongguan) Co, Ltd

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Title: NOVA Lifestyle Home Furniture Franchise Agreement
Date: 6/30/2011

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Exhibit 10.4

English Translation

 

NOVA Lifestyle Home Furniture Franchise Agreement

 

NOVA Lifestyle Home Furniture Franchise Agreement

 

Party A:                      Nova Furniture (Dongguan) Co., Ltd.

Address:                     Nova Furniture Industrial Garden, Daojiao Town, Dongguan City

Zip Code:                    523000

Telephone:                  0769—88386441         0769—88313446

Facsimile:                   0769—88313449         0769—88386442

Email:

Website:

 

Party B:

Franchise Address:

Mailing Address:

Zip Code:

Telephone:                                                               Cell Phone:

Facsimile:                                                                Email:

Franchisee Representative:                                 ID Number:

 

Article One:                                General

 

Pursuant to the << Contract Law of People’s Republic of China>> and relevant rules or regulations, Party B purchases NOVA Lifestyle home furniture product, and Party A agrees to sell a specified series of NOVA Lifestyle product to Party B in the designated territory set forth by this contract, and to promote the sale and to advise the product under the terms and conditions of this contract. Based on the principle of voluntariness, equality and honesty, and through friendly negotiation, both parties hereby enter the following agreements:

 

Article Two:                                Definition

 

 

2.1.  

Any “regular product” in this contract means the product in the regular sale or the new arrival, but excludes the customer-made, decorative product and product on sale; a “store-within-store” means the NOVA Lifestyle franchise established and operated in the department store.

2.2.   

Any “single unit franchisee” mentioned in this contract means Party B is only authorized to sell the NOVA Lifestyle product in a single unit franchise.

 

2.3.  

Any “force majeure” mentioned in this contract means an unpredictable, unavoidable and incurable occurrence or event (including act of god, war, state action and etc.)

2.4.  

Any title of article is made for attention only and shall not have effect on the explanation to this contract.

 

Article Three:                            Qualification of Party B

 

3.1.  

Party B guarantees it is a person or a corporation that is registered and established under the laws of P.R.China. It is fully capable of contractibility and competent to enter this contract (any person who signs this contact in a personal capacity should be associated with a corporation that is registered and established under the laws of P.R.China). It is capable of possessing sufficient funds to market Party A’s product in the designated territory, and complying with the relevant law and regulations, operating  its business according to the law and not getting involved with any illegal activity.

3.2.  

Party B shall present an original and provide with a photocopy of ID and a valid business license at the same time prior to the signature of this contract. Within ten days commencing from the date of contract, Party B shall provides Party A with a directory of its investors (shareholders), senior managers and valid legal documents issued by the industrial and commercial officials. Party B shall not provide Party A with any fraudulent information or document.

 

 

1


Address: NOVA Home Furniture Industrial Garden, Nange Industrial Zone, Daojiao, Dongguan, Guangdong

Tel: 0769-88386442   Fax: 0769-88313449

 

 

 

NOVA Lifestyle Home Furniture Franchise Agreement

 

 

3.3.  

If Party B signs the contract in a personal capacity, such person is deemed the only contracting party to Party A and Party A will not recognize Party B’s associates other than Party B himself/herself (excluding the associates of Party B already in Party A’s record).

3.4.  

For any change of documents or licenses in the aforesaid, Party B shall notify Party A within three business days commencing from the date of change.

 

Article Four:                              Terms of Contract

 

4.1.  

The term of contract starts from ____ Year ____ month ____ day and ends ____ year ____ month ____ day, unless revoked or terminated in advance as specified by this contract.

4.2.  

If Party B wishes to renew at the end of contract, it shall submit its renewal written application one month before the end of the contract, which is subject to the written approval of Party A. If Party B does not submit a written application in a timely fashion specified in the aforementioned, Party A reserves the right to revoke the franchisee’s license and withdraw the authorization at the end of contract.

 

4.3.  

If Party B is a first-time franchisee, it shall follow the <<Annual Business Plan and Incentives>> and make progress with the plan accordingly. A three-month delay to such plan will result in the termination of this contract and Party B’s performance bond will not be returned.

 

Article Five:                                Product and Tradename Franchising and Exclusive Territory

 

5.1.  

Party B shall operate the contractual commercial activity only in the territory designated by Party A.

5.2.  

Party A authorizes Party B as an exclusive franchisee for ________ Brand ________ Series in the territory of ________ Province ________ (City) Borough (The only authorized channels include single unit franchise,  professional furniture store, store-within-store or any other channels authorized by Party A).

 

5.3.  

Party B shall only operate and market its business within the designated territory as agreed and shall not engage in cross-border business, selling the product over the designated area or marketing the product through any channel other than the authorized.

5.4.  

Party B shall strictly follow the <<Annual Business Plan and Incentives>>; Unless Party B opens the second store or store-within-store pursuant to <<Annual Business Plan and Incentives>> or it completes the annual business plan, Party A guarantees that it will not authorize a third party who located in the same city (borough) as Party B as its franchisee (unless otherwise contracted between the parties).

 

5.5.  

The group order coming from Party B’s territory and made directly by the corporation is not covered by the authorization.

 

Article Six:                                Place of Franchise

 

6.1.  

Party B shall provide a store conforming to Party A’s specification (the usable area shall not be less than 200 square meters) as its place of business and operate it in the form of franchise.

6.2.  

All of Party B’s franchise shall be reported to and only opened upon the written approval of Party A. All franchise (store-within-store) shall be decorated (including renovation of old store) in compliance with Party A’s requirement. Party A shall issue the letter of authorization after its inspection. Party B is responsible for the expense of decoration, but Party A shall rebate the decoration at a rate of ______ yuan/square meters as agreed by both parties; if the inspection is failed, Party B must rectify in a set period of time, with expense on it. As soon as the rectification is done and passes Party A’s inspection, Party B is allowed to open the franchise. Party B shall maintain the decoration in good condition and shall not remove or replace at will. If damaged, it shall be repaired timely.

 

6.3.  

Party A’s rebate of decoration expense is payable as following: upon the completeness of decoration and Party A’s satisfied inspection, _____% shall be rebated, the balance shall be rebated at the rate of ____% of each supply payment. The issuance of monthly rebate is made no later than each fifth day of next month by offset of purchase amount.

6.4.  

Whenever Party A requires the change of decoration as needed by the operation of business and the maintenance of brand name image, Party B shall re-decorate the store as required by Party A, with expense on Party B.

 

 

2


Address: NOVA Home Furniture Industrial Garden, Nange Industrial Zone, Daojiao, Dongguan, Guangdong

Tel: 0769-88386442   Fax: 0769-88313449

 

 

 

NOVA Lifestyle Home Furniture Franchise Agreement

 

6.5.  

During Party B’s operation, whenever the place of franchise fails to meet the contractual requirement, or the suspension of  Party B’s operation resulting from the place of franchise, business license or capital flow, or the franchise ceases to operate without Party A’s approval (except for force majeure), Party A reserves right to unilaterally terminate this contract without any liability.

6.6.  

If Party B reduces the number of franchise or suspends the operation due to the force majeure, the failure to open new franchise or restore the operation within two months after the date of reduction or elimination of effect by force majeure is deemed that Party B failed to comply with the current <<Annual Business Plan and Incentives>> (Appendix One).

 

6.7.  

Without Party A’s written approval, Party B shall neither assign or transfer the right of operation and use in disguised form, nor shall it sublet to any third party, or engage in associated operation or sale with any third party by use of the site or grant of franchise; any Party B’s execution in the aforesaid is revocable and deemed Party B’s breach of contract.

 

Article Seven:                            Intellectual Property and Safeguard of Brand

 

7.1.  

After Party B becomes Party A’s franchisee, Party A grants Party B the following rights in the designated territory:

1  

to use the name of “NOVA Lifestyle” as agreed by this contract;

 

2  

to sell Party A’s product in the name of Party A’s franchisee;

3  

to use Party A’s trademark or relevant tradename in the decoration or layout of franchise (store-within-store).

 

7.2.  

Without Party A’s written approval, Party B shall not transfer or assign this contract to any third party.

7.3.  

If Party B needs to advertise the product within the designated area of sale (including but not limited to outdoor advertisement, catalog, posters and etc.), any use of Party A’s trademark, tradename, logo art, photography or any other work contained intellectual property in the content of advertisement requires Party A’s written approval in the first place. Such content cannot change or alter the trademark or logo and is only allowed to release after the local supervising authority approves it.

 

7.4.  

Party B has duty to uphold the image of NOVA Lifestyle and its reputation. Party B shall not engage in any conduct to taint the image of NOVA Lifestyle or damage its reputation. Party B shall also timely report any third party’s infringement to Party A’s intellectual property or any other benefit and it shall cooperate with Party A’s safeguard activity.

 

Article Eight:                             Business Plan and Sale

 

8.1.

Both parties shall start negotiation one month before the end of concurrent <<Annual Business Plan and Incentives>> and decides the next <<Annual Business Plan and Incentives>>.

8.2.  

If Party B fails to complete the annual purchase plan set by the <<Annual Business Plan and Incentives>> or fails to complete the monthly purchase plan for three accumulated months, or fails to open NOVA Lifestyle franchise as planned in a limited period of time, Party A reserves right to unilaterally terminate this contract or narrow Party B’s authorized territory of sale by written notice and without any liability imposed thereto.

 

8.3.  

Party A shall provide the display of product and necessary training to Party B’s staff; Party B shall transport its staff to the training place designated by Party A, with cost and expense on Party A.

8.4.  

 Party A shall communicate with Party B with the most recent updated information and marketing policy, and shall assist with Party B’s compliance of such. Party A guarantees its product to meet the standard state of art in quality and its delivery in the time-frame set and agreed by both parties.

 

8.5.  

Party A has duty to design the layout for Party B’s new franchise with cost and expense on Party A.

8.6.  

Party B shall display the franchise to meet Party A’s standard and comply with Party A’s Management and Assessment Rules (Appendix Two). Any non-NOVA Lifestyle product or counterfeit is prohibited from being sold in NOVA franchise. Party A reserves right to enter Party B’s franchise at any time for inspection. If any non-NOVA Lifestyle product or unauthorized product by Party A is sold in the franchise is found, Party A shall have right to photograph. Any Party B’s attempt to prevent Party A’s employee from entering the franchise or photographing is considered as Party B’s breach of contract by selling the non-NOVA Lifestyle product or unauthorized product by Party A, or failing to display in compliance with Party A’s requirement.

 

 

3


Address: NOVA Home Furniture Industrial Garden, Nange Industrial Zone, Daojiao, Dongguan, Guangdong

Tel: 0769-88386442   Fax: 0769-88313449

 

 

 

NOVA Lifestyle Home Furniture Franchise Agreement

 

 

8.7.  

Party B shall maintain sufficient fund for Party A’s product and is prohibited from making excuse for any shortage of the variety or series of Party A’s product demanded by the market. Party B shall strictly comply with the rules of product structure set forth by Party A.

8.8.  

Party B shall follow Party A’s marketing and pricing policy. Party B shall not raise or lower the price at will, and raise or lower price in disguised form, unless approved by Party A in certain circumstance; Party A reserves right to depends on the market to adjust, change its marketing or pricing policy. Such adjustment and change take effect on the designated date and will be notified to Party B in writing.

 

8.9.  

Party B shall actively cooperate with Party A’s promotion and other relevant activity. If Party B wishes to carry on promotion or any other commercial activity on its own, a written approval from Party A shall be obtained and recorded. If Party B releases advertisement without Party A’s approval and causes damage, it shall be held liable for such damage and Party A reserves right to claim the damage from Party B.

8.10.  

Party B shall provide the market review in writing prior to the 28 th day of each month and shall conduct quarterly order estimate.

 

8.11.  

Party A shall timely provide the new product to Party B as soon as it is available. If Party B does not cooperate with the promotion of any new product or other home products, Party A reserves the right to authorize other distributor in such territory to sell.

8.12.  

Party A reserves the right to check Party B’s inventory, service quality, financial statement, accounting books and all other matters in relation to business activities, and Party B has duty to actively cooperate.

 

8.13.  

As required by Party A, Party B shall provide the customers with relevant product information, including performance, service policy and application service. Party B shall commit to the post-sale customer service.

8.14.  

Party B shall accept the return of defective product and remedy in accordance with Party A’s return policy and procedure.

 

8.15.  

If Party B fails to catch up with the annual store opening plan and purchase plan set forth by the <<Annual Business Plan and Incentives>>, Party A reserves right to terminate the contract unconditionally.

8.16.  

Party B shall purchase and install the necessary office and communication devices as required by Party A and be equipped with designated software by Party A.

 

Article Nine:                              Performance Bond

 

9.1.  

In three days commencing from the date of contract, Party B shall deliver performance bond of RMB THIRTY thousand yuan to Party A. If Party B timely perfor


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