FRANCHISE AGREEMENT
PARTIES
FIGHT KLUB LIMITED (Company Number 09964835) whose registered office address is Andrew James House Bridge Road Ashford TN23 1BB (“Franchisor”); and
[Name of Franchisee] of [address] (“You”) [nb. this assumes sole trader Franchisee. If corporate, provide separate Personal Guarantee]
BACKGROUND
Time, effort and money has been expended in developing a business offering high intensity workouts in a night club atmosphere, using a system built on specific techniques, equipment, formats, methodology, combinations, choreography, drills, sequences, challenges, material, lyrics, vocal motivation, cuing and countdowns techniques and digital technology contents and services (“System”). The business operates under the trade name “Fight Klub” (“the Trade Name”) and an associated trade mark has been registered by the Franchisor’s owner, details of which are set out in the Schedule (“the Trade Mark”).
[You are an existing Franchisee and have agreed to formalise your relationship] OR [The Franchisor has agreed to appoint You to use the System and the Trade Mark] on the terms set out in this Agreement.
OPERATIVE PROVISIONS
DEFINITIONS
In this Agreement all words starting with a capital letter shall be given the meaning set out in the Schedule or as defined in the Agreement.
LICENCE GRANT
In consideration of You paying to the Franchisor the fees set out at Clause 7, the Franchisor grants to You the right to operate a business under the Trade Mark and the Trade Name using the System (“the Business”) by offering Services at Venues in the Territory, all on the terms set out below.
You agree not to indirectly or directly market the Services outside the Territory nor provide the Services at Venues outside the Territory unless specifically authorised in writing by the Franchisor. Such authorisation may be withdrawn at any time.
The Franchisor will not licence any other person than You to operate the System under the Trade Mark at Venues in the Territory.
TERM OF THE AGREEMENT
This Agreement shall start on the Commencement Date and, subject to early termination as provided for elsewhere in this Agreement, will continue for an initial period of three years, and after that is as set out in clause 3.2, but subject to the one year break clause in clause 8.2.
At the end of the initial three year term, the Franchisor may offer You a full Fight Klub franchise. This will be on the then terms of the standard Fight Klub franchise agreement save that You will not be expected to pay any additional initial fee other than the Franchisor’s reasonable legal fees in issuing the Fight Klub franchise agreement. If the Franchisor does not offer You a new franchise, or You decline to accept it, then this Agreement will continue until terminated by either party giving to the other not less that one month’s written notice.
TRAINING
You must attend such training as is required by the Franchisor prior to starting operation of Your Business. If, on completion of such training, You have failed to reach the standards required by the Franchisor, this Agreement shall terminate immediately and the Franchisor will reimburse to You the Initial Fee less the cost of such training and any other reasonable expenses incurred by the Franchisor.
All training is provided at venues selected by the Franchisor, and You will be responsible for payment of all of Your travel, subsistence and accommodation expenses in attending such training.
The Franchisor may at its discretion provide additional training to You. Any training which may be provided during the first year of the term of this Agreement shall be at such cost to be agreed between the parties.
FRANCHISOR’S OBLIGATIONS
Provided that You comply with the terms of this Agreement at all times, the Franchisor will provide:-
the training specified in Clause 4.1.
the Starter Package.
advice on marketing for potential clients in the Territory;
telephone consultation and advice on the System, together with such visits to You as the Franchisor considers appropriate.
such additional stationery, marketing materials, as You may require, at Your cost.
Punch Bags on hire at the Franchisor’s standard rates.
guidance in respect of the System, and revisions to the System through periodic updates (which may be verbal or in writing).
The Franchisor may provide You with such additional services, such as certification services, which it deems appropriate, and at a cost to be agreed between the parties.
YOUR OBLIGATIONS
In order to maintain the common identity and reputation associated with the System and the Trade Mark, and the Trade Name, You agree throughout the term to:-
Operate Your Business strictly in accordance with the System, and with all instructions given by the Franchisor and as detailed in the Manual, and not to provide, use or sell as part of the Business any services equipment or products that are not authorised by the Franchisor.
Comply with all legal requirements and regulations which apply to the Business including but not limited to health and safety requirements, requirements for clearance for working with children, police checks, and data protection legislation.
Use the Trade Mark as specified by the Franchisor and at all times safeguard and promote the reputation of the Trade Mark, the Trade Name and the Business.
Not transfer this Agreement. You may sell Your Business subject to obtaining the Franchisor’s prior written consent, which will normally be given provided that the purchaser is approved by the Franchisor and pays the appropriate training fee and the full licence fee, and that prior to any such sale You are VAT registered.
Attend such additional training at Your cost as the Franchisor shall reasonably require.
Take out and maintain in force at all times during the term such insurance cover as is specified by the Franchisor with an insurance company approved by the Franchisor, and provide to the Franchisor copies of such insurance cover.
Only use such advertising and marketing material as is approved in advance by the Franchisor.
Only use in Your Business the Punch Bags and equipment, business stationery and other materials supplied directly by the Franchisor or its nominated suppliers. You acknowledge that each Punch Bag is supplied on hire to You, and that as such You never gain ownership of a Punch Bag, which must be returned to the Franchisor on termination of this Agreement.
Allow the Franchisor’s representative to attend any classes operated by you.
Only engage Instructors on terms approved by the Franchisor.
Provide to the Franchisor copies of such accounting and financial period records including Gross Revenue reports as the Franchisor may from time to time require.
In every month from and including the seventh month of the term onwards make a minimum of 50 sales per week. You acknowledge that any failure to comply with this requirement will cause a loss to both You and the Franchisor and that accordingly the Franchisor may make the Territory non-exclusive should You fail to remedy this requirement within 30 days of our written notification to that effect.
FEES
You agree to pay the Franchisor the Initial Fee immediately on execution of this Agreement. Such payment shall be deemed earned on receipt and shall not be refundable in any circumstances.
It is a fundamental part of the System that all clients book and pay online. The Franchisor will pay You all Gross Revenue that it receives on Your behalf on a monthly basis within two weeks of the end of the period to which the payments apply, but after deducting the Management Service Fee Business Support Fee hire fees and any other payments properly due to the Franchisor.
You undertake that You will pay into a bank account nominated by us any payment that you receive for Your provision of the Services within 5 days of its receipt and will promptly notify all such receipts on the reports required as part of the System.
TERMINATION
The Franchisor may terminate this Agreement immediately by giving notice in writing to You in any of the following events:-
If You do or omit to do any act which, in the Franchisor’s reasonable opinion, is damaging to the reputation of the Trade Mar, Trade Name or the Franchisor or has a detrimental effect on any other Fight Klub franchisees or Franchisees.
If You cease or threaten to cease to carry on Your Business.
If You commit any breach of this Agreement and, where the breach is capable of remedy, fail to remedy such a breach within fourteen days of the date of a written notice from the Franchisor to that effect.
If You commit two or more breaches of any of the terms of this Agreement within a six month period whether You have remedied such breach or not.
If You have a bankruptcy order made against You or You enter into any arrangement with Your creditors or You die.
8.2 You may terminate this Agreement by giving written notice of termination given not more than 60 and not less than 30 days before the first anniversary of the Commencement Date time being of the essence. No reminder will be given and if such notice is not received in time this Agreement shall continue to be binding up to the Expiry Date.
EFFECTS OF TERMINATION
Immediately on termination or expiry of this Agreement, You shall:-
return to the Franchisor at Your own cost the Manual and all materials and equipment loaned to You by the Franchisor and return all written guidance, stationery, marketing and advertising material, and promotional products, and all material whatsoever and in whatever form and whether or not bearing the Trade Mark;
cease to use the Trade Mark and the System and all signs, notices, advertising and any other material whatsoever indicative of the Franchisor, and not hold Yourself out as an operator of the Business;
transfer to the Franchisor in such form as the Franchisor shall reasonably require the benefits of any client contracts relating to the Business and pay over to the Franchisor any sums received on account of such contracts without any deduction or right of set-off;
pay the Franchisor in full for all sums that You owe to it;
provide to the Franchisor a list of clients of Your Business both actual and prospective.
return Punch Bags and any other equipment hired to You in good condition.
You shall for a period of one year from the date of termination or expiry of this Agreement:
not be engaged within the Territory in any capacity in any business which is similar to the Business or which provides services which compete with, or are similar to the Services;
not solicit or tout for business from any person, business or organisation which was during the period of one year prior to such termination a customer of Your Business.
ACKNOWLEDGMENTS
You acknowledge that the goodwill and all other intellectual property rights in the Trade Name, the Trade Mark the Manual and the System (including any developments to the System in which You participate) shall at all times belong to the Franchisor and that You only have the right to benefit from such rights to the extent provided by this Agreement. You acknowledge that You have been told that the title of all freestanding punchbags remains with the company.
You acknowledge that You have been advised by the Franchisor that some parts of the System are at their early stages of development and therefore to seek appropriate independent advice on that basis and that the decision to enter into this Agreement has been taken solely on the basis of Your personal judgement and experience having taken such independent advice. You acknowledge that the business venture contemplated by this Agreement involves business risks particularly because the System will be developed over time by the Franchisor and that Your Business’s success will be affected by Your ability and commitment.
You further acknowledge that the contents of the Manual and all other written material provided to You by the Franchisor and all other details of the System are confidential and You undertake that You will not, except for the sole purpose of conducting Your Business, at any time (both during and after the term), use or divulge to any other person any information or knowledge concerning the Business, the System or the contents of the Manual, both during the term and after termination or expiry of this Agreement.
You acknowledge that You have been told that if there are any pre-contractual statements made to You by the Franchisor which You consider have induced You to enter into this Agreement You are obliged to attach an agreed form of the pre-contractual statements on which You have relied to this Agreement. You acknowledge that if no such pre-contractual statements are attached, then You are deemed not to have relied upon any such pre-contractual statements.
This Agreement therefore contains the entire agreement between the parties and no pre-contractual statements shall add to or vary this Agreement unless they are attached to this Agreement, provided that nothing in this Agreement shall exclude the Franchisor’s liability for pre-contractual statements made by it fraudulently.
You further acknowledge and agree that all rights in data used by Your Business including films of Your classes and all customer information in digital or other form shall belong to the Franchisor and that You only have the rights to benefit from access to this data on the terms and for the purposes set out in this Agreement. You hereby assign all current and future rights in such data to the Franchisor.
MISCELLANEOUS
The Franchisor may assign this Agreement without any consent from You. You may only assign this Agreement with the prior written consent of the Franchisor.
The parties to this Agreement do not intend that any of its terms will be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person not a party to it.
This Agreement shall be subject to English law and to the non-exclusive jurisdiction of the English courts.
VALUE ADDED TAX
All sums payable to the Franchisor under or in connection with this Agreement shall be exclusive of any VAT which may be chargeable, which will be payable in addition to the sums in question at the rate for the time being prescribed by law.
IN WITNESS this Agreement has been signed by the parties on the date at the beginning of it.
THE SCHEDULE
Business Support Fee: means [£12.50 per week], or the fees then in place. The business support fee is subject to change with 14 days notice.
Commencement Date: from date of payment of initial fee
Expiry Date: 3 years after the Commencement Date
Gross Revenue: means the gross sales of Your Business including all cash and credit transactions of whatever nature and receivable but excluding any Value Added Tax and any credit notes properly issued in any calendar month.
Initial Fee: £ amount on payment form
Manual Details of the System which may initially be in outline form and which will be developed by the Franchisor during the term.
Management Service Fee: 25% of Gross Revenue or £99.00 (GB pounds) per month minimum fee, whichever is more.
Punch Bags means the branded punch bags and associated accessories supplied by or on behalf of the Franchisor;
Services: means the provision of [the training programmes set out in the Manual]
Starter Package:
Training and opening support
Manual [and instructor’s
handbook] on loan
Territory: means the [following postcodes] [area bordered in red on the attached plan]
Venue means any location at which You provide the Services
Trade Mark:
Trade Mark Number
Text
Class
02606198
Stylised Fight Klub
16,25,35,41