Detailed terms & conditions for Master Franchisee
An aspiring individual, who is financially sound and have experience in sales or business development or managing a region and have a caliber to establish and run the operations of the regional office and willing to setup his own business of LPG/Auto LPG in his state.
An individual will be expected to grow the market for all the products of the company, such as LPG cylinders (mini, domestic, commercial & industrial), Auto-LPG etc.
- Office: The individual must maintain an office at the headquarters within the designated region. The office must have an area of at least 93 Sq. mtr. (1000 sq. ft.) approximately, consisting of office hall, visitor lounge, conference hall and cabin for the Master Franchisees. 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.
- Land requirement: Minimum 3 acre (12041 Sq. meters) for bottling plant of 100 MT storage capacities, covering up to maximum 250 kms. radius. (In case the company already has an operational bottling plant in the state then land is not required.) An additional bottling plant will be required for covering the areas beyond 250 kms. radius.
- Staff: The Master Franchisee will appoint marketing and administrative staff of the cadre and number as per requirement in the office. All staff members will be direct employees of the Master Franchisee and managed by an individual directly and the company shall have no liability of them. However, the company will support by issuing appropriate literature for training of the staff, along with functional guidelines to discharge their duties.
Total investment of Rs. 10 crore based on the infrastructure and resources required including but not limited to setting up bottling plant, stock and working capital for the LPG business & for setting up ALDS in the state under the COCO and CODO scheme.
- Business Model
An individual will start as Business Organizer for the maximum period of one year or until the franchise fee has been fully paid, whichever is earlier. After the payment, an individual is free to select, either to form a partnership or choose to work individually.
- In case of partnership, a joint venture (LLP) will be formed with associate concern, S.O. Gas Products Pvt. Ltd., MSME of 1984 with equal partnership. The royalty will be 10%, to be paid to Premier LPG Ltd. If the LLP has been formed, the shares of master Franchisee shall not be transferable to anyone without the written consent of the company.
- In case an individual choose to work individually, they will have full ownership of following the company guidelines and the royalty will be 25% to be paid directly to Premier LPG Ltd.
In any case, all securities and investments taken from the associates will remain with the Master Franchisee. All other associates in the state will be appointed under tripartite agreement after appointment of Master Franchisee.
- Master Franchisee Fee
To be paid solely by the Master Franchisee depending on the state with mutual understanding within one year from the date of signing the agreement. ₹50 Lacs (Rupees fifty lac only) to be paid upfront at the time of signing the agreement as Security Deposit without interest which will be adjusted against the Franchise fee within one year.
- Terms of appointment
Ten years, three years lock in period 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, the franchisee fee will be forfeited.
At least one designated region (State) but it can be more depending on the investment and resources available, agreed beforehand with mutual consent.
- Statutory provisions
- No formal approval/permission is required for the trade. The company has complied with all statutory requirements/provisions relating to LPG and Auto LPG business.
- An individual will also comply with the incidental matters/local compliances applicable to the designated zone and ensure due compliance of such provisions by all associates.
- An individual will be responsible for renewal of license, service contract, insurance and bank guarantee of associates etc. within the designated zone.
- An individual will be required to execute agreements of i) non-disclosure ii) working with the company and tripartite agreements with all associates appointed in the areas after their appointment
- Rate list
The rate of LPG/Auto LPG changes every month as per international market. 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 associates 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.
- To establish and run the state office of the company in the designated geographical area of jurisdiction for intensive business promotion and sale of company’s products.
- To set up and run the bottling plant and maintain stock of cylinders, LPG, spares, seals, caps etc. along with full stationary, publicity items etc. in accordance with the company’s guidelines.
- To conduct survey of the area and identify potential centers for appointing associates etc.
- To select and recommend suitable persons for appointment as associates in accordance with the terms & conditions of the company in the designated area.
- To help in getting all formalities completed by their associates for quick commencement of their business with the company as well as the local authorities.
- To help their associates in appointment of the staff and train them in all respects.
- To correspond with their associates and convey instructions issued by the company from time to time.
- To collect orders from their associates and submit them to bottling plant for supply and other jobs incidental to the above, as per guidelines of the company issued from time to time.
- To conduct various publicity/advertisement programs in the designated area as per guidelines and policies of the company mentioned at the website. An individual will also acquire an approval from the head office of the company for any publicity program that they would like to run or if required by any of their associates. An individual will make related arrangements for refund of expenses incurred by the associates as per policy of the company. An individual will be keeping the custody of the publicity material entrusted to them by the company and issue the same to their associates.
- 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.
- To renew the agreement/bank guarantee/security/insurance/license etc. of associates in time, before expiry.
- To maintain any/all vehicles provided at site for service and the machineries installed at the dispensing stations, including any minor/major repairs required from time to time.
- To attend the complaints of customers and keep a vigilant watch on the working of their associates.
- In case of discontinuance of association by any associate with the company either on completion of tenure or premature, the Master Franchisee will finalize the accounts, take the material issued to an individual by the company and make alternate arrangement ofthe associates in their place, as the case may be.
- To keep information of competitors in/around the respective zone and advise the company from time to time, to protect and build the image of the company and maintain the same.
- To watch and submit details of any illegal activity in the respective 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..
- Master Franchisee will collect reports from their associates periodically and submit to the company as required from time to time after compilation at their own level and other reports mentioned above in the sub-heading of “responsibilities”
- To submit daily/monthly reports to the company.
- To do any other work assigned by the company from time to time.
- Return on investment
The investment & profitability will be transparent and Master Franchise can earn as per their own capability to develop business in the state. The expenses of the business will be covered if they generate only 10% business. However, if the expenses are not covered, the company takes the responsibility of shortfall expenses subject to the conditions that guidelines of the company are followed and reports as mentioned are submitted in time and correctly.
1. Area to be Covered (State) : 1
2. No. of Distributors (District) : 20
3. No. of Dealers (sub-district) : 40
4. No. of Retailers (colonies) : 100
5. No. of Mini Retailers (shops) : 250
6. ALDS : 20
Until they become a Master Franchisee, they will only be entitled to earn 5% commission on the investment made by the associates, Rs. 1/- per Kg. on LPG and Re. 0.50/- per ltr. on Auto LPG. For details, refer projected profitability.
Once they have become a Master Franchisee, one of the following conditions will apply, depending on which business model they have selected;
- In case of Partnership with S.O. Gas, Franchisee will be entitled for 50% profit after deducting 10% royalty to PLL on the profits of the full business of the state except partner remuneration.
- In case a Master Franchisee choose to work individually, they will be entitled for 100% profit after deducting 25% royalty to PLL on the profits of the full business of the state.
- Support from the company:-
- Company is already providing its associate concern S.O. Gas Products Pvt. Ltd. as its partner from 1st day who has all the expertise required to run the business independently.
- Company has all the literature/guidelines to help the master franchisee to run the business smoothly.
- Training to sales representative, accountant, clerk and any other staff to be appointed by the Company at Master Franchisee’s office either digitally or in person.
- Provide printed stationery at reasonable rates, if desired by the Master Franchisee.
- Reimbursement of short-fall expenses (risk-protection) if any, subject to submission of proper reports and documents after the bottling plant is established.
- Company’s 27 year experience in all fields like Marketing, Finance, Accounts, etc. will always be available with the Master Franchisee as per their requirement.
- The Master Franchisee will share the publicity campaign with the company and the company’s logo/name/brand will obviously be allowed but with prior written consent of the company.
- The company has framed plans for all types of publicity that can be executed in the region and this is readily available at the website for Franchisee to review and follow.
- However, they cannot compel the company for any type of publicity. Even at their cost, they cannot make any publicity without permission of the company.
- Submission of report/returns
They will submit periodical reports/returns required by the company from time to time.
- Surrender of association ship
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 three years 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. Franchisee fee is non-refundable once paid.
If the Master Franchisee wishes to exit in the 1st year, company will refund Rs. 25 Lacs without interest out of the Rs. 50 lacs taken at the time of signing the agreement as Security Deposit and amount invested by them if any, without any interest.
- 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.
- Competition and Non-Disclosure
- Master Franchisee will never share any trade secrets and business know-how including but not limited to information of a commercial nature (e.g. Selling strategies, market research, product research and plans, client list, customer list, advertising or marketing strategy, financial figures, profit figures etc.) with any 3rd party without written consent by the company
- Franchisee may not be directly or indirectly engaged, concerned or interested in any other business or activity which could reasonably be considered as conflicting with their contractual responsibilities or the interest of the company. Therefore, before taking any part-time employment, or becoming involved in additional business or related activity, they must ask the company for their written permission.
- During the period of this agreement and for a period of two year immediately following the termination of this agreement for any reason, Master Franchisee on their own or through someone or on behalf of any other firm, directly or indirectly :-
- Solicit the clients of Premier LPG Ltd.
- Be engaged or concerned with any businesses which is in direct competition of Premier LPG
- Miscellaneous provisions
- 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.
- 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.
- 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.
- The company reserves the right to change, amend, add or delete any/all clauses at any time without prior notice.
- All disputes are subject to jurisdiction of Delhi courts only.
The Franchisee will return the duplicate copy of these detailed terms and conditions duly signed in token of acknowledgement and acceptance to the company.