Addendum To Franchise Agreement

EXHIBIT 10.48


REMEDY INTELLIGENT STAFFING, INC.
EARLY RENEWAL
ADDENDUM TO FRANCHISE AGREEMENT
FOR EXISTING FRANCHISEES


This Early Renewal Addendum to Franchise Agreement for Existing Franchisees ("ADDENDUM") is made effective as of _____________, 200__, ("EFFECTIVE DATE"), through _______, 200__, by and between Remedy Intelligent Staffing, Inc., a California corporation and wholly-owned subsidiary of RemedyTemp, Inc., having its principal place of business at 101 Enterprise, Aliso Viejo, California 92656 ("FRANCHISOR"), and _____________________________________________________________________________, (residing at / having its principal place of business at) _____________________ __________________________("FRANCHISEE") with reference to the following facts:


RECITALS


WHEREAS, Franchisor and Franchisee previously entered into a Remedy Intelligent Staffing, Inc. Franchise Agreement dated ______________________ [NOTE: INSERT DATE.] (the "INITIAL AGREEMENT").


WHEREAS, The expiration date of the Initial Agreement is, or was, on: _________________ [NOTE: COMPLETE THIS BLANK BY DETERMINING THE DATE ON WHICH THE CURRENT TERM OF THE INITIAL AGREEMENT EXPIRES.] (the "ORIGINAL EXPIRATION DATE").


WHEREAS, Franchisor and Franchisee have mutually agreed to terminate the Initial Agreement prior to the Original Expiration Date, and have entered into on this date a new form of Remedy Intelligent Staffing, Inc. Franchise Agreement (the "FRANCHISE AGREEMENT").


WHEREAS, Franchisor and Franchisee desire to make certain modifications to the Franchise Agreement to reflect both Franchisee's status as an existing franchisee of Franchisor, and that the Franchise Agreement is being entered into as a renewal of franchise rights.


NOW, THEREFORE, Franchisor and Franchisee agree as follows:


1. TERMINATION OF INITIAL AGREEMENT
AND EFFECTIVENESS OF RENEWAL


Franchisor and Franchisee acknowledge and agree that the Franchise Agreement shall become effective as of the Effective Date. At the time this Addendum and the Franchise Agreement become effective, the Initial Agreement shall terminate and, except for Franchisee's outstanding obligations thereunder, shall no longer be of any force or effect, and the franchise rights and obligations thereafter shall be governed solely by the Franchise Agreement and this Addendum.


2. GENERAL RENEWAL CHANGES


Franchisor and Franchisee agree that the following changes will be made to the Franchise Agreement to reflect that it is for the renewal of an existing Remedy Franchised Business. Unless otherwise defined herein, all capitalized terms shall have the same meaning as set forth in the Franchise Agreement.


2.1 The third "WHEREAS" clause of the Franchise Agreement shall be deleted in its entirety; and the following shall be substituted in lieu thereof:


"WHEREAS, Franchisee wishes to continue to operate its Remedy
Franchised Business, and adopt the terms set forth in this Agreement."


2.2 In Section 1 of the Franchise Agreement, "DEFINITIONS," the definition for "Calculation Year" shall be deleted in its entirety; and the following shall be substituted in lieu thereof:


"CALCULATION YEAR" shall mean, for the first Calculation Year, the
twelve (12) calendar month period beginning on the Effective Date, and,
for subsequent Calculation Years, each consecutive twelve (12) month
period thereafter during the term of this Agreement."


2.3 In Section 1 of the Franchise Agreement, "DEFINITIONS," in the definition for "Franchisor's Share," is deleted in its entirety; and the following will be substituted in lieu thereof:


"FRANCHISOR'S SHARE" shall be an amount of money, paid to
Franchisor, equal to the sum of: (i) Franchisor's Split of the Adjusted
Gross Margin Dollars, determined according to the Gross Margin Schedule
set forth in Section 5.6, (ii) eight percent (8%) of Direct-Hire Billings
during an Accounting Period, (iii) Franchisor's Split of Subcontractor
Profit during an Accounting Period, and (iv) eight percent (8%) of
Temporary-to-Hire Conversion Fees during an Accounting Period.


2.4 In Section 1 of the Franchise Agreement, "DEFINITIONS," the definition for "Gross Margin Floor" shall be deleted in its entirety; and "Gross Margin Floor" shall mean the Gross Margin Floor as set forth in the Gross Margin Schedule elected by Franchisee pursuant to Section 2.5 of this Addendum.


2.5 In Section 1 of the Franchise Agreement, "DEFINITIONS," the definition for "Gross Margin Schedule" shall be deleted in its entirety; and "Gross Margin Schedule" shall mean the schedule of Gross Margin Tiers, dollar amounts, Franchisor's Split, Franchisee's Split, Gross Margin Floor and Adjusted Gross Margin Dollar application as set forth in Attachment A or Attachment B hereto, as the case may be. In connection therewith:


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A. At the time Franchisor and Franchisee enter into this Addendum, Franchisee shall elect, by checking the appropriate box [ONLY ONE BOX SHOULD BE CHECKED], one of the following in connection with the Gross Margin Schedule to be applied to the Franchise Agreement:


[ ] Gross Margin Schedule A, attached hereto as Attachment A; or


[ ] Gross Margin Schedule B, attached hereto as Attachment B.


B. Once selected, Franchisee shall have no right to change from one Gross Margin Schedule to the other except as provided below:


1. So long as Franchisee is not then in default of the Franchise Agreement, Franchisee shall have one (1) option, exercisable only during the third or fourth Calculation Year following the Effective Date, to change from the Gross Margin Schedule selected pursuant to Section 2.5.A (either Gross Margin Schedule A or Gross Margin Schedule B) to the other Gross Margin Schedule; provided, that Franchisee must deliver a duly completed and executed notice of exercise of option, in the form of Attachment E, to Franchisor no later than ninety (90) days prior to the end of the second or third (as applicable) Calculation Year following the Effective Date. The new Gross Margin Schedule will become effective at the beginning of the next Calculation Year (either the third or fourth (as applicable) Calculation Year following the Effective Date) and shall remain effective until the termination or expiration of the Franchise Agreement, unless changed pursuant to Section 2.5.B.2. below.


2. So long as Franchisee is not then in default of the Franchise Agreement, and Franchisee has renewed its Franchise Agreement pursuant to Section 4.2 of the Franchise Agreement, Franchisee shall have one (1) option, exercisable only during the seventh or eighth Calculation Year following the Effective Date, to change from its then-current Gross Margin Schedule (either Gross Margin Schedule A or Gross Margin Schedule B) to the other Gross Margin Schedule; provided, that Franchisee must deliver a duly completed and executed notice of exercise of option, in the form of Attachment E, to Franchisor no later than ninety (90) days prior to the end of the sixth or seventh (as applicable) Calculation Year following the Effective Date. The new Gross Margin Schedule will become effective at the beginning of the next Calculation Year (either the seventh or eighth (as applicable) Calculation Year following the Effective Date) and shall remain effective until the termination or expiration of the Franchise Agreement.


2.6 The definition of "Initial Term" in Section 1 of the Franchise Agreement, under the heading "DEFINITIONS" shall be revised to mean the period of time from the Effective Date until the fifth (5th) anniversary of the Original Expiration Date, and the language of Section 4.1 of the Franchise Agreement shall be amended to reflect this revised Initial Term.


2.7 In Section 1 of the Franchise Agreement, "DEFINITIONS," in the definition for "Technology Fee," is deleted in its entirety; and the following will be substituted in lieu thereof:


"TECHNOLOGY FEE" means a monthly fee paid to Franchisor each Accounting
Period in the amount of Two Hundred thirty Six Dollars ($236) for the
first Location of the Franchised


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Business, and One Hundred Dollars ($100) for each additional Location of
the Franchised Business.


2.8 Section 4 of the Franchise Agreement, "TERM AND RENEWAL," shall be supplemented by the addition of the following new Section 4.5:


4.5. OPTIONS UPON EXPIRATION OF RENEWAL TERM.


4.5.1. Request for Additional Renewal. If, at the end of the term of the
Renewal Agreement, Franchisee desires to obtain an extra renewal period of
five (5) years (an "EXTRA RENEWAL TERM") and timely applies with
Franchisor therefor as described below, then the terms of this Section 4.5
will apply. If Franchisee makes a written request to Franchisor for an
Extra Renewal Term, no earlier than five hundred forty (540) days and no
later than three hundred sixty (360) days prior to the end of the term
under the Renewal Agreement, Franchisor may, without any obligation, offer
a new Renewal Agreement (the "EXTRA RENEWAL AGREEMENT") to Franchisee
prior to three hundred fifteen (315) days before expiration of the term of
the Renewal Agreement. The terms of the Extra Renewal Agreement,
including, without limitation, the financial terms and conditions which
provide for the compensation to both Franchisor and Franchisee, shall be
the same as the terms set forth in Franchisor's then-current form of
franchise agreement for a new Remedy franchise, except that, under the
Extra Renewal Agreement: (i) the provisions applicable to further renewals
shall not apply, (ii) no initial or renewal franchise fee shall be charged
to Franchisee, and (iii) the Territory shall remain the same. If
Franchisee does not desire to obtain an Extra Renewal Term, if Franchisee
does not timely apply therefor, or if Franchisor offers such Extra Renewal
Agreement and Franchisee does not enter into such Extra Renewal Agreement
within forty-five (45) days after such offer, then the Renewal Agreement
will expire in accordance with its terms and Franchisee will continue to
be bound by all its obligations which survive thereunder (including, but
not limited to, the provisions of the Renewal Agreement related to
noncompetition, confidentiality, and customer lists).


4.5.2. Request for Purchase of Franchised Business.


(a) If, as of two hundred seventy (270) days prior to the expiration
of the term of the Renewal Agreement, (i) Franchisee has timely applied
for an Extra Renewal Agreement pursuant to Section 4.5.1, but Franchisor
has not offered an Extra Renewal Agreement to Franchisee, (ii) Franchisee
is not then in default of the Renewal Agreement, and (iii) Franchisee
demonstrates to Franchisor's satisfaction that Franchisee has conducted in
good faith a diligent search within the past twelve (12) months for a
prospective third-party buyer but has not received a bona fide offer to
acquire the Franchised Business, then Franchisee may request that
Franchisor consider a purchase of the assets of the Franchised Business by
delivering to Franchisor a purchase consideration request, in the form
attached to the Early Renewal Addendum to the Franchise Agreement as
Attachment F (a "PURCHASE CONSIDERATION REQUEST"), no later than one
hundred eighty (180) days prior to expiration of the term of the Renewal
Agreement.


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(b) If Franchisee timely delivers such Purchase Consideration
Request in accordance with Section 4.5.2.(a) above, Franchisor may either
(i) engage in discussions with Franchisee for the purchase of the
Franchised Business, or (ii) notify Franchisee that it will not consider
such purchase. If within thirty (30) days after receipt of the Purchase
Consideration Request Franchisor fails to engage in purchase discussions
or notifies Franchisee that it will not consider such purchase, the
Renewal Agreement will expire in accordance with its terms, and Franchisee
will continue to be bound by all its obligations which survive thereunder,
including, without limitation, the provisions of the Renewal Agreement
related to confidentiality and customer list obligations; provided,
however, that Franchisee will not continue to be bound by the post-term
non-competition provision of the Renewal Agreement.


(c) If Franchisor elects to engage in discussions with Franchisee
with respect to a potential purchase, Franchisor and Franchisee shall
engage in such discussions for a sixty (60) day period after Franchisor's
receipt of the Purchase Consideration Request (the "DISCUSSION PERIOD"),
and Franchisor and Franchisee shall each conduct and submit to the other
party a valuation of the assets of the Franchised Business at least ten
(10) days prior to the end of the Discussion Period. If the parties cannot
agree upon the terms of such purchase during the Discussion Period, then
if Franchisor's valuation of the Franchised Business is (i ...