Franchise Development Agreement
This Agreement is made and entered into by and between The Franchise Company located at 3472 Parkside Drive, San Bernardino, California 92404 (hereinafter "TFC") and ________________________________________________________________________ (hereinafter "Client") effective this ____ day of ______________________________, 200_.
WHEREAS, TFC has experience in the development and operation of franchising systems, including franchising agreements, offering circulars, registration materials, forms, training programs, marketing brochures, franchisee support programs, sales programs, and related services; and
WHEREAS, Client desires to develop a franchising program and to market that program on a regional, national and/or international basis;
NOW, THEREFORE, in consideration of the foregoing and the promises contained herein, the parties hereto agree as follows:
1. Document Preparation
A. Franchise Agreement and Uniform Franchise Offering Circular
TFC will ask you to supply the answers to our detailed Franchisor Questionnaire and return these to us together with any additional written materials that describe your services and/or products. Based upon the information received from you TFC will develop a draft of the required franchise documents setting forth the contractual relationship between the Client and potential franchisees and the required disclosures. Pursuant to discussions between TFC and Client, a final copy of these documents shall be prepared by TFC and forwarded to Client for your use.
2. Consulting Services
A. Franchise Marketing Brochure
TFC shall consult with, instruct and assist Client in the development of the layout and wording of a franchise marketing brochure for use by Client as a marketing tool in the offering of its franchise opportunity ("Brochure"). Based upon the prior documents and the discussions between the parties hereto TFC shall provide Client with the suggested wording and layout for the Brochure.
B. Franchise Registration Assistance
TFC shall provide consultation services with Client in the preparation and filing of applications for registration of the franchise offering documents with regulatory agencies requiring such registration, filing or review. This service will be provided on a state by state basis in those jurisdictions in which Client intends to market its franchises. Although the charges for the home state of Client are included in the retainer paid by Client, payment of the fees required by each registration state shall be the sole responsibility of Client, in addition to a $500 fee to TFC for each registration state. As of the date of this franchise development agreement the following states are known to require such fees and applications: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin. Florida, Kentucky, Nebraska, Texas and Utah require an exemption filing and smaller fee, but are not registration states.
C. Systems and Forms
TFC will discuss with Client the various systems, forms and reporting procedures that are available and will recommend certain systems and forms to Client.
D. Support Programs
TFC shall provide consulting services during the term of this Agreement. These services shall include advice on programs and systems to provide an ongoing link between Client and its franchisees, including profit and loss statements, analysis tools, and marketing and operational forms.
E. Franchise Marketing
TFC shall provide Franchise Marketing and Sales consulting services to Client concerning the various methods of franchise marketing and the mechanics of conducting and completing the franchise sale.
F. Advertising
TFC will supply Client with samples of suggested advertising materials designed to attract prospects and leads for the sale of franchises.
With respect to the provision of each of the above consultation services it is specifically understood by Client that TFC shall provide such consultation by facsimile transmission, e-mail through Internet services and/or regular mail. This will provide a complete record of all communications and advice and will considerably reduce the cost to both parties.
3. Optional Further Services
If Client desires continuing operational, marketing and advertising consultation and management services following the services provided during this Agreement, TFC shall provide such services for a monthly retainer of $2,000 per month payable at the commencement of such services and on the same date of each month thereafter for which such services are to be provided. Client may terminate this continuing assistance at any time by written notice that the next month's retainer will not be paid.
4. Expenses
TFC shall pay its own expenses of word processing, typing, photocopying and mailing of materials prepared on behalf of Client as well as telephone communications made by TFC on behalf of Client.
Client shall reimburse, on an as-billed basis, for any travel, room and board expense incurred by TFC on behalf of Client provided that the incurring of any such expense has received the prior written or e-mail approval of Client.
Client agrees to pay for all printing costs of the franchise agreement, UFOC, brochures, advertisements and for all photography and camera-ready artwork and all other advertising and marketing materials.
Client agrees to pay for all fees or charges of any regulatory or governmental agency for registration or other documentation of the offering of sale of Client's franchise opportunities.
5. Cooperation
Client acknowledges that its cooperation is essential to the timely completion of the services to be performed by TFC pursuant to this agreement. Therefore, Client agrees to make its staff and facilities available to TFC upon reasonable request and to promptly provide TFC with all materials so requested and to timely respond to inquiries of TFC.
6. Confidentiality and Non-Competition
TFC hereby covenants and agrees that any and all information received from Client shall be treated as absolutely confidential and shall not be divulged to any person or entity for any purpose whatsoever without the specific, written or e-mailed permission of the person signing below on behalf of "Client." TFC further agrees that it will not compete in any manner at any time in any business or venture related to the business of Client unless at the specific written request of Client.
7. Consulting Fee
Client shall pay a consulting fee of $28,500 for the provision of the services as described in this Agreement, except for registration services, for which there are additional charges. An initial retainer of $9,750 shall be paid immediately upon the execution of this Agreement. A payment of $3,750 will be paid thirty days after the retainer, followed by five consecutive monthly payments of $3,000 whereupon the contract will be paid in full.
__________________________ (Client) The Franchise Company (TFC)
By: ______________________ By: ___________________
