Franchising Agreement

Our UK Franchise Agreement is a fully comprehensive agreement drafted to protect the Franchisor and its business format. It clearly sets out each parties obligations and what is expected from them.

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The term `franchising` has been used to describe many different forms of business relationships, including licensing, distributor and agency arrangements. The more popular use of the term has arisen from the development of what is called `business format franchising.` McDonalds and Subway are both franchises.

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and to make use of an entire business package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.

Our UK Franchise Agreement is a fully comprehensive agreement drafted to protect the Franchisor and its business format. It clearly sets out each parties obligations and what is expected from them.

These forms have been created by UK lawyers for use in England and Wales.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.














Franchise Agreement







This Packet Includes:
1. Information;
2. Step-by-Step Instructions; and
3. Franchise Agreement





Information
Franchise Agreement




The term 'franchising' has been used to describe many different forms of business relationships, including licensing, distributor and agency arrangements. The more popular use of the term has arisen from the development of what is called 'business format franchising.'  McDonalds and Subway are both franchises.

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and to make use of an entire business package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.

Why would people want to purchase a franchise? Its simple. Any successful franchise business should be a “turn key operation”.

    You don't have to come up with a new idea - someone else has had it and tested it, too!
    Larger, well-established franchise operations will often have national advertising campaigns and a solid trading name
    Good franchisors will offer comprehensive training programmes in sales and indeed all business skills.
    Good franchisors can also help secure funding for your investment as well as e.g. discounted bulk-buy supplies for outlets when you are in operation
    If aware that you are running a franchise, customers will also understand that you will be offering the best possible value for money and service - although you run your 'own show', you are part of a much larger organisation.

1.1   Who is in Control?
Each business outlet is owned and operated by the franchisee. However, the franchisor retains control over the way in which products and services are marketed and sold, and controls the quality and standards of the business.

1.2   What are the Cost Implications?


The franchisor will receive an initial fee from the franchisee, payable at the outset, together with on-going management service fees - usually based on a percentage of annual turnover or mark-ups on supplies. In return, the franchisor has an obligation to support the franchise network, notably with training, product development, advertising, promotional activities and with a specialist range of management services.



If you own a business which you know is successful and can be replicated anywhere then it is ripe to franchise.

In order for any business to franchise its business format you must have a good franchise agreement in order to protect the business format.

Our Franchise Agreement is a comprehensive agreement drafted to protect the Franchisor and its business format. It clearly sets out each parties obligations and what is expected from them. It is unusual for the Franchisor to allow any changes requested by the Franchisee. Its usually a take it or leave it scenario.

As with all our agreements clear uncomplicated language has been used throughout and therefore the terms will be self-explanatory. Not every clause in the agreement will be appropriate for your circumstances.

You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate.



Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.


Step-by-Step Instructions
 Franchise Agreement



   

In addition to the above we would also draw your attention to the following:

   Parties   You will note there are three parties. The Franchisor, the Franchisee and the Individual. The Individual is there as a guarantor for the Franchisee. The Franchisee may be a limited company that actually has no assets. The Franchisor may want the obligations of the Franchisee guaranteed by the individual(s) who own the corporate franchisee. If so enter their names here.

   Recital A   Enter a brief description of the business format (eg Fast Food Restaurant) and the name the business trades under.

   Clause 2   This clause grants the Franchisee the right to use the business format, trade names and other stationary and products relating to the business in the Territory. The Territory will be a specific area in the UK (eg W1 or Romford). You will need to ensure you have defined Territory in the definitions section at the beginning of the agreement.

   Clause 2.3   This agreement runs for five years. Please change this if this is not what you want.

   Clause 3   The Franchisee will have the automatic right to renew the franchise after the initial term period has expired provided the Franchisee has complied with the obligations sets out in the rest of clause 3.

   Clause 4.1   To the Franchisor this is the most important clause. Its how they get paid!! A Franchisor will normally charge an Initial Fee for granting the franchise which is paid on signing (or perhaps in instalments). Enter the figure here. Also it is usual for the Franchisee to pay the Franchisees legal fees.

   Clause 4.2   After paying the initial fee the Franchisor will normally collect weekly or monthly royalties calculated as a percentage of weekly sales by the Franchisee. Make sure you insert in the Definitions section at the front of the agreement whether these weekly sales will be weekly or monthly. In this agreement we also state the Franchisees must pay a weekly advertising levy. This is to be used by the Franchisor solely for the purpose of advertising the business brand in normally national advertising campaigns.

   Clause 5   This clause sets out exactly what the Franchisor must provide to the Franchisee before the opening of the retail unit. The Manual is a very useful tool provided by the Franchisor. The Manual is basically a book that tells the Franchisee step by step how to run the business in every minute detail and thus make money.



   Clause 5.1   The Franchisor will need to look carefully through this clause to make sure he fills in the blanks properly and deletes those sub clauses which are not relevant.

   Clause 6   This clause relates to the training the Franchisor will give the Franchisee to ensure they can run the business system correctly. Again the Franchisor needs to carefully review this entire clause to make sure he is happy with its content.

   Clause 14   This agreement provides that the Franchisor collects from the franchisees an advertising levy which is spent on advertising campaigns in accordance with this clause 14. Read it carefully and make sure you complete the advertising levy definition at the beginning of the agreement.

   Clause 19   Although the business format and the trademarks belong to the Franchisor the actual business which operates from the premises where the franchisee is based belongs to the Franchisee and can therefore be sold by the Franchisee to another third party provided the Franchisor consents (which he must do unless he can show a very good reason not to) and the Franchisee has complied with the other conditions set out in this clause.

   Clause 20   If you have an Individual guaranteeing the Franchisees obligations then you will need this clause as it deals with what happens if the Individual dies or is incapacitated.

   Clause [21]   This clause sets under what circumstances this agreement can be terminated especially by the Franchisor. Read it carefully.

   Clause [25]   If you have an Individual guaranteeing the Franchisees obligations then you will need this clause as this clause sets out the actual guarantee clause.

   Signature
Block    These are the signature lines the parties all sign which is right at the end of the agreement. If you are not going to have an Individual then obviously you will need to delete this line.



   Schedule   In this Schedule you need to insert details of the Territory, the Trade Marks etc.




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FRANCHISING AGREEMENT

DATE:         
Parties:
(1)   [                              ] LIMITED (Company No:[          ])whose registered office is at [                                                            ] (“the Franchisor”) and
(2)   [________] whose registered office is at [________] (“the Franchisee”) and
(3)   [________] of [________] (“the Individual”)
Recitals:
(A)   The Franchisor as a result of extensive research and practical business experience has developed and established a successful business of [________] which is carried on under the name [________]”;
(B)   The Franchisor has built up a substantial reputation and goodwill in the Trade Name which is associated with the highest standards of services;
(C)   The Franchisor has developed and will during the term of this agreement develop specialised products (“the Products”) and specialised services (“the Services”) to be used in the Business;
(D)   The Franchisor is the owner of confidential information on the management and operation of the Business and in methods of conducting, marketing and promoting the Business;
(E)   The Franchisor has registered the trade mark(s)/service mark(s) set out in the Schedule which is/are associated with the Products and Services;
(F)   The Franchisee wishes to acquire from the Franchisor the right and franchise to operate the Business in accordance with the terms of this agreement.
Operative provisions:
2.   Definitions
2.1   In this agreement unless the context otherwise requires:
“Advertising Levy
means [________] per cent of the Gross [Weekly] Sales;
“Business
means a [________] business;
“Equipment
means those items contained in the Equipment Package and any other similar items to be purchased or leased by the Franchisee for the Franchisees Business;
“Equipment Package
means the Equipment set out in the Schedule;
“Financial Package
means a package of accounting books ledger sheets and invoices supplied by the Franchisor and to be used by the Franchisee in the Franchisees Business
“Franchisee
means as defined above
“Franchisees Business
means that part of the Business operated by the Franchisee in accordance with the provisions of this agreement
“the Franchisor
means as defined above
“Gross [Weekly] Sales
means the gross takings of the Franchisees Business arising directly or indirectly from the conduct of the Franchisees Business during each [week] that this agreement is in force (and for any period less than a complete [week]) and gross takings shall include:
(a)   the value (less the amount already taken into account under (b) below) of all goods sold, and delivered or collected or services performed by the Franchisee during each [week] whether or not invoiced and whether or not such orders are recorded in the Franchisees books;
(b)   in respect of orders taken by the Franchisee but the goods or services which are the subject of such orders have not been supplied the value of the payment in part or in whole which has been received (whether or not invoiced and whether or not such orders are recorded in the Franchisees books) in each [week];
(c)   the assumed gross takings of the Franchisees Business in each Month calculated for the purposes of any loss of profits or business interruption insurance claim;
Gross takings shall not be reduced by:
   credit card commissions or charges suffered by the Franchisee;
   any free offers or discounts made or given by the Franchisee whether as part of any special promotion required or authorised by the Franchisor or otherwise;
Gross takings shall be reduced by any customer refunds or allowances which do not relate to promotional activity and the making of which has been authorised by the Franchisor;
 Gross takings shall not include VAT;
“Individual
means as defined above
“Initial Fee
means the fee payable in accordance with clause [4.1];
“Launch and Promotion Pack
means such PR and advertising as the Franchisor shall consider adequate to launch effectively the franchise hereby granted;
“Manual
means the operating manual of the Franchisor setting out the way in which the Franchisee shall operate the Franchisees Business as amended by the Franchisor from time to time;
“Month
means a calendar month;
“Opening Date
means [________] Months from the date on which this agreement is executed or such earlier date as the Franchisee opens the Premises for the purposes of the Franchisees Business;
“Opening Hours
means all those hours during which the Premises are open to the public for the purposes of trade;
“Payment Date
means Friday of each Week or the next working day if such a day is a bank holiday;
“Premises
means the premises at the location specified in the Schedule or such other location agreed by the Franchisor in accordance with clause [2.1];
“Products
means as defined in the Recitals
“Services
means as defined in the Recitals
“Service Fee
means [________] per cent of the Gross [Weekly] Sales [or [7      ] per [week] [month]
“Stationery
means all invoices, hire documents, stationery bags, and other documents to be used by the Franchisee for the purposes of the Franchisees Business;
“Stock
means the initial stock of the Products set out in the Schedule;
“System
means confidential information which is owned by the Franchisor on the management and operation of the Business and in methods of conducting marketing and promoting the Business
“Territory
means the territory set out in the Schedule
“Trade Marks
means the trade marks set out in the Schedule as the same may be amended by the Franchisor from time to time
“Trade Name
means [________]” or such additional or alternative trade names as the Franchisor may specify from time to time
“VAT
means Value Added Tax
“Vehicle(s)
means the vehicle or vehicle(s) which have been previously approved in writing by the Franchisor.

2.2   In this agreement unless the context otherwise requires:
2.2.1   the singular includes the plural and vice versa and reference to any gender includes the other genders;
2.2.2   reference to persons include bodies corporate, unincorporated associations and partnerships;
2.2.3   words and phrases defined in the Companies Act 1985 have the same meanings in this agreement but the word “company” includes any body corporate;
2.2.4   references to “clauses” are to clauses or subclauses of this agreement, references to the “schedule” are to the schedule to this agreement.
2.3   In this agreement:
2.3.1   any reference to any statute or statutory instrument or any section or part thereof includes any enactment replacing or amending it or any instrument, order or regulation made under it and also includes any past statutory provisions (as from time to time modified or reenacted) which such provision has directly or indirectly replaced;
2.3.2   headings are for reference purposes only and shall not affect the construction of anything in this agreement.
2.4   The Schedule shall be treated as an integral part of this agreement and references to this agreement shall include the Schedule.
3.   Franchise rights and term
3.1   The Franchisor grants to the Franchisee the right:
3.1.1   to operate the Franchisees Business;
3.1.2   to use the Trade Name;
3.1.3   to operate the System;
3.1.4   to use the Trade Marks;
3.1.5   to use the Stationery and all other material emanating from the Franchisor which is the subject of copyright;
3.1.6   to sell the Products and provide the Services;
from the Premises or such other premises within the Territory as may be approved in writing by the Franchisor.
3.2   The Franchisor will not licence any person other than the Franchisee to operate the Business [under the Trade Name] in the Territory.
3.3   This agreement shall commence on the date of execution of this agreement or the date the Franchisee becomes registered for VAT whichever shall be the last to occur and shall, subject to the provisions contained in this agreement, be for a fixed period of five years from the date of this agreement.
4.   Rights of renewal
4.1   The Franchisee may apply to renew the franchise at the end of the term by notice in writing to the Franchisor given not more than six Months nor less than three Months before the expiration of the term.
4.2   The Franchisor shall renew the term for a further period of [five] years or for a term of years equal to the Franchisees leasehold interest in the Premises whichever is the shorter, provided that:
4.2.1   there have been no breaches of this agreement and there are no breaches of this agreement outstanding at the date that the notice referred to in clause 3.1 is served or at any time thereafter up to and including the expiry of the term granted by this agreement;
4.2.2   the Franchisee and the Individual have performed their obligations under this agreement to the reasonable satisfaction of the Franchisor;
4.2.3   the Franchisee and the Individual shall have entered into a new agreement which shall be in the Franchisors then current form of renewal franchise agreement, which will contain a right of renewal as contained in this clause, provided however, that the Franchisee will not be under any obligation to pay any sum expressed to be payable by way of initial fee and the Franchisor shall be under no obligation to perform any of the obligations set out in clause [5] or to provide any initial training as set out in clause [6.1] and 6.3;
4.2.4   the Franchisee shall at its expense refurbish the Premises and the fixtures and fittings at the Premises and renew the Equipment and to the extent that the Franchisor shall reasonably deem to be necessary to ensure that the Franchisees Business meets the Franchisors then current requirements and within the time prescribed by the Franchisor;
4.2.5   the Franchisee and the Individual, if so required by the Franchisor, shall relinquish in such form as the Franchisor may require all claims against the Franchisor or any third party associated with the Franchisor;
4.2.6   the Individual, and any person employed by or concerned with the Franchisee, specified by the Franchisor, shall have completed at the Franchisees expense such retraining or refresher training at such time and at such place as the Franchisor may require;
4.2.7   the Franchisors legal costs (if any) relating to the grant of the new agreement shall be reimbursed;
Provided that if after the service of the notice referred to in subclause [3.1] and prior to the execution of the new franchise agreement referred to in subclause [3.2.4] above the Franchisee shall fail to comply with the provisions set out above the Franchisor shall not be obliged to grant a renewal under this clause.
4.3   If the Franchisee continues to operate the Franchisees Business after expiry of this agreement without having previously entered into a renewal agreement as envisaged by this clause [3], the Franchisee shall be deemed to be operating as a franchisee at will subject to the terms of this agreement, save that the Franchisor may by serving one Months written notice, terminate the franchise at will.
5.   Fees
5.1   On the execution of this agreement the Franchisee shall pay to the Franchisor the sum of £[________] as an initial fee, and shall reimburse the Franchisors legal costs relating to the grant of the agreement.

5.2   Every week following the Opening Date the Franchisee shall pay the Service Fee and Advertising Levy on the Payment Date following the week to which the Service Fee and Advertising Levy relate.
5.3   Upon the signing of this Agreement, the franchise will (as directed by the Fanchisor set upon direct debits, standing or other payment arrangement in order to make all payments requested to be made under this Agreement  or, if so requested by the Franchisor, shall retain the said payments for collection by a representative of the Franchisor on the Payment Date.
6.   Preopening obligations
6.1   The Franchisor shall provide the Franchisee before the Opening Date with the following:
6.1.1   Manualon successful completion of the training specified in subclause [5.1.4] below the right to view at the Franchisors offices one copy on loan of the Franchisors current Manual setting out the way in which the Franchisee is to operate the Franchisees Business the contents of which are for the exclusive use of the Franchisee and its staff;
6.1.2   Equipment[________]
6.1.3   Stationerysuch stock at no charge to the Franchisee of the Stationery as the Franchisor shall reasonably consider will be necessary for the first Months trading;
6.1.4   Training[________]
6.1.5   Premises
   advice on site selection, location, criteria and provide assistance on the acquisition of Premises;
   plans and specifications for the internal layout, signs, and fixtures and fittings at the Premises;
   general supervision of the construction or conversion works as the Franchisor shall consider appropriate;
6.1.6   Stock[________]
6.1.7   Financial Package[________]
6.1.8   Telephone Answering Machines[________]
6.1.9   Launch and Promotion Pack[________]
6.1.10   [Vehicle/Vehicle Livery[________]
6.1.11   Shop Fascia[________]
6.2   The Franchisee shall at its own cost before the Opening Date:
6.2.1   refurbish the Premises as required by the plans and specifications referred to in clause [5.1.5] above and for such purposes make use of the Franchisors nominated architect, designer, quantity surveyor and shopfitter (in respect of whose fees the Franchisor shall have used its reasonable commercial endeavours to ensure that they are competitive) unless the Franchisors prior written approval has been obtained to the use of an alternative;
6.2.2   comply with the Franchisors reasonable instructions concerning the refurbishment of the Premises;
6.2.3   order the Equipment.
7.   Training
7.1   The Franchisor shall, as specified in clause [5.1.4] train the Individual in the operation of the System and in relevant aspects of the Business.
7.2   [If the Franchisor reasonably believes that the Individual does not meet the Franchisors minimum standards at any time during the training referred to in clause [5.1.4] the Franchisor shall inform the Individual accordingly. The Individual shall then use his best endeavours to appoint a manager in his place and such manager shall undertake the initial training session. If the Individual fails to appoint a manager within such reasonable period as the Franchisor may specify or if the said manager fails to meet the Franchisors minimum standards the Franchisor shall have the right upon notice in writing forthwith to terminate this agreement and shall return (subject to the Franchisee complying with all the provisions of this agreement applicable on termination and returning in good condition all items of Equipment, Stationery and other items supplied by the Franchisor) to the Franchisee the Initial Fee or part thereof paid less such sum (not exceeding £[________]) representing the cost to the Franchisor of the performance of its obligations under this agreement and any other costs incurred by the Franchisor in relation to this agreement.]
OR
7.3   [If the Franchisor reasonably believes that the Individual does not meet the Franchisors minimum standards at any time during the training referred to in clause [5.1.4] the Franchisor shall have the right upon notice in writing forthwith to terminate this agreement and shall return (subject to the Franchisee complying with all the provisions of this agreement applicable on termination and returning in good condition all items of Equipment, Stationery and other items supplied by the Franchisor) to the Franchisee the Initial Fee or part thereof paid less such sum (not exceeding £[________]) representing the cost to the Franchisor of the performance of its obligations under this agreement and any other costs incurred by the Franchisor in relation to this agreement.
7.4   The Franchisee shall submit all those of its employees or self employed persons as are designated by the Franchisor for training prior to the Opening Date and shall terminate their employment or engagement if in the Franchisors reasonable opinion they are unsuitable.
7.5   The Franchisor shall have the right to require the Individual and/or the Franchisees employees or selfemployed persons to attend further training courses at any time during the term of this agreement if it reasonably considers that such further training is necessary.
7.6   The Franchisee shall on taking on an employee or self employed person at a level where training is normally provided immediately inform the Franchisor and if required by the Franchisor submit such persons for training and shall terminate their employment or engagement if in the Franchisors reasonable opinion they are unsuitable.
7.7   All training referred to in this clause (save for the training referred to in clause [6.1] which shall be provided free of charge) shall be provided at the Franchisors standard rate and in all cases the Franchisee shall be liable for travelling and living expenses and salaries of those attending.
7.8   The time and place of any training shall unless otherwise specified be at the absolute discretion of the Franchisor but the Franchisor shall try to accommodate the Franchisees reasonable requirements. [or shall be at             ]
8.   Franchisors continuing obligations
The Franchisor shall subject to compliance by the Franchisee and the Individual with the terms of this agreement throughout the term of this agreement:
8.1   permit the Franchisee to carry on the Franchisees Business under the Trade Name;
8.2   promptly make available to the Franchisee members of the Franchisors staff for “onsite” advice in connection with the System when reasonably required by the Franchisee and subject to the reimbursement of the Franchisors costs;
8.3   subject to the provision by the Franchisee of such information as the Franchisor may require so as to enable the Franchisor to monitor the performance of the Franchisee provide the Franchisee with advice and guidance on all aspects of the Franchisees Business including finance, management, operational and promotional matters and provide reasonable problem solving facilities to the Franchisee so as to enable the Franchisee to operate the Franchisees Business efficiently;
8.4   make available to the Franchisee, at cost, services for the selection of appropriately trained and qualified staff for engagement in the Franchisees Business;
8.5   make available to the Franchisee and its employees at the Franchisors standard rate, such further training as the Franchisee may from time to time reasonably require, the Franchisee bearing the cost of any travel and subsistence involved in such further training and the salaries of any employees;
8.6   provide the Franchisee, at the Franchisees expense, with standard contracts for use by the Franchisee in the Franchisees Business;
8.7   provide to the Franchisee or assist the Franchisee in obtaining the products, services and equipment described in the Manual on the terms specified in the Manual and if such products, services and equipment are obtained from third parties use its reasonable endeavours to obtain competitive rates for furnishing such supplies;
8.8   organise and convene regular franchisee meetings, the Franchisee bearing the cost of any travel and subsistence expenses incurred in attending such meetings;
8.9   update the Manual from time to time and continue its research and development so as continually to improve the System;
8.10   make available to the Franchisee all items and services which the Franchisor makes available to its other franchisees.
9.   Franchisees operating obligations
In order to maintain the highest standard of service to be provided by the Franchisee and the Franchisors other franchisees the Franchisee shall during the term of this agreement:
9.1   Immediate obligations
9.1.1   Immediately on execution of this agreement enter into a registered licence agreement in respect of the Trade Marks in such form as the Franchisor shall reasonably require;
9.1.2   Acquire the Premises.
9.2   Supplies
9.2.1   Use in the Franchisees Business [only the Equipment, Vehicle and Stationery] and no other similar equipment, vehicle or stationery unless the Franchisors prior written approval has been obtained;
9.2.2   Obtain its supplies of the Products, Equipment, Stationery and other products or services specified in the Manual from the Franchisor at the Franchisors current prices from time to time or such other person that has been previously approved in writing by the Franchisor;
9.2.3   [Maintain the Vehicle to the highest mechanical standards including regular servicing and keep the Vehicle clean and in good condition.]
9.3   General
9.3.1   Ensure that adequate finance is available to the Franchisee to enable the Franchisee fully to develop the Franchisees Business in accordance with this agreement;
9.3.2   Carry on the Franchisees Business to the highest standards of service;
9.3.3   Use its best endeavours to promote and extend the Franchisees Business;
9.3.4   Not do anything which may bring the Business or the Franchisees Business into disrepute or may have a detrimental effect on the Business or the Franchisees Business;
9.3.5   Comply with all statutes, byelaws and other legal requirements relating to the Franchisees Business and obtain (and maintain) all licences, consents and approvals (if any) that may be required;
9.3.6   Permit the Franchisor and/or any person authorised by the Franchisor without notice to enter, during normal business hours, upon the Premises or elsewhere to inspect the same and remove for inspection or take copies of any item;
9.3.7   Not engage and procure that the Individual does not engage in or be involved directly or indirectly or in any way assist any third party to so engage in or be involved in any business which competes with the Business or the Franchisees Business;
9.3.8   Not, without the previous written consent of the Franchisor, such consent not to be unreasonably withheld, engage in or be involved in any business other than the Franchisees Business and procure that the Individual complies with a similar obligation;
9.3.9   Not engage in the Franchisees Business outside the Territory and procure that the Individual complies with a similar obligation;
9.3.10   Comply in all respects with the Manual as the same may be amended from time to time;
9.3.11   Ensure that the Franchisees Business is effectively managed by the Individual and by no other person unless the Franchisors prior written consent has been obtained;
9.3.12   Keep details of actual and potential customers and supply a copy of the same to the Franchisor immediately on request;
9.3.13   Register for VAT within one Month of executing this agreement;
9.3.14   Comply with the invoicing and accounting procedures specified by the Franchisor;
9.3.15   Not enter into any arrangement or agreement to factor, charge or otherwise dispose of any debts or liabilities of the Franchisees Business without first obtaining the consent in writing of the Franchisor (such consent not to be unreasonably withheld or delayed).
9.4   Name and knowhow
9.4.1   Not make use of, or disclose, other than exclusively for the purposes of the Franchisees Business, any information relating to the Business or the Franchisees Business or any other confidential information supplied by or on behalf of the Franchisor and procure that the Individual complies with a similar obligation and the Franchisee shall ensure that none of its employees or selfemployed persons make use of or disclose such information other than for such purpose.
9.5   Trading
9.5.1   Forthwith inform the Franchisor of all relevant details of any enquiry from a potential customer outside the Territory;
9.5.2   Provide potential franchisees, at the request of the Franchisor, with such information concerning the Business and the Franchisees Business as such prospective franchisees may reasonably require and at all times be courteous and cooperative to such prospective franchisees;
9.5.3   Accept such charge and credit cards including “Visa” and “Mastercard” as are set out in the Manual;
9.5.4   Continuously operate the Franchisees Business upon such days and between such hours as the Franchisor shall specify;
9.5.5   Pay all suppliers of goods and services sold or provided to the Franchisee in accordance with their terms of payment;
9.5.6   Maintain sufficient stocks and employ sufficient staff to meet all likely demand from the customers of the Franchisees Business;
9.5.7   Promptly replace or refund the costs of any product supplied by the Franchisee which does not conform with the high standards required by the System;
9.5.8   Consult with the Franchisor as to the prices to be charged in the Franchisees Business and refrain from charging in excess of any maximum charges specified by the Franchisor;
9.5.9   Sell or provide only such products or services as may be described from time to time in the Manual upon the terms and conditions therein set out and ensure that the range of Products and Services specified by the Franchisor are available for sale by the Franchisee.
9.6   Internet
9.6.1   Not promote the Franchisees Business or sell or make available the Products or the Services whether for the purposes of advertising, promotion, sales or otherwise through or on the world wide web, internet or any other electronic means without the Franchisors prior written consent which will be given subject to such conditions as the Franchisor shall consider in its sole discretion necessary to protect its goodwill and reputation;
9.6.2   Save as set out in clause [8.6.1] acknowledge that all rights relating to the exploitation of the Trade Marks, the Trade Name and the System through or on the world wide web, internet or through any other electronic means will solely and exclusively belong to the Franchisor;
9.6.3   Not make use of or establish a web site which uses the Trade Name and/or the Trade Mark or any similar trade mark or trade name as its domain name or establish a web site for the purposes of communicating with the Franchisors franchisees or with third parties in relation to the Franchisor, the Business or the Franchisors franchisees;
9.6.4   If required by the Franchisor participate in the Franchisors web site as stipulated by the Franchisor and at the cost of the sums standing in the account referred to in clause [14.1].
10.   Telephone numbers
10.1   [The Franchisee shall use only such telephone number or numbers as have been obtained by the Franchisor for the use of the Franchisee in the Franchisees Business (“the Telephone Numbers”) to the exclusion of all others and the Telephone Numbers shall only be used for the Franchisees Business and for no other purpose.
10.2   The Franchisee recognises that during the term of this agreement the Franchisor shall be the official subscriber of the Telephone Numbers.
10.3   [All charges for the installation, rental and use of the Telephone Numbers shall be borne by the Franchisor but the Franchisee shall reimburse the Franchisor on demand all such charges and shall, if so required by the Franchisor, enter into a standing order or other arrangement specified by the Franchisor to facilitate the payment of such sums to the Franchisor.]
OR
10.4   [All charges for the installation, rental and use of the Telephone Numbers shall be borne by the Franchisor but the Franchisee shall reimburse the Franchisor on demand all such charges and shall on the Payment Date make a payment in advance to the Franchisor of such sum as the Franchisor may set being the Franchisors reasonable estimate of the likely weekly telephone charges incurred by the Franchisee and every quarter the Franchisor shall prepare a reconciliation of all such payments and charges and the Franchisor or the Franchisee as the case may be shall within seven days of such reconciliation pay the amount which the reconciliation shall show is owing.]
10.5   Upon termination of this agreement for any reason whatsoever the Franchisee shall immediately discontinue the use of the Telephone Numbers.
10.6   The Franchisee shall not permit to appear in any marketing, advertising or promotional material or in any business correspondence any telephone number or numbers other than the Telephone Numbers.]
OR
10.7   [The Franchisee shall inform the Franchisor before the Opening Date of all telephone numbers which it proposes to use in connection with the Franchisees Business (“the Telephone Numbers”) and shall immediately upon receiving a request by the Franchisor execute and forward to the Franchisor an undated instruction in such form as the Franchisor may reasonably require transferring the Telephone Numbers to the Franchisor.
10.8   The Franchisee shall not subscribe whether itself or through a nominee, for telephone numbers other than the Telephone Numbers referred to in subclause [9.1] above for the purposes of the Franchisees Business, unless the Franchisor shall have been previously informed in writing, and the Franchisee or its nominee shall if so requested by the Franchisor execute an undated instruction relating to the further telephone numbers.
10.9   The Franchisee shall ensure that the Telephone Numbers shall only be used for the Franchisees business and for no other purpose.
10.10   The Franchisor shall not make use of the undated instructions referred to in subclauses [9.1 and 9.2] above until the termination of this agreement.
10.11   The Franchisee shall use the Telephone Numbers referred to in subclause [9.2] above exclusively for the Franchisees Business and no other business.]
11.   Accounting records
The Franchisee shall:
11.1   Maintain accurate records of the Gross [Weekly] Sales made up to the close of business on the last working day of each week, and prepare in the form set out in the Manual a weekly financial statement and shall submit the same to the Franchisor on or before each Payment Date;
11.2   Furnish to the Franchisor all such other accounting and management information as may be set out in the Manual from time to time and any other information which the Franchisor may from time to time reasonably require;
11.3   At the Franchisees expense in each accounting year have prepared audited accounts by a Chartered Accountant and provide a copy of the same to the Franchisor within three Months after each accounting reference date;
11.4   Maintain at the Premises in a form set out in the Manual accurate books of account and supporting accounting records including all invoices, credit notes, statements and delivery notes and shall permit the Franchisor or its duly authorised agents during business hours to inspect any such accounts and records and take copies at the expense of the Franchisor;
11.5   Procure that the accounting reference date of the Franchisee shall be such date as is specified by the Franchisor;
11.6   Preserve all such accounts and records for not less than six years notwithstanding the expiry or termination of this agreement;
11.7   Permit accountants nominated by the Franchisor at the expense of the Franchisor to undertake such audits and checks as the Franchisor may consider appropriate on reasonable notice during normal business hours and if such audits or checks reveal a discrepancy of more than [________] per cent in the financial information supplied to the Franchisor in respect of which the Service Fee is calculated, to reimburse the Franchisors costs in relation to such audits and checks as well as immediately making good, with interest, any shortfall;
11.8   Submit to the Franchisor copies of all VAT returns as and when they are due to H.M. Customs and Excise.
12.   Insurance
12.1   The Franchisee shall take out and maintain such standard insurance as the Franchisor shall have arranged for its franchisees as the same is specified in the Manual.
12.2   The Franchisee shall promptly pay all premiums required to be paid by the Franchisor.
13.   Premises
13.1   The Franchisee shall ensure that:
13.1.1   the Premises shall be kept clean and all fixtures and fittings thereon shall be kept in full working order;
13.1.2   only those insignia, symbols, brand names, trade names or trade marks as are approved by the Franchisor shall be displayed at the Premises;
13.1.3   the Premises are maintained to the standard of hygiene and cleanliness set by the Franchisor;
13.1.4   the Premises are open to the public for the purpose of the Franchisees Business between such hours as the Franchisor shall reasonably require.
13.2   The Franchisee shall display such notices, subject to any necessary planning or byelaw consents, in such manner and upon such part or parts of the Premises as the Franchisor may direct including a sign or signs bearing the following words (or such other similar words as may from time to time be specified by the Franchisor) “a [________] franchise owned and operated under licence by” followed by the name of the Franchisee;
13.3   The Franchisee shall not alter or convert the Premises or its internal layout or the fixtures and fittings thereon nor install nor alter any fixtures and fittings, erect or display any sign or other medium of advertisement whether inside or outside the Premises without in every case seeking and obtaining the prior consent in writing of the Franchisor, and each such alteration, conversion, erection or installation shall be carried out only in accordance with plans and specifications previously submitted to and approved by the Franchisor.
14.   Staffing
The Franchisee shall:
14.1   Be responsible for ensuring that adequate staff levels are maintained at all times and in particular not less than one suitably qualified person is available at the Premises during Opening Hours;
14.2   Ensure that all employees and self employed persons wear such uniforms as the Franchisor shall reasonably require and that they are maintained, repaired and cleaned regularly;
14.3   Obtain a signed contract of service from all persons employed by or who provide services to the Franchisee in such form as is approved by the Franchisor prior to their employment or their engagement and shall disclose confidential information only to such persons who have previously signed such a contract;
14.4   Ensure that all personnel employed in or who provide services on behalf of the Franchisees Business shall at all times have a neat and clean appearance, render competent, sober and courteous service to customers and comply with any and all directions of the Franchisor relating to dress, appearance and demeanour;
14.5   Procure that the persons responsible for managing the Franchisees Business and all senior employees and self employed persons nominated by the Franchisor shall attend such further periods of training as may from time to time be required by the Franchisor and bear any travel and subsistence expenses and the salaries of such persons;
14.6   Not take on any persons who are self employed to assist in the Franchisees Business unless the Franchisors prior written consent has been obtained.
15.   Advertising/promotions
15.1   The Franchisor shall pay such amounts of Advertising Levy as it shall receive from the Franchisee and its other franchisees into a separate account and shall expend such sums in undertaking such advertising and promotional activities as it shall in its absolute discretion consider to be appropriate. If at any time the Franchisor expends monies in excess of those standing to the credit of the account such excess expenditure may be set off against subsequent monies received in the account and any underpaid may be carried forward.
15.2   The advertising account referred to in subclause [14.1] above shall at the expense of the sums standing in the account be certified annually by the Franchisors auditors or such independent accountants as the Franchisor shall nominate and the Franchisor shall if so required by the Franchisee provide to the Franchisee a copy of the accountants certificate within three Months of the date to which it is prepared.
15.3   The Franchisee will also expend in every year not less than [________] per cent of its Gross [Weekly] Sales in such year on local advertising.
15.4   The Franchisee will not publish or distribute any advertising or promotional material unless it has been approved in writing by the Franchisor. The Franchisee will immediately cease the use of any advertising or promotional material upon receipt of a request from the Franchisor so to do.
15.5   The Franchisee shall prominently display, and distribute point of sale marketing material supplied by the Franchisor.
15.6   The Franchisee will participate in and comply with the terms of any special advertising, promotion or other activity as the Franchisor may reasonably direct.
16.   Trade Marks
16.1   The Franchisor warrants that it is entitled to license the Trade Marks and that the use of the Trade Marks by the Franchisee in accordance with the terms of this agreement will not constitute an infringement of the rights of any third party.
16.2   The Franchisee shall render to the Franchisor all reasonable assistance at the Franchisors expense to enable the Franchisor to obtain registration of the Trade Marks. In no circumstance will the Franchisee apply for registration as a proprietor of any of the Trade Marks unless so requested by the Franchisor.
16.3   The Franchisee acknowledges that the goodwill and all other rights in and associated with the Trade Marks vest absolutely in the Franchisor and that all such rights will at all times hereafter and for all purposes remain vested in the Franchisor and in the event that any such rights at any time accrue to the Franchisee the Franchisee will at its own expense forthwith on demand do all such acts and things and execute all such documents as the Franchisor shall deem necessary to vest such rights absolutely in the Franchisor.
16.4   If the Franchisor obtains registration of any trade mark for use in the Business after the date of this agreement the Franchisee shall have such rights to such trade marks as if they had been included in the Schedule to this agreement at the date hereof and where the context so allows all references in this agreement to the Trade Marks shall be deemed to include a reference to such further marks.
16.5   The Franchisee will immediately notify the Franchisor of all circumstances coming to the attention of the Franchisee which may constitute an infringement of any of the Trade Marks or may constitute passing off in respect of the Trade Name and any unregistered trade mark used in the Business and shall take such reasonable action as the Franchisor may direct at the expense of the Franchisor to assist the Franchisor in the protection of the Trade Marks and the Trade Name.
16.6   If required by the Franchisor the Franchisee shall forthwith enter into the Franchisors then standard registered licence agreement in respect of the Trade Marks.
16.7   The Franchisee shall in all representations of the Trade Marks append in a manner approved by the Franchisor such inscription as the Franchisor shall require to indicate that such Trade Marks are registered.
16.8   Any rights which the Franchisee may have under sections 30 and 31 of the Trade Marks Act 1994 are excluded.
17.   Improvements
17.1   The Franchisee shall without delay introduce any improvement or modification to the Franchisees Business at the time and in the manner specified by the Franchisor in writing.
17.2   The Franchisee shall notify the Franchisor of any improvement or modification which may be beneficial to the operation of the Business and the Franchisor may introduce such improvement or modification without any obligation to make any payment to the Franchisee.
17.3   The Franchisee shall not introduce any improvement or modification to the Franchisees Business without the prior written consent of the Franchisor.
18.   Manual
18.1   The Franchisor will notify the Franchisee of any alterations to the Manual to enable the Franchisee to view the alterations at such place the Franchisor directs.
18.2   The Franchisor shall keep at its registered office an up to date copy of the Manual as revised from time to time which shall be the authentic text of the Manual.
18.3   The Franchisee shall conduct the Franchisees Business strictly in accordance with the Manual, the terms of which shall be deemed incorporated into and shall form part of this agreement. In the event of any conflict between the terms of this agreement and the terms of the Manual the terms of the agreement shall prevail.
18.4   The Manual shall at all times remain the sole and exclusive property of the Franchisor and the Franchisee hereby acknowledges that the copyright in the Manual vests in the Franchisor and that it will not take and will procure that no other person will take any copies of the Manual without the prior written consent of the Franchisor and that it will not use the Manual other than in accordance with this Agreement.
19.   Franchisors right to communicate with customers
19.1   In order to protect the reputation of the Franchisor and its franchisees and to maintain satisfactory public relations the Franchisor reserves the right to communicate with any of the Franchisees customers at any time during the term of this agreement to ascertain the quality of the services provided by or on behalf of the Franchisee and the Franchisee shall upon request furnish the Franchisor with such particulars of its customers as the Franchisor shall reasonably require and provide such reasonable assistance as may be necessary for this purpose.
20.   Right to sell
20.1   The Franchisee shall not whether before or after termination assign this agreement or any rights under it nor grant any sublicence of its rights or obligations under this agreement or subcontract any of its obligations but may with the prior written consent of the Franchisor sell the Franchisees Business. Such consent shall not be unreasonably withheld or delayed upon the Franchisee fully complying with the following terms and conditions:
20.1.1   the Franchisee and the Individual must at the time the Franchisee seeks consent from the Franchisor to the sale of the Franchisees Business be in full compliance with all material terms and conditions on their part to be performed under this agreement;
20.1.2   any proposed buyer or in the case of a limited liability company its shareholders and directors shall meet the Franchisors standards with respect to prior related business experience, financial standing and satisfy the Franchisors current recruitment criteria;
20.1.3   the Franchisee shall procure that the proposed buyer and if the proposed buyer is a limited liability company such of the shareholders and directors of the proposed buyer as the Franchisor shall reasonably require, shall if required by the Franchisor enter into a new agreement in such form as is currently offered by the Franchisor to new franchisees save that no Initial Fee shall be payable and the Franchisor shall not be required to perform any obligations (except for those relating to training) currently contained in clauses [5 and 6];
20.1.4   the proposed buyer shall be registered for VAT;
20.1.5   any offer by the proposed buyer shall be made in good faith;
20.1.6   the Franchisee shall with every application for consent pay the Franchisors then current expenses not to exceed £1,000 of investigating such application whether or not the Franchisees Business is eventually sold;
20.1.7   the Franchisee shall pay all monies due to the Franchisor;
20.1.8   the proposed buyer (or in the case of a limited liability company such of its shareholders and directors as the Franchisor shall reasonably require) shall undertake such initial training as is required to be undertaken by new franchisees and shall meet the Franchisors then minimum standards during such training;
20.1.9   prior to the sale of the Franchisees Business the Franchisee shall pay or procure the payment to the Franchisor of such sum as represents [60%] of the Franchisors then standard Initial Fee to reimburse the cost of training and other services provided to the proposed buyer;
20.1.10   all the Franchisees available information about employees is provided to the Franchisor and the proposed buyer and the Franchisee complies with the Franchisors reasonable requests for cooperation in relation to the transfer of such employees.
20.2   The Franchisee shall submit to the Franchisor a copy of the proposed buyers written offer to purchase the Franchisees Business together with a detailed financial statement of affairs and business history of the proposed buyer, full written details of any other terms agreed between the Franchisee and the proposed buyer all other relevant information and a warranty (as at the date it is given and as at the date of sale) that the Franchisor has been provided with all information required to be provided by this clause. Upon receipt of such information the Franchisor shall have in addition to its other rights hereunder an option to purchase or nominate a third party to purchase the Franchisees Business for the same amount and upon the same terms as the proposed buyer has offered. The Franchisor shall have a period of 40 days after the receipt of such information in which to exercise its option to purchase. If the Franchisor does not exercise such option and consents to the proposed sale the proposed buyer shall deposit the full purchase price with the Franchisor as agent for the Franchisee and the Franchisor shall deduct from the said purchase price any sums which are payable or will become payable by the Franchisee or the proposed buyer to the Franchisor (as certified by the Franchisors accountants). The outstanding balance of the purchase price shall then be remitted to the Franchisee.
20.3   The Franchisee shall pay to the Franchisor a commission of [________] per cent of the purchase price of the Franchisees Business if the Franchisor shall have introduced the proposed buyer to the Franchisee.
20.4   The above provisions shall apply if the Individual and all other shareholders in the Franchisee wish to transfer either all or a majority of the then current issued voting share capital of the Franchisee and references in this clause to the sale or transfer of the Franchisees Business shall be construed accordingly but, in the case of a transfer of the then current issued share capital the proposed buyer will not be permitted to be a body corporate, save as expressly provided in this agreement transfers of some but not all, of the then current issued share capital of the Franchisee are not permitted.
21.   Death or incapacity of the individual
21.1   The Individual shall take all steps which the Franchisor shall require to ensure that if the Individual shall die during the currency of this agreement, relatives of or the personal representatives of the Individual shall within 24 hours inform the Franchisor of the Individuals death.
21.2   On the death of the Individual the Franchisor shall forthwith terminate this agreement and repay to the Individuals personal representatives the Initial Fee.
21.3   The Individual shall take all steps to ensure that the Individuals relatives or personal representatives do all such things which the Franchisor may require to enable the Franchisor to operate the Franchisees Business within the Territory following the death of the Individual.
21.4   The Franchisor will use its reasonable commercial endeavours to find a buyer of the assets of the Franchisees Business following the death of the Individual but if no such buyer has been found within six Months of the death of the Individual the Franchisor may (but shall be under no obligation so to do) purchase the said assets at their market value less 20 per cent and less the amount of the Initial Fee repaid under subclause [20.2] by notice in writing given to the Individuals personal representatives but the Franchisor shall not be obliged to purchase or take an assignment of a lease or freehold of any premises. If the parties are unable to agree upon the market value of the said assets within ten days after the service of the said written notice the market value of the said assets shall be ascertained at the request of either party by a Chartered Accountant acceptable to both parties or failing agreement by a Chartered Accountant nominated by the President of the Institute of Chartered Accountants of England and Wales who shall act as an expert and whose decision shall be binding on both parties. The Franchisor may take over the assets at any time after the date it serves notice under this subclause and the price to be paid for the assets shall be calculated as at the date the Franchisor takes over the Franchisees Business. If the Franchisor finds a buyer for the assets of the Franchisees Business who would make a suitable franchisee the provisions of clause [19] will apply save that in addition to the payments to be made by the Franchisee thereunder the Franchisor shall be reimbursed the amount of the Initial Fee repaid in accordance with subclause [20.2].
21.5   If the individual is at any time incapacitated or in the reasonable opinion of the Franchisor is unable to a material degree to operate the Franchisees Business for a continuous period of two Months or a total period of 80 working days in any period of 12 Months, the Franchisor may by notice to that effect terminate the agreement whereupon the provisions set out above shall apply as if the references to the Individuals death shall be to receipt of the said notice and the references to the Individuals personal representatives shall be to the Franchisee.
21.6   References in this clause to the assets of the Franchisees Business shall be deemed to include in the alternative the entire issued share capital of the Franchisee with the intent that the Franchisor or a third party may at their option acquire the said shares instead of the assets of the Franchisees Business.
21.7   Any action taken by the Franchisor under the above provisions of this clause on the instructions of, or with the approval of, any person or persons claiming to be the executor or personal representative of a deceased Individual shall be binding on and not under any circumstances open to challenge by the executors or personal representatives of such deceased Individual even if they were not a party thereto and the Individual signing this agreement expressly binds his executors and personal representatives in respect of, and to ratify and confirm, all actions by any person or persons so acting under this agreement and to indemnify and so free and relieve the Franchisor of and from all liabilities or responsibilities whatever in respect of such action.
22.   Termination
22.1   The Franchisor may terminate this agreement immediately by giving notice in writing to the Franchisee in any of the following events which because of the special nature of the Franchise relationship shall constitute repudiatory breaches of contract or in the case of subclauses [21.1.10, 21.1.11 and 21.1.12] will in the Franchisors opinion inevitably lead to such a repudiatory breach:
22.1.1   if the Franchisee fails to commence the Franchisees Business within a period of [________] Months from the date of this agreement;
22.1.2   if the Franchisee shall at any time fail to pay any amounts due to the Franchisor unless such failure arises for reasons outside the Franchisees control or occurs only once in any 12 month period and is immediately corrected on receiving notification from the Franchisor of such nonpayment;
22.1.3   if the Franchisee shall, in the reasonable opinion of the Franchisor, have a detrimental effect on the goodwill of the Business or the Franchisees Business;
22.1.4   if the Franchisee shall transfer any of the rights, licences or obligations contained in this agreement other than in accordance with the terms of this agreement;
22.1.5   if the Franchisee fails for more than 10 days to submit to the Franchisor any of the accounting or management information required to be submitted;
22.1.6   if the Franchisee discloses or allows the disclosure of any part of the Manual or other confidential information relating to the Business or the Franchisees Business otherwise than in accordance with the terms of this agreement;
22.1.7   if the Franchisee fails to obtain any prior written approval or consent of the Franchisor expressly required by this agreement;
22.1.8   if the Franchisee, the Individual or any officer, director or employee of the Franchisee gives to the Franchisor any false or misleading information or makes any misrepresentation in connection with obtaining this agreement or at any time during the continuance of this agreement in connection with the Franchisees Business;
22.1.9   in the event of the Franchisee ceasing to carry on the Franchisees Business or failing to confirm its intention to continue to carry on the Franchisees Business within 21 days of receiving a formal request from the Franchisor to provide such confirmation;
22.1.10   in the event that any of the Individuals shall have a bankruptcy order made against him (provided that such individuals bankruptcy is in the Franchisors reasonable opinion likely to have a material detrimental effect on the Franchisees Business) or if a person who is qualified to act as an insolvency practitioner shall be appointed in relation to him under section 273 of the Insolvency Act 1986 or if a receiver or manager (including for the avoidance of doubt an interim receiver within the meaning of Part IX of the Insolvency Act 1986) shall be appointed in respect of him or the whole or any part of his property or estate or if an interim order shall be made in relation to him under section 252 of the Insolvency Act 1986 or if he shall enter into any arrangement or composition with his creditors (including for the avoidance of doubt any voluntary arrangement within the meaning of Part VIII of the Insolvency Act 1986);
22.1.11   in the event that any of the Individuals becomes a patient as defined by the Mental Health Act 1983 or commits any criminal offence (other than a road traffic offence not involving a custodial sentence) provided that such Individuals illness or criminal offence is in the Franchisors reasonable opinion likely to have a material detrimental effect on the Franchisees Business;
22.1.12   in the event of the Franchisee going into liquidation (other than voluntarily for the purpose of amalgamation or reconstruction) or being unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 (or any statutory modification or reenactment thereof) or suffering a distress or execution to be levied on or a receiver appointed over any property used in connection with the Franchisees Business or if the Franchisee makes any arrangements with its creditors or if an administrator is appointed under the Insolvency Act 1986;
22.1.13   in the event of persistent valid complaints to the Franchisor as to the quality of the service given by the Franchisee the Franchisee having been given timely notice of such complaints and having been given the opportunity to address the issues which are the subject of such complaints;
22.1.14   in the event of a change in the shareholdings in the Franchisee company as set out in the Schedule unless the Franchisors previous written consent has been obtained;
22.1.15   if the Franchisee or any of the Individuals shall be in breach of any of the terms of this agreement (except those set out above) the Manual, or the Franchisors reasonable instructions and the Franchisor shall have notified the Franchisee or any of the Individuals (as the case may be) in writing of any such breach and the Franchisee or the Individual as the case may be shall not have rectified such breach immediately or if immediate rectification is not possible, within such period, not exceeding 28 days as the Franchisor shall reasonably require;
22.1.16   in the event of any repeated breach of any of the Franchisees or the Individuals obligations under this agreement or the Manual. For the purpose of this subclause a repeated breach shall be interpreted as two or more breaches of the same provision of this agreement by the Franchisee or the Individual during any calendar year;
22.1.17   if the Franchisee loses its right to possession of the Premises.
22.2   Any termination under this clause shall be without prejudice to the rights of either party against the other in respect of any antecedent breach of any of the terms and conditions of this agreement.
22.3   In the event of any termination by the Franchisor the Franchisee shall not be entitled to recover any part of the Initial Fee.
22.4   If the Franchisor has reasonable grounds for believing that the Franchisee has ceased to operate the Franchisees Business without the Franchisors consent the Franchisor may operate the Franchisees Business as the Franchisees agent with full powers to bind the Franchisee and the Franchisee shall be responsible for the Franchisors costs until the date of termination which shall not be more than one Month after the Franchisor starts to operate the Franchisees Business under this subclause.
22.5   This agreement shall (unless the Franchisor has indicated otherwise prior to the effective date of termination) automatically terminate if the Franchisee takes any steps to cease to be registered for VAT or fails to take any steps to prevent such event occurring or breaches subclause [14.6], termination being effective immediately before the said registration ceases to be in effect or immediately before the breach of clause [14.6] occurs, as the case may be. In the event of the termination of this agreement under this subclause, the Franchisor shall be entitled to claim damages as if termination has occurred by virtue of the Franchisees repudiatory breach of this agreement.
22.6   If this agreement is terminated under this clause, the Franchisee shall, by way of liquidated damages, pay to the Franchisor, within five days of being notified in writing of the amount so payable, such sum as is calculated as follows:
E = A × (the higher of B or C) × D
A =    the number of Months between the effective date of termination and the date this agreement would have terminated by effluxion of time;
B =    the average Service Fees receivable from the Franchisors franchisees in the three Month period prior to termination of this agreement;
C =    the average Service Fees receivable from the Franchisee during the same period as is referred to in B;
D =    [________]% representing a [________]% discount by virtue of accelerated payment, the Franchisors duty to mitigate its loss and the Franchisor not being required to perform its obligations hereunder;
E =    Payment due from the Franchisee.
23.   Conditions following termination
23.1   Immediately upon termination of this agreement for any reason the Franchisee and the Individual shall:
23.1.1   cease forthwith to trade under the Trade Name;
23.1.2   not hold themselves out as operators of the Franchisees Business or as having any connection with the Business;
23.1.3   not make or receive telephone calls or emails in connection with the Franchisees Business;
23.1.4   cease to use by advertising on the [Vehicle,] Stationery, sign, uniform or otherwise the Trade Name or the Trade Marks or any imitation or approximation thereof;
23.1.5   pass to the Franchisor the names of all persons enquiring about and/or requesting the services of the Business;
23.1.6   not divulge or use any confidential information relating to the Business the Franchisees Business or the Franchisor unless it has entered the public domain otherwise than by virtue of this agreement;
23.1.7   deliver up to the Franchisor all customer lists and names and addresses and full details of contracts with customers and details of all persons who have become or who have enquired about becoming customers of the Franchisee during the term hereof;
23.1.8   if demanded in writing by the Franchisor return all the Equipment in good repair and condition to the Franchisor subject to the reimbursement (after deducting sums payable to the Franchisor) of such sum as in the Franchisors reasonable opinion represents their secondhand value;
23.1.9   pay to the Franchisor all money owing;
23.1.10   return to the Franchisor in good condition the Manual and any copies and shall not copy the Manual or any part of the Manual before returning the same to the Franchisor;
23.1.11   pay all debts owing to the creditors of the Franchisees Business and permit the Franchisor to make such payments on behalf of the Franchisee;
23.1.12   return to the Franchisor all Stationery;
23.1.13   join with the Franchisor in cancelling any registered licence of the Trade Marks. If the Franchisee shall fail so to do the Franchisor is hereby irrevocably appointed the agent of the Franchisee with full authority to give such notice to the Registrar of Trade Marks on behalf of the Franchisee;
23.1.14   irrevocably permit the Franchisor to deduct from all sums payable by the Franchisor to the Franchisee all sums which the Franchisor pays (whether legally obliged to or not) under subclause [22.1.11];
23.1.15   execute and deliver to the Franchisor any and all documents necessary to complete the termination or would facilitate the termination of this agreement.
23.2   On termination of this agreement otherwise than by virtue of the Franchisors default the Franchisee and the Individual shall not, save as the holders of not more than 5 per cent of the issued share capital of a company whose shares are publicly quoted on a recognised stock exchange:
23.2.1   for a period of [six] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business or the business of the Franchisors other Franchisees or the Franchisees Business or in any business similar to the Business, save as the holders of not more than 5 per cent of the issued share capital of a company whose shares are publicly quoted on a recognised stock exchange or the Franchisees Business or the business of the Franchisors other franchisees, within the United Kingdom;
23.2.2   for a period of [twelve] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business, or the Franchisees Business or in any business similar to the Business or the Franchisees Business within the Territory;
23.2.3   for a period of [nine] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business or the business operated by a franchisee of the Franchisor, or in any business similar to the Business or the Business operated by a franchisee of the Franchisor within the territory of another franchisee;
23.2.4   for a period of [twelve] Months thereafter solicit for the purposes of a competing business to the Business or the Franchisees Business the custom of any person, firm or company that has been a customer of the Franchisee at any time in the twelvemonth period prior to termination;
23.2.5   for a period of twelve Months thereafter solicit, interfere with or endeavour to entice away or employ an employee of the Franchisor or any of the Franchisors franchisees or any employee who in the period of six Months before the said termination was an employee of the Franchisees Business.
23.3   The Franchisee and the Individual agree that each of the restrictions contained in clauses [22.2.1 to 22.2.5] is reasonable.
23.4   Notwithstanding the extent of the temporal and geographical restrictions contained in clauses [22.2.1 to 22.2.5] the Franchisor may at any time whether during or after the term of this agreement by written notice to the Franchisee and/or Individual as the case may be reduce the temporal or geographical extent of all or any such restriction.
23.5   Each undertaking contained in clauses [22.2.1 to 22.2.5] shall be construed as a separate undertaking and if any one or more of such undertakings is held to be against the public interest or in any way an unreasonable restraint of trade, the remaining undertakings shall continue in full force and effect and shall bind the Franchisee and the Individual.
23.6   The Individual undertakes that he will procure that all directors and shareholders of the Franchisee shall enter into valid and legally enforceable undertakings with the Franchisor to accept the obligations imposed by this clause and shall submit the same to the Franchisor within seven days of this agreement or in the case of any person becoming a shareholder or director during the term of this agreement within seven days of such occurrence.
23.7   Immediately upon termination of this agreement, otherwise than by virtue of a breach by the Franchisor of the terms of this agreement, the Franchisor and/or its nominee shall have the right to enter upon the Premises with such other personnel as it deems reasonably necessary and operate the Franchisees Business in place of the Franchisee and the Individual, provided that written notice of its intent to do so shall be given to the Franchisee within 14 days following the date of termination and the Premises are not residential premises.
23.8   If the Premises are leasehold business premises the parties shall use their best endeavours to enable the Franchisor to enter upon the Premises as set out above but save as aforesaid the Franchisee shall not be required to allow the Franchisor or its nominee to occupy the Premises if to do so would amount to a breach of the Franchisees lease.
23.9   The benefit of the Franchisees Business shall vest in the Franchisor or its nominees absolutely from the date on which the Franchisees Business is operated by or on behalf of the Franchisor provided that the Franchisee shall be indemnified against liability for any expense of the Franchisees Business from such date excepting any expense or liability referred to in subclause [22.11] below.
23.10   Upon receipt of written notice from the Franchisor in accordance with subclause [22.7] above the Franchisee shall take such steps as are necessary to give up possession of and/or transfer to the Franchisor or its nominee the ownership of the Premises and the assets of the Franchisees Business or, if so required by the Franchisor, the obligations to pay for any lease, hire purchase, rent or other charges in relation to the Franchisees Business. The following items shall be excluded from such transfer unless otherwise required by the Franchisor:
23.10.1   the bank accounts of the Franchisee and all monies belonging to the Franchisee;
23.10.2   the right to receive the debts of the Franchisee;
23.10.3   all liabilities of the Franchisee except as otherwise agreed.
23.11   The consideration payable to the Franchisee under any written notice under subclause [22.7] shall be:
“A + B - C
Where:
A =    for all physical assets used in the Franchisees Business, not itemised in the latest audited accounts of the Franchisees Business and which are to be transferred to the Franchisor, the current cost price to the Franchisee, or the price which was payable by the Franchisee at the date of delivery of the said items, or the market value as at the date of termination, whichever shall be the lower;
B =    for all other physical assets used in the Franchisees Business which are to be transferred to the Franchisor the net written down value in the latest audited accounts of the Franchisee, or the market value as at the date of termination, whichever shall be the lower, provided that such items are wholly owned by the Franchisee. If not wholly owned but subject to a lease, hire, hirepurchase, or other form of rental or credit agreement, the Franchisor or its nominee at no cost to the Franchisor may but shall not be obliged to take over the obligations and benefits under any such agreement as from the date of termination of this agreement (excepting any liability, financial or otherwise, arising from the default of the Franchisee under such agreement prior to the date of termination or expiry of this agreement), and the Franchisee shall take such steps and execute such documents as are required to complete an assignment or novation as required by the Franchisor;
C =    the amount of all sums owing to the Franchisor by the Franchisee.
23.12   All assets other than leased assets shall be transferred by the Franchisee with full title guarantee free of all encumbrances. Freehold or leasehold premises shall be transferred in accordance with the National Conditions of Sale current at the date of service of the notice under clause [22.7.1] except insofar as the said National Conditions are inconsistent with the terms of this agreement and save that:
23.12.1   no deposit will be payable;
23.12.2   completion shall be set for 28 days from the date of the notice referred to in clause [22.7.1] or in the case of the purchase of a leasehold interest seven days from the date upon which the landlords licence to assign has been obtained;
23.12.3   title shall be deduced in accordance with section 110 of the Land Registration Act 1925 and in the case of an unregistered freehold property with a conveyance at least 15 years before the date of the notice referred to in clause [22.7.1].
23.13   If the exercise of the option in clause [22.7] is a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 or any amendment thereof apply the Franchisee hereby irrevocably agrees to indemnify the Franchisor and/or its nominee against any claims for wrongful and/or unfair dismissal and/or redundancy payments or any other claim by any person employed by the Franchisee immediately prior to the exercise of the rights set out in subclause [22.7] in relation to the transfer of assets. Such indemnity shall include legal costs and disbursements incurred by the Franchisor and/or its nominee on a full indemnity basis.
24.   Indemnity
24.1   The Franchisee shall indemnify and keep indemnified the Franchisor from and against any and all loss, damage, liability and legal fees and costs incurred by the Franchisor arising from any breach of contract or negligence of the Franchisee, its agents, employees or licensees unless such act or default is required by the terms of this agreement, the Manual or the Franchisor.
25.   Individuals obligations
25.1   In consideration of the Franchisor entering into this agreement with the Franchisee at the request of the Individual, the Individual hereby irrevocably guarantees the performance of all the obligations of the Franchisee under this agreement [and all other agreements entered into under the Franchisees Business,] and the Individual agrees that his obligations under this clause shall be unconditional and that the Individual shall be fully liable whether or not any action has been taken to enforce the obligations of the Franchisee, or any judgment has been obtained against the Franchisee or there have been any dealings or transactions between the Franchisee and the Franchisor, and whether or not the Franchisee has been dissolved or liquidated or there has been a change in the control or ownership of the Franchisee, or any other circumstances have occurred which might otherwise constitute a legal or equitable discharge of a guarantor.
25.2   During the currency of this agreement the Individual shall:
25.2.1   hold in his own name not less than [________] per cent of the issued voting capital of the Franchisee;
25.2.2   be a director of the Franchisee;
25.2.3   devote his full time and attention to the Franchisees Business.
25.3   References in this agreement to the Individual shall unless the context otherwise requires be to each (if there are more than one) of the Individuals.
25.4   The Individual acknowledges that he has entered into this agreement only for the purposes of accepting the obligations in this agreement which are expressed to apply to the Individual and the Individual confirms that he has no rights against the Franchisor in contract or tort arising from this agreement, the Franchisees Business or the Franchisors representations, all such rights being vested in the Franchisee.
25.5   If the Individual shall consist of more than one person the liability of such persons shall be joint and several.
26.   Acknowledgements
26.1   The Franchisee and the Individual hereby acknowledge that they have no rights in the System save for those rights granted under this agreement.
26.2   The Franchisee and the Individual hereby acknowledge that in giving advice to the Franchisee, assisting the Franchisee to establish the Franchisees Business, recommending equipment and materials and assessing the suitability of the Franchisee and the Premises, the Franchisor has based its recommendations on experience actually obtained in practice but that the Franchisor does not give any guarantee or warranty with regard to such matters or generally in connection with the sales volume, profitability or any other aspect of the Franchisees Business. The Franchisee and the Individual acknowledge that they have been advised by the Franchisor to discuss their intention to enter into this agreement with other franchisees of the Franchisor and to seek other appropriate independent advice, and that the decision to enter into this agreement has been taken solely on the basis of the personal judgement and experience of the Franchisee and the Individual having taken such independent advice. Accordingly, no representation, warranty, inducement or promise express or implied has been made by the Franchisor or relied upon by the Franchisee or the Individual in entering into this agreement save such as may have been notified by the Franchisee or the Individual to the Franchisor in writing and are annexed to this agreement and signed by the parties to this agreement.
26.3   It is hereby expressly agreed between the parties that each of the restrictions contained in this agreement is reasonably necessary for the protection of the Franchisor and its other franchisees, the System, the Trade Name and the Trade Marks and does not unreasonably interfere with the freedom of action of the Franchisee or the Individual who enter into this agreement with the benefit of legal advice in full knowledge of all the provisions hereof and the Franchisee and the Individual acknowledge that all such provisions are fair and reasonable.
26.4   The Franchisee and the Individual hereby warrant that prior to the execution of this agreement or any similar agreement with the Franchisor they had no knowledge of the System, methods, trade secrets and confidential information or know how relating to the operation of a business similar to the Business or on how to conduct the Business.
27.   No warranties without authority
27.1   The Franchisee shall make no representation or claim and shall give no warranty to any person in respect of the Franchisees Business, the Business, the Products, the Services or the System save such as are specifically authorised in the Manual in its then current form at the time of the making by the Franchisee of any such representation, claim or warranty.
28.   Transfer by franchisor
28.1   This agreement and all the rights of the Franchisor hereunder may be assigned, transferred or otherwise dealt with by the Franchisor and shall inure to the benefit of the successors and assigns of the Franchisor. If required by the Franchisor the Franchisee and the Individual shall do all such things as the Franchisor shall reasonably require to facilitate such a transfer.
29.   Reservation of rights
29.1   All rights and licences not specifically or expressly granted to and conferred upon the Franchisee by this agreement are for all purposes reserved to the Franchisor.
30.   Agency
30.1   Nothing in this agreement shall be construed as making the parties hereto partners or joint venturers or render either party hereto liable for any of the debts or obligations of the other party and the Franchisee shall in no way be considered as being an agent or representative of the Franchisor in any dealings which the Franchisee may have with any third party and the Franchisee shall not act for or make any representation on behalf of the Franchisor in any such dealings and shall have no power to contract on behalf of the Franchisor.
31.   Business Names
31.1   The Franchisee shall place upon all letter headings, bills, invoices and all other documents and literature used in connection with the Franchisees Business in such manner and place as the Franchisor may direct the following words (or such other words to similar effect as may from time to time be specified by the Franchisor): “a Franchise owned and operated under Licence by” followed by the name of the Franchisee.
32.   Force majeure
32.1   None of the parties to this agreement shall be responsible to any other party for any delay in performance or nonperformance due to any causes beyond the reasonable control of the parties hereto, but the affected party shall promptly upon the occurrence of such cause so inform the other parties in writing, stating that such cause has delayed or prevented its performance hereunder and thereafter such party shall take all action within its power to comply with the terms of this agreement as fully and promptly as possible.
33.   Waiver
33.1   The failure of any party at any time to enforce any of the terms provisions or conditions of this agreement or to exercise any right hereunder shall not constitute a waiver of the same or affect that partys rights thereafter.
34.   Continuing provisions
34.1   The termination of this agreement (for whatever reason) shall not terminate any provision which is expressly or by implication provided to come into or continue in force after such termination and shall be without prejudice to the accrued rights and liabilities and other remedies of the parties hereto.
35.   Data protection
35.1   The Franchisee agrees that it will in relation to the personal data processed in connection with this agreement (“Franchise Data”):
35.1.1   process the Franchise Data in accordance with the Data Protection Act 1998 (“1998 Act”) and any other applicable data protection legislation;
35.1.2   process the Franchise Data only insofar as is necessary for the purpose of performing its obligations under this agreement;
35.1.3   not disclose Franchise Data to or allow access to it other than by employees and/or third parties engaged by the Franchisee to perform the obligations imposed on the Franchisee by this agreement and to ensure that such employees and/or third parties are subject to written contractual obligations concerning the Franchise Data which are no less onerous than those imposed on the Franchisee by this agreement;
35.1.4   use all reasonable efforts to assist the Franchisor to comply with such obligations as are imposed on the Franchisor by the 1998 Act. This includes the obligation to:
   provide the Franchisor with reasonable assistance in complying with any subject access request served on the Franchisor under Section 7 of the 1998 Act; and
   promptly inform the Franchisor about the receipt of any subject access request received by the Franchisee; and
   not disclose or release any Franchise Data in response to a subject access request without first consulting with and obtaining the consent of the Franchisor; and
   inform any individual whose personal data may be processed under this agreement, of such processing. For the avoidance of doubt, this includes informing such individuals that on termination of this agreement, personal data relating to them, including personal data contained in any customer list, shall be retained by or, as the case may be, transferred to the Franchisor. In addition the Franchisee shall obtain any necessary consents for such processing under the 1998 Act. To ensure that the Franchisors obligations under the 1998 Act are complied with, the Franchisee agrees to allow the Franchisor to approve and if the Franchisor deems necessary, amend, any such notice.
35.2   Process and/or processing means obtaining, recording or holding personal data or carrying out any operation or set of operations on the personal data, including:
35.2.1   organisation, adaptation or alteration;
35.2.2   retrieval, consultation or use;
35.2.3   disclosure by transmission, dissemination or otherwise making available; or
35.2.4   alignment, combination, blocking, erasure or destruction.
35.3   Insofar as the Franchisee acts as a person or organisation which processes personal data on behalf of a data controller (“Data Processor”) or on behalf of the Franchisor in relation to the Franchise Data, the Franchisee agrees to comply with the obligations placed on the Franchisor by the seventh data protection principle (“the Seventh Principle”) set out in the 1998 Act, which shall include:
35.3.1   to maintain technical and organisational security measures sufficient to comply at least with the obligations imposed on the Franchisor by the Seventh Principle;
35.3.2   only to process Franchise Data for and on behalf of the Franchisor for the purpose of performing its obligations under and in accordance with this agreement and only on written instructions from the Franchisor to ensure compliance with the 1998 Act.
35.4   The Franchisee agrees to provide the Franchisor with contact details of the Franchisee and at least one employee for the Franchisor to provide in relation to enquiries about the Franchisee and to display on the Franchisors website. The Franchisee agrees to ensure that for this purpose, any notices and/or consents required for the Franchisor to comply with the 1998 Act shall be provided to/acquired from such employee(s) by the Franchisee on behalf of the Franchisor.
35.5   The Franchisee shall indemnify the Franchisor against all claims and proceedings and all liability, loss, costs and expenses incurred in connection therewith incurred by the Franchisor as a result of any claim made or brought by any individual or other legal person in respect of any loss, damage or distress caused to that individual or other legal person as a result of the Franchisees unauthorised processing, unlawful processing, destruction of and/or damage to any Franchise Data processed by the Franchisee, its employees or agents.
35.6   In this Clause data controller and personal data shall have the same meanings as set out in the 1998 Act.
36.   Governing law
36.1   This agreement is governed in all respects in accordance with English law and shall be construed and take effect as an agreement made in England.
36.2   The Franchisee shall conduct its business in a lawful manner and it will faithfully comply with all applicable laws or regulations for the conduct of its business.
36.3   The Franchisor will before recourse to litigation attempt to settle all disputes in good faith and on an amicable basis.
36.4   The Franchisee must and the Franchisor may refer (but shall not be obliged so to do) all disputes to an arbitrator under the British Franchise Associations then current arbitration scheme.
36.5   Notwithstanding the provisions of subclauses [35.3 and 35.4] the parties shall not be prevented from resolving any dispute by litigation if the procedure envisaged by subclause [35.4] fails to resolve the dispute or if either party believes that immediate injunctive relief is required or the dispute relates to the non payment of sums due from one party to the other.
36.6   If litigation is instigated as envisaged by subclause [35.5] and the Franchisor is awarded its costs in the proceedings, the Franchisee shall make good the difference between the costs awarded to the Franchisor by the court and the actual costs (including all disbursements and court fees) incurred by the Franchisor within fourteen days of receiving a request therefore from the Franchisor.
37.   Supervening laws
37.1   The rights and obligations of the parties hereto under this agreement shall be subject to all applicable laws, orders, regulations, directions, restrictions and limitations of governments or other bodies having jurisdiction over the parties hereto.
37.2   If any such law, order, regulation, direction, restriction or limitation as aforesaid or any treaty or other international agreement or the judicial construction of any of them shall substantially alter the relationship between the parties hereto or the advantages derived from such relationship then the parties shall on request from the Franchisor enter into bona fide negotiations directed towards agreeing a modification to this agreement to restore the situation if practicable or to compensate for such alteration if not. If the parties are unable to agree on such a modification or compensation within three months after the notice of request has been received by the party not affected, then the Franchisor may terminate this agreement.
37.3   If the Franchisor shall receive advice confirmed in writing by a solicitor specialising in franchising who is a member of the British Franchise Associations legal committee (“the Expert”) that this agreement does not comply with the European Commissions block exemption for vertical restraints (“the Exemption”), that a failure to so comply could constitute a breach of Article 81 of the E.C. Treaty and that it is in the Franchisors commercial interests for the agreement to so comply, the Franchisor shall submit a revised franchise agreement in the same form as this agreement but incorporating those amendments (and only those amendments) which are in the Experts opinion required to enable this agreement to comply with the Exemption along with an explanatory memorandum setting out the reasons for the amendments. The Franchisee and the Individual shall execute the revised agreement within 14 days of its receipt.
38.   No set off
38.1   Neither the Franchisee nor the Individual will be entitled to withhold or reduce any payment required by the Franchisor to be made to the Franchisor for any reason whatsoever unless:
38.1.1   the Franchisor has issued a credit note or has otherwise acknowledged in writing that the Franchisee and/or the Individual have made an over payment or are otherwise entitled to withhold or reduce a payment; or
38.1.2   the proposed withholding or reduction of a payment by the Franchisee or the Individual arises directly from the Franchisors fraud or intentional breach of this agreement.
38.2   For the avoidance of doubt if the Franchisee or the Individual are required to make any payment to third parties neither the Franchisee nor the Individual will be entitled to withhold or reduce any payments required to be made to that third party on the grounds that it or he is owed monies by the Franchisor unless such third partys consent has previously been obtained in writing.
39.   Modification
39.1   No variation, modification or alteration of any of the terms of this agreement (which for such purposes shall exclude the Manual) shall be of any effect unless evidenced in writing signed by or on behalf of each of the parties hereto.
40.   Interest and VAT
40.1   Any monetary obligation not paid by the Franchisee on its due date shall bear interest at two per cent per Month from the date payment became due until payment is received in full by the Franchisor. The Franchisee shall pay all the Franchisors costs, charges and expenses directly or indirectly incurred in obtaining or otherwise enforcing payment of the same.
40.2   All sums to be paid to the Franchisor under this agreement are, unless otherwise expressly provided, VAT exclusive and accordingly VAT at the appropriate rate should be added to such payment.
41.   Entire agreement
41.1   This agreement and the Manual constitute the entire agreement between the parties and supersedes all prior agreements in connection with the subject matter of this agreement. No director, employee or agent of the Franchisor is authorised to make any representation or warranty not contained in this agreement or Manual and the Franchisee and the Individual acknowledge that they have not relied on any such oral or written representations or statements about the Business, the Franchisees Business, the prospects for the same, turnover, profitability or any other matter unless such representations or statements are annexed to this agreement and signed by the parties.
41.2   The Franchisee and the Individual having been given the opportunity to provide to the Franchisor particulars of any statements or representations which they consider have been made and which have induced either of them to enter into this agreement shall to the extent that any such statements or representations are not annexed to this agreement confirm that they have not relied on any such statement or representation.
41.3   If the exclusion of liability for negligent misrepresentation fails the test of reasonableness applicable to such an exclusion then liability for negligent misrepresentations shall not be excluded.
41.4   It is expressly provided that nothing in this agreement shall exclude any liability of the Franchisor for precontractual statements or representations made fraudulently.
42.   Notice and third party rights
42.1   Any notice, consent or the like required to be given to any party in connection with this agreement shall be in writing and shall be served personally or shall be sent by fax, email, first class post or recorded delivery to the address of such party set out in this agreement or to such changed address as shall for that purpose be notified to the other party and every such notice, consent and the like shall be deemed to have been given when served if made by personal delivery or if not made by personal delivery at the time when in the course of ordinary postage or transmission it should have been delivered at the address to which it was sent.
42.2   This agreement does not create any right enforceable by any person not a party to it except that a transferee, successor or assignee under clause [27] is deemed to be a party to this agreement.
42.3   This agreement may be rescinded or varied without the consent of or the need to give any notice to any person not a party to it.

Signed by the Franchisor    

Signed by the Franchisee   

Signed by the Individual   
SCHEDULE
The Trade Marks: [________]
The Equipment Package: [________]
Location of the Premises: [________]
Stock of the Products: [________]
The Territory: [________]


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Franchise Agreement







This Packet Includes:
1. Information;
2. Step-by-Step Instructions; and
3. Franchise Agreement





Information
Franchise Agreement




The term 'franchising' has been used to describe many different forms of business relationships, including licensing, distributor and agency arrangements. The more popular use of the term has arisen from the development of what is called 'business format franchising.'  McDonalds and Subway are both franchises.

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and to make use of an entire business package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.

Why would people want to purchase a franchise? Its simple. Any successful franchise business should be a “turn key operation”.

    You don't have to come up with a new idea - someone else has had it and tested it, too!
    Larger, well-established franchise operations will often have national advertising campaigns and a solid trading name
    Good franchisors will offer comprehensive training programmes in sales and indeed all business skills.
    Good franchisors can also help secure funding for your investment as well as e.g. discounted bulk-buy supplies for outlets when you are in operation
    If aware that you are running a franchise, customers will also understand that you will be offering the best possible value for money and service - although you run your 'own show', you are part of a much larger organisation.

1.1   Who is in Control?
Each business outlet is owned and operated by the franchisee. However, the franchisor retains control over the way in which products and services are marketed and sold, and controls the quality and standards of the business.

1.2   What are the Cost Implications?


The franchisor will receive an initial fee from the franchisee, payable at the outset, together with on-going management service fees - usually based on a percentage of annual turnover or mark-ups on supplies. In return, the franchisor has an obligation to support the franchise network, notably with training, product development, advertising, promotional activities and with a specialist range of management services.



If you own a business which you know is successful and can be replicated anywhere then it is ripe to franchise.

In order for any business to franchise its business format you must have a good franchise agreement in order to protect the business format.

Our Franchise Agreement is a comprehensive agreement drafted to protect the Franchisor and its business format. It clearly sets out each parties obligations and what is expected from them. It is unusual for the Franchisor to allow any changes requested by the Franchisee. Its usually a take it or leave it scenario.

As with all our agreements clear uncomplicated language has been used throughout and therefore the terms will be self-explanatory. Not every clause in the agreement will be appropriate for your circumstances.

You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate.



Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.


Step-by-Step Instructions
 Franchise Agreement



   

In addition to the above we would also draw your attention to the following:

   Parties   You will note there are three parties. The Franchisor, the Franchisee and the Individual. The Individual is there as a guarantor for the Franchisee. The Franchisee may be a limited company that actually has no assets. The Franchisor may want the obligations of the Franchisee guaranteed by the individual(s) who own the corporate franchisee. If so enter their names here.

   Recital A   Enter a brief description of the business format (eg Fast Food Restaurant) and the name the business trades under.

   Clause 2   This clause grants the Franchisee the right to use the business format, trade names and other stationary and products relating to the business in the Territory. The Territory will be a specific area in the UK (eg W1 or Romford). You will need to ensure you have defined Territory in the definitions section at the beginning of the agreement.

   Clause 2.3   This agreement runs for five years. Please change this if this is not what you want.

   Clause 3   The Franchisee will have the automatic right to renew the franchise after the initial term period has expired provided the Franchisee has complied with the obligations sets out in the rest of clause 3.

   Clause 4.1   To the Franchisor this is the most important clause. Its how they get paid!! A Franchisor will normally charge an Initial Fee for granting the franchise which is paid on signing (or perhaps in instalments). Enter the figure here. Also it is usual for the Franchisee to pay the Franchisees legal fees.

   Clause 4.2   After paying the initial fee the Franchisor will normally collect weekly or monthly royalties calculated as a percentage of weekly sales by the Franchisee. Make sure you insert in the Definitions section at the front of the agreement whether these weekly sales will be weekly or monthly. In this agreement we also state the Franchisees must pay a weekly advertising levy. This is to be used by the Franchisor solely for the purpose of advertising the business brand in normally national advertising campaigns.

   Clause 5   This clause sets out exactly what the Franchisor must provide to the Franchisee before the opening of the retail unit. The Manual is a very useful tool provided by the Franchisor. The Manual is basically a book that tells the Franchisee step by step how to run the business in every minute detail and thus make money.



   Clause 5.1   The Franchisor will need to look carefully through this clause to make sure he fills in the blanks properly and deletes those sub clauses which are not relevant.

   Clause 6   This clause relates to the training the Franchisor will give the Franchisee to ensure they can run the business system correctly. Again the Franchisor needs to carefully review this entire clause to make sure he is happy with its content.

   Clause 14   This agreement provides that the Franchisor collects from the franchisees an advertising levy which is spent on advertising campaigns in accordance with this clause 14. Read it carefully and make sure you complete the advertising levy definition at the beginning of the agreement.

   Clause 19   Although the business format and the trademarks belong to the Franchisor the actual business which operates from the premises where the franchisee is based belongs to the Franchisee and can therefore be sold by the Franchisee to another third party provided the Franchisor consents (which he must do unless he can show a very good reason not to) and the Franchisee has complied with the other conditions set out in this clause.

   Clause 20   If you have an Individual guaranteeing the Franchisees obligations then you will need this clause as it deals with what happens if the Individual dies or is incapacitated.

   Clause [21]   This clause sets under what circumstances this agreement can be terminated especially by the Franchisor. Read it carefully.

   Clause [25]   If you have an Individual guaranteeing the Franchisees obligations then you will need this clause as this clause sets out the actual guarantee clause.

   Signature
Block    These are the signature lines the parties all sign which is right at the end of the agreement. If you are not going to have an Individual then obviously you will need to delete this line.



   Schedule   In this Schedule you need to insert details of the Territory, the Trade Marks etc.




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FRANCHISING AGREEMENT

DATE:         
Parties:
(1)   [                              ] LIMITED (Company No:[          ])whose registered office is at [                                                            ] (“the Franchisor”) and
(2)   [________] whose registered office is at [________] (“the Franchisee”) and
(3)   [________] of [________] (“the Individual”)
Recitals:
(A)   The Franchisor as a result of extensive research and practical business experience has developed and established a successful business of [________] which is carried on under the name [________]”;
(B)   The Franchisor has built up a substantial reputation and goodwill in the Trade Name which is associated with the highest standards of services;
(C)   The Franchisor has developed and will during the term of this agreement develop specialised products (“the Products”) and specialised services (“the Services”) to be used in the Business;
(D)   The Franchisor is the owner of confidential information on the management and operation of the Business and in methods of conducting, marketing and promoting the Business;
(E)   The Franchisor has registered the trade mark(s)/service mark(s) set out in the Schedule which is/are associated with the Products and Services;
(F)   The Franchisee wishes to acquire from the Franchisor the right and franchise to operate the Business in accordance with the terms of this agreement.
Operative provisions:
2.   Definitions
2.1   In this agreement unless the context otherwise requires:
“Advertising Levy
means [________] per cent of the Gross [Weekly] Sales;
“Business
means a [________] business;
“Equipment
means those items contained in the Equipment Package and any other similar items to be purchased or leased by the Franchisee for the Franchisees Business;
“Equipment Package
means the Equipment set out in the Schedule;
“Financial Package
means a package of accounting books ledger sheets and invoices supplied by the Franchisor and to be used by the Franchisee in the Franchisees Business
“Franchisee
means as defined above
“Franchisees Business
means that part of the Business operated by the Franchisee in accordance with the provisions of this agreement
“the Franchisor
means as defined above
“Gross [Weekly] Sales
means the gross takings of the Franchisees Business arising directly or indirectly from the conduct of the Franchisees Business during each [week] that this agreement is in force (and for any period less than a complete [week]) and gross takings shall include:
(a)   the value (less the amount already taken into account under (b) below) of all goods sold, and delivered or collected or services performed by the Franchisee during each [week] whether or not invoiced and whether or not such orders are recorded in the Franchisees books;
(b)   in respect of orders taken by the Franchisee but the goods or services which are the subject of such orders have not been supplied the value of the payment in part or in whole which has been received (whether or not invoiced and whether or not such orders are recorded in the Franchisees books) in each [week];
(c)   the assumed gross takings of the Franchisees Business in each Month calculated for the purposes of any loss of profits or business interruption insurance claim;
Gross takings shall not be reduced by:
   credit card commissions or charges suffered by the Franchisee;
   any free offers or discounts made or given by the Franchisee whether as part of any special promotion required or authorised by the Franchisor or otherwise;
Gross takings shall be reduced by any customer refunds or allowances which do not relate to promotional activity and the making of which has been authorised by the Franchisor;
 Gross takings shall not include VAT;
“Individual
means as defined above
“Initial Fee
means the fee payable in accordance with clause [4.1];
“Launch and Promotion Pack
means such PR and advertising as the Franchisor shall consider adequate to launch effectively the franchise hereby granted;
“Manual
means the operating manual of the Franchisor setting out the way in which the Franchisee shall operate the Franchisees Business as amended by the Franchisor from time to time;
“Month
means a calendar month;
“Opening Date
means [________] Months from the date on which this agreement is executed or such earlier date as the Franchisee opens the Premises for the purposes of the Franchisees Business;
“Opening Hours
means all those hours during which the Premises are open to the public for the purposes of trade;
“Payment Date
means Friday of each Week or the next working day if such a day is a bank holiday;
“Premises
means the premises at the location specified in the Schedule or such other location agreed by the Franchisor in accordance with clause [2.1];
“Products
means as defined in the Recitals
“Services
means as defined in the Recitals
“Service Fee
means [________] per cent of the Gross [Weekly] Sales [or [7      ] per [week] [month]
“Stationery
means all invoices, hire documents, stationery bags, and other documents to be used by the Franchisee for the purposes of the Franchisees Business;
“Stock
means the initial stock of the Products set out in the Schedule;
“System
means confidential information which is owned by the Franchisor on the management and operation of the Business and in methods of conducting marketing and promoting the Business
“Territory
means the territory set out in the Schedule
“Trade Marks
means the trade marks set out in the Schedule as the same may be amended by the Franchisor from time to time
“Trade Name
means [________]” or such additional or alternative trade names as the Franchisor may specify from time to time
“VAT
means Value Added Tax
“Vehicle(s)
means the vehicle or vehicle(s) which have been previously approved in writing by the Franchisor.

2.2   In this agreement unless the context otherwise requires:
2.2.1   the singular includes the plural and vice versa and reference to any gender includes the other genders;
2.2.2   reference to persons include bodies corporate, unincorporated associations and partnerships;
2.2.3   words and phrases defined in the Companies Act 1985 have the same meanings in this agreement but the word “company” includes any body corporate;
2.2.4   references to “clauses” are to clauses or subclauses of this agreement, references to the “schedule” are to the schedule to this agreement.
2.3   In this agreement:
2.3.1   any reference to any statute or statutory instrument or any section or part thereof includes any enactment replacing or amending it or any instrument, order or regulation made under it and also includes any past statutory provisions (as from time to time modified or reenacted) which such provision has directly or indirectly replaced;
2.3.2   headings are for reference purposes only and shall not affect the construction of anything in this agreement.
2.4   The Schedule shall be treated as an integral part of this agreement and references to this agreement shall include the Schedule.
3.   Franchise rights and term
3.1   The Franchisor grants to the Franchisee the right:
3.1.1   to operate the Franchisees Business;
3.1.2   to use the Trade Name;
3.1.3   to operate the System;
3.1.4   to use the Trade Marks;
3.1.5   to use the Stationery and all other material emanating from the Franchisor which is the subject of copyright;
3.1.6   to sell the Products and provide the Services;
from the Premises or such other premises within the Territory as may be approved in writing by the Franchisor.
3.2   The Franchisor will not licence any person other than the Franchisee to operate the Business [under the Trade Name] in the Territory.
3.3   This agreement shall commence on the date of execution of this agreement or the date the Franchisee becomes registered for VAT whichever shall be the last to occur and shall, subject to the provisions contained in this agreement, be for a fixed period of five years from the date of this agreement.
4.   Rights of renewal
4.1   The Franchisee may apply to renew the franchise at the end of the term by notice in writing to the Franchisor given not more than six Months nor less than three Months before the expiration of the term.
4.2   The Franchisor shall renew the term for a further period of [five] years or for a term of years equal to the Franchisees leasehold interest in the Premises whichever is the shorter, provided that:
4.2.1   there have been no breaches of this agreement and there are no breaches of this agreement outstanding at the date that the notice referred to in clause 3.1 is served or at any time thereafter up to and including the expiry of the term granted by this agreement;
4.2.2   the Franchisee and the Individual have performed their obligations under this agreement to the reasonable satisfaction of the Franchisor;
4.2.3   the Franchisee and the Individual shall have entered into a new agreement which shall be in the Franchisors then current form of renewal franchise agreement, which will contain a right of renewal as contained in this clause, provided however, that the Franchisee will not be under any obligation to pay any sum expressed to be payable by way of initial fee and the Franchisor shall be under no obligation to perform any of the obligations set out in clause [5] or to provide any initial training as set out in clause [6.1] and 6.3;
4.2.4   the Franchisee shall at its expense refurbish the Premises and the fixtures and fittings at the Premises and renew the Equipment and to the extent that the Franchisor shall reasonably deem to be necessary to ensure that the Franchisees Business meets the Franchisors then current requirements and within the time prescribed by the Franchisor;
4.2.5   the Franchisee and the Individual, if so required by the Franchisor, shall relinquish in such form as the Franchisor may require all claims against the Franchisor or any third party associated with the Franchisor;
4.2.6   the Individual, and any person employed by or concerned with the Franchisee, specified by the Franchisor, shall have completed at the Franchisees expense such retraining or refresher training at such time and at such place as the Franchisor may require;
4.2.7   the Franchisors legal costs (if any) relating to the grant of the new agreement shall be reimbursed;
Provided that if after the service of the notice referred to in subclause [3.1] and prior to the execution of the new franchise agreement referred to in subclause [3.2.4] above the Franchisee shall fail to comply with the provisions set out above the Franchisor shall not be obliged to grant a renewal under this clause.
4.3   If the Franchisee continues to operate the Franchisees Business after expiry of this agreement without having previously entered into a renewal agreement as envisaged by this clause [3], the Franchisee shall be deemed to be operating as a franchisee at will subject to the terms of this agreement, save that the Franchisor may by serving one Months written notice, terminate the franchise at will.
5.   Fees
5.1   On the execution of this agreement the Franchisee shall pay to the Franchisor the sum of £[________] as an initial fee, and shall reimburse the Franchisors legal costs relating to the grant of the agreement.

5.2   Every week following the Opening Date the Franchisee shall pay the Service Fee and Advertising Levy on the Payment Date following the week to which the Service Fee and Advertising Levy relate.
5.3   Upon the signing of this Agreement, the franchise will (as directed by the Fanchisor set upon direct debits, standing or other payment arrangement in order to make all payments requested to be made under this Agreement  or, if so requested by the Franchisor, shall retain the said payments for collection by a representative of the Franchisor on the Payment Date.
6.   Preopening obligations
6.1   The Franchisor shall provide the Franchisee before the Opening Date with the following:
6.1.1   Manualon successful completion of the training specified in subclause [5.1.4] below the right to view at the Franchisors offices one copy on loan of the Franchisors current Manual setting out the way in which the Franchisee is to operate the Franchisees Business the contents of which are for the exclusive use of the Franchisee and its staff;
6.1.2   Equipment[________]
6.1.3   Stationerysuch stock at no charge to the Franchisee of the Stationery as the Franchisor shall reasonably consider will be necessary for the first Months trading;
6.1.4   Training[________]
6.1.5   Premises
   advice on site selection, location, criteria and provide assistance on the acquisition of Premises;
   plans and specifications for the internal layout, signs, and fixtures and fittings at the Premises;
   general supervision of the construction or conversion works as the Franchisor shall consider appropriate;
6.1.6   Stock[________]
6.1.7   Financial Package[________]
6.1.8   Telephone Answering Machines[________]
6.1.9   Launch and Promotion Pack[________]
6.1.10   [Vehicle/Vehicle Livery[________]
6.1.11   Shop Fascia[________]
6.2   The Franchisee shall at its own cost before the Opening Date:
6.2.1   refurbish the Premises as required by the plans and specifications referred to in clause [5.1.5] above and for such purposes make use of the Franchisors nominated architect, designer, quantity surveyor and shopfitter (in respect of whose fees the Franchisor shall have used its reasonable commercial endeavours to ensure that they are competitive) unless the Franchisors prior written approval has been obtained to the use of an alternative;
6.2.2   comply with the Franchisors reasonable instructions concerning the refurbishment of the Premises;
6.2.3   order the Equipment.
7.   Training
7.1   The Franchisor shall, as specified in clause [5.1.4] train the Individual in the operation of the System and in relevant aspects of the Business.
7.2   [If the Franchisor reasonably believes that the Individual does not meet the Franchisors minimum standards at any time during the training referred to in clause [5.1.4] the Franchisor shall inform the Individual accordingly. The Individual shall then use his best endeavours to appoint a manager in his place and such manager shall undertake the initial training session. If the Individual fails to appoint a manager within such reasonable period as the Franchisor may specify or if the said manager fails to meet the Franchisors minimum standards the Franchisor shall have the right upon notice in writing forthwith to terminate this agreement and shall return (subject to the Franchisee complying with all the provisions of this agreement applicable on termination and returning in good condition all items of Equipment, Stationery and other items supplied by the Franchisor) to the Franchisee the Initial Fee or part thereof paid less such sum (not exceeding £[________]) representing the cost to the Franchisor of the performance of its obligations under this agreement and any other costs incurred by the Franchisor in relation to this agreement.]
OR
7.3   [If the Franchisor reasonably believes that the Individual does not meet the Franchisors minimum standards at any time during the training referred to in clause [5.1.4] the Franchisor shall have the right upon notice in writing forthwith to terminate this agreement and shall return (subject to the Franchisee complying with all the provisions of this agreement applicable on termination and returning in good condition all items of Equipment, Stationery and other items supplied by the Franchisor) to the Franchisee the Initial Fee or part thereof paid less such sum (not exceeding £[________]) representing the cost to the Franchisor of the performance of its obligations under this agreement and any other costs incurred by the Franchisor in relation to this agreement.
7.4   The Franchisee shall submit all those of its employees or self employed persons as are designated by the Franchisor for training prior to the Opening Date and shall terminate their employment or engagement if in the Franchisors reasonable opinion they are unsuitable.
7.5   The Franchisor shall have the right to require the Individual and/or the Franchisees employees or selfemployed persons to attend further training courses at any time during the term of this agreement if it reasonably considers that such further training is necessary.
7.6   The Franchisee shall on taking on an employee or self employed person at a level where training is normally provided immediately inform the Franchisor and if required by the Franchisor submit such persons for training and shall terminate their employment or engagement if in the Franchisors reasonable opinion they are unsuitable.
7.7   All training referred to in this clause (save for the training referred to in clause [6.1] which shall be provided free of charge) shall be provided at the Franchisors standard rate and in all cases the Franchisee shall be liable for travelling and living expenses and salaries of those attending.
7.8   The time and place of any training shall unless otherwise specified be at the absolute discretion of the Franchisor but the Franchisor shall try to accommodate the Franchisees reasonable requirements. [or shall be at             ]
8.   Franchisors continuing obligations
The Franchisor shall subject to compliance by the Franchisee and the Individual with the terms of this agreement throughout the term of this agreement:
8.1   permit the Franchisee to carry on the Franchisees Business under the Trade Name;
8.2   promptly make available to the Franchisee members of the Franchisors staff for “onsite” advice in connection with the System when reasonably required by the Franchisee and subject to the reimbursement of the Franchisors costs;
8.3   subject to the provision by the Franchisee of such information as the Franchisor may require so as to enable the Franchisor to monitor the performance of the Franchisee provide the Franchisee with advice and guidance on all aspects of the Franchisees Business including finance, management, operational and promotional matters and provide reasonable problem solving facilities to the Franchisee so as to enable the Franchisee to operate the Franchisees Business efficiently;
8.4   make available to the Franchisee, at cost, services for the selection of appropriately trained and qualified staff for engagement in the Franchisees Business;
8.5   make available to the Franchisee and its employees at the Franchisors standard rate, such further training as the Franchisee may from time to time reasonably require, the Franchisee bearing the cost of any travel and subsistence involved in such further training and the salaries of any employees;
8.6   provide the Franchisee, at the Franchisees expense, with standard contracts for use by the Franchisee in the Franchisees Business;
8.7   provide to the Franchisee or assist the Franchisee in obtaining the products, services and equipment described in the Manual on the terms specified in the Manual and if such products, services and equipment are obtained from third parties use its reasonable endeavours to obtain competitive rates for furnishing such supplies;
8.8   organise and convene regular franchisee meetings, the Franchisee bearing the cost of any travel and subsistence expenses incurred in attending such meetings;
8.9   update the Manual from time to time and continue its research and development so as continually to improve the System;
8.10   make available to the Franchisee all items and services which the Franchisor makes available to its other franchisees.
9.   Franchisees operating obligations
In order to maintain the highest standard of service to be provided by the Franchisee and the Franchisors other franchisees the Franchisee shall during the term of this agreement:
9.1   Immediate obligations
9.1.1   Immediately on execution of this agreement enter into a registered licence agreement in respect of the Trade Marks in such form as the Franchisor shall reasonably require;
9.1.2   Acquire the Premises.
9.2   Supplies
9.2.1   Use in the Franchisees Business [only the Equipment, Vehicle and Stationery] and no other similar equipment, vehicle or stationery unless the Franchisors prior written approval has been obtained;
9.2.2   Obtain its supplies of the Products, Equipment, Stationery and other products or services specified in the Manual from the Franchisor at the Franchisors current prices from time to time or such other person that has been previously approved in writing by the Franchisor;
9.2.3   [Maintain the Vehicle to the highest mechanical standards including regular servicing and keep the Vehicle clean and in good condition.]
9.3   General
9.3.1   Ensure that adequate finance is available to the Franchisee to enable the Franchisee fully to develop the Franchisees Business in accordance with this agreement;
9.3.2   Carry on the Franchisees Business to the highest standards of service;
9.3.3   Use its best endeavours to promote and extend the Franchisees Business;
9.3.4   Not do anything which may bring the Business or the Franchisees Business into disrepute or may have a detrimental effect on the Business or the Franchisees Business;
9.3.5   Comply with all statutes, byelaws and other legal requirements relating to the Franchisees Business and obtain (and maintain) all licences, consents and approvals (if any) that may be required;
9.3.6   Permit the Franchisor and/or any person authorised by the Franchisor without notice to enter, during normal business hours, upon the Premises or elsewhere to inspect the same and remove for inspection or take copies of any item;
9.3.7   Not engage and procure that the Individual does not engage in or be involved directly or indirectly or in any way assist any third party to so engage in or be involved in any business which competes with the Business or the Franchisees Business;
9.3.8   Not, without the previous written consent of the Franchisor, such consent not to be unreasonably withheld, engage in or be involved in any business other than the Franchisees Business and procure that the Individual complies with a similar obligation;
9.3.9   Not engage in the Franchisees Business outside the Territory and procure that the Individual complies with a similar obligation;
9.3.10   Comply in all respects with the Manual as the same may be amended from time to time;
9.3.11   Ensure that the Franchisees Business is effectively managed by the Individual and by no other person unless the Franchisors prior written consent has been obtained;
9.3.12   Keep details of actual and potential customers and supply a copy of the same to the Franchisor immediately on request;
9.3.13   Register for VAT within one Month of executing this agreement;
9.3.14   Comply with the invoicing and accounting procedures specified by the Franchisor;
9.3.15   Not enter into any arrangement or agreement to factor, charge or otherwise dispose of any debts or liabilities of the Franchisees Business without first obtaining the consent in writing of the Franchisor (such consent not to be unreasonably withheld or delayed).
9.4   Name and knowhow
9.4.1   Not make use of, or disclose, other than exclusively for the purposes of the Franchisees Business, any information relating to the Business or the Franchisees Business or any other confidential information supplied by or on behalf of the Franchisor and procure that the Individual complies with a similar obligation and the Franchisee shall ensure that none of its employees or selfemployed persons make use of or disclose such information other than for such purpose.
9.5   Trading
9.5.1   Forthwith inform the Franchisor of all relevant details of any enquiry from a potential customer outside the Territory;
9.5.2   Provide potential franchisees, at the request of the Franchisor, with such information concerning the Business and the Franchisees Business as such prospective franchisees may reasonably require and at all times be courteous and cooperative to such prospective franchisees;
9.5.3   Accept such charge and credit cards including “Visa” and “Mastercard” as are set out in the Manual;
9.5.4   Continuously operate the Franchisees Business upon such days and between such hours as the Franchisor shall specify;
9.5.5   Pay all suppliers of goods and services sold or provided to the Franchisee in accordance with their terms of payment;
9.5.6   Maintain sufficient stocks and employ sufficient staff to meet all likely demand from the customers of the Franchisees Business;
9.5.7   Promptly replace or refund the costs of any product supplied by the Franchisee which does not conform with the high standards required by the System;
9.5.8   Consult with the Franchisor as to the prices to be charged in the Franchisees Business and refrain from charging in excess of any maximum charges specified by the Franchisor;
9.5.9   Sell or provide only such products or services as may be described from time to time in the Manual upon the terms and conditions therein set out and ensure that the range of Products and Services specified by the Franchisor are available for sale by the Franchisee.
9.6   Internet
9.6.1   Not promote the Franchisees Business or sell or make available the Products or the Services whether for the purposes of advertising, promotion, sales or otherwise through or on the world wide web, internet or any other electronic means without the Franchisors prior written consent which will be given subject to such conditions as the Franchisor shall consider in its sole discretion necessary to protect its goodwill and reputation;
9.6.2   Save as set out in clause [8.6.1] acknowledge that all rights relating to the exploitation of the Trade Marks, the Trade Name and the System through or on the world wide web, internet or through any other electronic means will solely and exclusively belong to the Franchisor;
9.6.3   Not make use of or establish a web site which uses the Trade Name and/or the Trade Mark or any similar trade mark or trade name as its domain name or establish a web site for the purposes of communicating with the Franchisors franchisees or with third parties in relation to the Franchisor, the Business or the Franchisors franchisees;
9.6.4   If required by the Franchisor participate in the Franchisors web site as stipulated by the Franchisor and at the cost of the sums standing in the account referred to in clause [14.1].
10.   Telephone numbers
10.1   [The Franchisee shall use only such telephone number or numbers as have been obtained by the Franchisor for the use of the Franchisee in the Franchisees Business (“the Telephone Numbers”) to the exclusion of all others and the Telephone Numbers shall only be used for the Franchisees Business and for no other purpose.
10.2   The Franchisee recognises that during the term of this agreement the Franchisor shall be the official subscriber of the Telephone Numbers.
10.3   [All charges for the installation, rental and use of the Telephone Numbers shall be borne by the Franchisor but the Franchisee shall reimburse the Franchisor on demand all such charges and shall, if so required by the Franchisor, enter into a standing order or other arrangement specified by the Franchisor to facilitate the payment of such sums to the Franchisor.]
OR
10.4   [All charges for the installation, rental and use of the Telephone Numbers shall be borne by the Franchisor but the Franchisee shall reimburse the Franchisor on demand all such charges and shall on the Payment Date make a payment in advance to the Franchisor of such sum as the Franchisor may set being the Franchisors reasonable estimate of the likely weekly telephone charges incurred by the Franchisee and every quarter the Franchisor shall prepare a reconciliation of all such payments and charges and the Franchisor or the Franchisee as the case may be shall within seven days of such reconciliation pay the amount which the reconciliation shall show is owing.]
10.5   Upon termination of this agreement for any reason whatsoever the Franchisee shall immediately discontinue the use of the Telephone Numbers.
10.6   The Franchisee shall not permit to appear in any marketing, advertising or promotional material or in any business correspondence any telephone number or numbers other than the Telephone Numbers.]
OR
10.7   [The Franchisee shall inform the Franchisor before the Opening Date of all telephone numbers which it proposes to use in connection with the Franchisees Business (“the Telephone Numbers”) and shall immediately upon receiving a request by the Franchisor execute and forward to the Franchisor an undated instruction in such form as the Franchisor may reasonably require transferring the Telephone Numbers to the Franchisor.
10.8   The Franchisee shall not subscribe whether itself or through a nominee, for telephone numbers other than the Telephone Numbers referred to in subclause [9.1] above for the purposes of the Franchisees Business, unless the Franchisor shall have been previously informed in writing, and the Franchisee or its nominee shall if so requested by the Franchisor execute an undated instruction relating to the further telephone numbers.
10.9   The Franchisee shall ensure that the Telephone Numbers shall only be used for the Franchisees business and for no other purpose.
10.10   The Franchisor shall not make use of the undated instructions referred to in subclauses [9.1 and 9.2] above until the termination of this agreement.
10.11   The Franchisee shall use the Telephone Numbers referred to in subclause [9.2] above exclusively for the Franchisees Business and no other business.]
11.   Accounting records
The Franchisee shall:
11.1   Maintain accurate records of the Gross [Weekly] Sales made up to the close of business on the last working day of each week, and prepare in the form set out in the Manual a weekly financial statement and shall submit the same to the Franchisor on or before each Payment Date;
11.2   Furnish to the Franchisor all such other accounting and management information as may be set out in the Manual from time to time and any other information which the Franchisor may from time to time reasonably require;
11.3   At the Franchisees expense in each accounting year have prepared audited accounts by a Chartered Accountant and provide a copy of the same to the Franchisor within three Months after each accounting reference date;
11.4   Maintain at the Premises in a form set out in the Manual accurate books of account and supporting accounting records including all invoices, credit notes, statements and delivery notes and shall permit the Franchisor or its duly authorised agents during business hours to inspect any such accounts and records and take copies at the expense of the Franchisor;
11.5   Procure that the accounting reference date of the Franchisee shall be such date as is specified by the Franchisor;
11.6   Preserve all such accounts and records for not less than six years notwithstanding the expiry or termination of this agreement;
11.7   Permit accountants nominated by the Franchisor at the expense of the Franchisor to undertake such audits and checks as the Franchisor may consider appropriate on reasonable notice during normal business hours and if such audits or checks reveal a discrepancy of more than [________] per cent in the financial information supplied to the Franchisor in respect of which the Service Fee is calculated, to reimburse the Franchisors costs in relation to such audits and checks as well as immediately making good, with interest, any shortfall;
11.8   Submit to the Franchisor copies of all VAT returns as and when they are due to H.M. Customs and Excise.
12.   Insurance
12.1   The Franchisee shall take out and maintain such standard insurance as the Franchisor shall have arranged for its franchisees as the same is specified in the Manual.
12.2   The Franchisee shall promptly pay all premiums required to be paid by the Franchisor.
13.   Premises
13.1   The Franchisee shall ensure that:
13.1.1   the Premises shall be kept clean and all fixtures and fittings thereon shall be kept in full working order;
13.1.2   only those insignia, symbols, brand names, trade names or trade marks as are approved by the Franchisor shall be displayed at the Premises;
13.1.3   the Premises are maintained to the standard of hygiene and cleanliness set by the Franchisor;
13.1.4   the Premises are open to the public for the purpose of the Franchisees Business between such hours as the Franchisor shall reasonably require.
13.2   The Franchisee shall display such notices, subject to any necessary planning or byelaw consents, in such manner and upon such part or parts of the Premises as the Franchisor may direct including a sign or signs bearing the following words (or such other similar words as may from time to time be specified by the Franchisor) “a [________] franchise owned and operated under licence by” followed by the name of the Franchisee;
13.3   The Franchisee shall not alter or convert the Premises or its internal layout or the fixtures and fittings thereon nor install nor alter any fixtures and fittings, erect or display any sign or other medium of advertisement whether inside or outside the Premises without in every case seeking and obtaining the prior consent in writing of the Franchisor, and each such alteration, conversion, erection or installation shall be carried out only in accordance with plans and specifications previously submitted to and approved by the Franchisor.
14.   Staffing
The Franchisee shall:
14.1   Be responsible for ensuring that adequate staff levels are maintained at all times and in particular not less than one suitably qualified person is available at the Premises during Opening Hours;
14.2   Ensure that all employees and self employed persons wear such uniforms as the Franchisor shall reasonably require and that they are maintained, repaired and cleaned regularly;
14.3   Obtain a signed contract of service from all persons employed by or who provide services to the Franchisee in such form as is approved by the Franchisor prior to their employment or their engagement and shall disclose confidential information only to such persons who have previously signed such a contract;
14.4   Ensure that all personnel employed in or who provide services on behalf of the Franchisees Business shall at all times have a neat and clean appearance, render competent, sober and courteous service to customers and comply with any and all directions of the Franchisor relating to dress, appearance and demeanour;
14.5   Procure that the persons responsible for managing the Franchisees Business and all senior employees and self employed persons nominated by the Franchisor shall attend such further periods of training as may from time to time be required by the Franchisor and bear any travel and subsistence expenses and the salaries of such persons;
14.6   Not take on any persons who are self employed to assist in the Franchisees Business unless the Franchisors prior written consent has been obtained.
15.   Advertising/promotions
15.1   The Franchisor shall pay such amounts of Advertising Levy as it shall receive from the Franchisee and its other franchisees into a separate account and shall expend such sums in undertaking such advertising and promotional activities as it shall in its absolute discretion consider to be appropriate. If at any time the Franchisor expends monies in excess of those standing to the credit of the account such excess expenditure may be set off against subsequent monies received in the account and any underpaid may be carried forward.
15.2   The advertising account referred to in subclause [14.1] above shall at the expense of the sums standing in the account be certified annually by the Franchisors auditors or such independent accountants as the Franchisor shall nominate and the Franchisor shall if so required by the Franchisee provide to the Franchisee a copy of the accountants certificate within three Months of the date to which it is prepared.
15.3   The Franchisee will also expend in every year not less than [________] per cent of its Gross [Weekly] Sales in such year on local advertising.
15.4   The Franchisee will not publish or distribute any advertising or promotional material unless it has been approved in writing by the Franchisor. The Franchisee will immediately cease the use of any advertising or promotional material upon receipt of a request from the Franchisor so to do.
15.5   The Franchisee shall prominently display, and distribute point of sale marketing material supplied by the Franchisor.
15.6   The Franchisee will participate in and comply with the terms of any special advertising, promotion or other activity as the Franchisor may reasonably direct.
16.   Trade Marks
16.1   The Franchisor warrants that it is entitled to license the Trade Marks and that the use of the Trade Marks by the Franchisee in accordance with the terms of this agreement will not constitute an infringement of the rights of any third party.
16.2   The Franchisee shall render to the Franchisor all reasonable assistance at the Franchisors expense to enable the Franchisor to obtain registration of the Trade Marks. In no circumstance will the Franchisee apply for registration as a proprietor of any of the Trade Marks unless so requested by the Franchisor.
16.3   The Franchisee acknowledges that the goodwill and all other rights in and associated with the Trade Marks vest absolutely in the Franchisor and that all such rights will at all times hereafter and for all purposes remain vested in the Franchisor and in the event that any such rights at any time accrue to the Franchisee the Franchisee will at its own expense forthwith on demand do all such acts and things and execute all such documents as the Franchisor shall deem necessary to vest such rights absolutely in the Franchisor.
16.4   If the Franchisor obtains registration of any trade mark for use in the Business after the date of this agreement the Franchisee shall have such rights to such trade marks as if they had been included in the Schedule to this agreement at the date hereof and where the context so allows all references in this agreement to the Trade Marks shall be deemed to include a reference to such further marks.
16.5   The Franchisee will immediately notify the Franchisor of all circumstances coming to the attention of the Franchisee which may constitute an infringement of any of the Trade Marks or may constitute passing off in respect of the Trade Name and any unregistered trade mark used in the Business and shall take such reasonable action as the Franchisor may direct at the expense of the Franchisor to assist the Franchisor in the protection of the Trade Marks and the Trade Name.
16.6   If required by the Franchisor the Franchisee shall forthwith enter into the Franchisors then standard registered licence agreement in respect of the Trade Marks.
16.7   The Franchisee shall in all representations of the Trade Marks append in a manner approved by the Franchisor such inscription as the Franchisor shall require to indicate that such Trade Marks are registered.
16.8   Any rights which the Franchisee may have under sections 30 and 31 of the Trade Marks Act 1994 are excluded.
17.   Improvements
17.1   The Franchisee shall without delay introduce any improvement or modification to the Franchisees Business at the time and in the manner specified by the Franchisor in writing.
17.2   The Franchisee shall notify the Franchisor of any improvement or modification which may be beneficial to the operation of the Business and the Franchisor may introduce such improvement or modification without any obligation to make any payment to the Franchisee.
17.3   The Franchisee shall not introduce any improvement or modification to the Franchisees Business without the prior written consent of the Franchisor.
18.   Manual
18.1   The Franchisor will notify the Franchisee of any alterations to the Manual to enable the Franchisee to view the alterations at such place the Franchisor directs.
18.2   The Franchisor shall keep at its registered office an up to date copy of the Manual as revised from time to time which shall be the authentic text of the Manual.
18.3   The Franchisee shall conduct the Franchisees Business strictly in accordance with the Manual, the terms of which shall be deemed incorporated into and shall form part of this agreement. In the event of any conflict between the terms of this agreement and the terms of the Manual the terms of the agreement shall prevail.
18.4   The Manual shall at all times remain the sole and exclusive property of the Franchisor and the Franchisee hereby acknowledges that the copyright in the Manual vests in the Franchisor and that it will not take and will procure that no other person will take any copies of the Manual without the prior written consent of the Franchisor and that it will not use the Manual other than in accordance with this Agreement.
19.   Franchisors right to communicate with customers
19.1   In order to protect the reputation of the Franchisor and its franchisees and to maintain satisfactory public relations the Franchisor reserves the right to communicate with any of the Franchisees customers at any time during the term of this agreement to ascertain the quality of the services provided by or on behalf of the Franchisee and the Franchisee shall upon request furnish the Franchisor with such particulars of its customers as the Franchisor shall reasonably require and provide such reasonable assistance as may be necessary for this purpose.
20.   Right to sell
20.1   The Franchisee shall not whether before or after termination assign this agreement or any rights under it nor grant any sublicence of its rights or obligations under this agreement or subcontract any of its obligations but may with the prior written consent of the Franchisor sell the Franchisees Business. Such consent shall not be unreasonably withheld or delayed upon the Franchisee fully complying with the following terms and conditions:
20.1.1   the Franchisee and the Individual must at the time the Franchisee seeks consent from the Franchisor to the sale of the Franchisees Business be in full compliance with all material terms and conditions on their part to be performed under this agreement;
20.1.2   any proposed buyer or in the case of a limited liability company its shareholders and directors shall meet the Franchisors standards with respect to prior related business experience, financial standing and satisfy the Franchisors current recruitment criteria;
20.1.3   the Franchisee shall procure that the proposed buyer and if the proposed buyer is a limited liability company such of the shareholders and directors of the proposed buyer as the Franchisor shall reasonably require, shall if required by the Franchisor enter into a new agreement in such form as is currently offered by the Franchisor to new franchisees save that no Initial Fee shall be payable and the Franchisor shall not be required to perform any obligations (except for those relating to training) currently contained in clauses [5 and 6];
20.1.4   the proposed buyer shall be registered for VAT;
20.1.5   any offer by the proposed buyer shall be made in good faith;
20.1.6   the Franchisee shall with every application for consent pay the Franchisors then current expenses not to exceed £1,000 of investigating such application whether or not the Franchisees Business is eventually sold;
20.1.7   the Franchisee shall pay all monies due to the Franchisor;
20.1.8   the proposed buyer (or in the case of a limited liability company such of its shareholders and directors as the Franchisor shall reasonably require) shall undertake such initial training as is required to be undertaken by new franchisees and shall meet the Franchisors then minimum standards during such training;
20.1.9   prior to the sale of the Franchisees Business the Franchisee shall pay or procure the payment to the Franchisor of such sum as represents [60%] of the Franchisors then standard Initial Fee to reimburse the cost of training and other services provided to the proposed buyer;
20.1.10   all the Franchisees available information about employees is provided to the Franchisor and the proposed buyer and the Franchisee complies with the Franchisors reasonable requests for cooperation in relation to the transfer of such employees.
20.2   The Franchisee shall submit to the Franchisor a copy of the proposed buyers written offer to purchase the Franchisees Business together with a detailed financial statement of affairs and business history of the proposed buyer, full written details of any other terms agreed between the Franchisee and the proposed buyer all other relevant information and a warranty (as at the date it is given and as at the date of sale) that the Franchisor has been provided with all information required to be provided by this clause. Upon receipt of such information the Franchisor shall have in addition to its other rights hereunder an option to purchase or nominate a third party to purchase the Franchisees Business for the same amount and upon the same terms as the proposed buyer has offered. The Franchisor shall have a period of 40 days after the receipt of such information in which to exercise its option to purchase. If the Franchisor does not exercise such option and consents to the proposed sale the proposed buyer shall deposit the full purchase price with the Franchisor as agent for the Franchisee and the Franchisor shall deduct from the said purchase price any sums which are payable or will become payable by the Franchisee or the proposed buyer to the Franchisor (as certified by the Franchisors accountants). The outstanding balance of the purchase price shall then be remitted to the Franchisee.
20.3   The Franchisee shall pay to the Franchisor a commission of [________] per cent of the purchase price of the Franchisees Business if the Franchisor shall have introduced the proposed buyer to the Franchisee.
20.4   The above provisions shall apply if the Individual and all other shareholders in the Franchisee wish to transfer either all or a majority of the then current issued voting share capital of the Franchisee and references in this clause to the sale or transfer of the Franchisees Business shall be construed accordingly but, in the case of a transfer of the then current issued share capital the proposed buyer will not be permitted to be a body corporate, save as expressly provided in this agreement transfers of some but not all, of the then current issued share capital of the Franchisee are not permitted.
21.   Death or incapacity of the individual
21.1   The Individual shall take all steps which the Franchisor shall require to ensure that if the Individual shall die during the currency of this agreement, relatives of or the personal representatives of the Individual shall within 24 hours inform the Franchisor of the Individuals death.
21.2   On the death of the Individual the Franchisor shall forthwith terminate this agreement and repay to the Individuals personal representatives the Initial Fee.
21.3   The Individual shall take all steps to ensure that the Individuals relatives or personal representatives do all such things which the Franchisor may require to enable the Franchisor to operate the Franchisees Business within the Territory following the death of the Individual.
21.4   The Franchisor will use its reasonable commercial endeavours to find a buyer of the assets of the Franchisees Business following the death of the Individual but if no such buyer has been found within six Months of the death of the Individual the Franchisor may (but shall be under no obligation so to do) purchase the said assets at their market value less 20 per cent and less the amount of the Initial Fee repaid under subclause [20.2] by notice in writing given to the Individuals personal representatives but the Franchisor shall not be obliged to purchase or take an assignment of a lease or freehold of any premises. If the parties are unable to agree upon the market value of the said assets within ten days after the service of the said written notice the market value of the said assets shall be ascertained at the request of either party by a Chartered Accountant acceptable to both parties or failing agreement by a Chartered Accountant nominated by the President of the Institute of Chartered Accountants of England and Wales who shall act as an expert and whose decision shall be binding on both parties. The Franchisor may take over the assets at any time after the date it serves notice under this subclause and the price to be paid for the assets shall be calculated as at the date the Franchisor takes over the Franchisees Business. If the Franchisor finds a buyer for the assets of the Franchisees Business who would make a suitable franchisee the provisions of clause [19] will apply save that in addition to the payments to be made by the Franchisee thereunder the Franchisor shall be reimbursed the amount of the Initial Fee repaid in accordance with subclause [20.2].
21.5   If the individual is at any time incapacitated or in the reasonable opinion of the Franchisor is unable to a material degree to operate the Franchisees Business for a continuous period of two Months or a total period of 80 working days in any period of 12 Months, the Franchisor may by notice to that effect terminate the agreement whereupon the provisions set out above shall apply as if the references to the Individuals death shall be to receipt of the said notice and the references to the Individuals personal representatives shall be to the Franchisee.
21.6   References in this clause to the assets of the Franchisees Business shall be deemed to include in the alternative the entire issued share capital of the Franchisee with the intent that the Franchisor or a third party may at their option acquire the said shares instead of the assets of the Franchisees Business.
21.7   Any action taken by the Franchisor under the above provisions of this clause on the instructions of, or with the approval of, any person or persons claiming to be the executor or personal representative of a deceased Individual shall be binding on and not under any circumstances open to challenge by the executors or personal representatives of such deceased Individual even if they were not a party thereto and the Individual signing this agreement expressly binds his executors and personal representatives in respect of, and to ratify and confirm, all actions by any person or persons so acting under this agreement and to indemnify and so free and relieve the Franchisor of and from all liabilities or responsibilities whatever in respect of such action.
22.   Termination
22.1   The Franchisor may terminate this agreement immediately by giving notice in writing to the Franchisee in any of the following events which because of the special nature of the Franchise relationship shall constitute repudiatory breaches of contract or in the case of subclauses [21.1.10, 21.1.11 and 21.1.12] will in the Franchisors opinion inevitably lead to such a repudiatory breach:
22.1.1   if the Franchisee fails to commence the Franchisees Business within a period of [________] Months from the date of this agreement;
22.1.2   if the Franchisee shall at any time fail to pay any amounts due to the Franchisor unless such failure arises for reasons outside the Franchisees control or occurs only once in any 12 month period and is immediately corrected on receiving notification from the Franchisor of such nonpayment;
22.1.3   if the Franchisee shall, in the reasonable opinion of the Franchisor, have a detrimental effect on the goodwill of the Business or the Franchisees Business;
22.1.4   if the Franchisee shall transfer any of the rights, licences or obligations contained in this agreement other than in accordance with the terms of this agreement;
22.1.5   if the Franchisee fails for more than 10 days to submit to the Franchisor any of the accounting or management information required to be submitted;
22.1.6   if the Franchisee discloses or allows the disclosure of any part of the Manual or other confidential information relating to the Business or the Franchisees Business otherwise than in accordance with the terms of this agreement;
22.1.7   if the Franchisee fails to obtain any prior written approval or consent of the Franchisor expressly required by this agreement;
22.1.8   if the Franchisee, the Individual or any officer, director or employee of the Franchisee gives to the Franchisor any false or misleading information or makes any misrepresentation in connection with obtaining this agreement or at any time during the continuance of this agreement in connection with the Franchisees Business;
22.1.9   in the event of the Franchisee ceasing to carry on the Franchisees Business or failing to confirm its intention to continue to carry on the Franchisees Business within 21 days of receiving a formal request from the Franchisor to provide such confirmation;
22.1.10   in the event that any of the Individuals shall have a bankruptcy order made against him (provided that such individuals bankruptcy is in the Franchisors reasonable opinion likely to have a material detrimental effect on the Franchisees Business) or if a person who is qualified to act as an insolvency practitioner shall be appointed in relation to him under section 273 of the Insolvency Act 1986 or if a receiver or manager (including for the avoidance of doubt an interim receiver within the meaning of Part IX of the Insolvency Act 1986) shall be appointed in respect of him or the whole or any part of his property or estate or if an interim order shall be made in relation to him under section 252 of the Insolvency Act 1986 or if he shall enter into any arrangement or composition with his creditors (including for the avoidance of doubt any voluntary arrangement within the meaning of Part VIII of the Insolvency Act 1986);
22.1.11   in the event that any of the Individuals becomes a patient as defined by the Mental Health Act 1983 or commits any criminal offence (other than a road traffic offence not involving a custodial sentence) provided that such Individuals illness or criminal offence is in the Franchisors reasonable opinion likely to have a material detrimental effect on the Franchisees Business;
22.1.12   in the event of the Franchisee going into liquidation (other than voluntarily for the purpose of amalgamation or reconstruction) or being unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 (or any statutory modification or reenactment thereof) or suffering a distress or execution to be levied on or a receiver appointed over any property used in connection with the Franchisees Business or if the Franchisee makes any arrangements with its creditors or if an administrator is appointed under the Insolvency Act 1986;
22.1.13   in the event of persistent valid complaints to the Franchisor as to the quality of the service given by the Franchisee the Franchisee having been given timely notice of such complaints and having been given the opportunity to address the issues which are the subject of such complaints;
22.1.14   in the event of a change in the shareholdings in the Franchisee company as set out in the Schedule unless the Franchisors previous written consent has been obtained;
22.1.15   if the Franchisee or any of the Individuals shall be in breach of any of the terms of this agreement (except those set out above) the Manual, or the Franchisors reasonable instructions and the Franchisor shall have notified the Franchisee or any of the Individuals (as the case may be) in writing of any such breach and the Franchisee or the Individual as the case may be shall not have rectified such breach immediately or if immediate rectification is not possible, within such period, not exceeding 28 days as the Franchisor shall reasonably require;
22.1.16   in the event of any repeated breach of any of the Franchisees or the Individuals obligations under this agreement or the Manual. For the purpose of this subclause a repeated breach shall be interpreted as two or more breaches of the same provision of this agreement by the Franchisee or the Individual during any calendar year;
22.1.17   if the Franchisee loses its right to possession of the Premises.
22.2   Any termination under this clause shall be without prejudice to the rights of either party against the other in respect of any antecedent breach of any of the terms and conditions of this agreement.
22.3   In the event of any termination by the Franchisor the Franchisee shall not be entitled to recover any part of the Initial Fee.
22.4   If the Franchisor has reasonable grounds for believing that the Franchisee has ceased to operate the Franchisees Business without the Franchisors consent the Franchisor may operate the Franchisees Business as the Franchisees agent with full powers to bind the Franchisee and the Franchisee shall be responsible for the Franchisors costs until the date of termination which shall not be more than one Month after the Franchisor starts to operate the Franchisees Business under this subclause.
22.5   This agreement shall (unless the Franchisor has indicated otherwise prior to the effective date of termination) automatically terminate if the Franchisee takes any steps to cease to be registered for VAT or fails to take any steps to prevent such event occurring or breaches subclause [14.6], termination being effective immediately before the said registration ceases to be in effect or immediately before the breach of clause [14.6] occurs, as the case may be. In the event of the termination of this agreement under this subclause, the Franchisor shall be entitled to claim damages as if termination has occurred by virtue of the Franchisees repudiatory breach of this agreement.
22.6   If this agreement is terminated under this clause, the Franchisee shall, by way of liquidated damages, pay to the Franchisor, within five days of being notified in writing of the amount so payable, such sum as is calculated as follows:
E = A × (the higher of B or C) × D
A =    the number of Months between the effective date of termination and the date this agreement would have terminated by effluxion of time;
B =    the average Service Fees receivable from the Franchisors franchisees in the three Month period prior to termination of this agreement;
C =    the average Service Fees receivable from the Franchisee during the same period as is referred to in B;
D =    [________]% representing a [________]% discount by virtue of accelerated payment, the Franchisors duty to mitigate its loss and the Franchisor not being required to perform its obligations hereunder;
E =    Payment due from the Franchisee.
23.   Conditions following termination
23.1   Immediately upon termination of this agreement for any reason the Franchisee and the Individual shall:
23.1.1   cease forthwith to trade under the Trade Name;
23.1.2   not hold themselves out as operators of the Franchisees Business or as having any connection with the Business;
23.1.3   not make or receive telephone calls or emails in connection with the Franchisees Business;
23.1.4   cease to use by advertising on the [Vehicle,] Stationery, sign, uniform or otherwise the Trade Name or the Trade Marks or any imitation or approximation thereof;
23.1.5   pass to the Franchisor the names of all persons enquiring about and/or requesting the services of the Business;
23.1.6   not divulge or use any confidential information relating to the Business the Franchisees Business or the Franchisor unless it has entered the public domain otherwise than by virtue of this agreement;
23.1.7   deliver up to the Franchisor all customer lists and names and addresses and full details of contracts with customers and details of all persons who have become or who have enquired about becoming customers of the Franchisee during the term hereof;
23.1.8   if demanded in writing by the Franchisor return all the Equipment in good repair and condition to the Franchisor subject to the reimbursement (after deducting sums payable to the Franchisor) of such sum as in the Franchisors reasonable opinion represents their secondhand value;
23.1.9   pay to the Franchisor all money owing;
23.1.10   return to the Franchisor in good condition the Manual and any copies and shall not copy the Manual or any part of the Manual before returning the same to the Franchisor;
23.1.11   pay all debts owing to the creditors of the Franchisees Business and permit the Franchisor to make such payments on behalf of the Franchisee;
23.1.12   return to the Franchisor all Stationery;
23.1.13   join with the Franchisor in cancelling any registered licence of the Trade Marks. If the Franchisee shall fail so to do the Franchisor is hereby irrevocably appointed the agent of the Franchisee with full authority to give such notice to the Registrar of Trade Marks on behalf of the Franchisee;
23.1.14   irrevocably permit the Franchisor to deduct from all sums payable by the Franchisor to the Franchisee all sums which the Franchisor pays (whether legally obliged to or not) under subclause [22.1.11];
23.1.15   execute and deliver to the Franchisor any and all documents necessary to complete the termination or would facilitate the termination of this agreement.
23.2   On termination of this agreement otherwise than by virtue of the Franchisors default the Franchisee and the Individual shall not, save as the holders of not more than 5 per cent of the issued share capital of a company whose shares are publicly quoted on a recognised stock exchange:
23.2.1   for a period of [six] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business or the business of the Franchisors other Franchisees or the Franchisees Business or in any business similar to the Business, save as the holders of not more than 5 per cent of the issued share capital of a company whose shares are publicly quoted on a recognised stock exchange or the Franchisees Business or the business of the Franchisors other franchisees, within the United Kingdom;
23.2.2   for a period of [twelve] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business, or the Franchisees Business or in any business similar to the Business or the Franchisees Business within the Territory;
23.2.3   for a period of [nine] Months thereafter engage in, be employed by or be concerned or interested, directly or indirectly, in any business which competes with the Business or the business operated by a franchisee of the Franchisor, or in any business similar to the Business or the Business operated by a franchisee of the Franchisor within the territory of another franchisee;
23.2.4   for a period of [twelve] Months thereafter solicit for the purposes of a competing business to the Business or the Franchisees Business the custom of any person, firm or company that has been a customer of the Franchisee at any time in the twelvemonth period prior to termination;
23.2.5   for a period of twelve Months thereafter solicit, interfere with or endeavour to entice away or employ an employee of the Franchisor or any of the Franchisors franchisees or any employee who in the period of six Months before the said termination was an employee of the Franchisees Business.
23.3   The Franchisee and the Individual agree that each of the restrictions contained in clauses [22.2.1 to 22.2.5] is reasonable.
23.4   Notwithstanding the extent of the temporal and geographical restrictions contained in clauses [22.2.1 to 22.2.5] the Franchisor may at any time whether during or after the term of this agreement by written notice to the Franchisee and/or Individual as the case may be reduce the temporal or geographical extent of all or any such restriction.
23.5   Each undertaking contained in clauses [22.2.1 to 22.2.5] shall be construed as a separate undertaking and if any one or more of such undertakings is held to be against the public interest or in any way an unreasonable restraint of trade, the remaining undertakings shall continue in full force and effect and shall bind the Franchisee and the Individual.
23.6   The Individual undertakes that he will procure that all directors and shareholders of the Franchisee shall enter into valid and legally enforceable undertakings with the Franchisor to accept the obligations imposed by this clause and shall submit the same to the Franchisor within seven days of this agreement or in the case of any person becoming a shareholder or director during the term of this agreement within seven days of such occurrence.
23.7   Immediately upon termination of this agreement, otherwise than by virtue of a breach by the Franchisor of the terms of this agreement, the Franchisor and/or its nominee shall have the right to enter upon the Premises with such other personnel as it deems reasonably necessary and operate the Franchisees Business in place of the Franchisee and the Individual, provided that written notice of its intent to do so shall be given to the Franchisee within 14 days following the date of termination and the Premises are not residential premises.
23.8   If the Premises are leasehold business premises the parties shall use their best endeavours to enable the Franchisor to enter upon the Premises as set out above but save as aforesaid the Franchisee shall not be required to allow the Franchisor or its nominee to occupy the Premises if to do so would amount to a breach of the Franchisees lease.
23.9   The benefit of the Franchisees Business shall vest in the Franchisor or its nominees absolutely from the date on which the Franchisees Business is operated by or on behalf of the Franchisor provided that the Franchisee shall be indemnified against liability for any expense of the Franchisees Business from such date excepting any expense or liability referred to in subclause [22.11] below.
23.10   Upon receipt of written notice from the Franchisor in accordance with subclause [22.7] above the Franchisee shall take such steps as are necessary to give up possession of and/or transfer to the Franchisor or its nominee the ownership of the Premises and the assets of the Franchisees Business or, if so required by the Franchisor, the obligations to pay for any lease, hire purchase, rent or other charges in relation to the Franchisees Business. The following items shall be excluded from such transfer unless otherwise required by the Franchisor:
23.10.1   the bank accounts of the Franchisee and all monies belonging to the Franchisee;
23.10.2   the right to receive the debts of the Franchisee;
23.10.3   all liabilities of the Franchisee except as otherwise agreed.
23.11   The consideration payable to the Franchisee under any written notice under subclause [22.7] shall be:
“A + B - C
Where:
A =    for all physical assets used in the Franchisees Business, not itemised in the latest audited accounts of the Franchisees Business and which are to be transferred to the Franchisor, the current cost price to the Franchisee, or the price which was payable by the Franchisee at the date of delivery of the said items, or the market value as at the date of termination, whichever shall be the lower;
B =    for all other physical assets used in the Franchisees Business which are to be transferred to the Franchisor the net written down value in the latest audited accounts of the Franchisee, or the market value as at the date of termination, whichever shall be the lower, provided that such items are wholly owned by the Franchisee. If not wholly owned but subject to a lease, hire, hirepurchase, or other form of rental or credit agreement, the Franchisor or its nominee at no cost to the Franchisor may but shall not be obliged to take over the obligations and benefits under any such agreement as from the date of termination of this agreement (excepting any liability, financial or otherwise, arising from the default of the Franchisee under such agreement prior to the date of termination or expiry of this agreement), and the Franchisee shall take such steps and execute such documents as are required to complete an assignment or novation as required by the Franchisor;
C =    the amount of all sums owing to the Franchisor by the Franchisee.
23.12   All assets other than leased assets shall be transferred by the Franchisee with full title guarantee free of all encumbrances. Freehold or leasehold premises shall be transferred in accordance with the National Conditions of Sale current at the date of service of the notice under clause [22.7.1] except insofar as the said National Conditions are inconsistent with the terms of this agreement and save that:
23.12.1   no deposit will be payable;
23.12.2   completion shall be set for 28 days from the date of the notice referred to in clause [22.7.1] or in the case of the purchase of a leasehold interest seven days from the date upon which the landlords licence to assign has been obtained;
23.12.3   title shall be deduced in accordance with section 110 of the Land Registration Act 1925 and in the case of an unregistered freehold property with a conveyance at least 15 years before the date of the notice referred to in clause [22.7.1].
23.13   If the exercise of the option in clause [22.7] is a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 or any amendment thereof apply the Franchisee hereby irrevocably agrees to indemnify the Franchisor and/or its nominee against any claims for wrongful and/or unfair dismissal and/or redundancy payments or any other claim by any person employed by the Franchisee immediately prior to the exercise of the rights set out in subclause [22.7] in relation to the transfer of assets. Such indemnity shall include legal costs and disbursements incurred by the Franchisor and/or its nominee on a full indemnity basis.
24.   Indemnity
24.1   The Franchisee shall indemnify and keep indemnified the Franchisor from and against any and all loss, damage, liability and legal fees and costs incurred by the Franchisor arising from any breach of contract or negligence of the Franchisee, its agents, employees or licensees unless such act or default is required by the terms of this agreement, the Manual or the Franchisor.
25.   Individuals obligations
25.1   In consideration of the Franchisor entering into this agreement with the Franchisee at the request of the Individual, the Individual hereby irrevocably guarantees the performance of all the obligations of the Franchisee under this agreement [and all other agreements entered into under the Franchisees Business,] and the Individual agrees that his obligations under this clause shall be unconditional and that the Individual shall be fully liable whether or not any action has been taken to enforce the obligations of the Franchisee, or any judgment has been obtained against the Franchisee or there have been any dealings or transactions between the Franchisee and the Franchisor, and whether or not the Franchisee has been dissolved or liquidated or there has been a change in the control or ownership of the Franchisee, or any other circumstances have occurred which might otherwise constitute a legal or equitable discharge of a guarantor.
25.2   During the currency of this agreement the Individual shall:
25.2.1   hold in his own name not less than [________] per cent of the issued voting capital of the Franchisee;
25.2.2   be a director of the Franchisee;
25.2.3   devote his full time and attention to the Franchisees Business.
25.3   References in this agreement to the Individual shall unless the context otherwise requires be to each (if there are more than one) of the Individuals.
25.4   The Individual acknowledges that he has entered into this agreement only for the purposes of accepting the obligations in this agreement which are expressed to apply to the Individual and the Individual confirms that he has no rights against the Franchisor in contract or tort arising from this agreement, the Franchisees Business or the Franchisors representations, all such rights being vested in the Franchisee.
25.5   If the Individual shall consist of more than one person the liability of such persons shall be joint and several.
26.   Acknowledgements
26.1   The Franchisee and the Individual hereby acknowledge that they have no rights in the System save for those rights granted under this agreement.
26.2   The Franchisee and the Individual hereby acknowledge that in giving advice to the Franchisee, assisting the Franchisee to establish the Franchisees Business, recommending equipment and materials and assessing the suitability of the Franchisee and the Premises, the Franchisor has based its recommendations on experience actually obtained in practice but that the Franchisor does not give any guarantee or warranty with regard to such matters or generally in connection with the sales volume, profitability or any other aspect of the Franchisees Business. The Franchisee and the Individual acknowledge that they have been advised by the Franchisor to discuss their intention to enter into this agreement with other franchisees of the Franchisor and to seek other appropriate independent advice, and that the decision to enter into this agreement has been taken solely on the basis of the personal judgement and experience of the Franchisee and the Individual having taken such independent advice. Accordingly, no representation, warranty, inducement or promise express or implied has been made by the Franchisor or relied upon by the Franchisee or the Individual in entering into this agreement save such as may have been notified by the Franchisee or the Individual to the Franchisor in writing and are annexed to this agreement and signed by the parties to this agreement.
26.3   It is hereby expressly agreed between the parties that each of the restrictions contained in this agreement is reasonably necessary for the protection of the Franchisor and its other franchisees, the System, the Trade Name and the Trade Marks and does not unreasonably interfere with the freedom of action of the Franchisee or the Individual who enter into this agreement with the benefit of legal advice in full knowledge of all the provisions hereof and the Franchisee and the Individual acknowledge that all such provisions are fair and reasonable.
26.4   The Franchisee and the Individual hereby warrant that prior to the execution of this agreement or any similar agreement with the Franchisor they had no knowledge of the System, methods, trade secrets and confidential information or know how relating to the operation of a business similar to the Business or on how to conduct the Business.
27.   No warranties without authority
27.1   The Franchisee shall make no representation or claim and shall give no warranty to any person in respect of the Franchisees Business, the Business, the Products, the Services or the System save such as are specifically authorised in the Manual in its then current form at the time of the making by the Franchisee of any such representation, claim or warranty.
28.   Transfer by franchisor
28.1   This agreement and all the rights of the Franchisor hereunder may be assigned, transferred or otherwise dealt with by the Franchisor and shall inure to the benefit of the successors and assigns of the Franchisor. If required by the Franchisor the Franchisee and the Individual shall do all such things as the Franchisor shall reasonably require to facilitate such a transfer.
29.   Reservation of rights
29.1   All rights and licences not specifically or expressly granted to and conferred upon the Franchisee by this agreement are for all purposes reserved to the Franchisor.
30.   Agency
30.1   Nothing in this agreement shall be construed as making the parties hereto partners or joint venturers or render either party hereto liable for any of the debts or obligations of the other party and the Franchisee shall in no way be considered as being an agent or representative of the Franchisor in any dealings which the Franchisee may have with any third party and the Franchisee shall not act for or make any representation on behalf of the Franchisor in any such dealings and shall have no power to contract on behalf of the Franchisor.
31.   Business Names
31.1   The Franchisee shall place upon all letter headings, bills, invoices and all other documents and literature used in connection with the Franchisees Business in such manner and place as the Franchisor may direct the following words (or such other words to similar effect as may from time to time be specified by the Franchisor): “a Franchise owned and operated under Licence by” followed by the name of the Franchisee.
32.   Force majeure
32.1   None of the parties to this agreement shall be responsible to any other party for any delay in performance or nonperformance due to any causes beyond the reasonable control of the parties hereto, but the affected party shall promptly upon the occurrence of such cause so inform the other parties in writing, stating that such cause has delayed or prevented its performance hereunder and thereafter such party shall take all action within its power to comply with the terms of this agreement as fully and promptly as possible.
33.   Waiver
33.1   The failure of any party at any time to enforce any of the terms provisions or conditions of this agreement or to exercise any right hereunder shall not constitute a waiver of the same or affect that partys rights thereafter.
34.   Continuing provisions
34.1   The termination of this agreement (for whatever reason) shall not terminate any provision which is expressly or by implication provided to come into or continue in force after such termination and shall be without prejudice to the accrued rights and liabilities and other remedies of the parties hereto.
35.   Data protection
35.1   The Franchisee agrees that it will in relation to the personal data processed in connection with this agreement (“Franchise Data”):
35.1.1   process the Franchise Data in accordance with the Data Protection Act 1998 (“1998 Act”) and any other applicable data protection legislation;
35.1.2   process the Franchise Data only insofar as is necessary for the purpose of performing its obligations under this agreement;
35.1.3   not disclose Franchise Data to or allow access to it other than by employees and/or third parties engaged by the Franchisee to perform the obligations imposed on the Franchisee by this agreement and to ensure that such employees and/or third parties are subject to written contractual obligations concerning the Franchise Data which are no less onerous than those imposed on the Franchisee by this agreement;
35.1.4   use all reasonable efforts to assist the Franchisor to comply with such obligations as are imposed on the Franchisor by the 1998 Act. This includes the obligation to:
   provide the Franchisor with reasonable assistance in complying with any subject access request served on the Franchisor under Section 7 of the 1998 Act; and
   promptly inform the Franchisor about the receipt of any subject access request received by the Franchisee; and
   not disclose or release any Franchise Data in response to a subject access request without first consulting with and obtaining the consent of the Franchisor; and
   inform any individual whose personal data may be processed under this agreement, of such processing. For the avoidance of doubt, this includes informing such individuals that on termination of this agreement, personal data relating to them, including personal data contained in any customer list, shall be retained by or, as the case may be, transferred to the Franchisor. In addition the Franchisee shall obtain any necessary consents for such processing under the 1998 Act. To ensure that the Franchisors obligations under the 1998 Act are complied with, the Franchisee agrees to allow the Franchisor to approve and if the Franchisor deems necessary, amend, any such notice.
35.2   Process and/or processing means obtaining, recording or holding personal data or carrying out any operation or set of operations on the personal data, including:
35.2.1   organisation, adaptation or alteration;
35.2.2   retrieval, consultation or use;
35.2.3   disclosure by transmission, dissemination or otherwise making available; or
35.2.4   alignment, combination, blocking, erasure or destruction.
35.3   Insofar as the Franchisee acts as a person or organisation which processes personal data on behalf of a data controller (“Data Processor”) or on behalf of the Franchisor in relation to the Franchise Data, the Franchisee agrees to comply with the obligations placed on the Franchisor by the seventh data protection principle (“the Seventh Principle”) set out in the 1998 Act, which shall include:
35.3.1   to maintain technical and organisational security measures sufficient to comply at least with the obligations imposed on the Franchisor by the Seventh Principle;
35.3.2   only to process Franchise Data for and on behalf of the Franchisor for the purpose of performing its obligations under and in accordance with this agreement and only on written instructions from the Franchisor to ensure compliance with the 1998 Act.
35.4   The Franchisee agrees to provide the Franchisor with contact details of the Franchisee and at least one employee for the Franchisor to provide in relation to enquiries about the Franchisee and to display on the Franchisors website. The Franchisee agrees to ensure that for this purpose, any notices and/or consents required for the Franchisor to comply with the 1998 Act shall be provided to/acquired from such employee(s) by the Franchisee on behalf of the Franchisor.
35.5   The Franchisee shall indemnify the Franchisor against all claims and proceedings and all liability, loss, costs and expenses incurred in connection therewith incurred by the Franchisor as a result of any claim made or brought by any individual or other legal person in respect of any loss, damage or distress caused to that individual or other legal person as a result of the Franchisees unauthorised processing, unlawful processing, destruction of and/or damage to any Franchise Data processed by the Franchisee, its employees or agents.
35.6   In this Clause data controller and personal data shall have the same meanings as set out in the 1998 Act.
36.   Governing law
36.1   This agreement is governed in all respects in accordance with English law and shall be construed and take effect as an agreement made in England.
36.2   The Franchisee shall conduct its business in a lawful manner and it will faithfully comply with all applicable laws or regulations for the conduct of its business.
36.3   The Franchisor will before recourse to litigation attempt to settle all disputes in good faith and on an amicable basis.
36.4   The Franchisee must and the Franchisor may refer (but shall not be obliged so to do) all disputes to an arbitrator under the British Franchise Associations then current arbitration scheme.
36.5   Notwithstanding the provisions of subclauses [35.3 and 35.4] the parties shall not be prevented from resolving any dispute by litigation if the procedure envisaged by subclause [35.4] fails to resolve the dispute or if either party believes that immediate injunctive relief is required or the dispute relates to the non payment of sums due from one party to the other.
36.6   If litigation is instigated as envisaged by subclause [35.5] and the Franchisor is awarded its costs in the proceedings, the Franchisee shall make good the difference between the costs awarded to the Franchisor by the court and the actual costs (including all disbursements and court fees) incurred by the Franchisor within fourteen days of receiving a request therefore from the Franchisor.
37.   Supervening laws
37.1   The rights and obligations of the parties hereto under this agreement shall be subject to all applicable laws, orders, regulations, directions, restrictions and limitations of governments or other bodies having jurisdiction over the parties hereto.
37.2   If any such law, order, regulation, direction, restriction or limitation as aforesaid or any treaty or other international agreement or the judicial construction of any of them shall substantially alter the relationship between the parties hereto or the advantages derived from such relationship then the parties shall on request from the Franchisor enter into bona fide negotiations directed towards agreeing a modification to this agreement to restore the situation if practicable or to compensate for such alteration if not. If the parties are unable to agree on such a modification or compensation within three months after the notice of request has been received by the party not affected, then the Franchisor may terminate this agreement.
37.3   If the Franchisor shall receive advice confirmed in writing by a solicitor specialising in franchising who is a member of the British Franchise Associations legal committee (“the Expert”) that this agreement does not comply with the European Commissions block exemption for vertical restraints (“the Exemption”), that a failure to so comply could constitute a breach of Article 81 of the E.C. Treaty and that it is in the Franchisors commercial interests for the agreement to so comply, the Franchisor shall submit a revised franchise agreement in the same form as this agreement but incorporating those amendments (and only those amendments) which are in the Experts opinion required to enable this agreement to comply with the Exemption along with an explanatory memorandum setting out the reasons for the amendments. The Franchisee and the Individual shall execute the revised agreement within 14 days of its receipt.
38.   No set off
38.1   Neither the Franchisee nor the Individual will be entitled to withhold or reduce any payment required by the Franchisor to be made to the Franchisor for any reason whatsoever unless:
38.1.1   the Franchisor has issued a credit note or has otherwise acknowledged in writing that the Franchisee and/or the Individual have made an over payment or are otherwise entitled to withhold or reduce a payment; or
38.1.2   the proposed withholding or reduction of a payment by the Franchisee or the Individual arises directly from the Franchisors fraud or intentional breach of this agreement.
38.2   For the avoidance of doubt if the Franchisee or the Individual are required to make any payment to third parties neither the Franchisee nor the Individual will be entitled to withhold or reduce any payments required to be made to that third party on the grounds that it or he is owed monies by the Franchisor unless such third partys consent has previously been obtained in writing.
39.   Modification
39.1   No variation, modification or alteration of any of the terms of this agreement (which for such purposes shall exclude the Manual) shall be of any effect unless evidenced in writing signed by or on behalf of each of the parties hereto.
40.   Interest and VAT
40.1   Any monetary obligation not paid by the Franchisee on its due date shall bear interest at two per cent per Month from the date payment became due until payment is received in full by the Franchisor. The Franchisee shall pay all the Franchisors costs, charges and expenses directly or indirectly incurred in obtaining or otherwise enforcing payment of the same.
40.2   All sums to be paid to the Franchisor under this agreement are, unless otherwise expressly provided, VAT exclusive and accordingly VAT at the appropriate rate should be added to such payment.
41.   Entire agreement
41.1   This agreement and the Manual constitute the entire agreement between the parties and supersedes all prior agreements in connection with the subject matter of this agreement. No director, employee or agent of the Franchisor is authorised to make any representation or warranty not contained in this agreement or Manual and the Franchisee and the Individual acknowledge that they have not relied on any such oral or written representations or statements about the Business, the Franchisees Business, the prospects for the same, turnover, profitability or any other matter unless such representations or statements are annexed to this agreement and signed by the parties.
41.2   The Franchisee and the Individual having been given the opportunity to provide to the Franchisor particulars of any statements or representations which they consider have been made and which have induced either of them to enter into this agreement shall to the extent that any such statements or representations are not annexed to this agreement confirm that they have not relied on any such statement or representation.
41.3   If the exclusion of liability for negligent misrepresentation fails the test of reasonableness applicable to such an exclusion then liability for negligent misrepresentations shall not be excluded.
41.4   It is expressly provided that nothing in this agreement shall exclude any liability of the Franchisor for precontractual statements or representations made fraudulently.
42.   Notice and third party rights
42.1   Any notice, consent or the like required to be given to any party in connection with this agreement shall be in writing and shall be served personally or shall be sent by fax, email, first class post or recorded delivery to the address of such party set out in this agreement or to such changed address as shall for that purpose be notified to the other party and every such notice, consent and the like shall be deemed to have been given when served if made by personal delivery or if not made by personal delivery at the time when in the course of ordinary postage or transmission it should have been delivered at the address to which it was sent.
42.2   This agreement does not create any right enforceable by any person not a party to it except that a transferee, successor or assignee under clause [27] is deemed to be a party to this agreement.
42.3   This agreement may be rescinded or varied without the consent of or the need to give any notice to any person not a party to it.

Signed by the Franchisor    

Signed by the Franchisee   

Signed by the Individual   
SCHEDULE
The Trade Marks: [________]
The Equipment Package: [________]
Location of the Premises: [________]
Stock of the Products: [________]
The Territory: [________]


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