Free version backup restored on Ubuntu 14.04LTS bench not updating

After wrestling for an installation on a 16.04LTS vps, I switched to 14.04LTS and did the easy setup for production. Getting a successful install I restored the database backup from the free version available on erpnext.com using --force option and started using. As it is Sunday here, I thought for a bench update and what I am getting is:
INFO:bench.utils:./env/bin/pip install Pillow
Requirement already satisfied: Pillow in ./env/lib/python2.7/site-packages
Requirement already satisfied: olefile in ./env/lib/python2.7/site-packages (from Pillow)

Cannot proceed with update: You have local changes in app “frappe” that are not committed.

What is going on?

Assuming this is a fresh install, git stash all changes from apps/frappe

No local changes to save

hi, if you dont want changes do bench update --reset

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