FRANCHISE AGREEMENT

THIS FRANCHISE AGREEMENT entered into this ____ day of

__________________, 2011, M/S. COTTON GINNY, a Partnership Firm registered in
accordance with the provisions of the Partnership Act, 1932, having it place of business
at Lahore (hereinafter
referred to as the “Franchisor”) and Mr. ,(hereinafter
referred to as the “Franchisee”).

(The Franchisor and Franchisee are collectively referred to as the “Parties”)

WHEREAS the Franchisor is carrying out its business as a manufacturer, producer,

distributor and seller of “men’s and women’s readymade garments” (hereinafter referred
to as the “Franchise Product”) in the name and style of M/S. COTTON GINNY, at

, Lahore.

AND WHEREAS the Franchisee is desirous of purchasing rights to sell the Franchise
Product manufactured, produced, distributed and sold by the Franchisor, and in this
regard, has applied to the Franchisor for the grant of rights to sell the Franchise Product
at and from a shop situate at ,
Islamabad (hereinafter referred to as the “Franchise Shop”).

AND WHEREAS the Franchisor has agreed to grant the Franchisee, rights to sell
Franchise Product at and from the Franchise Shop, under this Franchise Agreement.

NOW THEREFORE the Parties have agreed to be bound

Article 1: The Grant

The Franchisor has agreed to grant the Franchisee rights to sell the Franchise Product at
and from the Franchise Shop for a term of two years from the date of execution of this
Franchise Agreement.

Article 2: The Franchise Shop

a) The Franchise Shop shall at all times during the validity of this Franchise
Agreement be situate at ,
Islamabad.

b) The Franchisee shall not sell the Franchise Product at or from any other location
other than the Franchise Shop.
Article 3: Term and Renewal

a) This Franchise Agreement shall remain valid for a term of two years from the date
of execution of this Franchise Agreement, after the lapse of which the same shall
automatically stand terminated, until and unless renewed by the Parties in
accordance with the terms of this Franchise Agreement.

b) At the expiration of the term of this Franchise Agreement, the Parties may renew
the same from time to time, by an instrument in writing, evidenced by not more
than two attesting witnesses.

Article 4: Purchase

a) The Franchisee shall purchase the Franchise Product exclusively from the
Franchisor.

b) Upon the launch of every new collection containing various designs and items,
the Franchisee shall be bound for the first time, to place orders for not less than 16
articles pertaining to each design and item. However, after the completion of the
first purchase, the franchisee shall be entitled to place further orders pertaining to
the same designs and items, in such quantities as the Franchisee deems fit.

c) The Franchisee shall be bound to make payment for every purchase in advance
before take delivery and possession of the Franchise Product.

d) The Franchisor upon payment by the Franchisee in advance, shall be liable to

hand over delivery and possession of the Franchise Product, at the Original Shop.

e) The Franchisee shall be solely liable for the transportation of the Franchise
Product from the Original Shop to the Franchise Shop, and any expenses incurred
in this behalf shall be solely paid by the Franchisee.

f) The Franchisee, its agents and or employees, shall be entitled to inspect the
Franchise Product at the Original Shop before taking delivery and possession of
the same.

g) The Franchisor shall be bound to give reasonable opportunity to the Franchisee,

its agents and or employees to carry put inspections pertaining to the Franchise
Product before handing over delivery and possession at the Original Shop.
 h) In the event the Franchisee after taking delivery and possession of the Franchise
Product is not satisfied with the quality of the Franchise Product, the Franchisee
shall not be allowed to apply for the exchange of the Franchise Product, until and
unless such application has been made to the Franchisor within 24 hours of taking
delivery and possession.

i) The Franchisor may upon the application of the Franchisee for the exchange of
the Franchise Product, provided that the same has been made within 24 hours of
the completion of the purchase, allow the Franchisee to exchange the Franchise
Product

Article 5: Purchase Price

The Franchisee shall be entitled to purchase the Franchise Product from the Franchisor
for a purchase price tantamount to 75 percent of the selling price charged by the
Franchisor to its customers at or from the Original Shop.

Article 6: Sale Price

The Franchisee shall sell the Franchise Product, at a sale price neither less, nor more, than
the price charged by the Franchisor to its customers at or from the Original Shop.

Article 7: Profit

The difference between the Purchase Price and Selling Price which shall amount to 25
percent of the selling price charged by the Franchisor to its customers at or from the
Original Shop shall be retained by the Franchisee as profit.

Article 8: Exchange

a) After the completion of a purchase, and after taking delivery and possession of the
Franchise Product, the Franchisee shall not be allowed to apply for the exchange
of the Franchise Product, until and unless such application has been made to the
Franchisor within 24 hours of taking delivery and possession.

b) The Franchisor may upon the application of the Franchisee for the exchange of
the Franchise Product, allow the Franchisee to exchange the Franchise Product.

Article 9: Discounts
 a) The Franchisee shall be bound to sell the Franchise Product at a sale price neither
less, nor more, than the price charged by the Franchisor to its customers at or
from the Original Shop.

b) Provided, that the Franchisee may offer discounts on the sale price to its
customers, upon obtaining express permission in writing from the Franchisor.

Article 10: Design of the Franchise Shop

a) The Franchisor shall be entitled to submit a design for the Franchise Shop (both
interior and exterior) before the Franchisee, and the same shall be bound to design
or cause to be designed, the Franchise Shop in accordance with the design
submitted by the Franchisor.

b) The Franchisee shall not, design the Franchise Shop (both internally and
externally), and or alter or change, or make additions to the design of the
Franchise Shop, in such a way so as to make the design of the Franchise Shop
different from that submitted by the Franchisor.

c) Article 11: Intellectual Property

d) All intellectual property in and related to the Brand Cotton Ginny and Franchise
Product including patents, trademarks, copyrights etc., shall at all time vest
absolutely in the Franchisor.

e) This Franchise Agreement for all intents and purposes shall not divest the
Franchisor of his ownership in intellectual property pertaining to the Brand
Cotton Ginny and Franchise Product.

f) Any use made by the Franchisee, of the patents, trademarks, copyrights or other
things pertaining to the Brand Cotton Ginny and Franchise, in which and in
relation to which, the Franchisor enjoys ownership of intellectual property, shall
be deemed to be permitted by a license granted by the Franchisor.

g) The aforementioned license if any in favour of the Franchisee to make use of the
patents, trademarks, copyrights or other things pertaining to the Brand Cotton
Ginny and Franchise, in which and in relation to which, the Franchisor enjoys
ownership of intellectual property, shall stand revoked upon the lapse of this
Franchise Agreement, or its termination by any of the Parties whether by mutual
consent or otherwise.
Article 12: Termination

a) This Franchise Agreement shall stand terminated upon the lapse of two years
from the execution of this Agreement, until and unless renewed by the parties by
an instrument in writing, evidenced by not more than two attesting witnesses.

b) The Parties may at any time terminate this Franchise Agreement by mutual
consent affected by an instrument in writing, evidenced by not more than two
attesting witnesses.

c) A breach of the terms of this Franchise Agreement shall give the Party not in
breach a right to terminate this Agreement, provided that such party
communicates its intention to terminate by a three months prior notice in writing
to the Party in breach.

Article 13: Liability

a) In the event the Franchisee in the course of its business acts or omits to act at or
from the Franchise Shop which is tantamount to an offence punishable under the
law, or an offence is committed by the Franchisee at or from the Franchise Shop
which injures another whether present at the Franchise Shop or elsewhere, the
Franchisor shall not be liable for any such acts or omissions.

b) In the event any person other than the Franchisee acts or omits to act, at or from
the Franchise Shop which is tantamount to an offence punishable under the law,
or an offence is committed by the any person other than the Franchisee, at or from
the Franchise Shop which injures another whether present at the Franchise Shop
or elsewhere, the Franchisor shall not be liable for any such acts or omissions.

c) Any action or omission by the Franchisee or any other person, whether committed
at the Franchise Shop or elsewhere, which is tantamount to a civil wrong or any
other wrong, by which another suffers loss and damage, the Franchisor shall not
be liable for such acts or omissions or loss or damage.

Article 14: Refundable Security

a) Upon the execution of this Franchise Agreement between the Parties the
Franchisee shall be liable to pay a sum of Rs. 1. Million (Rupees One Million
Only) to the Franchisor as security, and the same shall be refunded back to the
Franchisee upon the termination of this Franchise Agreement.
 b) Upon the termination of this Franchise Agreement the Franchisee shall apply to
the Franchisor for the refund of the security, and the Franchisor shall refund the
security within three months of such application.

c) Provided, in the event of breach by the Franchisee of the terms of this Franchise
Agreement, the Franchisor shall be entitled to retain the security as damages, and
the Franchisee shall not have any claim over the same.

IN WITNESS WHEREOF, the parties hereunto have caused this agreement to be

executed on the date first above written.

Franchisor Franchisee

Name: Name:

N.I.C. N.I.C.

Sign Sign

WITNESSES