Detailed terms & conditions for business associate

  1. Eligibility criteria

The applicant should be well educated and belong to marketing zone with initiative, zeal and organizing capacity. A chartered accountant having 5 yrs experience of practice as CA with good clientage etc. will be preferred. It is an apex level position in the marketing structure of the company. A business associate is franchise to operate zonal office of the company with responsibility for developing the company’s marketing structure covering through distributors/dealers/retailers etc. The target is to cover every type of consumer progressively within 1-2 years.

  1. Infrastructure
  1. Office: The business associates must maintain an office at the headquarters of his zone. The office must have an area of at least 1000 sq. ft., consisting of office hall, visitor lounge, conference hall and cabin for the business associates. It must be well equipped with telephone, internet, computer facilities etc. At the front of the premises the sign board of the company (minimum size 8`x3`) must be displayed.
  2. Staff: The business associates will appoint marketing and administrative staff of the cadre and number as per requirement in his office. All staff members will be direct employees of the business associates and managed by him directly and the company shall have absolutely no liability of them. Though, the company will support by issuing appropriate literature for training of the staff, along with functional guidance to discharge their duties.
  1. Security deposit

Rs.10,00,000/- (Rupees ten lac) against 8% simple interest per annum at the time of maturity of agreement.

  1. Franchisee fee

The Business Associates will pay Franchisee fee ₹. 50,000/- (Rupees fifty thousand) only one time with security deposit.

  1. Terms of appointment

Three years with the provision for further renewal by mutual consent. The renewal will be at the sole discretion of the company. The company will have a right to terminate the agreement earlier, if violation of any of the contractual terms is brought to its notice, and in that case, his security will be forfeited.

  1. Jurisdiction/area

He will be given jurisdiction of a geographical area of 20 districts or more as per requirement and agreement with the company.

  1. Statutory provisions
  1. No formal approval/permission is required for the trade. The company has complied with all statutory requirements/provisions relating to LPG marketing.
  2. He will also comply with the incidental matters applicable to his zone and ensure due compliance of such provisions by all associates.
  3. He will be responsible for renewal of license, service contract, insurance and bank guarantee etc. of his zone.
  4. He will be required to execute an agreement with the company and tripartite agreements with all associates appointed in his areas after their appointment.
  1. Rate list 

The rate of LPG will be changed as per international market every month. The circular will be issued by the company by 1st of every month. The other items will also be sold as per rates fixed by the company from time to time. Changes, if any in rates will be communicated by the company in advance. Issue of circular at the address or email given by the mini retailer will be sufficient to implement the rates of supply. The rates will be charged applicable on the date of supply from plants/distributor/dealer’s godown. Refer customer price list on website.

  1. Responsibilities
  1. To act as an extended organization of the company in his geographical area of jurisdiction for intensive business, promotion and sale of company’s products.
  2. To conduct survey of the area and identify potential centers for appointing distributors/dealers/retailers etc.o select and recommend suitable persons for appointment as distributors/dealers in accordance with the terms & conditions of the company in his area.
  3. To help in getting all formalities completed by his associates for quick commencement of their business with the company as well as the local authorities.
  4. To help his associates in appointment of their staff and train them in all respects.
  5. To correspond with his associates and convey them instructions issued by the company from time to time.
  6. To collect orders from his associates and submit them to company’s bottling plant for supply and other jobs incidental to the above, as per guidelines of the company issued from time to time.
  7. To conduct various publicity/advertisement programs in his area including at the places of his associates, as per guidelines and policies of the company. He will also acquire an approval from the head office of the company for any publicity program that he would like to run or if required by any of his associates and make related arrangements for refund of expenses incurred by the associates as per policy of the company. He will be keeping the custody of the publicity material entrusted to him by the company and issue the same to his associates.
  8. To safeguard and promote the business interests of the company at the highest level, attend the liaison/legal work of the company with different government departments and perform all necessary or incidental functions for all purposes, being the representative of the company in the zone.
  9. To operate the non-operating collection bank accounts (to be opened at the zonal centre by the company in its name), by depositing cheques received from his associates and submit details to the company of such deposits on a daily basis.
  10. To renew the agreement of association/bank guarantee/security/insurance/licenses etc. in time, before expiry of each.
  11. To maintain any/all vehicles provided at site for service and the machineries installed at the dispensing stations, including any minor/major repairs needed from time to time.
  12. To attend the complaints of customers and keep a vigilant watch on the working of his associates.
  13. In case of discontinuance of association by any associate with the company either on completion of tenure or premature, the business associate would finalize the accounts, return the material issued to him by the company and make alternate arrangement of the associates in his place, as the case may be.
  14. To keep information of competitors in/around his zone and advise the company from time to time, to protect and build the image of the company and maintain the same.
  15. To watch and submit details of any illegal activity in his zone, to the company, to catch people who either sell duplicate products or use subsidized gas for commercial/industrial purpose or fill small cylinders in an illegal manner etc.
  16. Business associate will collect reports from his associates periodically and submit to the company as required from time to time after compilation at his own level and other reports mentioned above in the sub-heading of “responsibilities”
  17. To do any other work assigned by the company from time to time at present/in future.
  1. Return on investment

Refer projected profitability. This statement of investment & projected profitability has been calculated on full functioning of zonal office. Initially, the expenses will be covered, if we generate only 10% business. However, if the expenses are not covered, the company takes the responsibility of shortfall expenses subject to condition that guidelines of the company is followed and reports as mentioned are submitted in time and correctly.

  1. Area to be Covered (State) :   1
  2. of Distributors (District)        :   20
  3. of Dealers (sub-district)    :   40
  4. of Retailers (colonies) :   100
  5. of Mini Retailers (shops) :   250 

However, the margin will be as under:-

i) Commission on amount generated
from sale of new connections i/c. petromax
portable cylinders installation of auto LPG dispensing station                          :    3% ;

ii) Refilling of domestic/commercial/industrial cylinders                                    :     0.50 Rs. per Kg.

iii) Sale of auto LPG at ALDS                                                                            :     0.20 Rs. per liter.

  1. Support from the company:-
  1. Training to sales representative, accountant, clerk and any other staff to be appointed by the business associate at business associate/company’s office.
  2. Provide printed stationery at reasonable rates, if desired by the business associate.
  3. Reimbursement of short-fall expenses (risk-protection) if any, subject to submission of proper reports and documents.
  4. Allow business associate to recommend distributor, dealer, retailer, mini retailer and customer representative in his area on the terms and conditions framed by the company to boost his sale.
  1. Publicity
  1. Initially, publicity material as per list enclosed will be supplied by the company to the distributor along with first order at concessional rates against the payment made by him as publicity expenses. Indent for further requirement should be made by the business associate to the company with payment. For details, refer to our guidelines for publicity in our website under head “publicity”.
  2. He can arrange further local publicity including cable TV in consultation with the PRO/BDM as per policy of the company. The company will reimburse 50% of the expenses on such advertisement if he got approval from the Head office of the company in writing.
  3. The company will also provide maximum support in organizing road show, public campaign and exhibition in his areas. The distributor has to lift the sufficient quantity of material as prescribed by the company to meet the demand of consumer during campaign/exhibition in his area.
  4. National & zonal level publicity, national newspaper, T.V., hoardings on highways etc. will be arranged by the company as and when company felt the need of it.
  5. However, he cannot compel the company for any type of publicity. Even at his cost, he cannot make any publicity without permission of the company.
  1. Submission of report/returns

He will submit periodical reports/returns required by the company from time to time. 

  1. Surrender of associationship

Either party shall give at least 3 months’ notice in writing in case it wants to dissolve the agreement before maturity but not before the period of one year from the date of agreement. The notice to be given to either party shall be deemed to have been served if sent by registered post at the address entered in this agreement or the changed address duly communicated. In case of notice prematurity, no interest on security deposit will be given.

  1. Arbitration clause

In case, any differences or dispute arises between the parties, it will be referred to the sole arbitrator to be appointed by managing director of the company. The arbitration proceedings shall be governed by the provisions of arbitration and conciliation act as applicable at the prevailing time. Language of the proceedings shall be in English and venue for arbitration shall be in Delhi. The decision of the arbitrator will be binding on both the parties. Courts of Delhi only shall have jurisdiction to adjudicate upon the findings of sole arbitrator.

  1. Miscellaneous provisions
  1. These are general terms and conditions; the contract/agreement executed between the parties after negotiations shall be final and have an overriding effect on these general terms and conditions.
  2. These terms and conditions may be changed, altered, modified depending upon the change in governing rules and regulations issued by the Government of India from time to time.
  3. The acceptance or rejection of the application is at the sole discretion of the company. After rejection, no correspondence will be entertained in this regard.
  4. The company reserves the right to change, amend, add or delete any/all clauses at any time without prior notice.
  5. All disputes are subject to jurisdiction of Delhi courts only.

He will return the duplicate copy of these detailed terms and conditions duly signed in token of acknowledgement and acceptance to the company.

FAQ (Q-20 to 41) Business Associates Summary of terms Projected profitability Step by step action Application form