October 7, 2002



PERSONAL AND CONFIDENTIAL

William K. Jacobson
2714 Windepoint Court
Sheboygan, WI 53083

Dear Bill:

This letter confirms our mutual understanding regarding the terms and conditions
related to your retirement from Fresh Brands Distributing, Inc.

You agree to announce your pending retirement on Monday, November 4, 2002. You
will effectively resign that day as a Director and Assistant Secretary. You will
retain your title of Senior Vice President of Retail Operations and Development
until a successor is named or February 14, 2003, whichever occurs first. In
order to ensure a seamless transition of your duties and responsibilities and to
ensure you will be able to complete various projects such as new business
prospecting and other projects or duties and responsibilities assigned to you by
Elwood Winn, to whom you will continue to report until your retirement, you will
continue as an active, full-time employee of Fresh Brands at your current base
salary rate through, and retire as of, Friday, February 14, 2003. Your
retirement will not affect your eligibility to receive allocations under our
Executive Benefit Restoration Plan related to compensation paid to you in 2002,
but you will not receive any allocations under this plan related to compensation
paid to you in 2003. You will be eligible to receive any discretionary bonus for
2002 as may be deemed appropriate by the Compensation Committee in its sole and
absolute discretion. You will not be eligible for any bonus for 2003. On your
retirement date, you will receive payment of your five (5) weeks of accrued and
unused vacation and your two (2) personal holidays, minus the vacation and/or
personal holidays that you use prior to your retirement date. Your retirement
will be considered a "retirement" for purposes of determining the vesting of
your stock options.

Commencing February 15, 2003 and ending on December 31, 2003, you will be
retained by Fresh Brands as a consultant reporting directly to Elwood Winn
and/or his designees. During this period ( the "Initial Consulting Period"), you
agree to provide up to five hundred (500) hours of consulting services as and
when reasonably requested by Fresh Brands. On or shortly after March 3, 2003 and
thereafter promptly after the beginning of each subsequent month during the
Initial Consulting Period, Fresh Brands will pay you a retainer fee of seven
thousand five hundred dollars ($7,500), provided that you've remained in
compliance with all of the terms and conditions of this agreement through such
date. If, during the Initial Consulting Period, Fresh Brands uses your
consulting services for more than a total of five hundred (500) hours, Fresh
Brands will pay you an additional $125 for each additional hour of consulting
services provided. You will also


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be eligible to receive such other consulting payments as mutually agreed between
you and Fresh Brands.

Beginning January 1, 2004 and ending December 31, 2004 (the "Second Consulting
Period" and collectively with the Initial Consulting Period, the "Consulting
Periods"), you agree to provide up to five hundred (500) hours of consulting
services as and when reasonably requested by Fresh Brands. Promptly after the
beginning of each month during the Second Consulting Period, Fresh Brands will
pay you a retainer fee of six thousand two hundred fifty dollars ($6,250),
provided that you've remained in compliance with all of the terms and conditions
of this agreement through such date. If during the Second Consulting Period,
Fresh Brands uses your consulting services for more than a total of five hundred
(500) hours, Fresh Brands will pay you an additional $125 for each additional
hour of consulting services provided.

During both Consulting Periods, provided that you've remained in compliance with
all of the terms and conditions of this agreement, (i) your consulting retainer
fees will be paid to you in consideration of you remaining available to provide
reasonably requested consulting services and regardless of the number of hours
of consulting services that you actually provide and (ii) Fresh Brands will
reimburse you for your reasonable and documented out-of-pocket expenses incurred
directly in conjunction with your provision of consulting services. On or prior
to the tenth day of each month during the Consulting Periods, you will provide
Fresh Brands with a statement itemizing your out-of-pocket expenses incurred and
the number of hours you provided consulting services under this agreement during
the previous month. Such statement will be subject to Fresh Brands' review and
approval. As additional consideration for the services provided under this
agreement, Fresh Brands will, until December 31, 2005, provide you with health
insurance for you and your family under Fresh Brands' current (or similar)
health insurance plan, provided that you've remained in compliance with all of
the terms and conditions of this agreement. You will be responsible for the
employee contribution payments for such insurance. Beginning when you reach the
age of 55, you will be eligible to purchase the retiree insurance for you and
your family entirely at your own expense.

In consideration for the payments and benefits to be provided to you under this
agreement, you will not, during the Consulting Periods and for one year
thereafter, directly or indirectly (i) engage in any activities that compete
with, or otherwise damage or are adverse to, any portion of Fresh Brands' (or
its affiliates') business (as conducted now or at any time on or before the end
of the Consulting Periods); (ii) solicit the business of any current or
prospective Fresh Brands' (or one of its affiliates') franchisee or independent
store customer, other than on behalf of Fresh Brands (or its affiliates); (iii)
solicit for employment or advise or recommend to any other person that he or she
solicit for employment, or otherwise hire, any person employed at that time by
Fresh Brands (or one of its affiliates); or (iv) engage in any form of conduct,
or make any statements or representations, that disparage or otherwise harm the
reputation, good will or commercial interest of Fresh Brands or any of its
affiliates or the officers, employees or other representatives of Fresh Brands
or any of its affiliates. In addition, during the


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Consulting Periods, you agree to actively support and promote Fresh Brands' and
its affiliates' best interests, especially with respect to their relationships
with their franchisees and independent customers, and use all efforts to
maintain such franchisees' and independent customers' relationships with, and
support of, Fresh Brands and its affiliates. The sole exceptions to clause (i)
above are the following items (which shall be allowed only to the extent that
they do not interfere with your other obligations hereunder): (1) working
directly for one of Fresh Brands' (or one of its affiliate's) franchisees
(provided that you first so advise Fresh Brands); and (2) owning and operating a
floral business with your wife. You will also maintain the confidentiality of
all confidential and/or proprietary information of or about Fresh Brands and/or
its affiliates at all times after the date of this letter.

If, at any time after September 1, 2003, you receive an opportunity to work with
another company on a full-time basis and your acceptance of that job would not
violate the terms of this agreement except that you may be unable to provide the
consulting services required, you may, on sixty (60) days' written notice,
terminate your obligation to provide consulting services under this agreement.
Such termination (i) will not affect your obligations in the previous paragraph
and (ii) will terminate all of Fresh Brands' obligations under this agreement.
If, at any time, you receive an opportunity to work with another company and
your acceptance of that job would violate your obligations in the previous
paragraph, you may, in writing, ask me for a written waiver of the previous
paragraph (which waiver will not affect your confidentiality obligations
included below).

The payments and other benefits provided to you pursuant to this agreement are
conditioned upon your compliance with all of the terms and conditions of this
agreement. Each of the provisions of this agreement are material terms of this
agreement. If you or anyone acting at your direction violate any provision of
this agreement, then Fresh Brands may withhold and terminate all payments and
other benefits pursuant to this agreement. The exercise of such rights will not
affect Fresh Brands' right to pursue any other available legal or equitable
remedies.

You agree to keep this agreement confidential and not to reveal its content to
anyone other than your attorney, financial consultant, and immediate family
members. Fresh Brands, Inc. may, however, disclose the contents of this
agreement pursuant to any rule or regulation of the Securities and Exchange
Commission or The Nasdaq Stock Market or otherwise required by law.
Notwithstanding anything to the contrary in this agreement, this paragraph will
survive the termination of this agreement.

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If you agree that the foregoing satisfactorily states our mutual understanding,
please sign and date this agreement in the spaces indicated below and return it
directly to me.

Sincerely yours,

Fresh Brands Distributing Inc.


By: /s/ Elwood F. Winn
    -------------------------------------
    Elwood F. Winn
    President and Chief Executive Officer

Agreed and accepted this 17th day of October, 2002


/s/ William K. Jacobson
-------------------------------------
William K. Jacobson