This Article does not make a distinction between payments due by the franchisee in consideration of the rights granted by franchisor under the franchising contract and the payment of the goods supplied by the franchisor for resale. Parties might in certain cases prefer to deal separately with these two situations.

24.1 Terms of payment

24.1.1 All payments shall include applicable value added tax or other taxes as may be properly chargeable thereon.

Consult tax lawyers with respect to the question whether any withholding tax applies. If so, it is recommended to define payment procedures between the parties as withholding tax refunds can take significant time.

24.1.2 In case of non-payment, the sum due shall bear the rate of ___ % interest (without any prior written notice necessary) from the due date for payment and the actual date of payment.

29 24.2 Security

24.2.1 The Franchisee shall obtain from a bank agreed with the Franchisor an unconditional first demand bank guarantee in accordance with ICC Uniform Rules for Demand Guarantees URDG 758 of the payment of all amounts due to the Franchisor under this Contract limited, however, to a maximum amount of _____.

24.2.2 No later than ____ days after the signature of this Contract, the Franchisee shall provide the Franchisor with such signed bank guarantee.

There are different types of securities that can be used, e.g. standby letter of credit, personal guarantee, warrant, etc. It is important to verify the effectiveness of the security chosen with respect to the actual situation.

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