Kanan Bhatt
and
Lisa Jane Robson
Individual Unit Franchise Agreement
Contents
ClausePage
1Definitions
2Franchise Rights And Term
3Rights Of Renewal
4Fees
5Pre-Opening Obligations
6Training
7Franchisor's Continuing Obligations
8Franchisee's Operating Obligations
9Accounting Records
10Insurance
11Premises
12Staffing
13Advertising/Promotions
14Trade Marks
15Improvements
16Manual
17Franchisor's Right To Communicate With Customers
18Sale Of The Franchisee's Business
19Death Or Incapacity Of The Franchisee
20Termination
21Conditions Following Termination
22Indemnity
23Limitation Of Liability
24Incorporation
25Acknowledgements By Franchisee
26No Warranties Without Authority
27Assignment By Franchisor
28Reservation Of Rights
29No Partnership Or Agency
30Force Majeure
31Waiver
32Continuing Provisions
33Data Protection
34Governing Law
35Supervening Laws
36Modification
37Interest And Payments
38Entire Agreement And Further Assurance
39Notice
40Third Party Rights
41General
Schedule 1
Baby SensoryVersion 2.522 May 2012
This Agreementis dated 19th July 2013
Between
Kanan Bhatt whose registered office is at 34 Windsor Road, London, N13 5PR("the Franchisor"); and
Lisa Jane Robson of 113 Fortis Green Road, Muswell Hill, London, N10 3HP (“the Franchisee”)
Whereas
The Licensor (as defined below) as a result of extensive research and practical business experience has developed a successful business of a baby and parent bonding and development service (“the Business”) which is carried on under the name Baby Sensory (“the Trade Name”);
The Licensor has built up a substantial reputation and goodwill in the Trade Name which is associated with the highest standards of service;
The Licensor has developed specialised bonding and development services (“the Services”) to be supplied by the Business;
The Licensor is the owner of confidential information on the management and operation of the Business and in methods of conducting marketing and promoting the Business (“the System”);
The Licensor is the owner of trade mark rights in the Baby Sensory name and has registered the trade mark set out in the Schedule (“the Trade Mark”) which is associated with the Services and the Franchisor will licence the Franchisee to use the Trade Mark;
The Licensor has granted an exclusive master licence to the Franchisor to sub-licence the Business and the System in its territory which includes the Territory (as defined below); and
The Franchisee wishes to acquire from the Franchisor the right to provide the Services and to operate the System in accordance with the terms of this Agreement.
It Is Agreed as follows:-
1Definitions
1.1In this Agreement where the context so admits the following expressions shall have the meanings set out below:-
Billing Periodthe Business / Three month period to which the Franchise Rental applies.
as defined in the Recitals;
Classes / the baby and parent bonding classes run by the Franchisee’s Business;
Equipment / as set out in the Schedule;
the Franchisee’s Business / a baby and parent bonding and development service to be operated by the Franchisee in accordance with the provisions of this Agreement;
Franchise Rental Fee / the fee payable pursuant to Clause 4.3 and set out in the Schedule (the first payment of which to be made on date indicated in the Schedule (Initial Fee));
Future Trade Marks / has the meaning given in Clause 14.5;
Gross Quarterly Income / the gross income of the Franchisee's Business arising directly or indirectly from the conduct of the Franchisee's Business including income for which invoices have been issued during eachQuarter that this Agreement is in force whether or not such invoices have been settled (and for any period less than a completeQuarter). Gross income shall exclude Value Added Tax (VAT). For the avoidance of doubt this includes all fees charged to parents for attending Baby Sensory Classes.
the Initial Fee / the fee payable pursuant to Clause 4.2 and set out in the Schedule;
Licensor
Maximum Equipment Expenditure / Baby Sensory Limited, a company incorporated and registered in England and Wales with company number 05454365;
the sum referred to in Clause 8.1.3 and set out in the Schedule
Minimum Sales Levels / the minimum number of Classes to be provided by the Franchisee’s Business as set out in the Schedule;
Net Quarterly Income / Gross Quarterly Income less Venue Costs incurred during the relevant Quarter;
Opening Date / the first day of the next Billing Period from the date on which this Agreement is executed or such date as the Franchisor may agree with the Franchisee;
Payment Date / each Quarter Day;
Premises / the premises at the location specified in the Schedule or such other location agreed by the Franchisor pursuant to Clause 2.1;
Quarter Days / 25 March, 24 June, 29 September and 25 December in each calendar year;
Quarter / means each consecutive period of 3 months ending on each Quarter Day;
RPI / means the Retail Prices Index (All Items) as published by the Office for National Statistics from time to time, or failing such publication, such other index as the parties may agree most closely to resemble such index;
the Services / as defined in the Recitals;
the System / as defined in the Recitals;
Term / the period specified in Clause 2.2;
Territory / The territory set out in the Schedule;
the Trade Mark / as defined in the Recitals and set out in the Schedule;
Venue Costs / the costs incurred by the Franchisee in hiring or rentingvenues for its Classes.
1.2In this Agreement, unless the context otherwise requires:-
1.2.1the singular includes the plural and vice versa and references to any gender includes the other genders;
1.2.2reference to persons include bodies corporate, unincorporated associations and partnerships;
1.2.3words and phrases defined in the Companies Act 1985 have the same meanings in this Agreement but the word "company" includes any body corporate;
1.2.4references to "Clauses" are to Clauses or sub-Clauses of this Agreement, references to "schedules" are to the schedules to this Agreement and references within a schedule to "paragraphs" are to paragraphs or subparagraphs of that schedule; and
1.2.5references to any rate of interest shall be construed as meaning that rate as from time to time in force, calculated from day to day, and compounded on the last day of March, June, September and December in each year, both before and after judgement.
1.3In this Agreement
1.3.1any 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 re-enacted) which such provision has directly or indirectly replaced; and
1.3.2headings are for reference purposes only and shall not affect the construction of anything in this Agreement.
1.4The Schedule shall be treated as an integral part of this Agreement and references to this Agreement shall include the Schedule.
2Franchise Rights And Term
2.1The Franchisor grants to the Franchisee the exclusive rights in the Territory:
2.1.1to operate the Franchisee's Business;
2.1.2to use the Trade Name and the Trade Mark;
2.1.3to operate the System;
2.1.4to use the Stationery and all other material emanating from the Franchisor or the Licensor which is the subject of copyright; and
2.1.5to provide the Services from premises that meet the guidelines set out in the Licensors Manual.
2.2The Term shall commence on the Opening Date and shall be for a fixed period ending on 1st September 2018 (subject to the provisions of Clause 20) continuing thereafter if the renewal option set out in Clause 3 below has been exercised.
3Rights Of Renewal
The Franchisee shall have the right to renew the franchise at the expiration of the Term subject to the following conditions:-
3.1The Franchisee shall by notice in writing to the Franchisor, given not more than 6 months nor less than 3 months before the expiration of the Term, request the Term to be renewed.
3.2The Franchisor shall renew the Term for a period of 5 years provided that prior to the expiry of the Term provided:-
3.2.1there have been no material 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;
3.2.2the Franchisee has performed its obligations under this Agreement to the reasonable satisfaction of the Franchisor;
3.2.3the Franchisee shall have entered into a new Agreement which shall be in the Franchisor's then current form of franchise agreement, provided that the Franchisee shall not be under any obligation to pay any sum expressed to be payable by way of a licence fee and the Franchisor shall be under no obligation to perform any of the obligations set out in Clauses 5 and 6;
3.2.4the Franchisee shall at its expense ensure that any equipment and other items used in the Franchisee’s Business are of a standard then required by the Franchisor of its franchisees and as set out in the Catalogue; and
3.2.5the Franchisor's legal costs (if any) plus VAT thereon relating to the grant of the new Agreement shall be reimbursed
Provided That, if after the service of the notice pursuant to Clause 3.1 and prior to the execution of the Agreement referred to in Clause 3.2.3 the Franchisee shall fail to comply with Clause 3.2.4 the Franchisor shall not be obliged to grant a renewal pursuant to this Clause 3.
4Fees
4.1Prior to commencement of the training the Franchisee shall pay any fees related to training as set out in the Schedule.
4.2On the date of execution of this Agreement the Franchisee shall pay to the Franchisor in cleared funds the Initial Fee as set out in the Schedule.
4.3EveryQuarter following the Opening Date the Franchisee shall pay theapplicable Franchise RentalFee, plus any Value Added Tax, on the Payment Date without abatement, set-off or deduction.
4.4The Franchisee shall ensure that the Franchise Rental Fee is paid to the Franchisor's bank account,as notified to the Franchisee from time to time.
4.5In the event of any default in payment on the Payment Date of any sums due under this Agreement the Franchisor may suspend the provision of goods or services and the performance of its obligations under this Agreement without prejudice to any other remedy available to it.
4.6The Franchisee hereby agrees that it has no right to withhold payment of the Franchise Rental Fee by reason of its dissatisfaction with the Franchisor's performance of its obligations under this Agreement and that if it is dissatisfied it will pursue other remedies at law which may be available to it notwithstanding that the Franchisee shall be entitled to make a deduction or set off in respect of undisputed liquidated sums owed to the Franchisee by the Franchisor.
5Pre-Opening Obligations
5.1The Franchisor shall provide or procure the provision to the Franchisee before the Opening Date with the following items, the cost of which is covered by the Initial Fee:-
5.1.1Stationery - such stock of the Stationery as the Franchisor shall reasonably consider necessary;
5.1.2The first set of lesson plans;
5.1.3A copy of the Baby Sensory operations manual;
5.1.4An e-mail address to use for Baby Sensory business;
5.1.5Access to Baby Sensory marketing material;
5.2The Franchisee shall before the Opening Date:
5.2.1inform the Franchisor of the telephone number it proposes to use in the Franchisee's Business;
5.2.2arrange for the use of a suitable set of Premises for the provision of the Services during the currency of this Agreement, such Premises to be subject to the Franchisor’s prior written approval;
5.2.3attendthe Baby Sensory training as set out in the Schedule;
5.2.4procure a complete set of Baby Sensory Equipment from the Licensor;
5.2.5develop, agree (with the Franchisor) and implement a marketing plan for the launch of the Baby Sensory Business in the Territory.
6Training
6.1The Franchisee shallcomplete the Baby Sensory training programme as set out in the Schedule;
6.2If the Franchisor (or the provider of the training) reasonably believes that the Franchisee does not meet the Franchisor's minimum standards on completion of the training specified in the Schedule the Franchisor shall have the right upon notice in writing forthwith to terminate this Agreement. No part of the sums paid by the Franchisee for the training shall be returned to the Franchisee if the Franchisor so terminates this Agreement.
6.3The Franchisor shall have the right to require the Franchisee to attend further training courses at any time during the term of this Agreement if it reasonably considers that such further training is necessary. Such further training shall be charged at the Franchisor’s standard rates from time to time in force.
6.4All training referred to in this Clause shall be provided at the Franchisor’s standard rate and in all cases the Franchisee shall be liable for travelling, salaries and the living expenses of those attending.
6.5The time and place of any such training shall be at the absolute discretion of the Franchisor but the Franchisor shall try to accommodate the Franchisee's reasonable requirements.
7Franchisor's Continuing Obligations
7.1The Franchisor shall subject to compliance by the Franchisee with the terms of this Agreement at all times:-
7.1.1permit the Franchisee to carry on the Franchisee's Business under the Trade Name followed by a geographical name (as designated by the Franchisor);
7.1.2promptly make available to the Franchisee members of the Franchisor's (or the Licensor’s) staff for “on site” advice in connection with the System when reasonably required by the Franchisee and subject to the reimbursement of the Franchisor's then standard charges;
7.1.3subject 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 reasonable advice and guidance on all aspects of the Franchisee's 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 Franchisee's Business efficiently and PROVIDED ALWAYS that where the nature and frequency of advice and assistance needed by the Franchisee is such as to require additional training, the Franchisor shall have the right to require such training in accordance with Clause 6.3;
7.1.4make available to the Franchisee and its employees at the Franchisor's 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;
8Franchisee's Operating Obligations
In order to maintain the highest standard of service to be provided by the Franchisee and the Franchisor's other franchisees the Franchisee shall during the Term:-
8.1Supplies
8.1.1use in the Franchisee's Business only the promotion material provided by the Franchisor and no other promotion material unless the Franchisor's prior written approval has been obtained;
8.1.2obtain its supplies of products from the nominated suppliers or such companies as have been previously approved in writing by the Franchisor;
8.1.3subject to Clause 8.1.2, obtain such additional supplies of Equipment as the Franchisor may direct four times per year at the charges specified by the Franchisor from time to time in force (subject to the Maximum Equipment Expenditure per Billing Period);
8.2General
8.2.1carry on the Franchisee's Business to the highest standards of service;
8.2.2use its best endeavours to promote and extend the Franchisee's Business;
8.2.3not do anything which may bring the Business or the Franchisee's Business into disrepute or may have detrimental effect on the Business or the Franchisee's Business;
8.2.4comply with all statutes, by-laws and other legal requirements relating to the Franchisee's Business and obtain (and maintain) all licences, consents and approvals (if any) that may be required;
8.2.5permit the Franchisor and any person authorised by the Franchisor upon reasonable notice to enter, during normal business hours, upon the Premises or elsewhere to inspect the same and take copies of any item on the Premises;
8.2.6not during the term of this Agreement except as provided in Clause 8.2.7 be directly or indirectly interested or concerned in any business;
8.2.7The Franchisee may be interested or concerned in another business
(a)with the prior written consent of the Franchisor or
(b)under the terms of this Agreement or any other agreement with the Franchisor currently in force or
(c)as a shareholder in a company or as an owner of an interest in a business whether or not competitive with the Franchisee's Business or the Business but not if such company or business competes with the Business or other franchisees of the Franchisor and the Franchisee's interest in such a business gives it power to influence the economic conduct of the said company or business and
8.2.8not directly or indirectly solicit or tout for business outside the Territory;
8.2.9comply in all respects with the lesson plans;
8.2.10ensure that the Franchisee's Business is effectively managed by the Franchisee and by no other person without the Franchisor's prior written consent;
8.2.11not during the Term enter into any transaction or arrangement which causes The Trading Schemes Act 1996 to apply to the Business or the Franchisee's Business;
8.2.12give the Franchisor at leastsix months prior notice, such notice not to take effect until the end of the last day of the following Billing Period, of the implementation of any decision to cease or threaten to cease to carry on the Franchisee's Business within the Territory and consult with the Franchisor to enable the Franchisor to make arrangements to maintain trading relationships with its clients and the Franchisee's clients (and for the avoidance of doubt, the parties acknowledge that a failure by the Franchisee to comply with such notice and consultation may result in significant damage to the reputation of the Business and risk the loss of clients to the Business and the Franchisee's Business giving rise to a claim for damages by the Franchisor against the Franchisee);
8.2.13provide, by e-mail, the Franchisor with a complete list of customers at the end of each Billing Period;
8.2.14maintain the highest standards in relation to all of its obligations under the Franchisee Agreements;
8.2.15operate the Franchisee's Business"for such hours andfor such time as is required to expand the Franchisee'sBusiness and satisfy demand for Services in the Territory"
8.2.16not alter the System;
8.2.17comply with its obligations under the Franchise Agreement;
8.3Name and Know-how
8.3.1not make use other than exclusively for the purposes of the Franchisee's Business of any information relating to the Business, the Franchisee's Business or any other confidential information supplied by or on behalf of the Franchisor or Licensor and ensure that none of its employees or self-employed persons involved in the Franchisee's Business make use of such information other than for such purpose;