Free Franchise Agreement Template

DEFINITIONS

In this Agreement, unless the context requires otherwise:

"Brand" means the name SuperClean and all trade marks, trade names, logos, get-up, colour schemes and domain names used by the Franchisor in connection with the business.
"Business" means the business operated under the Brand as described in the Operating Manual.
"Operating Manual" means the manual of standards, procedures, specifications and methods used by the Franchisor, as amended from time to time.
"System" means the distinctive method of conducting the Business developed by the Franchisor, including the Brand, the Operating Manual, the know-how and the Confidential Information.
"Territory" means the geographical area defined in Clause 2.
"Gross Turnover" means the total revenue received by the Franchisee from the Business exclusive of VAT, credit card charge-backs and bona fide trade discounts.
"Term" means the initial period set out in Clause 2 together with any duly exercised renewal.

GRANT OF FRANCHISE, TERRITORY AND TERM

The Franchisor hereby grants to the Franchisee the right to operate the SuperClean Business within the following territory (the "Territory"):

Greater Manchester, defined as postcodes M1-M45 excluding M60 (city centre reserved).

The grant is exclusive; the Franchisor shall not grant further franchises or operate Company-owned units within the Territory. The grant is personal to the Franchisee and may not be assigned, charged, declared in trust, sub-franchised or otherwise transferred without the prior written consent of the Franchisor (not to be unreasonably withheld in the case of a bona fide sale of the whole Business).

The Business shall be operated from the following approved premises: Unit 4, Gorton Business Park, Manchester, M18 8QE. The Franchisee shall not relocate without the Franchisor's prior written consent.

Term. The initial term is 5 years, commencing on 2026-06-01, renewable for a further term of 5 years at the Franchisee's option exercised not less than six (6) months prior to expiry, subject to: (i) the Franchisee not being in material breach; (ii) execution of the Franchisor's then-current form of franchise agreement; (iii) payment of the then-current renewal fee; and (iv) any refurbishment reasonably required to bring the unit up to current System standards.

FEES, ROYALTIES AND MARKETING LEVY

In consideration of the rights granted under this Agreement, the Franchisee shall pay to the Franchisor:

(a) Initial Franchise Fee: £25,000 payable on or before the Commencement Date. The Initial Fee covers the right to use the System, initial training, pre-opening assistance, and the initial licence of the Brand. The Initial Fee is non-refundable save where the Franchisor fails to deliver the System rights or the Franchisee exercises a cooling-off right under Clause 16 (if included).

(b) Continuing Royalty: 6% of Gross Turnover, payable monthly in arrears within fourteen (14) days of each month end together with a VAT invoice. Late payment shall bear interest under the Late Payment of Commercial Debts (Interest) Act 1998 at 8% above the Bank of England base rate.

(c) National Marketing Levy: 2% of Gross Turnover, paid into a ring-fenced marketing fund administered by the Franchisor. The Franchisor shall account for the fund annually but is not obliged to spend an amount equal to any individual franchisee's contribution in that franchisee's Territory.

Audit Right. The Franchisor may, on reasonable notice, audit the Franchisee's books and point-of-sale records to verify Gross Turnover. If understatement exceeds 3%, the cost of the audit shall be borne by the Franchisee in addition to any shortfall and interest.

Set-off. The Franchisee shall make all payments without set-off or counterclaim. The Franchisor may set off any sum owed by the Franchisor against any sum owed by the Franchisee.

TRAINING AND SUPPORT

The Franchisor shall provide:

(a) Initial Training consisting of 10 working days at the Franchisor's head office followed by 5 days on-site pre-opening support. The cost of the initial training programme is included in the Initial Fee. The Franchisee and at least one manager must complete the programme before opening.

(b) Pre-Opening Assistance — site approval guidance, fit-out specification, and supply of the initial Operating Manual.

(c) Ongoing Support — telephone and field-visit support, periodic refresher training (reasonable travel and accommodation to be borne by the Franchisee), and notification of System updates.

(d) Additional / Refresher Training at the Franchisor's then-current rates where required following staff turnover or significant System changes.

FRANCHISEE'S OBLIGATIONS

The Franchisee shall throughout the Term:

(a) operate the Business strictly in accordance with the System and the Operating Manual, and use best endeavours to promote, develop and protect the Brand;
(b) use the Brand exclusively for the Business within the Territory and in the manner prescribed — inadequate quality control may give the Franchisor or a third party grounds to challenge the Brand's registration under s.46(1)(d) Trade Marks Act 1994;
(c) comply with all applicable laws and regulations including health and safety (Health and Safety at Work etc. Act 1974), food hygiene (where applicable, Food Safety Act 1990 and Food Information Regulations 2014), consumer protection (Consumer Rights Act 2015, Consumer Protection from Unfair Trading Regulations 2008), data protection (UK GDPR and Data Protection Act 2018), and employment law;
(d) obtain and maintain all permits, licences and insurances (including public liability, employers' liability in accordance with the Employers' Liability (Compulsory Insurance) Act 1969, and product liability), with the Franchisor named as additional insured where reasonable;
(e) pay all Fees promptly, file the Franchisor with monthly sales returns, and permit audit;
(f) attend all mandatory training and annual conferences;
(g) not engage in any conduct liable to bring the Brand into disrepute; and
(h) immediately notify the Franchisor of any customer complaint, enforcement notice, or adverse publicity, any infringement of the Brand of which the Franchisee becomes aware, and any material change in ownership or control.

PRE-CONTRACT DISCLOSURE AND NON-RELIANCE

The Franchisor confirms that a written Disclosure Document containing the information required by the British Franchise Association (BFA) Code of Ethical Conduct (including audited financial information, existing franchisee list, litigation history and earnings claims where made) was delivered to the Franchisee not less than fourteen (14) days before the date of this Agreement. The Franchisee acknowledges receipt of that Disclosure Document and of any earnings claims with sufficient time to take independent legal and financial advice.

Misrepresentation Act 1967. Each party acknowledges that it has not relied on any statement, representation, assurance or warranty (whether innocent, negligent or fraudulent) other than as expressly set out in this Agreement or in the Disclosure Document. Nothing in this clause shall exclude or limit any liability for fraudulent misrepresentation or for misrepresentation as to fundamental matters.

Cooling-Off. The Franchisee may terminate this Agreement within fourteen (14) days of execution by written notice, in which case the Initial Fee shall be refunded less any direct costs (including training) reasonably incurred by the Franchisor and evidenced to the Franchisee.

OPERATIONS AND STANDARDS

Operating Manual. The Franchisee shall operate the Business strictly in accordance with the Operating Manual, a copy of which has been provided to the Franchisee in electronic form and the current version of which shall remain the property of the Franchisor and be returned or destroyed on termination. The Operating Manual is protected by copyright under the Copyright, Designs and Patents Act 1988. The Franchisor may amend the Operating Manual on reasonable notice to reflect System developments; the Franchisee shall implement changes promptly.

Quality Standards. ISO 9001 certified cleaning processes; customer response within 4 working hours; NPS score maintained above 55.

Suppliers. The Franchisee shall purchase all specified goods and services only from the Franchisor or from suppliers nominated or approved by the Franchisor. This exclusive-purchasing obligation is intended to fall within the safe harbour of the Vertical Agreements Block Exemption Order 2022 (SI 2022/516) and the CMA Guidance on Vertical Agreements (CMA154) as a restriction necessary to maintain the identity and quality of the System. The Franchisee may propose alternative suppliers; the Franchisor shall not unreasonably withhold approval if the supplier meets published specifications.

Reporting. The Franchisee shall submit financial and operational reports monthly, including Gross Turnover, VAT returns, management accounts, and Key Performance Indicators as specified from time to time.

Audit. The Franchisor (or its appointed auditor) may on reasonable notice inspect the Franchisee's premises, systems, books, records and point-of-sale data to verify compliance with this Agreement and the Operating Manual. The Franchisee shall provide full access and co-operation.

Opening Hours. Required opening hours: Monday–Saturday 08:00–18:00; telephone cover 24/7 via central call-handling. Any deviation requires the Franchisor's prior written consent.

INTELLECTUAL PROPERTY AND TRADE MARKS

The Franchisor grants the Franchisee a limited, non-exclusive, non-sublicensable, non-transferable licence to use the Brand (including the registered trade marks UK00003456789 (word mark), UK00003456790 (logo mark)) solely for the operation of the Business within the Territory during the Term. This licence is granted under sections 28-31 of the Trade Marks Act 1994.

The Franchisee acknowledges that:
(a) all right, title and interest in the Brand, the Operating Manual, the System and all goodwill arising from use of the Brand belong and shall continue to belong exclusively to the Franchisor (or its licensors);
(b) it shall not register or apply to register any mark, domain name, company name or social-media handle that is identical with or similar to the Brand;
(c) it shall use the Brand strictly in accordance with the Franchisor's current guidelines and shall comply with reasonable quality-control inspections (required to preserve the validity of the Brand under s.46(1)(d) Trade Marks Act 1994);
(d) it shall notify the Franchisor promptly of any actual or suspected infringement of the Brand and shall provide reasonable co-operation in any enforcement action (at the Franchisor's cost);
(e) all improvements, adaptations or variations to the System developed by the Franchisee shall vest in the Franchisor (the Franchisee hereby assigning all such rights with full title guarantee), save that the Franchisor shall grant the Franchisee a royalty-free licence back to use the same for the duration of the Term.

DATA PROTECTION AND PRIVACY

Each party shall comply with its obligations under the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 in relation to all personal data processed in connection with the Business, including customer and employee data, CCTV footage of franchise premises, and marketing databases.

Controllership. The parties are independent data controllers in respect of their own processing; where the Franchisor shares a customer database, loyalty scheme or centralised CRM with the Franchisee, the parties shall enter into a joint-controller or controller-to-controller arrangement under Article 26 UK GDPR. Where the Franchisor processes data on the Franchisee's instructions (or vice versa), the parties shall enter into a Data Processing Agreement meeting the requirements of Article 28 UK GDPR.

Security. Each party shall implement appropriate technical and organisational measures (Article 32 UK GDPR) and shall notify the other without undue delay of any personal-data breach affecting the other's data, in order that Article 33 notifications to the ICO can be made within 72 hours where required.

Marketing. Direct-marketing activities shall comply with the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR).

BRIBERY AND ANTI-CORRUPTION

The Franchisee shall: (a) comply with all applicable anti-bribery and anti-corruption laws, including the Bribery Act 2010 (ss.1, 2, 6 and 7); (b) implement and maintain adequate procedures of the kind referred to in s.7(2) of that Act to prevent bribery by persons associated with the Franchisee; (c) not offer, promise, give, request, agree to receive or accept any financial or other advantage intended to induce improper performance; and (d) promptly notify the Franchisor of any request or demand for an undue financial or other advantage received by the Franchisee in connection with the Business. A breach of this clause shall entitle the Franchisor to terminate immediately under the default provisions of this Agreement.

CONFIDENTIALITY

The Franchisee shall keep confidential and shall procure that its officers, employees, agents and contractors keep confidential all information of a confidential nature relating to the Franchisor or the System (including the Operating Manual, recipes, formulae, software, customer lists, supplier terms, know-how and trade secrets). This obligation is grounded in the common-law duty of confidence (Coco v A. N. Clark (Engineers) Ltd [1968] FSR 415) and the Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597).

The obligation shall continue during the Term and for a period of five (5) years following termination or expiry, save for information which: (a) is or becomes publicly available otherwise than by breach of this clause; (b) is required to be disclosed by law, court order, regulator or recognised stock exchange (with reasonable prior notice to the Franchisor where permitted); or (c) is independently developed by the Franchisee without reference to the Confidential Information.

TERMINATION

The Franchisor may terminate this Agreement with immediate effect by written notice if the Franchisee:

(a) fails to pay any sum due and the default is not cured within fourteen (14) days of written notice;
(b) commits a material breach of this Agreement (including the Operating Manual) that is not capable of remedy, or is capable of remedy and has not been remedied within thirty (30) days of written notice;
(c) becomes insolvent, is the subject of a winding-up petition, administration order, a moratorium under Part A1 Insolvency Act 1986 or CVA proposal, has a receiver, administrator or liquidator appointed, or ceases or threatens to cease carrying on the Business (where the Franchisee is an individual, becomes bankrupt or enters an IVA);
(d) undergoes a change of Control (as defined in s.1124 Corporation Tax Act 2010) without the Franchisor's prior written consent;
(e) is convicted of a criminal offence or made subject to a regulatory sanction that, in the Franchisor's reasonable opinion, brings the Brand into disrepute;
(f) repeatedly fails to meet published System standards after two written warnings; or
(g) commits any act of fraud, dishonesty or material under-reporting of Gross Turnover.

Either party may terminate for convenience upon the expiry of the Initial Term (or any renewal term) by giving not less than six (6) months' written notice. Termination shall be without prejudice to accrued rights. The court's approach to repudiatory breach in franchise agreements is illustrated by Jewish Chronicle Ltd v Ashley [2022] EWHC 2324 (Ch).

POST-TERMINATION OBLIGATIONS AND RESTRICTIVE COVENANTS

Upon termination or expiry the Franchisee shall immediately:

(a) cease using the Brand, the Operating Manual, the System and any Confidential Information;
(b) remove all signage, promotional material, websites, social-media pages, vehicle livery and uniforms bearing the Brand, and assign to the Franchisor (free of charge) any domain names, social-media handles, local-number telephone numbers or listings used for the Business;
(c) return or at the Franchisor's option destroy the Operating Manual and all Confidential Information, and certify destruction;
(d) de-identify the premises such that no reasonable member of the public would associate them with the Brand; and
(e) not hold itself out as or as having been a franchisee of the Franchisor.

Restrictive Covenants. For a period of 12 months following termination or expiry, the Franchisee shall not, directly or indirectly, be interested in or engaged by any business that competes with the Business within 10 miles from the approved premises of the Territory (or the approved premises), nor solicit any customer, supplier, employee or key contractor of the Franchisor or any other franchisee of the System with whom the Franchisee has had material dealings in the preceding 12 months. These covenants are acknowledged by the Franchisee as reasonable and necessary to protect the legitimate business interests of the Franchisor in the System and its goodwill (Herbert Morris Ltd v Saxelby [1916] 1 AC 688; WFS Forwarding Ltd v Scarsbrook [2021] EWHC 2279 (Ch)). Each covenant is severable.

Buy-Back Option. The Franchisor shall have an option (exercisable within 30 days of termination) to purchase the Franchisee's fixtures, fittings, stock and lease of the premises at open-market value determined by an independent chartered surveyor, with goodwill attributable to the System expressly excluded.

TUPE AND EMPLOYEE TRANSFER

The parties acknowledge that, on termination or transfer of this Agreement, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) may apply so as to transfer the contracts of employment of employees assigned to the Business to the Franchisor or to an incoming franchisee. Each party shall provide such employee liability information (reg. 11) and co-operation as is reasonably required. The outgoing party shall indemnify the incoming party against any liability arising from acts or omissions before the transfer, and the incoming party shall indemnify the outgoing party against any liability arising after the transfer.

COMPETITION LAW COMPLIANCE

Each party shall comply with Chapter I of the Competition Act 1998 and with the Vertical Agreements Block Exemption Order 2022 (SI 2022/516). The parties acknowledge that:

(a) the Franchisor does not impose fixed or minimum resale prices; any recommended or maximum prices are advisory only and the Franchisee remains free to set its own prices (save that the Franchisee must not advertise prices that, in the Franchisor's reasonable opinion, damage the Brand);
(b) any restriction on passive sales outside the Territory is intended to fall within the exceptions permitted by Article 4 VABEO 2022 and the CMA Guidance on Vertical Agreements (CMA154);
(c) any non-compete obligation during the Term is limited to five (5) years (or the Term, if shorter) in accordance with Article 5 VABEO 2022; and
(d) any post-term non-compete obligation is limited to one (1) year and the Territory (or the approved premises), indispensable to protect know-how, and so falls within Article 5(3) VABEO 2022.

GOVERNING LAW, JURISDICTION AND GENERAL

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it shall be governed by and construed in accordance with the law of England and Wales.

Mediation. Before commencing court proceedings, the parties shall first attempt in good faith to resolve any dispute by mediation in accordance with the CEDR Model Mediation Procedure. A party may commence court proceedings if the dispute has not been resolved within sixty (60) days of referral, or earlier to seek injunctive relief.

Jurisdiction. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales, save that the Franchisor may seek injunctive or other equitable relief (including springboard relief) in any court of competent jurisdiction pursuant to s.37 Senior Courts Act 1981 and Part 25 of the Civil Procedure Rules.

Contracts (Rights of Third Parties) Act 1999. A person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

Entire Agreement / Variation / Severance. This Agreement (together with the Disclosure Document, where delivered, and the Operating Manual) constitutes the entire agreement between the parties. No variation shall be effective unless in writing and signed by both parties. If any provision is held invalid or unenforceable, it shall be modified to the minimum extent necessary or severed, and the remainder shall continue in full force.