franchise agreement, attachment B

635 Pages·2017·5.07 MB·English

ITT Version
Subject to Contract

Dated [INSERT DATE1]

(1) The Secretary of State for Transport
(2) [INSERT NAME OF FRANCHISEE2]

FRANCHISE AGREEMENT
relating to South Eastern Franchise

1 Note to Bidders: DfT to populate before contract signature.
2 Note to Bidders: Bidders to populate.

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[NOTE TO BIDDERS: THIS IS A MANUAL TABLE OF CONTENTS WITH HYPERLINKS
INSERTED TO THE MAIN SCHEDULES AND SUB-SCHEDULES. THE PAGE NUMBERS BELOW
ARE APPROXIMATE.]

TABLE OF CONTENTS

1. INTERPRETATION ........................................................................................... 16
2. AGREED DOCUMENTS ...................................................................................... 19
3. DEFINITIONS .................................................................................................. 20
4. COMMENCEMENT ........................................................................................... 110
5. DURATION OF THE FRANCHISE AGREEMENT ..................................................... 111
6. GENERAL OBLIGATIONS ................................................................................. 112
7. ASSIGNMENT ................................................................................................. 112
8. CHANGE OF CONTROL AND FACILITATION FEE ................................................... 112
9. COMPLIANCE WITH LAWS ................................................................................ 113
10. CUMULATIVE RIGHTS AND REMEDIES ............................................................... 113
11. DISPUTE RESOLUTION PROCEDURE .................................................................. 113
12. NOTICES ....................................................................................................... 115
13. SET-OFF ........................................................................................................ 116
14. MISCELLANEOUS PROVISIONS ......................................................................... 116
15. COMPETITION ................................................................................................ 118
16. ENTIRE AGREEMENT ....................................................................................... 120
17. GOVERNING LAW AND JURISDICTION ............................................................... 120
SCHEDULE 1 PASSENGER SERVICE OBLIGATIONS ................................................. 123
Schedule 1.1 - Franchise Services and Service Development ................................ 124
PART 1 – FRANCHISE SERVICES ................................................................................. 124
1. Franchise Services .......................................................................................... 124
2. Station Services ............................................................................................. 124
3. Light Maintenance Services .............................................................................. 124
4. Ancillary Services ............................................................................................ 125
5. Royal Train .................................................................................................... 127
6. Restrictions relating to Franchise Services .......................................................... 128
7. Restrictions on Closures of Railway Passenger Services or Railway Facilities ........... 129
8. Subcontracting any Passenger Services ............................................................. 130
PART 2 – SERVICE DEVELOPMENT ............................................................................... 131
9. Train Service Requirement - Purpose and Responsibility ...................................... 131
10. Train Plan ...................................................................................................... 131
11. Consultation on Significant Alterations to the Timetable ....................................... 132
12. Timetable Development Rights ......................................................................... 133
13. Certification and Notification by Franchisee of Exercising Timetable Development
Rights ........................................................................................................... 136
14. Planning to meet Target Passenger Demand ....................................................... 136
15. Capacity Mitigation Proposal ............................................................................. 138
16. New or amended Train Service Requirement by the Secretary of State
and Franchisee Informed Opinion ...................................................................... 139
17. Procedural Arrangements and Timescales .......................................................... 141

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18. Obligations in relation to other Train Operators................................................... 141
19. Provisions relating to Access Agreements and Property Leases ............................. 142
20. The Timetable and the Working Timetable ......................................................... 142
Appendix to Schedule 1.1 ........................................................................................... 143
Schedule 1.2 – Operating Obligations ................................................................... 143
1. Daily Operating Obligations .............................................................................. 143
2. Timetabling and Train Planning Compliance Investigation .................................... 143
3. Timetable changes proposed by the Infrastructure Manager ................................. 144
4. Timetable changes proposed by the Franchisee .................................................. 145
5. Timetable changes requested by the Secretary of State ....................................... 146
6. Obligations of the Franchisee in the event of disruption to railway
passenger services .......................................................................................... 146
7. Obligation to use all reasonable endeavours under this Schedule 1.2 ..................... 147
Schedule 1.3 – NOT USED ...................................................................................... 150
Schedule 1.4 – Passenger Facing Obligations ........................................................ 151
1. Publishing the Timetable .................................................................................. 151
2. Communicating Late Timetable Changes ............................................................ 152
3. Fares Selling Restrictions ................................................................................. 153
4. Passenger's Charter ........................................................................................ 155
5. End to End Journeys and Cycles ....................................................................... 156
6. Statutory Notices ............................................................................................ 156
7. Train and Station Cleaning ............................................................................... 157
8. Publication of Performance Data ....................................................................... 157
9. Publication of Complaints and Faults Handling Data ............................................. 158
10. Route Maps .................................................................................................... 159
Schedule 1.5 – Information about Passengers ...................................................... 161
1. Passenger Numbers Information ....................................................................... 161
2. Manual Passenger Counts ................................................................................ 162
3. Technology for Obtaining the Information Referred to in paragraph 1.2 ................. 162
4. Client Relationship Management (CRM) Data ...................................................... 163
5. Yield Management Data ................................................................................... 164
6. Personal Data - General Provisions .................................................................... 164
7. Rail Passenger Counts Database ....................................................................... 166
8. Intellectual Property Rights and General Provisions ............................................. 168
Schedule 1.6 - The Rolling Stock ........................................................................... 170
1. Purpose ......................................................................................................... 170
2. The Composition/Deployment of the Train Fleet .................................................. 170
3. Changes to the Train Fleet ............................................................................... 171
4. Rolling Stock Testing and Commissioning ........................................................... 172
5. Controlled Emission Toilets .............................................................................. 172
6. Baby Changing Facilities .................................................................................. 173
7. Measurement of Traction Energy Usage ............................................................. 173
APPENDIX 1 – The Composition of the Train Fleet ......................................................... 174
Schedule 1.7 - Stations ......................................................................................... 179
1. Station Asset Management ............................................................................... 179
2. Grey Assets ................................................................................................... 182

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3. Station Social and Commercial Development Plan ............................................... 183
4. Consultations ................................................................................................. 184
5. NOT USED ..................................................................................................... 185
6. Security at Stations ......................................................................................... 185
7. Information about Station Improvement Measures .............................................. 185
8. NOT USED ..................................................................................................... 186
9. Station Investment ......................................................................................... 186
APPENDIX 1 - List of Stations and Car Parks with Secure Station Accreditation and Secure Car
Parks Accreditation .................................................................................................... 187
APPENDIX 2 - Information about Station Improvement Measures .................................... 191
APPENDIX 3 – NOT USED .......................................................................................... 192
APPENDIX 4 – NOT USED .......................................................................................... 193
SCHEDULE 2 - ASSETS, LEASES, OTHER FRANCHISEES AND SCHEMES .................. 194
Schedule 2.1 – Asset Vesting and Transfer ........................................................... 195
1. Vesting of Property Leases at the Start Date ...................................................... 195
2. Vesting of Property Leases during the Franchise Term ......................................... 195
Schedule 2.2 - Security of Access Agreements, Rolling Stock Leases, Station and
Depot Leases ......................................................................................................... 196
1. Novation of Access Agreements during the Franchise Term ................................ 196
2. Rolling Stock Related Contracts and Insurance Arrangements ............................ 196
3. Cascaded Rolling Stock and Delayed Cascade Mitigation Plan ............................. 197
4. Assignment of Property Leases during the Franchise Term ................................. 200
5. Station and Depot Leases .............................................................................. 200
6. Station Subleases ......................................................................................... 201
Schedule 2.3 – Other Franchisees ......................................................................... 202
1. Other Franchisees .......................................................................................... 202
Schedule 2.4 – NOT USED ...................................................................................... 203
Schedule 2.5 - Transport, Travel and Other Schemes ............................................ 204
1. Local Authority Concessionary Travel Schemes ................................................. 204
2. Multi-modal Fares Schemes ........................................................................... 205
3. Discount Fare Schemes ................................................................................. 206
4. Inter-Operator Schemes ................................................................................ 206
APPENDIX 1 – List of Transport, Travel and Other Schemes ............................................ 208
SCHEDULE 3 – NOT USED ...................................................................................... 210
SCHEDULE 4 - ACCESSIBILITY AND INCLUSIVITY ................................................. 211
1. Relationship with other obligations relating to persons with disabilities ................ 212
2. Physical Alterations and Accessibility of Stations ............................................... 212
3. Dealing with Claims relating to Stations ........................................................... 215
4. Specific additional obligations relating to persons with disabilities ....................... 216
APPENDIX 1 – Minor Works ........................................................................................ 217
APPENDIX 2 – Accessible Transport Arrangements ........................................................ 218
SCHEDULE 5 – FARES AND SMART TICKETING ..................................................... 219
Schedule 5.1 - Purpose, Structure and Construction ............................................. 220
1. Purpose of provisions relating to Creating Fares ............................................... 220
2. Structure of Schedule 5 ................................................................................. 220
3. References to “Fare” ..................................................................................... 221

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4. Fares Documents .......................................................................................... 221
5. Setting of Child Prices ................................................................................... 222
6. New Stations ................................................................................................ 222
Schedule 5.2 - Franchisee's Obligation to Create Fares ......................................... 223
1. Creation of Protected Fares and Commuter Fares .............................................. 223
2. Restrictions on Creation of Fares .................................................................... 223
Schedule 5.3 - Allocation of Fares to Fares Baskets .............................................. 224
1. Allocation of Fares to Fares Baskets ................................................................ 224
2. Designation of Non Fares Basket Fares ............................................................ 224
Schedule 5.4 - Regulation of Fares Basket Values ................................................. 225
1. Value of Fares Basket not to exceed Regulated Value ........................................ 225
2. Value .......................................................................................................... 225
3. Projected Revenue ........................................................................................ 225
4. Regulated Value ........................................................................................... 225
Schedule 5.5 - Regulation of Individual Fares ....................................................... 227
1. Price not to exceed Regulated Price ................................................................. 227
2. Regulated Price ............................................................................................ 227
3. Compulsory Inter-available Flows ................................................................... 228
Schedule 5.6 - Exceeding the Regulated Value or Regulated Price ........................ 229
1. Exceeding the Regulated Value ....................................................................... 229
2. Exceeding the Regulated Price ........................................................................ 230
Schedule 5.7 - Changes to Fares and Fares Regulation ......................................... 231
1. Changes to Fares Baskets .............................................................................. 231
2. Changes to the 2015 Nominal Ticket Sales ....................................................... 232
3. Changes to the Reference Revenue, Gross Revenue, 2015 Nominal Ticket Sales
and/or 2015 Ticket Revenue .......................................................................... 232
4. Changes to Prices ......................................................................................... 233
5. Changes to Fares Regulation .......................................................................... 233
6. Changes to Compulsory Inter-available Flows ................................................... 233
7. Change of Lead Operator/Major Flow Operator ................................................. 233
8. Changes to Fares Documents ......................................................................... 234
Schedule 5.8 - Fares Regulation Information and Monitoring ............................... 235
1. Information .................................................................................................. 235
2. Monitoring ................................................................................................... 235
Schedule 5.9 – Smart Ticketing ............................................................................. 236
1. Smart Ticketing ............................................................................................ 236
SCHEDULE 6 - FRANCHISE SPECIFIC OBLIGATIONS AND COMMITTED OBLIGATIONS239
Schedule 6.1 - Franchise Specific Obligations ....................................................... 240
PART 1 - NOT USED ................................................................................................. 240
PART 2 - FRANCHISE SPECIFIC OBLIGATIONS ............................................................ 241
1. NOT USED ................................................................................................... 241
2. Specified Projects ......................................................................................... 241
3. Transferring Stations ..................................................................................... 241
4. NOT USED ................................................................................................... 242
5. Digital Railway Programme ............................................................................ 242
6. NOT USED ................................................................................................... 243

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7. NOT USED ................................................................................................... 243
8. NOT USED ................................................................................................... 243
9. NOT USED ................................................................................................... 243
10. Boxing Day Services ..................................................................................... 243
11. NOT USED ................................................................................................... 243
12. NOT USED ................................................................................................... 243
13. Co-operation with Third Party Promoted Franchise Schemes............................... 244
14. NOT USED ................................................................................................... 245
15. Railway Heritage........................................................................................... 245
16. NOT USED ................................................................................................... 245
17. NOT USED ................................................................................................... 245
18. Ticketless Travel Surveys ............................................................................... 245
19. Not used ...................................................................................................... 245
20. Branding Requirements ................................................................................. 245
21. GTR Units & Modifications .............................................................................. 246
22. Digital Rail Proposal ...................................................................................... 246
23. Co-operation regarding Charging Review ......................................................... 246
24. Chart Leacon depot ....................................................................................... 246
Schedule 6.2 - Committed Obligations .................................................................. 248
PART 1 - COMMITTED OBLIGATIONS ........................................................................... 248
PART 2 - SPECIAL TERMS RELATED TO COMMITTED OBLIGATIONS ................................. 249
1. Continuation of Availability ............................................................................. 249
2. Expenditure Commitments ............................................................................. 249
3. Underspend ................................................................................................. 250
4. Nature of Commitment .................................................................................. 250
5. Review of Compliance ................................................................................... 250
6. Consequences of Late Completion or Non-Delivery of Committed Obligations ....... 251
7. Specimen Schemes ....................................................................................... 251
8. Third Party Consents, Agreement and Conditions .............................................. 251
9. Designation of Assets comprised in COs as Primary Franchise Assets .................. 252
10. Obligations on Delivery of a Committed Obligation ............................................ 252
Schedule 6.3 - Contractual Incentive Mitigations ................................................... 253
1. Definitions ................................................................................................... 253
2. Application of Contractual Incentive Mitigations ................................................ 255
3. General Obligation of the Franchisee when the provisions of Schedule 6.3
(Contractual Incentive Mitigations) apply ..................................................................... 256
4. Bespoke Revenue Initiative Proposal ............................................................... 256
5. Marketing Plan ............................................................................................. 257
6. Ticketless Travel Payments ............................................................................ 260
7. Operational Performance ............................................................................... 263
8. Changes in Numbers and Total Cost of Employees ............................................ 264
9. Percentage Allocations ................................................................................... 264
10. The Bid Fares Strategy .................................................................................. 265
11. Changes to the Bid Fares Strategy .................................................................. 265
12. Industrial Action ........................................................................................... 266
13. Train Maintenance ........................................................................................ 266

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14. Additions to the Annual Business Plan ............................................................. 267
APPENDIX 1 ............................................................................................................. 268
APPENDIX 2 ............................................................................................................. 269
Part 1 - Ticketless Travel Benchmark ........................................................................... 269
Part 2 - Annual Ticketless Travel Benchmark ................................................................ 270
Part 3 - Payment Table .............................................................................................. 271
APPENDIX 3 ............................................................................................................. 272
Part 1 .................................................................................................................. 272
Part 2 .................................................................................................................. 273
Part 3 .................................................................................................................. 274
Schedule 6.4 - Alliances ......................................................................................... 275
1. Co-operation with Network Rail ....................................................................... 275
2. Compliance with the Alliance Agreement .......................................................... 275
3. Termination of the Alliance Agreement ............................................................. 275
4. Reporting on the Alliance Agreement ............................................................... 275
SCHEDULE 7 – PERFORMANCE BENCHMARKS ........................................................ 277
Schedule 7.1 – Operational Performance .............................................................. 278
1. Definitions, Charging Review, Track Access Agreement, Changes to Benchmarks and
Annual Benchmarks and Notice of Performance Results ...................................... 278
2. Reporting Requirements.................................................................................. 286
PART A – NON-FINANCIAL ENFORCEMENT REGIME ...................................................... 287
3. Cancellation Calculation: Value of A ................................................................. 287
4. Cancellation Calculations during the Initial Reporting Stage ................................ 287
5. Cancellation Calculation during the Breach Reporting Stage ................................ 288
6. Cancellation Calculations during the Subsequent Reporting Stage ........................ 288
7. NOT USED. ................................................................................................... 288
8 NOT USED. ................................................................................................... 288
9. NOT USED. ................................................................................................... 288
10. TOC Minute Delay Calculations during the Initial Reporting Stage ........................ 288
11. TOC Minute Delay Calculations during the Breach Reporting Stage ....................... 289
12. TOC Minute Delay Calculations during the Subsequent Reporting Stage ................ 289
13. NOT USED. ................................................................................................... 290
14. NOT USED. ................................................................................................... 290
15. Short Formations ........................................................................................... 290
16. Calculations .................................................................................................. 292
17. Service Recovery Plans and Force Majeure ........................................................ 292
18. Consequences for Poor Performance – Benchmarks............................................ 292
PART B – FINANCIAL REGIME .................................................................................... 293
19. Annual Cancellations Calculations .................................................................... 293
20. Annual TOC Minute Delay Calculations .............................................................. 293
21. Annual Short Formation Calculations ................................................................ 293
22. Performance Sum Payments – Annual Benchmarks and Annual Measures ............. 294
23. Determination of the Annual Benchmarks and Annual Measures for Franchisee Years
that are less than thirteen (13) Reporting Periods but are six (6) Reporting Periods or
More ............................................................................................................ 307

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24. Determination of the Actual T-3 Performance Level, the Actual T-15 Performance
Level and Actual All Cancellations Performance Level for Franchisee Years that are less
than thirteen (13) Reporting Periods but are six (6) Reporting Periods or more. .... 312
25. Infrastructure Manager Claim .......................................................................... 313
26. Consequences for Poor Performance – Annual Benchmarks and Annual
Measures ...................................................................................................... 313
27. Payments made by Secretary of State .............................................................. 315
28. NOT USED .................................................................................................... 315
29. Payments in respect of the Final Franchisee Year ............................................... 315
PART C – MISCELLANEOUS PROVISIONS..................................................................... 316
30. Allocation of Disputed Cancellations/Disputed Partial Cancellations ...................... 316
31. Allocation of Disputed Minuteds Delay .............................................................. 317
APPENDIX 1 - Cancellations Benchmarks and Annual Cancellations Benchmarks .............. 318
Part 1 – Cancellations Benchmark Table ...................................................................... 318
Part 2 – Annual Cancellations Benchmark Table ........................................................... 324
Part 3 – Annual Cancellations Payment Table ............................................................... 325
APPENDIX 2 - TOC Minute Delay Benchmarks and Annual TOC Minute Delay Benchmarks . 326
Part 1 – TOC Minute Delay Benchmark Table ............................................................... 326
Part 2 – Annual TOC Minute Delay Benchmark Table ..................................................... 332
Part 3 – Annual TOC Minute Delay Payment Table ........................................................ 333
APPENDIX 3 – Short Formation Benchmarks and Annual Short Formation Benchmarks ..... 334
Part 1 – Short Formation Benchmark Table ................................................................. 334
Part 2 – Annual Short Formation Benchmark Table ....................................................... 340
Part 3 – Annual Short Formation Payment Table .......................................................... 341
APPENDIX 4 - NOT USED .......................................................................................... 342
Not Used ............................................................................................................. 342
APPENDIX 5 – NOT USED .......................................................................................... 343
Not Used ............................................................................................................. 343
APPENDIX 6 - T-3 Measure .............................................................................................................................. 344
Part 1(A) – Annual T-3 Table (Financial Regime) .......................................................... 344
Part 2 (B) – Annual T-3 Payment Table (Financial Regime) ............................................ 345
APPENDIX 7 - T-15 Measure ........................................................................................................................... 346
Part 1(A) – Annual T-15 Table (Financial Regime) ........................................................ 346
Part 2 (B) – Annual T-15 Payment Table (Financial Regime) .......................................... 347
APPENDIX 8 - All Cancellations Measure .................................................................................................... 348
Part 1(A) – Annual All Cancellations Table (Financial Regime) ........................................ 348
Part 1 (B) – Annual All Cancellations Payment Table (Financial Regime) .......................... 349
Schedule 7.2 - Customer Experience and Engagement .......................................... 350
1. Definitions ................................................................................................... 350
2. Conduct of National Rail Passenger Surveys ..................................................... 350
3. NRPS Benchmarks ........................................................................................ 351
4. Performance Review ...................................................................................... 352
5. Required Improvement and NRPS Action Plans ................................................. 352
6. Additional Expenditure .................................................................................. 353
7. Payments on Termination .............................................................................. 354
8. Consultations ............................................................................................... 354
9. Customer and Stakeholder Engagement Strategy ............................................. 355

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10. Customer Report .......................................................................................... 355
11. Customer and Communities Investment (CCI) Scheme ...................................... 355
12. Customer Service and Satisfaction Data .......................................................... 357
APPENDIX 1 - NRPS Benchmark Table ......................................................................... 359
Schedule 7.3 – Service Quality Regime ................................................................ 363
1. Purpose ....................................................................................................... 363
2. Definitions ................................................................................................... 363
PART A - SERVICE QUALITY MANAGEMENT PROCESS .................................................... 366
3. Service Quality Management .......................................................................... 366
PART B - INPSECTIONS AND AUDITS ........................................................................... 367
4. Franchisee Service Quality Inspections ............................................................ 367
5. Mystery Shopper Inspection ........................................................................... 369
6. Service Quality Re-Inspection ......................................................................... 369
7. Indpendent Service Quality Audit .................................................................... 370
8. Secretary of State's Right of Audit .................................................................. 371
9. Access Rights ............................................................................................... 371
PART C - CALCULATIONS OF PASS RATES AND SERVICE QUALITY PAYMENTS
10. Calculation of Pass Rates ............................................................................... 372
11. Calculation of the Service Quality Payments ..................................................... 374
12. Payment of Service Quality Payments.............................................................. 376
PART D - PUBLICATION AND REPORTING REQUIREMENTS ............................................. 377
13. Publication of Pass Rates ............................................................................... 377
14. Reporting Requirements ................................................................................ 377
15. Additional Information Requirements for Service Quality Re-inpsections .............. 378
16. Maintenance of Records ................................................................................. 378
PART E - REMEDIES ................................................................................................... 378
17. Consequencies of a Failed Audit ...................................................................... 378
18. Material Discrepancies ................................................................................... 379
19. Contravention of the Franchise Agreement in respect of Material Discrepancies .... 380
20. Consequences of Performance falling below the SQR Benchmark ........................ 380
21. Variations to the Service Quality Regime ......................................................... 381
APPENDIX 1 - SERVICE QUALITY SCHEDULE ................................................................ 383
Part 1 ...................................................................................................................... 383
Part 2 ...................................................................................................................... 392
Part 3 ...................................................................................................................... 398
APPENDIX 2 - Service Quality Areas./SQR Benchmarks / Service Quality Indicators/
Weightings ............................................................................................................... 399
Part 1 ...................................................................................................................... 399
Part 2 ...................................................................................................................... 401
Part 3 ...................................................................................................................... 402
SCHEDULE 8 - PAYMENTS ...................................................................................... 403
Schedule 8.1 - Franchise Payments ....................................................................... 404
1. Franchise Payments ...................................................................................... 404
2. Payment of Franchise Payments ..................................................................... 409
3. Interest ....................................................................................................... 410
4. Disputes under Schedule 8 ............................................................................. 410

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5. Industrial Action ........................................................................................... 410
6. No Double Recovery ...................................................................................... 410
7. Force Majeure and Payments.......................................................................... 410
APPENDIX 1 - Annual Franchise Payments .................................................................... 411
APPENDIX 2 - Figures for Calculation of Annual Franchise Payments ................................ 413
APPENDIX 3 - Figures for Calculation of Advance Payments in respect of HS1 access
charges .................................................................................................................. 414
Schedule 8.2 - Profit Share Mechanism ................................................................. 415
1. Profit Share ................................................................................................. 415
2. Additional Compensation or Settlement Payments ............................................ 419
3. Relevant Profit Report ................................................................................... 420
4. Payment of Profit Share and Determination by the Secretary of State ................. 420
APPENDIX 1 - Profit Share Thresholds .......................................................................... 422
APPENDIX 2 - Components of AFA and DFR .................................................................. 425
Schedule 8.3 - Track Access Adjustments and Station Charge Adjustments .......... 427
1. Track Access Adjustments .............................................................................. 427
2. Station Charge Adjustment ............................................................................ 428
3. Additional IRC .............................................................................................. 429
Schedule 8.4 - NOT USED ...................................................................................... 431
Schedule 8.5 - NOT USED ...................................................................................... 432
Schedule 8.6 – Forecast Revenue Mechanism ....................................................... 433
1. Purpose and Application ................................................................................ 433
2. Definitions ................................................................................................... 433
3. Revenue Share ............................................................................................. 437
4. Revenue Share Reconciliation Amount ............................................................. 439
5. Eligibility for Revenue Support Adjustments ..................................................... 439
6. Revenue Support Reconciliation Amount .......................................................... 441
7. Revenue Share ............................................................................................. 442
8. Pro-rata Adjustment to Target Revenue at the end of the Franchise Period .......... 443
9. FRM Revenue Report ..................................................................................... 443
10. Affiliates and Forecast Revenue Mechanism ...................................................... 444
11. NOT USED ................................................................................................... 445
APPENDIX 1 - Target Revenue .................................................................................... 446
SCHEDULE 9 - CHANGES AND VARIATIONS ........................................................... 447
Schedule 9.1 - Financial and Other Consequences of Change ................................ 448
1. Purpose and Application of Schedule ............................................................... 448
2. Timescales ................................................................................................... 449
3. How any adjustments to Franchise Payments will be established ........................ 449
4. How Model Changes and/or Revised Inputs will be established ........................... 449
5. Changes to Benchmarks and/or Annual Benchmarks ......................................... 450
6. Run of the Financial Model following agreement or determination of the
Revised Inputs and Model Changes ................................................................. 450
7. Certification or Audit of the New Results .......................................................... 451
8. Costs of Audit ............................................................................................... 452
9. Restatement of Annual Franchise Payment Components and/or Benchmarks
and/or Annual Benchmarks and/or Profit Share Components .............................. 452

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