Franchise Agreement (2007)Full Document 

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FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT is made as of the 16 day of OCTOBER, 2002.
BETWEEN:
LULULEMON ATHLETICA INC., 2113 West 4th Avenue, Vancouver, British Columbia, V6K 1N6
(hereinafter called the “Franchisor” or “Lululemon”)
                                                                                                     OF THE FIRST PART
AND:
OQQO ENTERPRISES INC. of 1257 a Haultain St, Victoria B.C.
(hereinafter called the “Franchisee”)
                                                                                                     OF THE SECOND PART
RECITALS
WHEREAS:
               A.     Franchisor has developed a format, system and plan for the operation of retail stores featuring and offering for sale Lululemon Athletica trade-marked clothing and accessories, and related products and services, all of controlled quality, in accordance with Franchisor’s prescribed standards, specifications, policies and procedures, under the name, trade mark and style of “Lululemon Athletica” (the “system”);
               B.     Franchisor owns and controls the trade name and trade mark Lululemon Athletica and related trade marks and designs used in connection with the franchised business and system (the “Marks” or the “Trade Marks”); and
               C.     Franchisee has applied for a franchise to operate a Lululemon Athletica retail store utilizing and in conformity with Franchisor’s business method, format and system and the Trade Marks at one or more approved retail locations, and to distribute Lululemon Athletica trade-marked clothing and accessories within the Franchised Territory set out below, and
               Franchisor has agreed to supply Lululemon Athletica trade-marked clothing and accessories and to grant such a franchise to Franchisee upon the terms and conditions of this Agreement.
               NOW THEREFORE in consideration of the premises and of the mutual covenants and agreements herein contained, and for other consideration acknowledged by the parties to be of good and sufficient value, the parties agree as follows:
1.     Definitions
               In this Agreement, the following capitalized terms shall have the following meanings unless the context requires otherwise:

 


 

     (a)     “Agreement” means this Agreement and all schedules thereof and any subsequent agreement in writing which amends or supplements this Agreement;
     (b)     “Approved Retail Location” means the retail location which has been approved by Lululemon for the operation by Franchisee of a retail sales outlet as set forth in Schedule “B”, as may be amended or supplemented from time to time;
     (c)     “Commencement Date” means the Commencement Date as set forth in Schedule “B”;
     (d)     “CPI” means the Consumer Price Index For Canada, All Items (Not Seasonally Adjusted), 1992 = 100, Annual, or any successor index thereto, as published by Statistics Canada or any successor Agency thereto;
     (e)     “Effective Date” means the Effective Date as set forth in Schedule “B”;
     (f)     “Franchise” means a business operated by a Franchisee which is engaged in the retail sale of Lululemon Products in the Territory or any part thereof;
     (g)     “Franchise Agreement” means an agreement between Lululemon and a Franchisee or prospective Franchisee the subject matter of which relates to the acquisition or operation of a Franchise;
     (h)     “Franchise Fee” means a direct or indirect payment (whether payable on a onetime or recurring basis) which is required to be paid by a Franchisee to Lululemon, or to any affiliate of Lululemon, as consideration for the grant of a right to acquire or operate a Franchise;
     (i)     “Franchised Territory” means the same thing as “Territory”;
     (j)     “Franchisee” means Franchisee as the authorized retailer of Lululemon Products at an Approved Retail Location, as well as a person at arm’s length to Franchisee who is granted a right or license by Lululemon to operate a Franchise in the Territory,
     (k)     “Gross Sales” means, for a specified period, the gross sales of all Products sold by the Franchisee at an Approved Retail Location during that period less:
               (i)     returns of Product at the Approved Retail Location during that period,
               (ii)     refunds and allowances made by the Franchisee at the Approved Retail Location during that period,
               (iii)     any store credits redeemed by the Franchisee at the Approved Retail Location during that period,
               (iv)     any amounts received by the Franchisee from the sale of gift certificates at the Approved Retail Location during that period (it being understood that the redemption of gift certificates will be included as Gross Sales), and

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               (v)     any amounts collected by the Franchisee at the Approved Retail Location during that period on account of taxes;
     (l)     “License Agreement” means the same thing as “Franchise Agreement”;
     (m)     “License Fee” means the same thing as “Franchise Fee”, except as otherwise specified in this Agreement in respect of the Approved Retail Locations;
     (n)     “Licensed Product” means a third party product which is approved for sale by Lululemon in association with the Marks and which is distributed or sold by Franchisee;
     (o)     “Lululemon Products” means clothing and accessories, other than Licensed Products, which (i) display the Marks, or (ii) are distributed or sold under a system of distribution or sale in which the use or display of the Marks is an integral part thereof;

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