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See, Martha may be the youngest daughter in a family of three sisters, but she doesn't want to be a great success in the outside world—what she wants to do is settle down, get married, and have ten children.
Lettie is beautiful, brainy, and ambitious, and she would make a much better apprentice to the witch Mrs. Fairfax than Martha would.
So after Martha learns enough magic to change her appearance, she and Lettie trade places.
Martha levels with Sophie: Fanny is taking advantage of her.
Sophie's hats are making the shop a fortune, and Fanny isn't sharing any of that cash with her hard-working stepdaughter.
Sophie gets up the courage to ask Fanny for a salary after talking to Martha.
Fanny says sure… but then never brings it up again. (Pro tip: if someone promises to pay you more and never mentions it again, they're taking advantage of you.)
One day, a richly dressed woman walks into the shop with an upset-looking red-headed young man.
Weirdly, the woman seems to recognize the things that Sophie told the hats they were when she was working on them—youth and mysterious allure (2.46).
The woman announces that she is the Witch of the Waste, and she is here because she wants to get rid of any competition Sophie might present to her.
She makes a motion in Sophie's face, and something happens—Sophie can't tell what, but the man with the Witch of the Waste looks horrified.
(Considering all the things he has probably seen with the Witch, this is definitely a bad sign.)
The Witch leaves, but not before magically enchanting Sophie so that she cannot tell anyone about her curse.
Sophie looks in a mirror and sees that the Witch has transformed her into an old woman.
Since Sophie doesn't want her family to see her like this, she sets off on the road out of Market Chipping.
She walks by a scarecrow in a hedge, and wishes it luck.
Sophie passes a dog caught in a rope tied to a post and frees the dog, even though it growls and snaps at her.
Sophie spots Wizard Howl's castle, which is moving toward her.
Sophie commands the castle to stop so that she can speak to Howl. After all, at this point, what has she got to lose?