# FRANCHISE AGREEMENT
## Date and parties
Agreement date: 12 November 2028
This agreement is made between Hearth & Crumb Bakeries Limited, company number 08624119, registered office at 1 Market Yard, Leicester LE1 5GP, email franchise@hearthcrumb.example.test, called the Franchisor, and Mara Elizabeth Sutton, of 44 Cedar Drive, Loughborough LE11 2RF, email mara.sutton@example.test, called the Franchisee. The Franchisor's contract manager is Oliver James Whitmore, email oliver.whitmore@hearthcrumb.example.test, at the Franchisor's registered office. The Franchisee's contract manager is Mara Elizabeth Sutton, at the Franchisee's address and email above. The Franchisor owns the Hearth & Crumb brand and the Franchisee will operate one bakery at Unit 3, Willowgate Parade, 18 Nottingham Road, Loughborough LE11 1EU, called the Premises.
This is a business-to-business franchise arrangement. The Franchisee is an independent operator and not an employee, partner, agent or representative authorised to bind the Franchisor. The parties have had the opportunity to obtain independent legal, accounting, property, food-safety and finance advice.
## 1. Grant and territory
For the Term, the Franchisor grants the Franchisee an exclusive franchise to operate a Hearth & Crumb bakery from the Premises using the System and Marks. The protected territory is the Loughborough postcodes LE11 1, LE11 2 and LE11 3. During the Term the Franchisor will not grant another fixed-site Hearth & Crumb bakery within that territory, but may sell through national wholesale contracts, online ordering, supermarkets, temporary events and delivery platforms that are not operated as another fixed-site franchise.
The Franchisee must not operate a second site, kiosk, mobile unit, dark kitchen or online store under the Marks without a separate written agreement. The grant does not transfer ownership of any Mark, recipe, manual, customer data, domain, design or confidential method. The Franchisee may not sub-franchise, assign, charge or hold the franchise on trust without the Franchisor's written consent.
## 2. Premises and opening
The Franchisee must obtain and maintain a lease of the Premises that runs at least through 30 June 2039, being six months after the end of the initial Term. The intended lease is dated 12 November 2028, between Willowgate Estates LLP and the Franchisee, for the period from 1 January 2029 to 30 June 2039 at annual rent of £36,000 plus VAT, with a service charge budget of £4,800 plus VAT. The Franchisor is not the landlord and does not guarantee renewal, planning permission or a landlord's consent.
For this agreement, Business Day means a day other than a Saturday, Sunday or bank holiday in England and Wales on which banks in London are open for business.
The Franchisee must open to the public by 1 March 2029, at least six days a week, with ordinary hours of 7.00 am to 5.30 pm Monday to Saturday and 8.00 am to 4.00 pm Sunday, unless the Franchisor approves a variation for local trading conditions. A delay caused by landlord works, planning, utility connection or a force majeure event extends the opening date by the actual reasonable delay if the Franchisee gives notice within five Business Days. Otherwise, failure to open by 1 April 2029 is a material breach.
## 3. Initial fee and continuing fees
The Franchisee will pay an initial franchise fee of £32,000 plus VAT on signing. It covers initial training, opening support, brand access and the initial territory grant and is not refundable after the Franchisor has begun those services, except where the Franchisor's material breach causes termination before opening.
The Franchisee will pay a monthly royalty equal to 6 per cent of Gross Sales plus VAT. Gross Sales means every amount charged for food, drink, delivery, catering, gift vouchers redeemed and other sales through the bakery, excluding VAT, refunded transactions and genuine promotional discounts. A gift voucher is included when redeemed, not when sold. The Franchisee must submit a sales report by the fifth Business Day of each month and pay the preceding month's royalty by the tenth Business Day. For March 2029 Gross Sales of £48,500, VAT-exclusive, the royalty is £2,910, calculated as £48,500 multiplied by 0.06, plus VAT of £582 at 20 per cent, giving £3,492 payable. The Franchisee also pays a marketing contribution of 2 per cent of Gross Sales, calculated for that month as £970, plus VAT of £194.
Late payments bear interest at 3 per cent above the Bank of England base rate from due date to payment, subject to law. The Franchisee must not deduct a disputed claim from fees and must pay undisputed amounts on time.
## 4. System and manual
The System consists of the recipes, preparation methods, product specifications, bakery layout, approved suppliers, uniforms, training, point-of-sale settings, hygiene controls, customer service standards and marketing procedures in the confidential Operations Manual. The Franchisor may update the Manual reasonably to reflect food law, allergen information, technology, safety, consumer expectations or brand consistency. It will give at least 20 Business Days' notice for a material operational change unless urgent safety or legal compliance requires earlier implementation.
The Franchisee must ensure that all staff read the relevant Manual sections, complete induction before unsupervised work, and follow the current version. The Manual remains Franchisor property. The Franchisee must return or securely delete copies on termination, except one legal archive copy. A failure to follow a safety-critical procedure is a serious breach even if no customer complaint has yet been received.
## 5. Supply and products
The Franchisee must buy branded flour, sourdough starter, packaging, uniforms and specified cleaning products from the Franchisor or an approved supplier. The Franchisor may change an approved supplier if quality, continuity or price is reasonably affected. For goods not reasonably available from an approved supplier, the Franchisee may request a substitute; it must not substitute without written approval.
The Franchisee may sell only approved products, at prices it sets within any lawful recommended-price policy. A product specification may state that a loaf contains 500 grams and that the daily target is 220 units, but targets are not guaranteed sales. The Franchisee is responsible for ordering, waste, storage, allergens, traceability, stock rotation, pest control and disposal. It must keep chilled products at the temperatures in the Manual and record checks at opening, midday and closing.
## 6. Intellectual property and marketing
The Marks include UK trade mark UK00003899104 HEARTH & CRUMB, the flame-and-wheat logo and approved get-up. The Franchisee may use them only at the Premises, on approved packaging, in approved digital listings and in advertising that follows the Brand Guide. It must display the notice that it is an independently owned and operated franchise where the Manual requires it. It must not register a confusing domain, social-media account or company name, alter the logo, create a competing mark, or challenge the Franchisor's ownership.
The Franchisee must submit proposed local advertising costing more than £750 or using a new campaign to the Franchisor at least five Business Days before publication. The Franchisor may reject material that is inaccurate, unlawful, unsafe, offensive or inconsistent with the brand, and silence is not approval. The Franchisee owns its local customer relationships subject to the data provisions and grants the Franchisor a licence to use approved photographs and non-identifying performance information.
## 7. Quality, inspection and training
The Franchisor will provide ten training days for the Franchisee and one manager at its Leicester training bakery between 4 and 15 December 2028. The Franchisee pays travel and accommodation. The Franchisor will provide three opening-support days at the Premises. Further support is charged at £450 per day plus VAT and reasonable travel.
The Franchisor may inspect the Premises, records, products, digital listings and staff training without notice where it reasonably suspects a safety issue, and otherwise on 24 hours' notice during trading hours. It may take samples and commission an independent audit. A critical failure, including an allergen-control failure or sale of an unsafe product, requires immediate correction and may require closure until safe. The Franchisee must notify the Franchisor within four hours of a serious complaint, suspected contamination, regulator visit, injury or recall and preserve evidence.
## 8. Staff and compliance
The Franchisee recruits, trains, pays and supervises its staff and is responsible for employment law, right-to-work checks, pensions, payroll, National Minimum Wage, holiday, health and safety, equality and safeguarding. Nothing in this agreement transfers staff to the Franchisor. The Franchisee must maintain employer's liability, public liability, product liability and business-interruption insurance with reputable insurers, each with at least £5,000,000 public and product liability cover, and provide certificates on request.
The Franchisee must comply with food-safety, allergen, environmental health, fire, planning, licensing, consumer, advertising, modern-slavery, anti-bribery and data-protection requirements. At least 28 days before opening or any operation of the Premises as a food business, it must notify Charnwood Borough Council and register the Premises as a food business in accordance with the Food Safety and Hygiene (England) Regulations 2013 and Regulation (EC) No 852/2004 as retained in UK law. It must give the Franchisor evidence of the notification and registration, keep that registration current, and obtain any separate approval required under Regulation (EC) No 853/2004 as retained in UK law for an establishment handling products within that approval regime. Registration and approval are premises-specific and do not transfer from another bakery. The Franchisee must display required notices. It must not describe products as vegan, gluten-free, organic or locally sourced unless the claim is accurate and supported by records.
## 9. Data and systems
The parties are separate controllers of personal data unless a written data-processing schedule says otherwise. The Franchisee is responsible for customer orders, loyalty accounts, staff records and local marketing. It must provide a clear privacy notice, obtain consent for electronic marketing where required, honour unsubscribes within five Business Days, restrict till access by named user, use multi-factor authentication and report a personal-data breach to the Franchisor within 24 hours.
The Franchisor may process sales, stock, audit and support data to administer the franchise, secure systems, improve the System, calculate fees and comply with law. It may access transaction data but will not use identifiable customer data for unrelated marketing without a lawful basis. The Franchisee must retain sales and allergen records for the period required by law and provide secure exports on termination.
## 10. Term, renewal and transfer
The initial Term begins on 1 January 2029 and ends on 31 December 2038. The Franchisee may request one renewal of five years by written notice delivered between 1 January 2038 and 31 March 2038, inclusive. Renewal is conditional on no continuing material breach, payment of all sums, a compliant Premises lease extending at least six months beyond the renewal term, refurbishment to the current specification, execution of the Franchisor's then-current franchise agreement, and payment of a renewal fee of £12,000 plus VAT.
The Franchisor will not unreasonably withhold consent to a sale of the franchise to a buyer who passes financial, reputational and operational checks, completes training, signs the current agreement and pays a transfer fee of £8,500 plus VAT. The Franchisee must not advertise a sale using confidential information or promise that consent will be given.
## 11. Termination and consequences
The Franchisor may terminate immediately, subject to mandatory law, for insolvency, abandonment, cancellation, suspension or loss of a required food-business registration or approval, serious food-safety risk, unauthorised use of the Marks, deliberate falsification of sales, or unauthorised assignment. For another material breach, it must give 30 days to remedy; a payment breach has ten Business Days, and a breach incapable of remedy may be terminated on notice. The Franchisee may terminate for a material Franchisor breach not remedied within 30 days after notice or if the Franchisor becomes insolvent and the System cannot continue.
On termination or expiry, the Franchisee must stop using the Marks and System, remove signs within seven days, close or rebrand the digital listings, return the Manual, pay all fees, transfer or cancel the telephone and domain identifiers as directed, and permit a final stock and equipment inspection. It must not use confusingly similar branding or confidential recipes for 24 months within the protected territory, but may work in a bakery using its general skills. The Franchisor may buy unopened branded packaging at 50 per cent of its documented purchase price, with collection within 14 days.
## 12. Dispute resolution and notices
A dispute must first be referred to the Franchisee and Franchisor's managing director, who will meet within ten Business Days. If unresolved after 20 Business Days, the parties will consider mediation through the Centre for Effective Dispute Resolution. This does not delay urgent food-safety action, protection of intellectual property or a limitation deadline.
A notice must be in writing and sent by hand, pre-paid recorded post or email to the addresses stated above and to the named contract manager for the recipient. Hand delivery is effective when left between 9.00 am and 5.00 pm on a Business Day. Recorded post is effective at 9.00 am on the second Business Day after posting. Email is effective when sent before 5.00 pm if no delivery failure message is received, and at 9.00 am on the next Business Day if sent later. Email is an agreed valid notice method and not merely a copy. A routine sales report is not a notice unless it expressly identifies a breach.
## 13. General terms, law and jurisdiction
This agreement is the entire agreement about the franchise, subject to liability that cannot lawfully be excluded. Variation must be in writing signed by both parties, except a Manual update permitted by clause 4. If a provision is invalid it is severed only to the necessary extent. A person who is not a party has no right to enforce this agreement under the Contracts (Rights of Third Parties) Act 1999. The agreement is governed by the law of England and Wales, and the courts of England and Wales have exclusive jurisdiction.
## 14. Signatures
Signed for Hearth & Crumb Bakeries Limited by Daniel Thomas Whitfield, Director:
Signature: __________________________
Date: 12 November 2028
Witness signature: __________________________
Witness name: Eleanor Jade Morris
Witness address: 9 Granby Street, Leicester LE1 1DE
Witness occupation: Solicitor
Signed by Mara Elizabeth Sutton:
Signature: __________________________
Date: 12 November 2028
Witness signature: __________________________
Witness name: Reuben James Carter
Witness address: 36 Ashby Road, Loughborough LE11 3AA
Witness occupation: Chartered accountant
The signatories confirm that they have authority or capacity to sign, have read this agreement, and understand that the Franchisee operates its own business and bears its own trading risk.