- A PCD pharma franchise agreement should name both parties, state your territory and product list in plain words, explain any exclusivity and the conditions attached to it, and set out rates, payment terms, dispatch, breakage and expiry returns, promotional material and how the agreement ends.
- Read it fully before paying anything, and ask for every promise made on a call to be written in.
Jump to a section
- Why does the agreement matter so much?
- Which clauses should every agreement have?
- How should the territory and product list be written?
- What should the exclusivity clause say?
- What should the money clauses cover?
- What should the dispatch, expiry and returns clauses say?
- What should the exit clause say?
- What are the red flags in an agreement?
- A worked example: one phone promise, written in
- What should I ask before signing?
- What documents does Acrowell ask for before an agreement?
- Frequently asked questions
Why does the agreement matter so much?
Most disputes between a PCD company and its partner start with a promise that was made on the phone and never written down: "your district is protected", "we'll take back expiry", "visual aids will come with the first order". When something goes wrong, only the written agreement counts.
A good agreement is not long or complicated. It simply puts the important promises, on both sides, in plain words. This guide walks through the clauses one by one. It is general information, not legal advice; for large commitments, have a lawyer read the final draft.
Which clauses should every agreement have?
| # | Clause | What it should say |
|---|---|---|
| 1 | Parties | Full legal names, addresses, GSTINs and drug licence numbers of both sides |
| 2 | Territory | The district or area, named plainly (not "nearby areas") |
| 3 | Product list | The brands and packs you may sell, attached as a list |
| 4 | Exclusivity | Whether any monopoly applies, on which products, and on what conditions |
| 5 | Order commitment | Any purchase target linked to exclusivity, and what happens if it is missed |
| 6 | Rates | How the rate list is shared and how price changes are notified |
| 7 | Payment | Advance or credit, due dates, and the company's bank account |
| 8 | Dispatch and freight | Dispatch time after confirmation, transport, who pays freight |
| 9 | Breakage, expiry and returns | How damaged and near-expiry stock is handled, and the time limit to report it |
| 10 | Promotional material | Visual aids, literature, samples, MR bags: what comes, and how often |
| 11 | Brand use | You sell the company's brands as they are; no repacking or relabelling |
| 12 | Term and exit | How long it runs, notice period, and what happens to your stock if it ends |
How should the territory and product list be written?
Territory should be a named district, city zone or set of districts, written exactly. "Ambala district, Haryana" is clear. "Ambala and nearby" is not, because "nearby" will mean different things to you and the company a year later.
The product list should be an attached schedule with brand names and packs. When you add products later, ask for an updated schedule signed by both sides, so every product you promote is on paper.
What should the exclusivity clause say?
Not every partnership comes with exclusivity on day one, and that is normal. What matters is that the agreement says clearly whether it applies, and if it does:
- which products and which territory it covers;
- what you must do to keep it (for example, an order commitment);
- how much notice you get if the company believes the conditions are not met;
- whether it can be reviewed, and how.
At Acrowell Labs, monopoly rights are recognition for consistent, loyal partners, based on performance and order size. When a district is discussed, the investment depends on the area, demand and market conditions, and the terms are written into the agreement. How monopoly rights work.
What should the money clauses cover?
Rates and price changes
The rate list itself is usually a separate document that changes over time. The agreement should say how a new rate list is shared and from when it applies, so an order you placed at the old rate is billed at the old rate.
Payment
Write down whether orders are paid in advance or on credit, the due date, and the bank account. The account should be in the company's own name, the same name as on the GST invoice.
Deposits and fees
If any deposit, joining fee or booking amount is asked, the agreement should say exactly what it pays for and whether, when and how it is refunded. At Acrowell Labs there is no joining fee and no minimum order on in-stock products. What a PCD franchise really costs.
What should the dispatch, expiry and returns clauses say?
- Dispatch time: how soon an order leaves after it is confirmed. Acrowell dispatches within 24 hours of a confirmed order.
- Freight: who pays, and which transport or courier partners are used.
- Breakage and short supply: how many days you have to report it, and what proof is needed (photos, docket number).
- Expiry: whether near-expiry or expired stock can be returned or replaced, within what limits, and in what form (credit note or goods).
Expiry is where most arguments happen, so read this clause twice.
What should the exit clause say?
Every agreement should say how it ends, because one day it might. Look for:
- the term of the agreement and how it renews;
- the notice period for either side to end it;
- what happens to stock you hold on that day, and to any money due either way;
- what happens to exclusivity after the agreement ends.
Also check the clause on disputes: which city's courts have jurisdiction, and whether disputes go to arbitration first.
What are the red flags in an agreement?
- No agreement at all, or "we'll send it after your payment".
- A territory described only as "your area" or "nearby".
- Exclusivity promised on the phone but missing from the document.
- A deposit with no refund terms.
- One-sided termination: the company can end it any day, you cannot.
- Promises of fixed income or guaranteed sales. No honest agreement can promise what your market will do.
- A party name or GSTIN that does not match the company's registration. How to check a company.
A worked example: one phone promise, written in
Take an example. Manoj, a distributor in Bathinda, is told on a call that breakage in transit will be replaced. The draft agreement says nothing about breakage. Before signing, he asks for one line to be added: breakage reported within a set number of days of delivery, with photos and the docket number, is replaced in the next dispatch. The company adds it.
Three months later a carton of syrups arrives cracked. Manoj sends the photos and docket number the same day, and the replacement comes in his next order. Nobody argues, because the rule was already on paper.
What should I ask before signing?
- Can every promise from our calls be written into the agreement?
- Is my territory named exactly, and my product list attached?
- Does any exclusivity apply now? If not, what would earn it?
- Is there any deposit or fee, and what are its refund terms?
- What is the rule for breakage and expiry, and the time limit to report?
- How does either side end the agreement, and what happens to my stock?
Then sign, keep a copy with both signatures, and file it with your licence, GST certificate and first invoice.
What documents does Acrowell ask for before an agreement?
Three: your drug licence, your GST number and your ID. Acrowell verifies them before anything else. Documents for a PCD franchise.
Frequently asked questions
Is a written agreement necessary for a PCD franchise?
What is an order commitment in a pharma franchise agreement?
Should I pay before signing the agreement?
Does Acrowell Labs give monopoly in the first agreement?
Do I need a lawyer to check a franchise agreement?
Want to start with Acrowell Labs?
No joining fee, no minimum order on in-stock products, and dispatch within 24 hours of a confirmed order. Tell us your district and we will tell you what is open.