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EXHIBIT 6(a)
PICK-UPS PLUS, INC.
FRANCHISE AGREEMENT
This Franchise Agreement ("this Agreement"), made this _____ day of
_______________________, 19____, by and between PICK-UPS PLUS, INC., a
corporation formed and operating under the laws of the State of Delaware and
having its principal place of business at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 00,
Xxxxx, Xxxx 00000 ("Franchisor"), and _________________________________________
_______________________________________________________________________________
____________________________________________________________ ("Franchisee").
WITNESSETH:
WHEREAS, Franchisor, over a period of time and as the result of the
expenditure of time, expertise, effort and money, (i) has developed and owns a
unique System ("System"), identified by the Marks (as hereinafter defined)
relating to the establishment, development and operation of a retail facility
offering and selling pick-up truck accessories and related merchandise and
services ("Franchised Business"); and (ii) may develop certain private label and
other merchandise and products bearing the Marks ("Trademarked Product Lines"),
all of which may be changed by Franchisor from time to time; and
WHEREAS, the distinguishing characteristics of the System include,
without limitation, distinctive interior and exterior layout, decor and color
scheme; exclusively designed signage, decorations, furnishings and materials;
the PICK-UPS PLUS Confidential Operations Manual ("Manual"); the Trademarked
Product Lines (if developed); a Proprietary Software Package ("Software") (if
developed); methods and techniques for promoting pick-up truck accessories and
related merchandise and services; special techniques for packaging, display,
merchandising and marketing of products and services; procedures for
maintenance; retail business operating methods; and methods and techniques for
inventory and cost controls, record keeping and reporting, personnel management
and training, purchasing, marketing, sales promotion and advertising, all of
which may be changed, improved and further developed by Franchisor from time to
time; and
WHEREAS, Franchisor's President, Xxxx X. Xxxxxxxxxx, is the owner of
the right, title and interest together with all the goodwill connected thereto
in and to the trade names, service marks and trademarks "PICK-UPS PLUS",
"PICK-UPS PLUS YOUR TRUCK STORE", associated logos and commercial symbols, and
such other trade names, service marks and trademarks as are now designated (and
may hereinafter be designated by Franchisor in writing) as part of the System
("Marks(s)"); and has granted Franchisor the right to sublicense these Marks to
Franchisor's franchisees; and
WHEREAS, Franchisor will continue to develop, use and control such
Marks for the benefit and use of itself and its franchisees in order to identify
for the public the source of products and services marketed thereunder and to
represent the System's high standards of quality of operations, services,
products and appearance; and
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WHEREAS, Franchisor continues to develop, use and control the Marks for
the benefit and use of Franchisor and its franchisees in order to identify for
the public the source of the products and services marketed thereunder and to
represent the System's high standards of operations, quality, products,
appearance and service; and
WHEREAS, Franchisor grants to certain qualified persons franchises to
own and operate PICK-UPS PLUS businesses providing products and services
authorized and approved by Franchisor in utilizing the System and Marks, and
Franchisee desires to operate a Franchised Business under the System and wishes
to obtain a franchise from Franchisor for that purpose, as well as to receive
the training and other assistance provided by Franchisor in connection
therewith; and
WHEREAS, Franchisee understands and acknowledges the importance of
Franchisor's high and uniform standards of quality and service and the necessity
of operating the Franchised Business in conformity with Franchisor's standards
and specifications; and
WHEREAS, Franchisor expressly disclaims the making of and Franchisee
acknowledges that it has not received nor relied upon any warranty or guaranty,
express or implied, as to the revenues, profits or success of the business
venture contemplated by this Agreement. Franchisee acknowledges that it has read
this Agreement and Franchisor's Uniform Franchise Offering Circular and all
exhibits thereto upon which it has exclusively relied, and that it has no
knowledge of any representations by Franchisor or its officers, directors,
shareholders, employees or agents that are contrary to the statements made in
Franchisor's Uniform Franchise Offering Circular or to the terms herein.
NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments of each party to the other party, hereby agree as follows:
I. APPOINTMENT AND FRANCHISE FEE
A. Franchisor hereby grants to Franchisee, upon the terms and
conditions herein contained, the right, franchise and privilege to conduct the
Franchised Business in accordance with the System, as it may be changed,
improved and further developed from time to time, including the use of the trade
name "PICK-UPS PLUS", the trademark "PICK-UPS PLUS YOUR TRUCK STORE" and the
other Marks, and Franchisee undertakes the obligation to operate such Franchised
Business strictly in accordance with the System as it may be changed, improved
and further developed from time to time, at one (1) location only, such location
to be:
1._________________________________________________________________
_______________________________________________________________________________
______________________________________________________________ ("Premises"); or
2. At one (1) location to be designated, as provided in Paragraph
III. hereof within the following area: _______________________________________
_______________________________________________________________________________
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Provided, however, that when a location has been designated and approved by the
parties, said location shall be deemed to have been designated in Paragraph
I.A.1., as if originally set forth therein.
B. Franchisor will not, so long as this Agreement is in force and
effect and Franchisee is not in default under any of the terms hereof, franchise
or operate any other PICK-UPS PLUS business within the following area:
_________________________________________________________ ("Designated Area").
A map of the Designated Area is attached to this Agreement as Exhibit A.
However, Franchisor has the right, in its sole discretion, to franchise or
operate another PICK-UPS PLUS business outside of the Designated Area as
Franchisor, in its sole and exclusive discretion, deems appropriate.
1. Although neither Franchisor nor its affiliates will operate a
PICK-UPS PLUS business within the Designated Area, Franchisor and its affiliates
reserve the right, both within and outside of the Designated Area, to offer and
sell at wholesale, retail, via catalog, or through any other distribution
system, products and services including, but not limited to, the Trademarked
Product Lines (if developed), which comprise, or may in the future comprise, a
part of the System. Such products may be resold at retail or through any other
distribution channel including, but not limited to, department stores, garden
centers and other businesses to the general public by such entities.
2. Franchisor and its affiliates further reserve the right, both
within and outside the Designated Area, to sell at both wholesale and retail all
products and services which do not comprise a part of the System. Franchisor and
its affiliates also reserve the right, both within and outside the Designated
Area, to establish a business operating under a format and trademarks and
service marks distinct from the PICK-UPS PLUS System.
3. Franchisee shall engage only in the retail sale of pick-up truck
accessories and related products, and Franchisee agrees not to engage in the
wholesale sale and/or distribution of any product offered for sale through the
Franchised Business, except if authorized in writing by Franchisor. "Wholesale
Sale and/or Distribution" shall mean any sale and/or distribution of product by
Franchisee to a third party for resale, retail sale or further distribution by
such third party.
C. In consideration of the franchise granted herein, Franchisee shall
pay to Franchisor upon execution of this Agreement, a Franchise Fee ("Franchise
Fee") according to the following schedule: (INITIAL THE PROVISION THAT APPLIES.)
__ 1. The initial Franchise Fee is TWENTY-FIVE THOUSAND Dollars
($25,000.00).
__ 2. The Franchise Fee for each additional franchise purchased by an
existing franchisee is TWENTY THOUSAND Dollars ($20,000.00).
Said fee shall be deemed fully earned and non-refundable upon payment
thereof as consideration for expenses incurred by Franchisor in furnishing
assistance and services to Franchisee and for Franchisor's lost or deferred
opportunity to franchise others, except as may be specifically provided in this
Agreement, Exhibit B or any other exhibit attached hereto.
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D. Franchisee acknowledges that because complete and detailed
uniformity under many varying conditions may not be possible or practical,
Franchisor specifically reserves the right and privilege, at its sole discretion
and as it may deem in the best interests of all concerned in any specific
instance, to vary standards for any System franchisee based upon the
peculiarities of the particular site or circumstance, population of trade area,
density of population, business potential, existing business practices or any
other condition which Franchisor deems to be of importance to the successful
operation of such franchisee's business. Franchisee shall not be entitled to
require Franchisor to disclose or grant to Franchisee a like or similar
variation hereunder.
II. TERM AND RENEWAL
A. This Agreement shall be effective and binding from the date of its
execution for an initial term of five (5) years from the date of this Agreement
or for the term of any lease for the Franchised Business, whichever is shorter.
B. Franchisee shall have the right to renew this franchise at the
expiration of the initial term of the franchise. Franchisee shall have the right
to renew the franchise for a total of three (3) additional successive terms of
five (5) years each or for the term of any lease for the Franchised Business,
whichever is shorter, provided that all of the following conditions have been
fulfilled:
1. Franchisee has, during the entire term of this Agreement and any
subsequent renewals, complied with all its provisions;
2. Franchisee maintains possession of the Franchised Business and by
the expiration date of this Agreement has brought the Franchised Business into
full compliance with the specifications and standards then applicable for a new
or renewing Franchised Business and presents evidence satisfactory to Franchisor
that it has the right to remain in possession of the Premises for the duration
of any renewal term; or, in the event Franchisee is unable to maintain
possession of the Premises, or in the judgment of Franchisor the Franchised
Business should be relocated, Franchisee secures substitute premises approved by
Franchisor, in its sole discretion, and has, at Franchisee's sole cost and
expense (with respect to which Franchisor has not made any estimate or other
representation), furnished, stocked, equipped, remodeled, redesigned, modernized
or redecorated such premises to bring the Franchised Business at its previous or
substitute premises into full compliance with the then-current specifications
and standards;
3. Franchisee has given notice of renewal to Franchisor as provided
below;
4. Franchisee has satisfied all monetary obligations owed by
Franchisee to Franchisor and Franchisor's affiliate(s) and has timely met these
obligations throughout the term of this Agreement;
5. Franchisee has executed upon renewal Franchisor's then-current
form of the Franchise Agreement (with appropriate modifications to reflect the
fact that the Franchise Agreement
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relates to the grant of a renewal franchise), which agreement shall supersede in
all respects this Agreement, and the terms of which may differ from the terms of
this Agreement including, without limitation, a different percentage Continuing
Services and Royalty Fee ("Royalty Fee"), advertising contribution or
territorial grant; provided, however, Franchisee shall not be required to pay
the then-current Franchise Fee or its equivalent;
6. Franchisee has complied with Franchisor's then-current
qualification and training requirements; and
7. Franchisee has executed a general release, in the then-current
form prescribed by Franchisor, of any and all claims against Franchisor and its
affiliates, their respective officers, directors, agents, shareholders and
employees.
C. If Franchisee desires to renew this franchise at the expiration of
this Agreement, Franchisee shall give Franchisor written notice of its desire to
renew at least six (6) months, but not more than twelve (12) months, prior to
the expiration of the term of this Agreement. Within ninety (90) days after its
receipt of such timely notice, Franchisor shall furnish Franchisee with written
notice of: (1) reasons which could cause Franchisor not to grant a renewal to
Franchisee including any deficiencies which require correction and a schedule
for correction thereof by Franchisee; and (2) Franchisor's then-current
requirements relating to the image, appearance, decoration, furnishing,
equipping and stocking of the Franchised Business, and a schedule for effecting
such upgrading or modifications in order to bring the Franchised Business in
compliance therewith, as a condition of renewal. Renewal of the franchise shall
be conditioned upon Franchisee's compliance with such requirements and continued
compliance with all the terms and conditions of this Agreement up to the date of
termination, provided, however, that in the event Franchisee is diligently and
in good faith curing any deficiencies as required by Franchisor, the term of
this Agreement shall be extended for a period of time equal to the number of
days required to cure such deficiency as determined by Franchisor.
D. Franchisor shall give Franchisee written notice of its election not
to renew the franchise three (3) months prior to the expiration of the initial
term of this Agreement or any renewal term. Such notice shall specify the
reasons for non-renewal.
III. BUSINESS LOCATION
A. Franchisee may operate the Franchised Business only at the location
specified in Paragraph I. hereof. If the lease for the site of the Franchised
Business expires or terminates without fault of Franchisee, or if the site is
destroyed, condemned or otherwise rendered unusable, or as otherwise may be
agreed upon in writing by Franchisor and Franchisee, Franchisor may, in its sole
discretion, grant permission for relocation of the Premises within Franchisee's
Designated Area at a location and site acceptable to Franchisor. Any such
relocation shall be at Franchisee's sole expense and Franchisor shall have the
right to charge Franchisee for any costs incurred by Franchisor including, but
not limited to, legal and accounting fees, plus a fee of TWO HUNDRED Dollars
($200.00) for providing such assistance ("Relocation Fee").
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B. Franchisee will be solely responsible for purchasing or leasing a
suitable site for the Franchised Business. If the franchise location is not
designated above, Franchisor shall use reasonable efforts to help analyze
Franchisee's market area, to help determine site feasibility, and to assist in
the designation of the franchise location. While Franchisor shall utilize its
experience and expertise in approval of a location, nothing contained herein
shall be interpreted as a guarantee of success for said location nor shall any
site recommendation or approval made by Franchisor be deemed a representation
that any particular site is available for use as a Franchised Business. Prior to
the acquisition by lease or purchase of any site for the Premises, Franchisee
shall submit a description of the proposed site to Franchisor, together with a
letter of intent or other evidence satisfactory to Franchisor which confirms
Franchisee's favorable prospects for obtaining the proposed site. Franchisor
shall thereafter approve or disapprove such proposed site in the exercise of its
sole discretion and so advise Franchisee in writing within fifteen (15) business
days after receiving Franchisee's written proposal.
C. After receiving Franchisor's written approval of the location of the
Premises as provided in Paragraph III.B. hereof, Franchisee shall submit the
proposed lease (if the Premises are to be leased) or a binding agreement to
purchase the site, for approval by Franchisor. Franchisor's approval of the
lease may be conditioned upon inclusion of terms in the lease acceptable to
Franchisor and, at Franchisor's option, shall contain such provisions as
Franchisor may reasonably require including, but not limited to:
1. A provision reserving to Franchisor the right, at Franchisor's
election, to receive an assignment of the leasehold interest upon termination or
expiration of this Agreement;
2. A provision which expressly requires the lessor of the Premises
to provide Franchisor all sales and other information it may have related to the
operation of the Franchised Business, as Franchisor may request;
3. A provision which requires the lessor concurrently to provide
Franchisor with a copy of any written notice of deficiency under the lease sent
to Franchisee and which grants to Franchisor, in its sole discretion, the right
(but not the obligation) to cure any deficiency under the lease within fifteen
(15) business days after the expiration of the period in which Franchisee may
cure the default should Franchisee fail to do so;
4. A provision which evidences the right of Franchisee to display
the Marks in accordance with the specifications required by the Manual, subject
only to the provisions of applicable law;
5. A provision that the Premises shall be used only for the
operation of a Franchised Business; and
6. A provision which expressly states that any default under the
lease shall constitute a default under this Agreement, and any default under
this Agreement shall constitute a default under the lease.
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D. In the event no acceptable site is found and approved by the parties
within sixty (60) days from the date of this Agreement, then, and in that event,
upon written application from either party, this contract shall be terminated
and any funds received by Franchisor shall be returned to Franchisee minus the
costs incurred by Franchisor in its site evaluation activities in an amount not
to exceed TEN THOUSAND Dollars ($10,000.00). Upon return of said amount,
Franchisor shall be fully and forever released from any claims or causes of
action Franchisee may have under or pursuant to this Agreement and Franchisee
shall have no further right, title or interest in the Marks or the System and
any rights shall automatically revert to Franchisor.
E. Promptly after obtaining possession of the site for the Franchised
Business, Franchisee shall: (i) cause to be prepared and submit for approval by
Franchisor or Franchisor's architect, at Franchisee's sole expense, a site
survey and any modifications to Franchisor's basic architectural plans and
specifications (not for construction) for the Franchised Business (including
requirements for dimensions, exterior design, materials, interior design and
layout, equipment, fixtures, furniture, signs and decorating) required for the
development of the Franchised Business at the site leased or purchased therefor,
provided that Franchisee may modify Franchisor's basic plans and specifications
only to the extent required to comply with all applicable ordinances, building
codes and permit requirements and with prior notification to and approval by
Franchisor; (ii) obtain all required zoning changes; all required building,
utility, sign permits, licenses and any other required permits and licenses;
(iii) purchase or lease equipment, fixtures, furniture and signs as provided
herein; (iv) complete the construction and/or remodeling, equipment, fixture,
furniture and sign installation and decorating of the Franchised Business in
full and strict compliance with plans and specifications therefor approved by
Franchisor and all applicable ordinances, building codes and permit
requirements; (v) obtain all customary contractors' sworn statements and partial
and final waivers of lien for construction, remodeling, decorating and
installation services, unless Franchisor waives this requirement; and (vi)
otherwise complete development of and have the Franchised Business ready to open
and commence the conduct of its business in accordance with Paragraph XII.
hereof.
F. Franchisee shall be required to periodically make reasonable capital
expenditures to remodel, modernize and redecorate the Premises so that the
Franchised Business will reflect the then-current image intended to be portrayed
by the PICK-UPS PLUS business. All remodeling, modernization or redecoration of
the Premises must be done in accordance with the standards and specifications as
prescribed by Franchisor from time to time and with the prior written approval
of Franchisor. All replacements must conform to Franchisor's then-current
quality standards and specifications and must be approved by Franchisor in
writing. Franchisor recommends, but currently does not require, that Franchisee
set aside funds to be used for remodeling and updating the Franchised Business.
Franchisee shall not be required to remodel, modernize and redecorate the
Premises more than once during the initial term of this Agreement requiring
expenditures in excess of TEN THOUSAND Dollars ($10,000.00); however,
maintenance of the Premises and modifying or replacing equipment may exceed this
amount, and maintenance costs and equipment costs may not be credited to
remodeling, modernization or redecoration expenditures.
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IV. TRAINING AND ASSISTANCE
A. Franchisor shall make training available to Franchisee, Franchisee's
designated manager and one (1) employee of Franchisee per franchise. Training
for individuals in excess of the number specified in this Paragraph IV. shall be
provided at Franchisor's standard rate. Franchisee and/or its designated manager
shall successfully complete the initial training program prior to commencement
of business operations. The training program shall include both classroom and
on-the-job training at a Franchisor-designated facility. The training program at
Franchisor's designated location shall be approximately two (2) to three (3)
weeks and shall cover material aspects of the operation of the Franchised
Business including, without limitation, general bookkeeping procedures; retail
operational techniques; techniques for display and sale of products; marketing,
promotion and advertising techniques; inventory ordering techniques;
administrative procedures; maintenance procedures; deployment of labor; product
knowledge; customer service techniques; customer relations techniques; and
maintenance of quality standards. All expenses incurred by Franchisee and its
employees in attending such program including, without limitation, travel costs,
room and board expenses, and employees' salaries shall be the sole
responsibility of Franchisee.
B. For approximately one (1) week prior to and during commencement of
operations of the Franchised Business, Franchisor will furnish to Franchisee, at
the Premises and at Franchisor's expense, one (1) of Franchisor's
representatives for the purpose of facilitating the opening of Franchisee's
Franchised Business. During this period, such representative will also assist
Franchisee in establishing and standardizing procedures and techniques essential
to the operation of the Franchised Business and shall assist in training
personnel. Should Franchisee request additional assistance from Franchisor in
order to facilitate the opening of the Franchised Business, or should Franchisor
deem it necessary to provide such assistance, Franchisee shall reimburse
Franchisor for the expense of Franchisor providing such additional assistance at
the then-current rates published in the Manual including, but not limited to,
travel and lodging expenses for Franchisor or its representative.
C. If Franchisor determines, in its sole discretion, that Franchisee or
its designated manager is unable to satisfactorily complete the training program
at Franchisor's headquarters, Franchisor shall have the right to require that
Franchisee or its designated manager successfully complete additional training
or to terminate this Agreement in the manner herein provided. If this Agreement
is terminated pursuant to this Paragraph IV., Franchisor shall return to
Franchisee the Franchise Fees paid by Franchisee to Franchisor minus the
expenses incurred by Franchisor as of such date for providing training to
Franchisee and other expenses incurred by Franchisor not to exceed FIFTEEN
THOUSAND Dollars ($15,000.00). Franchisor shall have the option to purchase the
lease for the site from Franchisee at terms to be agreed upon by the parties.
Upon return of said amount, Franchisor shall be fully and forever released from
any claims or causes of action Franchisee may have under or pursuant to this
Agreement and Franchisee shall have no further right, title or interest in the
Marks or the System and any rights shall automatically revert to Franchisor.
Notwithstanding the foregoing, Franchisee shall be bound by all provisions
regarding confidentiality as set forth in Paragraphs VI., VII. and XV. of this
Agreement.
D. If Franchisee designates new or additional managers after the
initial training program, Franchisor shall provide training to such managers to
the extent that Franchisor can reasonably
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accommodate such managers in Franchisor's regularly scheduled training course.
Additional managers employed by Franchisee shall be trained by Franchisor at the
then-current rates published by Franchisor in the Manual. Franchisee shall be
responsible for all expenses incurred by Franchisee or Franchisee's employees in
attending such additional training including, without limitation, travel costs,
room and board expenses and employees' salaries.
E. Franchisor from time to time may provide and, if it does, may
require that previously-trained and experienced franchisees and their managers
or employees attend and successfully complete continuing education and training
programs or seminars to be conducted at such location as may be designated by
Franchisor. Attendance at such continuing educational training programs or
seminars shall be at Franchisee's sole expense; provided, however, that
attendance will not be required at more than one (1) such program in any
calendar year and shall not collectively exceed three (3) business days in
duration during any calendar year.
V. PROPRIETARY MARKS
A. Franchisee acknowledges that Xxxx X. Xxxxxxxxxx is the owner of the
Marks and that Franchisee's right to use the Marks is derived solely from this
Agreement and is limited to the conduct of business by Franchisee pursuant to
and in compliance with this Agreement and all applicable standards,
specifications and operating procedures prescribed by Franchisor from time to
time during the term of this Agreement. Any unauthorized use of the Marks by
Franchisee is a breach of this Agreement and an infringement of the rights of
Franchisor in and to the Marks. Franchisee acknowledges that all usage of the
Marks by Franchisee and any goodwill established by Franchisee's use of the
Marks shall inure to the exclusive benefit of Xxxx X. Xxxxxxxxxx and Franchisor
and that this Agreement does not confer any goodwill or other interests in the
Marks upon Franchisee. Franchisee shall not, at any time during the term of this
Agreement or after its termination or expiration, contest the validity,
strength, enforceability or ownership of any of the Marks or assist any other
person in contesting the validity, strength, enforceability or ownership of any
of the Marks.
B. Franchisee shall not use any Xxxx or portion of any Xxxx as part of
any corporate or trade name, with any prefix, suffix or other modifying words,
terms, designs or symbols, or in any modified or other confusingly similar form,
nor may Franchisee use any Xxxx or any modification or other confusingly similar
form thereof in connection with the sale of any unauthorized product or service
or in any other manner not expressly authorized in writing by Franchisor. While
this Agreement is in effect, Franchisee may, however, use "PICK-UPS PLUS" as a
fictitious or assumed name and shall obtain such fictitious or assumed name
registrations as may be required under applicable law, at Franchisee's expense.
In no event, however, shall this right to use be considered a specific grant of
any ownership rights in the Marks. Franchisee shall not use any of the Marks in
any manner which has not been specified or approved by Franchisor.
C. Franchisee shall promptly notify Franchisor of any claim, demand or
cause of action based upon or arising from any attempt by any other person, firm
or corporation to use the Marks or any confusingly similar form thereof.
Franchisee shall also notify Franchisor of any action, claim or demand against
Franchisee relating to the Marks within ten (10) days after Franchisee receives
notice
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of said action, claim or demand. Upon receipt of timely notice of any action,
claim or demand against Franchisee relating to the Marks, Franchisor shall have
the sole right to defend any such action. Franchisor shall have the exclusive
right to contest or bring action against any third party regarding the third
party's use of any of the Marks and shall exercise such right in its sole
discretion. In any defense or prosecution of any litigation relating to the
Marks or components of the System undertaken by Franchisor, Franchisee shall
cooperate with Franchisor and execute any and all documents and take all actions
as may be desirable or necessary in the opinion of Franchisor's counsel, to
carry out such defense or prosecution. Both parties will make every effort
consistent with the foregoing to protect, maintain and promote the Marks,
including the trade name "PICK-UPS PLUS" and its distinguishing characteristics
(and the other service marks, trademarks, slogans, etc., associated with the
System) as standing for the System and only the System. FRANCHISOR MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE, EXCLUSIVE
OWNERSHIP, VALIDITY OR ENFORCEABILITY OF THE MARKS.
D. If it becomes advisable at any time in Franchisor's sole discretion,
for Franchisor and/or Franchisee to modify or discontinue use of any Xxxx,
and/or use one or more additional or substitute trade names, trademarks, service
marks or other commercial symbols, Franchisee shall comply with Franchisor's
directions within a reasonable time after notice to Franchisee by Franchisor,
and Franchisor shall have no liability or obligation whatsoever with respect to
Franchisee's modification or discontinuance of any Xxxx.
E. In order to preserve the validity and integrity of the Marks and
copyrighted materials licensed herein and to ensure that Franchisee is properly
employing the same in the operation of its Franchised Business, Franchisor or
its agents shall have the right of entry and inspection of the Premises at all
reasonable times and, additionally, shall have the right to observe the manner
in which Franchisee is rendering its PICK-UPS PLUS services and conducting its
operations, to confer with Franchisee's employees and customers, and, at
Franchisee's expense, to select or request Franchisee to provide samples of
products, inventory, equipment, advertising and other items, materials and
supplies for inspection and evaluation purposes to make certain that the
services, products, inventory, materials, supplies, equipment and operations are
satisfactory and meet the quality control provisions and performance standards
established by Franchisor.
VI. CONFIDENTIAL OPERATIONS MANUAL
A. While this Agreement is in effect, Franchisor will loan to
Franchisee one (1) or more copies of the Manual containing mandatory and
suggested specifications, standards, operating procedures and rules prescribed
from time to time by Franchisor for PICK-UPS PLUS businesses and information
relative to other obligations of Franchisee hereunder and the operation of its
Franchised Business. Franchisor shall have the right to add to and otherwise
modify the Manual from time to time to reflect changes in the specifications,
standards, operating procedures and rules prescribed by Franchisor for PICK-UPS
PLUS businesses, provided that no such addition or modification shall alter
Franchisee's fundamental status and material rights under this Agreement.
Franchisee shall immediately upon notice adopt any such changes.
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B. The Manual shall at all times remain the sole property of Franchisor
and shall promptly be returned, upon the expiration or other termination of this
Agreement. Franchisee shall not make any disclosure, duplication or other
unauthorized use of any portion of the Manual.
C. The Manual contains proprietary information of Franchisor and shall
be kept confidential by Franchisee both during the term of this Agreement and
after its expiration or termination. Franchisee shall at all times ensure that
its copy of the Manual be available at the Premises in a current and up-to-date
manner. At all times that the Manual is not in use by authorized personnel,
Franchisee shall maintain the Manual in a locked receptacle at the Premises and
shall only grant authorized personnel, as defined in the Manual, access to the
key or lock combination of such receptacle. In the event of any dispute as to
the contents of the Manual, the terms of the master copy of the Manual
maintained by Franchisor at Franchisor's home office shall be controlling.
VII. CONFIDENTIAL INFORMATION
A. Franchisee acknowledges that its entire knowledge of the operation
of the Franchised Business is and will be derived from information disclosed to
Franchisee by Franchisor and that certain of such information is proprietary,
confidential and a trade secret of Franchisor. In addition, any improvements
developed by Franchisee pursuant to Franchisee's operation of the Franchised
Business shall constitute proprietary information of Franchisor. "Trade Secrets"
refer to the whole or any portion of know-how, knowledge, methods,
specifications, processes, procedures and/or improvements regarding the
Franchised Business and the System that is valuable and secret in the sense that
it is not generally known to competitors of Franchisor. Franchisee shall
maintain the absolute confidentiality of all such proprietary information during
and after the term of this Agreement and shall not use any such information in
any other business or in any manner not specifically authorized or approved in
writing by Franchisor.
B. Franchisee shall divulge such confidential information only to the
extent and only to such of its employees as must have access to it in order to
operate the Franchised Business. Any and all information, knowledge and know-how
including, without limitation, drawings, materials, equipment, techniques,
retail business systems, techniques and procedures for display of products,
supplier lists and other data, shall be deemed confidential for purposes of this
Agreement, except information which Franchisee can demonstrate lawfully came to
its attention in writing prior to disclosure thereof by Franchisor; or which, at
the time of disclosure by Franchisor to Franchisee, had lawfully become a part
of the public domain, through publication or communication by others, in
writing.
C. Due to the special and unique nature of the confidential
information, proprietary marks and Manual of Franchisor, Franchisee acknowledges
that Franchisor shall be entitled to immediate equitable remedies including, but
not limited to, restraining orders and injunctive relief in order to safeguard
such proprietary, confidential, unique and special information of Franchisor and
that money damages alone would be an insufficient remedy with which to
compensate Franchisor for any breach of the terms of Paragraphs V., VI. and VII.
of this Agreement. Furthermore, all employees of Franchisee having access to the
confidential and proprietary information of Franchisor shall be required to
execute confidentiality agreements in a form acceptable to Franchisor.
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VIII. MODIFICATION OF THE SYSTEM
Franchisee acknowledges that from time to time hereafter Franchisor may
change or modify the System presently identified by the Marks, including the
adoption and use of new or modified trade names, trademarks, service marks or
copyrighted materials, new computer systems, new inventory items, new
merchandising techniques, new equipment or new techniques and that Franchisee
will be required to accept, use and display for the purpose of this Agreement
any such changes in the System as if they were part of this Agreement at the
time of execution hereof. Franchisee will make such expenditures as are
reasonably required by such modifications in the System. Franchisee shall not
change, modify or alter the System in any way, except as directed by Franchisor.
IX. ADVERTISING
Recognizing the value of advertising and the importance of the
standardization of advertising and promotion to the furtherance of the goodwill
and the public image of the Franchised Business, Franchisee agrees as follows:
A. Franchisee will submit to Franchisor or its designated agency, for
its prior approval, all promotional materials and advertising to be used by
Franchisee including, but not limited to, newspapers, radio and television
advertising, specialty and novelty items, signs and boxes. In the event written
disapproval of said advertising and promotional material is not given by
Franchisor to Franchisee within twenty (20) days from the date such materials
are received by Franchisor, said materials shall be deemed approved. Failure by
Franchisee to conform with the provisions herein and subsequent nonaction by
Franchisor to require Franchisee to cure or remedy this failure and default
shall not be deemed a waiver of such default or future or additional failures
and defaults of any other provision of this Agreement. The submission of
advertising to Franchisor for approval shall not affect Franchisee's right to
determine the prices at which Franchisee sells its products or services.
B. Franchisee shall spend a minimum of SEVEN THOUSAND Dollars
($7,000.00) for newspaper, direct mail, product discounts, advertising or
promotional items through other media within the Designated Area during the
first month of operation of the Franchised Business ("Grand Opening
Advertising"). Franchisor shall provide guidelines for conducting such Grand
Opening Advertising.
C. Franchisor shall develop the PICK-UPS PLUS Advertising and
Development Fund ("Advertising Fund") and Franchisee shall contribute to the
Advertising Fund an amount currently equal to one and one-half percent (1.5%) of
Franchisee's Gross Sales, as defined in Paragraph X.A. Franchisor, at its
discretion, may raise the requirement, however, Franchisor will not raise the
Advertising Fund contribution requirement above three percent (3%) during the
term of this Agreement. Franchisee's required payments to the Advertising Fund
shall be made at the same time, in the same manner as, and in addition to the
Royalty Fee provided in Paragraph X. herein. Such payments shall be made in
addition to and exclusive of any sums that Franchisee may be required to spend
on local advertising and promotion. The Advertising Fund shall be maintained and
administered by Franchisor or its designee, as follows:
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1. Franchisor shall direct all advertising programs with sole
discretion over the creative concepts, materials and media used in such programs
and the placement and allocation thereof. Franchisor or its designee shall make
such expenditures for advertising and promotion in Franchisee's area of dominant
influence which are equivalent or proportionate to Franchisee's contribution.
However, Franchisor cannot and does not ensure that any particular franchisee
will benefit directly or pro rata from the placement of advertising.
2. Franchisor and affiliate-owned retail PICK-UPS PLUS businesses
operating under the Marks shall make contributions to the Advertising Fund
equivalent to the contributions required of Franchised Businesses within the
System.
3. The funds may be used to meet any and all costs of maintaining,
administering, directing and preparing advertising (including, without
limitation, the cost of preparing and conducting television, radio, magazine and
newspaper advertising campaigns and other public relations activities; employing
advertising agencies to assist therein; maintaining a toll free telephone number
to provide marketing assistance and support; paying salaries for employees who
develop marketing materials or provide or engage in promotional activities for
use in the System; and providing promotional brochures and other marketing
materials to franchisees in the System). All sums paid by Franchisee to the
Advertising Fund shall be maintained in a separate account from the other funds
of Franchisor and shall not be used to defray any of Franchisor's general
operating expenses, except for such reasonable administrative costs and
overhead, if any, as Franchisor may incur in activities reasonably related to
the administration or direction of the Advertising Fund and advertising programs
including, without limitation, conducting market research, preparing marketing
and advertising materials, and collecting and accounting for assessments for the
Advertising Fund.
4. Although Franchisor intends the Advertising Fund to be of
perpetual duration, Franchisor maintains the right to terminate the Advertising
Fund. The Advertising Fund shall not be terminated, however, until all monies in
the Advertising Fund have been expended for advertising and promotional
purposes.
5. An accounting of the operation of the Advertising Fund shall be
prepared annually and shall be made available to Franchisee upon request.
Franchisor reserves the right, at its option, to require that such annual
accounting include an audit of the operation of the Advertising Fund prepared by
an independent certified public accountant selected by Franchisor and prepared
at the expense of the Advertising Fund.
6. Once contributions to the Advertising Fund are made by
Franchisee, all such monies shall be used as herein required and shall not be
returned to Franchisee.
D. During each calendar month Franchisee will spend four percent (4%)
of the Gross Sales derived from the Franchised Business for the preceding
calendar month or ONE THOUSAND FIVE HUNDRED Dollars ($1,500.00) a month,
whichever is greater, on local advertising and promotion. Such expenditures
shall be made directly by Franchisee, subject to approval and direction by
Franchisor or Franchisor's designated advertising agency. Franchisor shall
provide guidelines for conducting local
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advertising and promotional programs, and any deviations from such guidelines
shall be approved by Franchisor in writing prior to use. Within thirty (30) days
of the end of each month, Franchisee shall furnish to Franchisor, in a manner
approved by Franchisor, an accurate accounting of the expenditures on local
advertising and promotion for the preceding month just ended.
E. From time to time, Franchisor may designate a local, regional or
national Advertising Coverage Area in which Franchisee's business and at least
one (1) other PICK-UPS PLUS business is located for purposes of developing a
cooperative local, regional or national advertising or promotional program. If
directed by Franchisor, Franchisee agrees to participate in and contribute to
such cooperative advertising and promotional programs in Franchisee's
Advertising Coverage Area in addition to such contributions and expenditures as
required pursuant to Paragraphs IX.B., C. and D. The cost of the program shall
be allocated among locations in such area and each Franchisee's share shall be
in proportion to its sales during the preceding twelve (12) month period, or
portion of said period. Said contributions to cooperative advertising
promotional programs will be credited toward the local advertising and
promotional expenditure required in Paragraph IX.D. above up to fifty percent
(50%) of the required local advertising expenditures. "Advertising Coverage
Area" shall be defined as the area covered by the particular advertising medium
(television, radio or other medium) as recognized in the industry. At the time a
program is submitted, Franchisor shall submit a list to Franchisee of all
operating businesses within the Advertising Coverage Area. At its discretion,
Franchisor will appoint a three (3) to five (5) person cooperative advertising
council based on the number of franchised and Company-owned PICK-UPS PLUS
businesses in a given region; provided, however, that all councils will have at
least one (1) Franchisor representative.
F. Franchisor may, from time to time, develop and market special
promotional items which will be made available to Franchisee at Franchisor's
cost plus a reasonable xxxx up and Franchisee shall maintain a representative
inventory of such promotional items to meet public demand. Franchisee shall have
the right to purchase alternative promotional items provided that such
alternative goods conform to the specifications and quality standards
established by Franchisor from time to time.
G. Franchisee shall maintain a business phone and advertise
continuously in the classified or Yellow Pages of the local telephone directory
under the listings "Trucks," "Truck Accessories," "Truck Caps and Shells" or any
such other listings as deemed appropriate by Franchisor using mats of the type
and size approved in advance by Franchisor. When more than one (1) PICK-UPS PLUS
business serves a metropolitan area, classified advertisements shall list all
PICK-UPS PLUS businesses operating within the distribution area of such
classified directories, and Franchisee shall contribute its equal share in the
cost of such advertisement. The expenditures for such advertising shall be
credited toward the local advertising requirements pursuant to Paragraph IX.D.
of this Agreement.
H. Franchisee shall not use in advertising or any other form of
promotion, the copyrighted materials, trademarks, service marks or commercial
symbols of Franchisor without appropriate notices which may be required by
applicable laws or as Franchisor may from time to time direct including, without
limitation, (C), (R), or other copyright or trademark registration notices or
the designations (TM) or (SM) where applicable or an indication that the name
"PICK-UPS PLUS" and the Xxxx "PICK-UPS PLUS YOUR TRUCK STORE", are the trade
names, trademarks and service marks of Franchisor.
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15
X. CONTINUING SERVICES AND ROYALTY FEE
A. Franchisee shall pay without offset, credit or deduction of any
nature to Franchisor, so long as this Agreement shall be in effect, a weekly
Royalty Fee equal to six percent (6%) of the Gross Sales derived from the
Franchised Business. Said fee shall be paid weekly in the manner specified below
or as otherwise prescribed in the Manual.
1. On or before Friday of each week, Franchisee will submit to
Franchisor, on a form approved by Franchisor, a correct statement, signed by
Franchisee, of Franchisee's Gross Sales for the preceding week just ended
Friday. Each weekly statement of Gross Sales shall be accompanied by
Franchisee's calculation of the Royalty Fee payment based on the Gross Sales
reported in the statement so submitted and a sales report for the preceding week
just ended Friday. Franchisee shall make available to Franchisor all original
books and records that Franchisor may deem necessary to ascertain Franchisee's
Gross Sales for reasonable inspections at reasonable times.
2. The term "Gross Sales," as used herein and throughout this
Agreement, shall mean and include the total of all revenues and income from the
sale of pick-up truck accessories and related merchandise, products and services
including, but not limited to, the Trademarked Product Lines (if developed), to
customers of Franchisee or any other source, whether or not sold or performed at
or from the Franchised Business, and whether received in cash, in services in
kind, from barter and/or exchange, on credit (whether or not payment is received
therefor) or otherwise. There will be deducted from Gross Sales for purposes of
said computation (but only to the extent they have been included) the amount of
all sales tax receipts or similar tax receipts which, by law, are chargeable to
customers, if such taxes are separately stated when the customer is charged and
if such taxes are paid to the appropriate taxing authority. There will be
further deducted from Gross Sales the amount of any documented mailing and
shipping costs, refunds, chargebacks, credits and allowances given in good faith
to customers by Franchisee. All barter and/or exchange transactions pursuant to
which Franchisee furnishes services and/or products in exchange for goods or
services to be provided to Franchisee by a vendor, supplier or customer will,
for the purpose of determining Gross Sales, be valued at the full retail value
of the goods and/or services so provided to Franchisee.
B. All Royalty Fees, advertising contributions, amounts due for
purchases by Franchisee from Franchisor or Franchisor's affiliate(s), and other
amounts which Franchisee owes to Franchisor or Franchisor's affiliate(s) shall
bear interest after the due date at eighteen percent (18%) per annum or the
highest applicable legal rate for open account business credit, whichever is
greater. Franchisee acknowledges that this Paragraph X. shall not constitute an
agreement by Franchisor or Franchisor's affiliate(s) to accept such payments
after same are due or a commitment by Franchisor to extend credit to, or
otherwise finance Franchisee's operation of the Franchised Business. Further,
Franchisee acknowledges that its failure to pay all amounts when due shall
constitute grounds for termination of this Agreement, as provided in Paragraph
XVI. hereof.
C. Notwithstanding any designation by Franchisee, Franchisor shall have
the sole discretion to apply any payments by Franchisee to any past due
indebtedness of Franchisee for Royalty Fees,
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advertising contributions, purchases from Franchisor, interest or any other
indebtedness, in such amounts and in such order as Franchisor shall determine.
XI. ACCOUNTING AND RECORDS
A. Franchisee shall maintain during the term of this Agreement, and
shall preserve for the time period specified in the Manual, full, complete and
accurate books, records and accounts in accordance with the standard accounting
system prescribed by Franchisor in the Manual or otherwise in writing.
Franchisee shall retain during the term of this Agreement and for three (3)
years thereafter all books and records related to the Franchised Business
including, without limitation, sales checks, purchase orders, invoices, payroll
records, check stubs, sales tax records and returns, cash receipts and
disbursement journals, general ledgers and any other financial records
designated by Franchisor or required by law.
B. Franchisee will supply to Franchisor on or before the fifteenth
(15th) day of the following calendar month, in a form approved by Franchisor, a
balance sheet as of the end of the last preceding calendar quarter and a profit
and loss statement for such quarter and Franchisee's fiscal year-to-date.
Additionally, Franchisee shall, at its expense, submit to Franchisor within
ninety (90) days of the end of each fiscal year during the term of this
Agreement, a profit and loss statement for such fiscal year and a balance sheet
as of the last day of such fiscal year, prepared on an accrual basis including
all adjustments necessary for fair presentation of the financial statements.
Such financial statements will be certified to be true and correct by
Franchisee. Franchisor requires, at Franchisee's expense, annual financial
statements, prepared in accordance with generally accepted accounting standards,
reviewed or audited by an independent certified public accountant. Franchisee
shall supply to Franchisor all federal and state income tax returns filed for
the Franchised Business within thirty (30) days after such filing.
C. Franchisee shall submit to Franchisor such other periodic reports,
forms and records in the manner and at the time as specified in the Manual or as
Franchisor shall otherwise require in writing from time to time.
D. Franchisee shall record all sales on a computerized inventory system
approved by Franchisor or as may be designated by Franchisor in the Manual or
otherwise in writing. Franchisee acknowledges that Franchisor shall have the
right to require Franchisee to utilize computerized inventory systems which are
fully compatible with any program or system which Franchisor, in its discretion,
may employ. If Franchisor requires such computerized inventory systems, all
Gross Sales and all sales information shall be recorded on such equipment.
Franchisor shall have full access to all of Franchisee's data, system and
related information by means of direct access whether in person, or by
telephone/modem.
E. Franchisor or its designated agents shall have the right at all
reasonable times to examine and copy, at its expense, the books, records and tax
returns of Franchisee. Franchisor shall also have the right, at any time, to
have an independent audit made of the books and records of Franchisee at
Franchisor's expense. If an inspection or audit should reveal that any payments
due to Franchisor have been understated in any report to Franchisor, Franchisee
shall immediately pay to Franchisor the amount
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understated upon demand, in addition to interest from the date such amount was
due until paid, at the rate of eighteen percent (18%) per annum or the maximum
rate permitted by law, whichever is greater. If an inspection or audit discloses
an understatement in any report of two percent (2%) or more, Franchisee shall,
in addition, reimburse Franchisor for any and all costs and expenses connected
with the inspection or audit (including, without limitation, reasonable
accounting and attorneys' fees). The foregoing remedies shall be in addition to
any other remedies Franchisor may have.
F. Franchisee acknowledges that nothing contained herein constitutes
Franchisor's agreement to accept any payments after same are due or a commitment
by Franchisor to extend credit to or otherwise finance Franchisee's operation of
the Franchised Business. Further, Franchisee acknowledges that its failure to
pay all amounts when due shall constitute a material default and grounds for
termination of this Agreement.
XII. STANDARDS OF QUALITY AND PERFORMANCE
A. Franchisee shall comply with all requirements set forth in this
Agreement, the Manual and other written policies supplied to Franchisee by
Franchisor. Mandatory specifications, standards, operating procedures and rules
prescribed from time to time by Franchisor in the Manual or otherwise
communicated to Franchisee in writing, shall constitute provisions of this
Agreement as if fully set forth herein and shall be reasonably and uniformly
applied to all franchisees. All references herein to this Agreement shall
include all such mandatory specifications, standards and operating procedures
and rules. Franchisee shall comply with the entire System including, but not
limited to, the provisions of this Paragraph XII.
B. Franchisee shall commence operation of the Franchised Business not
later than nine (9) months after execution of this Agreement, unless otherwise
agreed upon in writing by Franchisor. Prior to such opening, Franchisee shall
have complied with all Franchisor's pre-opening standards and specifications. If
Franchisee for any reason fails to commence operation as herein provided, such
failure shall be considered a default and Franchisor may terminate this
Agreement as herein provided.
C. Franchisee shall maintain the condition and appearance of the
Premises consistent with Franchisor's standards. Franchisee shall maintain the
Premises as is from time to time required to maintain or improve the appearance
and efficient operation of the Franchised Business including, but not limited
to, replacement of worn out or obsolete fixtures and signs, and repair of the
exterior and interior of the Premises. If at any time, in Franchisor's judgment,
the general state of repair or the appearance of the Premises or its equipment,
fixtures, signs or decor does not meet Franchisor's standards therefor,
Franchisor shall so notify Franchisee, specifying the action to be taken by
Franchisee to correct such deficiency. If Franchisee fails or refuses to
initiate within thirty (30) days after receipt of such notice, and thereafter
continue, a bona fide program to complete any required maintenance, Franchisor
shall have the right, in addition to all other remedies, to enter upon the
Premises and effect such maintenance on behalf of Franchisee and Franchisee
shall pay the entire costs thereof on demand.
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D. Franchisee shall make no alterations to the Premises nor shall
Franchisee replace or alter the equipment, fixtures or signs of the Franchised
Business without the prior written approval by Franchisor.
E. Franchisee shall offer for sale, use, sell and provide at the
Franchised Business all types of pick-up truck accessories and related
merchandise, products and services that Franchisor from time to time authorizes
and will not offer for sale or sell or provide at the Franchised Business or the
premises which it occupies any other category of merchandise or products or use
such premises for any purpose other than the operation of the Franchised
Business in full compliance with this Agreement.
F. From time to time, Franchisor shall provide to Franchisee a list of
approved manufacturers, suppliers and distributors authorized for the Franchised
Business ("Approved Suppliers List") and a list of approved inventory, products,
fixtures, furniture, equipment, signs, stationery, supplies and other items or
services necessary to operate the Franchised Business ("Approved Supplies
List"). Franchisor may revise the Approved Supplies List and Approved Suppliers
List from time to time in its sole discretion. If Franchisee proposes to offer
for sale or use at the Franchised Business any brand of product, or other
material or supply which is not on the Approved Supplies List or to purchase any
product from a supplier that is not on the Approved Suppliers List, Franchisee
shall first notify Franchisor and shall upon request by Franchisor submit
samples and such other information as Franchisor requires for examination and/or
testing or to otherwise determine whether such product, material or supply, or
such proposed supplier meets its specifications and quality standards. A charge
not to exceed the reasonable cost of the inspection and evaluation and the
actual cost of the test shall be paid by Franchisee or the supplier. Franchisor
reserves the right to re-inspect the facilities and products of any supplier of
an approved item and to revoke its approval of any item or supplier which fails
to continue to meet any of Franchisor's criteria or which refuses to allow
re-inspection.
G. All inventory, products and materials, and other items and supplies
used in the operation of the Franchised Business which are not specifically
required to be purchased in accordance with Franchisor's Approved Supplies List
and Approved Suppliers List shall conform to the specifications and quality
standards established by Franchisor from time to time.
H. Franchisor may, in the future, develop certain Trademarked Product
Lines consisting of specially developed or private labeled pick-up truck
accessories or other merchandise and products bearing the Marks. At such time as
Franchisor introduces the Trademarked Product Lines into the System (if ever),
Franchisee acknowledges that Franchisee shall be required to carry an adequate
supply and maintain a representative inventory of such Trademarked Product Lines
as required by the Manual, and Franchisee shall maintain, carry and promote such
Trademarked Product Lines for use in servicing the general public in order to
meet customer demand as designated by Franchisor. Franchisee shall, throughout
the term of this Agreement, purchase Trademarked Product Lines from Franchisor,
Franchisor's affiliate or other designated sources which manufacture the
Trademarked Product Lines to Franchisor's precise specifications.
I. Franchisor may, in the future, develop and custom design a software
package for conducting inventory control, accounting and related activities. If
developed, the Software shall be
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proprietary to and confidential information of Franchisor. Franchisor has
determined that it shall not be able to practically alter the Software and
System to accommodate each and every franchisee of the System; therefore,
Franchisee shall utilize the Software in the operation of the Franchised
Business and comply with all specifications and standards prescribed by
Franchisor regarding the Software, as shall be provided from time to time in the
Manual. This unique software will be in an ongoing development and testing state
and upgrades may be implemented into the System at Franchisor's discretion. If
developed, Franchisor or its designee shall provide ongoing service and support
to Franchisee regarding the Software, and Franchisor shall lease such software
to Franchisee at the then-current rates published by Franchisor.
J. Franchisee, at its expense, shall secure and maintain in force all
required licenses, permits and certificates relating to the operation of the
Franchised Business and shall operate the Franchised Business in full compliance
with all applicable laws, ordinances and regulations including, without
limitation, all government regulations relating to occupational hazards and
health, consumer protection, trade regulation, workers' compensation,
unemployment insurance and withholding and payment of federal and state income
taxes, social security taxes and sales, use and property taxes. Franchisee shall
refrain from any merchandising, advertising or promotional practice which is
unethical or may be injurious to the business of Franchisor and/or other
Franchised Business or to the goodwill associated with the Marks.
K. Franchisee shall, in the operation of the Franchised Business, use
only displays, labels, forms and other products and documentation imprinted with
the Marks and colors as prescribed from time to time by Franchisor.
L. Prior to commencement of operation of the Franchised Business,
Franchisee shall adequately supply the Franchised Business with a representative
inventory as prescribed by Franchisor of pick-up truck accessories of the type,
quantity and quality as specified by Franchisor. Franchisee shall maintain
levels of inventory that shall permit operation of the Franchised Business at
maximum capacity.
M. The Franchised Business shall at all times be under the direct,
on-premises supervision of Franchisee (or a trained and competent employee
acting as full-time manager). Franchisee shall keep Franchisor informed at all
times of the identity of any employee(s) acting as manager(s) of the Franchised
Business. To the extent that Franchisor can reasonably accommodate Franchisee's
manager in Franchisee's regularly scheduled training course, Franchisor shall
make training available, as is reasonable and necessary, for all managers
designated by Franchisee. Franchisor shall provide such training as provided in
Paragraph IV.D. of this Agreement. In no event will Franchisor be under any
obligation to provide individual training to Franchisee's managers. Franchisee
shall, at all times, faithfully, honestly and diligently perform its obligations
hereunder and shall not engage in any business or other activities that will
conflict with its obligations hereunder.
N. Franchisee shall not install or maintain on the Premises any
newspaper racks, video games, juke boxes, gaming machines, gum machines, games,
rides, vending machines or other similar devices without the written approval of
Franchisor.
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O. At such time that more than one (1) franchisee conducts a Franchised
Business in any given region (the boundaries of such region to be determined in
the sole and absolute discretion of Franchisor), Franchisor may form a PICK-UPS
PLUS Regional Advisory Council ("Council"). Franchisee shall participate in all
Council programs approved by Franchisor for Franchisee's particular Council. The
purposes of the Council(s) include, but are not limited to, exchanging ideas and
problem-solving methods, advising Franchisor on expenditures for regional
advertising, providing back-up support and staffing for political influence and
coordinating System franchisee efforts. Franchisee shall pay all Council
assessments levied by the Council, and Franchisor has the right to enforce this
obligation. Amounts and expenditures may vary from time to time and due to
variations in Council participation and costs as determined by a particular
Council and as approved by Franchisor. Although Franchisee shall pay such
Council assessments, such assessments shall in no way diminish Franchisee's
rights and the benefit of the bargain under this Agreement.
P. Franchisee shall notify Franchisor in writing within five (5) days
of any written threat or the actual commencement of any action, suit or
proceeding or of the issuance of any order, writ, injunction, award or decree of
any court, agency or other governmental instrumentality which may adversely
affect the operation or financial condition of the Franchised Business.
XIII. FRANCHISOR'S OPERATIONS ASSISTANCE
A. Franchisor may from time to time advise or offer guidance to
Franchisee relative to prices for the services and products offered for sale by
the Franchised Business that in Franchisor's judgment, constitute good business
practice. Such guidance will be based on the experience of Franchisor and its
franchisees in operating the Franchised Business and an analysis of the costs of
such products and prices charged for competitive products. Franchisee shall not
be obligated to accept any such advice or guidance and shall have the sole right
to determine the prices to be charged by the Franchised Business and no such
advice or guidance shall be deemed or construed to impose upon Franchisee any
obligation to charge any fixed, minimum or maximum prices for any product
offered for sale by the Franchised Business.
B. Upon commencement of operation of the Franchised Business and during
the term of this Agreement, Franchisor may provide to Franchisee the following:
1. A comprehensive list of established sources of equipment,
supplies and containers necessary for the operation of the Franchised Business
and provide specifications for such products;
2. Coordination of product distribution for local, regional and
national suppliers;
3. Regulation of quality standards and products in conformance
throughout the network of Franchised Businesses;
4. Coordination of advertising materials and strategies; and
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5. Negotiation of group rates for purchases of products and
materials as Franchisor, in its sole discretion, deems necessary and
appropriate.
C. Franchisor may furnish Franchisee with such assistance in connection
with the operation of the Franchised Business as is reasonably determined to be
necessary by Franchisor from time to time. Operations assistance may consist of
advice and guidance with respect to:
1. Proper utilization of procedures by the Franchised Business
regarding the service and sale of all services and products approved by
Franchisor;
2. Additional products and services authorized for sale from the
Franchised Business;
3. Purchase of inventory items, materials and supplies;
4. The institution of proper administrative, bookkeeping,
accounting, inventory control, supervisory and general operating procedures for
the effective operation of the Franchised Business;
5. Advertising and promotional programs; and
6. On-going research and development of new procedures and
techniques, new products and materials and other enhancements to the System.
D. Franchisor may make periodic visits to the Franchised Business for
the purposes of consultation, assistance and guidance of Franchisee in all
aspects of the operation and management of the Franchised Business. Franchisor
or Franchisor's representatives who visit at the Franchised Business may
prepare, for the benefit of both Franchisor and Franchisee, written reports with
respect to such visits outlining any suggested changes or improvements in the
operations of the Franchised Business and detailing any defaults in such
operations which become evident as a result of any such visit. A copy of each
such written report shall be provided to both Franchisor and Franchisee.
Franchisor shall advise Franchisee of problems arising out of the operation of
the Franchised Business as disclosed by reports submitted to Franchisor by
Franchisee or by inspections conducted by Franchisor of the Franchised Business.
E. All of the specifications, Approved Suppliers Lists, Approved
Supplies Lists, training and operations manuals to be provided by Franchisor to
Franchisee pursuant to this Agreement shall be delivered upon Franchisee's
satisfactory completion of Franchisor's initial training program.
XIV. INSURANCE
A. Franchisee shall procure at its expense and maintain in full force
and effect during the term of this Agreement, an insurance policy or policies
protecting Franchisee and Franchisor and its officers, directors, partners and
employees, against any loss, liability, personal injury, death, property damage
or expense whatsoever arising or occurring upon or in connection with the
Franchised Business, as Franchisor may reasonably require for its own and
Franchisee's protection. Franchisor shall be named
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an additional insured in such policy or policies. Such insurance is limited to
its "conditions, provisions and exclusions" and does not necessarily include any
expense whatsoever arising or occurring upon or in connection with the
Franchised Business.
B. Such policy or policies shall be written by a licensed insurance
company licensed in the state in which Franchisee operates and having at least
an "A" Rating Classification as indicated in Best's Key Rating Guide in
accordance with standards and specifications set forth in the Manual or
otherwise in writing, and shall include, at a minimum (except as different
coverages and policy limits may reasonably be specified for all franchisees from
time to time by Franchisor in the Manual or otherwise in writing), the
following:
1. All risks or special form coverage insurance on the Franchised
Business and all fixtures, equipment, supplies and other property used in the
operation of the Franchised Business (which coverage shall include flood and/or
earthquake coverage where appropriate, and theft insurance) for full repair and
replacement value of the equipment, improvements and betterments, without any
applicable co-insurance clause, except that an appropriate deductible clause
shall be permitted.
2. Workers' compensation and employer's liability insurance as well
as such other insurance as may be required by statute or rule of the state or
country in which the Franchised Business is located and operated.
3. Comprehensive general liability insurance and product liability
insurance, including a per premises aggregate with the following coverages:
broad form contractual liability, personal injury products/completed operation,
and fire legal, insuring Franchisor and Franchisee against all claims, suits,
obligations, liabilities and damages, including attorneys' fees, based upon or
arising out of actual or alleged personal injuries or property damage resulting
from, or occurring in the course of, or on or about or otherwise relating to the
Franchised Business, including General Aggregate coverage in the following
limits:
Recommended Coverage Minimum Limits of Coverage
-------------------- --------------------------
General Aggregate......................................... $1,000,000.00
Products/Completed Operations Aggregate................... $1,000,000.00
Personal and Advertising Injury........................... $1,000,000.00
Each Occurrence........................................... $1,000,000.00
Fire Damage (any one fire).................................... $50,000.00
Medical Expense (any one person).............................. $5,000.00
4. Business interruption insurance for actual losses sustained.
5. Automobile liability insurance, including owned, hired and
non-owned vehicle coverage, with a combined single limit of at least ONE MILLION
Dollars ($1,000,000.00).
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6. Such insurance and types of coverage as may be required by the
terms of any lease for the Franchised Business or as may be required from time
to time by Franchisor.
C. The insurance afforded by the policy or policies respecting
liability shall not be limited in any way by reason of any insurance which may
be maintained by Franchisor. Within sixty (60) days of the signing of this
Agreement, but in no event later than the date on which Franchisee acquires an
interest in the real property on which it will develop and operate the
Franchised Business, an Accord Form Certificate of Insurance showing compliance
with the foregoing requirements shall be furnished by Franchisee to Franchisor
for approval. Such certificate shall state that said policy or policies will not
be canceled or altered without at least thirty (30) days prior written notice to
Franchisor and shall reflect proof of payment of premiums. Maintenance of such
insurance and the performance by Franchisee of the obligations under this
Paragraph XIV. shall not relieve Franchisee of liability under the indemnity
provision set forth in this Agreement. Minimum limits as required above may be
modified from time to time, as conditions require, by written notice to
Franchisee.
D. Should Franchisee, for any reason, not procure and maintain such
insurance coverage as required by this Agreement, Franchisor shall have the
right and authority (without, however, any obligation to do so) immediately to
procure such insurance coverage and to charge same to Franchisee, which charges,
together with a reasonable fee for expenses incurred by Franchisor in connection
with such procurement, shall be payable by Franchisee immediately upon notice.
XV. COVENANTS
A. Unless otherwise specified, the term "Franchisee" as used in this
Paragraph XV. shall include, collectively and individually, Franchisee as
defined in Paragraph XXXI.
B. Franchisee covenants that during the term of this Agreement, except
as otherwise approved in writing by Franchisor, Franchisee (if Franchisee is an
individual), a shareholder of a beneficial interest of ten percent (10%) or more
of the securities of Franchisee (if Franchisee is a corporation), a general
partner of Franchisee (if Franchisee is a partnership) or Franchisee's full-time
manager shall devote full-time energy and best efforts to the management and
operation of the Franchised Business.
C. Franchisee covenants that during the term of this Agreement, except
as otherwise approved in writing by Franchisor, Franchisee shall not, either
directly or indirectly, for himself, or through, on behalf of or in conjunction
with any person, persons, partnership or corporation:
1. Divert or attempt to divert any business or customer of the
Franchised Business to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with the Marks or the System.
2. Employ or seek to employ any person who is at that time
employed by Franchisor, or by any other franchisee of Franchisor, or otherwise
directly or indirectly induce or seek to induce such person to leave his or her
employment thereat.
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3. Own, maintain, engage in or have any interest in any business
(including any business operated by Franchisee prior to entry into this
Agreement) specializing, in whole or in part, in offering or selling pick-up
truck accessories or related merchandise and products or any other business
which sells or offers to sell the same as, or similar to, those sold in the
System.
D. Franchisee specifically acknowledges that, pursuant to this
Agreement, Franchisee will receive valuable training and confidential
information including, without limitation, information regarding the
promotional, operational, sales and marketing methods and techniques of
Franchisor and the System. Accordingly, Franchisee covenants that, except as
otherwise approved in writing by Franchisor, Franchisee shall not, for a period
of one (1) year after the expiration or termination of this Agreement,
regardless of the cause of termination, either directly or indirectly, for
himself, or through, on behalf of or in conjunction with any person, persons,
partnership or corporation, own, maintain, engage in, consult with or have any
interest in any business engaged primarily in the offering and selling of
pick-up truck accessories or other related merchandise and products the same as,
or similar to, the type sold in the System:
1. Within the Metropolitan Statistical Area, as that term is defined
by the United States Census Bureau ("MSA") in which the Franchised Business is
located; or
2. Within a radius of ten (10) miles of the Franchised Business; or
3. Within a radius of ten (10) miles of the location of any other
business using the System, whether franchised or owned by Franchisor.
E. Each of the foregoing covenants shall be construed as independent of
any other covenant or provision of this Agreement. If all or any portion of a
covenant in this Paragraph XV. is held unreasonable or unenforceable by a court
or agency having valid jurisdiction in an unappealed final decision to which
Franchisor is a party, Franchisee shall be bound by any lesser covenant subsumed
within the terms of such covenant that imposes the maximum duty permitted by
law, as if the resulting covenant were separately stated in and made a part of
this Paragraph XV.
F. Franchisee understands and acknowledges that Franchisor shall have
the right, in its sole discretion, to reduce the scope of any covenant set forth
in Paragraphs XV.C. and D. in this Agreement or any portion thereof, without
Franchisee's consent, effective immediately upon receipt by Franchisee of
written notice thereof. Franchisee shall comply forthwith with any covenant as
so modified, which shall be fully enforceable notwithstanding the provisions of
Paragraph XXVII. hereof.
G. Franchisor shall have the right to require all of Franchisee's
officers, directors, shareholders, general partners, limited partners, personnel
performing managerial or supervisory functions and all personnel receiving
training from Franchisor to execute similar covenants in a form satisfactory to
Franchisor.
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XVI. DEFAULT AND TERMINATION
A. If Franchisee is in substantial compliance with this Agreement and
Franchisor materially breaches this Agreement and fails to cure such breach
within a reasonable time after written notice thereof is delivered to
Franchisor, Franchisee may terminate this Agreement. Such termination shall be
effective thirty (30) days after delivery of notice to Franchisor that such
breach has not been cured and Franchisee elects to terminate this Agreement. A
termination of this Agreement by Franchisee for any reason other than breach of
this Agreement by Franchisor and Franchisor's failure to cure such breach within
a reasonable time after receipt of written notice thereof shall be deemed a
termination by Franchisee without cause.
B. This Agreement shall terminate automatically upon delivery of notice
of termination to Franchisee if Franchisee or its owner(s), officer(s) or
manager(s):
1. Fails to satisfactorily complete the training program as provided
in Paragraph IV. of this Agreement;
2. Has made any material misrepresentation or omission in its
application for the franchise;
3. Is convicted of or pleads no contest to a felony or other crime
or offense that is likely to adversely affect the reputation of Franchisee or
the Franchised Business;
4. Makes any unauthorized use, disclosure or duplication of any
portion of the Manual or duplicates, discloses or makes any unauthorized use of
any trade secret or confidential information provided to Franchisee by
Franchisor;
5. Abandons, fails or refuses to actively operate the Franchised
Business for two (2) business days in any twelve (12) month period, unless the
Franchised Business has been closed for a purpose approved by Franchisor or due
to force majeure, or fails to relocate to approved premises within an approved
period of time following expiration or termination of the lease for the
Premises;
6. Surrenders or transfers control of the operation of the
Franchised Business, makes an unauthorized direct or indirect assignment of the
franchise or an ownership interest in Franchisee or fails or refuses to assign
the franchise or the interest in Franchisee of a deceased or disabled
controlling owner thereof as herein required;
7. Submits to Franchisor on two (2) or more separate occasions at
any time during the term of the franchise any reports or other data, information
or supporting records which understate by more than two percent (2%) the Royalty
Fees for any period of, or periods aggregating, three (3) or more weeks, and
Franchisee is unable to satisfactorily demonstrate to Franchisor that such
understatements resulted from inadvertent error;
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8. Materially misuses or makes an unauthorized use of any Marks or
commits any act which can reasonably be expected to impair the goodwill
associated with any Marks;
9. Materially misuses or makes an unauthorized use of the Software
(if developed);
10. Fails on two (2) or more separate occasions within any period of
twelve (12) consecutive weeks to submit when due reports or other information or
supporting records, to pay when due the Royalty Fees, advertising contributions,
amounts due for purchases from Franchisor or Franchisor's affiliate(s) or other
payments due to Franchisor or Franchisor's affiliate(s), or otherwise fails to
comply with this Agreement, whether or not such failures to comply are corrected
after notice thereof is delivered to Franchisee; or
11. If Franchisee shall be adjudicated bankrupt, becomes insolvent,
commits any affirmative act of insolvency or files any action or petition of
insolvency, or if a receiver (permanent or temporary) of its property or any
part thereof is appointed by a court of competent authority, if it makes a
general assignment for the benefit of its creditors, or if a final judgment
remains unsatisfied of record for thirty (30) days or longer (unless supersedeas
bond is filed), if execution is levied against Franchisee's business or
property, or if suit to foreclose any lien or mortgage against its premises or
equipment is instituted against Franchisee and not dismissed within thirty (30)
days or is not in the process of being dismissed; provided, however, that
Franchisor reserves the right to be named as trustee or receiver in any
voluntary petition for bankruptcy or insolvency filed by Franchisee.
C. This Agreement shall terminate without further action by Franchisor
or notice to Franchisee if Franchisee or Franchisee's owner:
1. Fails or refuses to make payments of any amounts due Franchisor
or Franchisor's affiliate(s) for Royalty Fees, advertising contributions,
purchases from Franchisor, Franchisor's parent or affiliate(s) or any other
amounts due to Franchisor or Franchisor's affiliate(s), and does not correct
such failure or refusal within ten (10) business days after written notice of
such failure is delivered to Franchisee;
2. Fails or refuses to comply with any other provision of this
Agreement, or any mandatory specification, standard or operating procedure
prescribed in the Manual or otherwise in writing and does not correct such
failure within thirty (30) days (or provide proof acceptable to Franchisor that
it has made all reasonable efforts to correct such failure and will continue to
make all reasonable efforts to cure until a cure is effected, if such failure
cannot reasonably be corrected within thirty [30] days) after written notice of
such failure to comply is delivered to Franchisee.
D. To the extent that the provisions of this Agreement provide for
periods of notice less than those required by applicable law, or provide for
termination, cancellation, non-renewal or the like other than in accordance with
applicable law, such provisions shall, to the extent such are not in accordance
with applicable law, not be effective, and Franchisor shall comply with
applicable law in connection with each of these matters.
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E. In addition to Franchisor's right to terminate this Agreement, and
not in lieu of such right or any other rights against Franchisee, Franchisor, in
the event that Franchisee shall not have cured a default under this Agreement
within the twenty (20) business days after receipt of a written notice to cure
from Franchisor, may, at its option, enter upon the Premises and exercise
complete authority with respect to the operation of said business until such
time as Franchisor determines that the default of Franchisee has been cured and
that there is compliance with the requirements of this Agreement. A designated
representative of Franchisor may take over, control and operate said business,
and Franchisee shall pay Franchisor a service fee per day as specified in the
Manual, plus all travel expenses, room and board and other expenses reasonably
incurred by such representative so long as it shall be required by the
representative to enforce compliance herewith. If, as herein provided,
Franchisor temporarily operates for Franchisee the Franchised Business,
Franchisee shall indemnify and hold harmless Franchisor and any representative
of Franchisor from any claims arising from the acts and omissions of Franchisor
and its representative.
XVII. RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION
Upon termination or expiration, this Agreement and all rights granted
hereunder to Franchisee shall forthwith terminate, and:
A. Franchisee shall immediately cease to operate the Franchised
Business under this Agreement, and shall not thereafter, directly or indirectly,
represent to the public or hold itself out as a present or former franchisee of
Franchisor.
B. Upon demand by Franchisor, at Franchisor's discretion, Franchisee
shall assign to Franchisor, Franchisee's interest in any lease then in effect
for the Premises, and Franchisee shall furnish Franchisor with evidence
satisfactory to Franchisor of compliance with this obligation within fifteen
(15) days after termination or expiration of this Agreement.
C. Franchisee shall immediately and permanently cease to use, by
advertising or in any manner whatsoever, any confidential methods, procedures
and techniques associated with the System; the Marks, any distinctive forms,
slogans, signs, symbols, logos or devices associated with the System. In
particular, Franchisee shall cease to use, without limitation, all signs,
advertising materials, stationery, forms and any other articles which display
the Marks associated with the System.
D. Franchisee shall take such action as may be necessary to cancel or
assign to Franchisor or its designee, at Franchisor's option, any fictitious or
assumed name rights or equivalent registration filed with state, city or county
authorities which contains the name "PICK-UPS PLUS" or any other service xxxx or
trademark associated with the System, and Franchisee shall furnish Franchisor
with evidence satisfactory to Franchisor of compliance with this obligation
within thirty (30) days after termination or expiration of this Agreement.
E. In the event Franchisee continues to operate or subsequently begins
to operate any other business, Franchisee shall not use any reproduction,
counterfeit, copy or colorable imitation of the Marks either in connection with
such other business or the promotion thereof, which is likely to cause
confusion,
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mistake or deception, or which is likely to dilute Franchisor's rights in and to
the Marks and further, Franchisee shall not utilize any designation of origin or
description or representation which falsely suggests or represents an
association or connection with Franchisor so as to constitute unfair
competition. Franchisee shall make such modifications or alterations to the
Premises operated hereunder (including, without limitation, the changing of the
telephone number) immediately upon termination or expiration of this Agreement
as may be necessary to prevent any association with Franchisor or the System and
any business thereon subsequently operated by Franchisee or others, and shall
make such specific additional changes thereto as Franchisor may reasonably
request for that purpose including, without limitation, removal of all
distinctive physical and structural features identifying the System. In the
event Franchisee fails or refuses to comply with the requirements of this
Paragraph XVII., Franchisor shall have the right to enter upon the Premises
where the Franchised Business was conducted, without being guilty of trespass or
any other tort, for the purpose of making or causing to be made such changes as
may be required at the expense of Franchisee, which expense Franchisee shall pay
upon demand.
F. Franchisee shall promptly pay all sums owing to Franchisor. In the
event of termination for any default of Franchisee, such sums shall include all
damages, costs and expenses, including reasonable attorneys' fees, incurred by
Franchisor as a result of the default.
G. Franchisee shall pay to Franchisor all damages, costs and expenses,
including reasonable attorneys' fees, incurred by Franchisor subsequent to the
termination or expiration of the franchise herein granted in obtaining
injunctive or other relief for the enforcement of any provisions of this
Paragraph XVII. or Paragraph XV.
H. Franchisee shall immediately turn over to Franchisor all manuals,
including the Manual, supplier lists, records, files, instructions, brochures,
agreements, disclosure statements, the Software (if developed) and any and all
other materials provided by Franchisor to Franchisee relating to the operation
of the Franchised Business (all of which are acknowledged to be Franchisor's
property).
I. Franchisor shall have the right, title and interest to any sign or
sign faces bearing the Marks. Franchisee hereby acknowledges Franchisor's right
to access the Premises should Franchisor elect to take possession of any said
sign or sign faces bearing the Marks.
J. Franchisor shall have the right (but not the duty), to be exercised
by notice of intent to do so within thirty (30) days after termination or
expiration, to purchase for cash any or all signs, advertising materials and all
items bearing Franchisor's Marks or any of the Franchised Business assets, at
fair market value or seventy-five percent (75%) of book value, whichever is
less. If the parties cannot agree on fair market value within a reasonable time,
the determination shall be made by arbitration in accordance with Paragraph XXX.
of this Agreement. If Franchisor elects to exercise any option to purchase
herein provided, it shall have the right to set off all amounts due from
Franchisee under this Agreement, and the cost of the arbitration, if any,
against any payment therefor.
K. Franchisee hereby acknowledges that all telephone and facsimile
numbers used in the operation of the Franchised Business constitute assets of
the Franchised Business; and upon termination or expiration of this Agreement,
Franchisee shall assign to Franchisor or its designee, all Franchisee's
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right, title and interest in and to Franchisee's telephone and facsimile numbers
and shall notify the telephone company and all listing agencies of the
termination or expiration of Franchisee's right to use any telephone number and
any regular, classified or other telephone directory listing associated with the
Marks and authorize a transfer of same to or at the direction of Franchisor.
L. Franchisee shall comply with the covenants contained in Paragraph
XV. of this Agreement.
M. All obligations of Franchisor and Franchisee which expressly or by
their nature survive the expiration or termination of this Agreement shall
continue in full force and effect subsequent to and notwithstanding its
expiration or termination and until they are satisfied or by their nature
expire.
XVIII. TRANSFERABILITY OF INTEREST
A. This Agreement and all rights hereunder can be assigned and
transferred by Franchisor and, if so, shall be binding upon and inure to the
benefit of Franchisor's successors and assigns; provided, however, that with
respect to any assignment resulting in the subsequent performance by the
assignee of the functions of Franchisor, the assignee shall:
1. At the time of such assignment, be financially responsible and
economically capable of performing the obligations of Franchisor hereunder; and
2. Expressly assume and agree to perform such obligations.
Specifically, and without limitation to the foregoing, Franchisee expressly
agrees that Franchisor may sell its assets, Marks or System outright to a third
party; may make a public offering of securities; may engage in a private
placement of some or all of its securities; may merge, acquire other
corporations or entities, or be acquired by another corporation or other entity;
may undertake a refinancing, recapitalization, leveraged buy out or other
economic or financial restructuring; and, with regard to any or all of the above
sales, assignments and dispositions, Franchisee expressly and specifically
waives any claims, demands or damages arising from or related to the loss of
said Marks (or any variation thereof) and/or the loss of association with or
identification of PICK-UPS PLUS, INC. as Franchisor hereunder. Nothing contained
in this Agreement shall require Franchisor to remain in the business in the
event that Franchisor exercises its rights hereunder to assign its rights in
this Agreement.
B. This Agreement and all rights hereunder may be assigned and
transferred by Franchisee and, if so, shall be binding upon and inure to the
benefit of Franchisee's successors and assigns, subject to the following
conditions and requirements, and Franchisor's right of first refusal as set
forth herein:
1. No Franchisee, partner of Franchisee (if Franchisee is a
partnership), or shareholder of Franchisee (if Franchisee is a corporation),
without Franchisor's prior written consent, by operation of law or otherwise
shall sell, assign, transfer, convey, give away or encumber to any person, firm
or corporation, all or any part of its interest in this Agreement or its
interest in the franchise granted hereby or its interest in any proprietorship,
partnership or corporation which owns any interest in the franchise, nor offer,
permit or suffer the same to be sold, assigned, transferred, conveyed, given
away or encumbered in any way to any person, firm or corporation. Franchisee may
not, without the prior
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written consent of Franchisor, fractionalize any of the rights of Franchisee
granted pursuant to this Agreement. Any purported assignment of any of
Franchisee's rights herein not having the aforesaid consent shall be null and
void and shall constitute a material default hereunder.
2. Franchisor shall not unreasonably withhold its consent to any
transfer referenced in Paragraph XVIII.B.1. of this Agreement when requested;
provided, however, that the following conditions and requirements shall first be
met to the full satisfaction of Franchisor.
a. If Franchisee is an individual or partnership and desires to
assign and transfer its rights to a corporation:
(1) Said transferee corporation shall be newly organized and
its charter shall provide that its activities are confined exclusively to acting
as a PICK-UPS PLUS franchisee as licensed under this Agreement;
(2) Franchisee shall be and shall remain the owner of the
majority fifty-one percent (51%) stock interest of the transferee corporation;
(3) The individual Franchisee (or, if Franchisee is a
partnership, one [1] of the partners) shall be and shall remain the principal
executive officer of the corporation;
(4) The transferee corporation shall enter into a written
assignment (in a form satisfactory to Franchisor), in which the transferee
corporation assumes all of Franchisee's obligations hereunder;
(5) All shareholders of the transferee corporation shall enter
into a written agreement, in a form satisfactory to Franchisor, jointly and
severally guaranteeing the full payment and performance of the transferee
corporation's obligations under this Agreement;
(6) Each stock certificate of the transferee corporation shall
have conspicuously endorsed upon it a statement that it is held subject to, and
that further assignment or transfer thereof is subject to, all restrictions
imposed upon assignments by this Agreement;
(7) No new shares of common or preferred voting stock in the
transferee corporation shall be issued to any person, partnership, trust,
foundation, or corporation without obtaining Franchisor's prior written consent
and then only upon disclosure of the terms and conditions contained herein being
made to the prospective new holders of the stock; and
(8) All accrued money obligations of Franchisee to Franchisor,
its subsidiaries or assignees, shall be satisfied prior to assignment or
transfer.
b. If the transfer, other than such transfer as is authorized
under Paragraph XVIII.B.2.a. of this Agreement, if consummated alone or together
with other related previous, simultaneous,
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or proposed transfers, would have the effect of transferring control of the
franchise licensed herein to someone other than an original signatory of this
Agreement:
(1) The transferee(s) shall be of good moral character and
reputation and shall have a good credit rating and competent business
qualifications reasonably acceptable to Franchisor. Franchisee shall provide
Franchisor with such information as Franchisor may require to make such
determination concerning each such proposed transferee(s).
(2) The transferee(s) or such other individual(s) as shall be
the actual manager of the franchise shall have successfully completed and passed
the training course then in effect for franchisees, or otherwise demonstrated,
to Franchisor's satisfaction, sufficient ability to operate the business being
transferred.
(3) The transferee(s), including all shareholders, officers,
directors and partners of the transferee(s), shall jointly and severally execute
any or all of the following, at Franchisor's sole discretion and as Franchisor
shall direct:
aa. A Franchise Agreement and other standard ancillary
agreements with Franchisor on the current standard forms being used by
Franchisor, except that an additional Franchise Fee shall not be charged; and/or
bb. A written assignment from Franchisee in a form
satisfactory to Franchisor, wherein transferee shall assume all of Franchisee's
obligations hereunder.
(4) Approval by Franchisor of any transfer by Franchisee of
the franchise herein granted or any of Franchisee's rights under this Agreement
shall in no way be deemed a release by Franchisor of Franchisee's obligations
pursuant to this Agreement. Consent by Franchisor to a transfer of the franchise
shall not constitute or be interpreted as consent for any future transfer
thereof.
(5) The term of said agreements required pursuant to
Subparagraph XVIII.B.2.b.(3) shall be for the unexpired term of this Agreement
and for any extensions or renewals as provided herein.
(6) If transferee is a corporation:
aa. Each stock certificate of the transferee corporation
shall have conspicuously endorsed upon it a statement that it is held subject
to, and that further assignment or transfer thereof is subject to, all
restrictions imposed upon assignments by this Agreement; and
bb. No new shares of common or preferred voting stock in
the transferee corporation shall be issued to any person, partnership, trust,
foundation or corporation without obtaining Franchisor's prior written consent
and then only upon disclosure of the terms and conditions contained herein being
made to the prospective new holders of the stock; and
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cc. All shareholders of the transferee corporation shall
enter into a written agreement, in a form satisfactory to Franchisor, jointly
and severally, guaranteeing full payment and the performance of the transferee
corporation of all obligations under this Agreement.
(7) All accrued money obligations of Franchisee to Franchisor
or its assignees, shall be satisfied prior to assignment or transfer, and
Franchisee shall not be in default under the terms of this Agreement.
(8) Franchisee, prior to the transfer, shall execute a general
release, in a form prescribed by Franchisor, of any and all existing claims
against Franchisor, Franchisor's respective officers, directors, agents and
employees, except such claims as are not permitted to be waived under applicable
law.
3. Franchisee shall have fully paid and satisfied all of
Franchisee's obligations to Franchisor, and the transferee or Franchisee shall
have fully paid to Franchisor a non-refundable transfer fee equal to fifty
percent (50%) of the then-current Franchise Fee charged by Franchisor for a
start-up franchise. The transfer fee is used to cover expenses of Franchisor for
the training, supervision, administrative costs, overhead, counsel fees,
accounting and other Franchisor expenses in connection with the transfer. This
transfer fee and training fee do not apply to an assignment of interest to a
corporation under Paragraph XVIII.B.2.a. of this Agreement.
4. No sale, assignment, transfer, conveyance, encumbrance or gift of
any interest in this Agreement or in the franchise granted thereby, shall
relieve Franchisee and the shareholders or partners participating in any
transfer, of the obligations of the covenants contained in Paragraph XV., except
where Franchisor shall expressly authorize in writing.
C. Franchisee must promptly ("promptly" herein defined as within thirty
[30] days of receipt of an offer to buy) give Franchisor written notice whenever
Franchisee has received an offer to buy Franchisee's franchise. Franchisee must
also give Franchisor written notice simultaneously with any offer to sell the
franchise made by, for or on behalf of Franchisee. The purpose of this Paragraph
XVIII. is to enable Franchisor to comply with any applicable state or federal
franchise disclosure laws or rules. Franchisee shall indemnify and hold harmless
Franchisor for Franchisee's failure to comply with this Paragraph XVIII.
D. Franchisee shall not, without prior written consent of Franchisor,
place in, on or upon the location of the Franchised Business or in any
communication media, any form of advertising, or list with any business, real
estate broker, agent or attorney any information relating to the sale of the
Franchised Business or the rights granted hereunder.
XIX. DEATH OR INCAPACITY OF FRANCHISEE
A. In the event of the death or incapacity of an individual
Franchisee, or any partner of a Franchisee which is a partnership or any
shareholder owning fifty percent (50%) or more of the capital
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stock of a Franchisee which is a corporation, the heirs, beneficiaries, devisees
or legal representative of said individual, partner or shareholders shall,
within one hundred eighty (180) days of such event:
1. Apply to Franchisor for the right to continue to operate the
franchise for the duration of the term of this Agreement and any renewals
hereof, which right shall be granted upon the fulfillment of all of the
conditions set forth in Paragraph XVIII.B.2.b. of this Agreement (except that no
transfer fee shall be required); or
2. Sell, assign, transfer or convey Franchisee's interest in
compliance with the provisions of Paragraphs XVIII.B. and XX. of this Agreement;
provided, however, in the event a proper and timely application for the right to
continue to operate has been made and rejected, the one hundred eighty (180)
days to sell, assign, transfer or convey shall be computed from the date of said
rejection. For purposes of this Paragraph XIX., Franchisor's silence on an
application made pursuant to Paragraph XIX.B. through the one hundred and eighty
(180) days following the event of death or incapacity shall be deemed a
rejection made on the last day of such period.
B. In the event of the death or incapacity of an individual franchisee,
or any partner or shareholder of a Franchisee which is a partnership or
corporation, where the aforesaid provisions of Paragraph XVIII. have not been
fulfilled within the time provided, all rights granted to Franchisee under this
Agreement shall, at the option of Franchisor, terminate forthwith and Franchisor
shall have the option to purchase the Franchised Business in accordance with
Paragraph XVII.J. herein.
C. For purposes of this Agreement, "incapacity" shall be defined as the
inability of Franchisee to operate or oversee the operation of the Franchised
Business on a regular basis by reason of any continuing physical, mental or
emotional incapacity, chemical dependency or other limitation. Any dispute as to
the existence of an incapacity as defined herein shall be resolved by majority
decision of three (3) licensed medical physicians practicing in the MSA in which
the Franchised Business is located, with each party selecting one (1) medical
physician and the two (2) medical physicians so designated selecting the third
medical physician. The determination of the majority of the three (3) medical
physicians shall be binding upon the parties and all costs of making said
determination shall be borne by the party against whom it is made.
XX. RIGHT OF FIRST REFUSAL
If Franchisee or its owners propose, in a single transaction or series
of related transactions, to sell all or substantially all of the assets of the
Franchised Business or a majority of the ownership interests in Franchisee in
terms of voting power or value or propose to merge Franchisee with an entity in
which the prior owners of Franchisee do not have such an ownership, Franchisee
or its owners shall obtain and deliver a bona fide, executed written offer to
purchase same to Franchisor, which shall, for a period of thirty (30) days from
the date of delivery of such offer, have the right, exercisable by written
notice to Franchisee or its owners, to purchase the Franchised Business or such
ownership for the price and on the terms and conditions contained in such offer
to Franchisor, provided that Franchisor may substitute cash for any form of
payment proposed in such offer. If Franchisor does not exercise this right of
first refusal, the offer may be accepted by Franchisee or its owners, subject to
the prior written approval of
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Franchisor, as provided in Paragraph XVIII. hereof, provided that if such offer
is not so accepted within one hundred twenty (120) days of the date thereof,
Franchisor shall again have the right of first refusal herein described. Should
a transferee franchisee assume the rights and obligations under this Agreement,
such transferee franchisee shall likewise be subject to Franchisor's right of
first refusal under terms and conditions as set forth herein. This right of
first refusal is a continuing right of first refusal. Franchisor's failure to
exercise its right of first refusal shall not be deemed a waiver of future
rights of first refusal.
XXI. OPERATION IN THE EVENT OF ABSENCE, DISABILITY OR DEATH
In order to prevent any interruption of the Franchised Business which
would cause harm to said business and thereby depreciate the value thereof, in
the event that Franchisee is absent or incapacitated by reason of illness or
death and is not, therefore, in the sole judgment of Franchisor, able to operate
the Franchised Business, Franchisee authorizes Franchisor to operate said
business for so long as Franchisor deems necessary and practical, and without
waiver of any other rights or remedies Franchisor may have under this Agreement;
provided, however, that Franchisor shall not be obligated to so operate the
Franchised Business. All monies from the operation of the business during such
period of operation by Franchisor shall be kept in a separate account and the
expenses of the business, including reasonable compensation and expenses for
Franchisor's representative, shall be charged to said account. If, as herein
provided, Franchisor temporarily operates for Franchisee the business licensed
herein, Franchisee shall indemnify and hold harmless Franchisor and any
representative of Franchisor who may act hereunder, from any and all claims
arising from the acts and omissions of Franchisor and its representative.
XXII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
A. This Agreement does not create a fiduciary relationship between the
parties nor does it constitute Franchisee as an agent, legal representative,
joint venturer, partner, employee or servant of Franchisor for any purpose
whatsoever. It is understood between the parties hereto that Franchisee shall be
an independent contractor and is not authorized to make any contract, agreement,
warranty or representation on behalf of Franchisor, or to create any obligation,
express or implied, on behalf of Franchisor. Franchisee shall not, without the
prior written approval of Franchisor, have any power to obligate Franchisor for
any expenses, liabilities or other obligations, other than as may be
specifically provided for in this Agreement. Franchisor shall not have the power
to hire or fire Franchisee's employees and, except as herein expressly provided,
Franchisor may not control or have access to Franchisee's funds or the
expenditure thereof, or in any other way exercise dominion or control over
Franchisee's Franchised Business. It is expressly understood and agreed that
neither Franchisee nor any employee of Franchisee whose compensation for
services is paid by Franchisee may, in any way, directly or indirectly,
expressly or by implication, be construed to be an employee of Franchisor for
any purpose, most particularly with respect to any mandated or other insurance
coverage, tax or contributions, or requirements pertaining to withholdings
levied or fixed by any local, state or federal governmental body or agency.
B. FRANCHISEE SHALL CONSPICUOUSLY IDENTIFY ITSELF AND ITS PREMISES AND
IN ALL DEALINGS WITH ITS CLIENTS, CONTRACTORS, SUPPLIERS, PUBLIC OFFICIALS AND
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OTHERS, AS AN INDEPENDENT FRANCHISEE OF FRANCHISOR, AND SHALL PLACE SUCH NOTICE
OF INDEPENDENT OWNERSHIP ON ALL FORMS, BUSINESS CARDS, STATIONERY, ADVERTISING,
SIGNS AND OTHER MATERIALS AND IN SUCH FASHION AS FRANCHISOR MAY, IN ITS SOLE AND
EXCLUSIVE DISCRETION, SPECIFY AND REQUIRE FROM TIME TO TIME IN ITS MANUAL (AS
SAME MAY BE AMENDED FROM TIME TO TIME) OR OTHERWISE.
C. EXCEPT AS OTHERWISE EXPRESSLY AUTHORIZED BY THIS AGREEMENT, NEITHER
PARTY HERETO WILL MAKE ANY EXPRESS OR IMPLIED AGREEMENTS, WARRANTIES, GUARANTEES
OR REPRESENTATIONS OR INCUR ANY DEBT IN THE NAME OF OR ON BEHALF OF THE OTHER
PARTY, OR REPRESENT THAT THE RELATIONSHIP BETWEEN FRANCHISOR AND FRANCHISEE IS
OTHER THAN THAT OF FRANCHISOR AND FRANCHISEE. FRANCHISOR DOES NOT ASSUME ANY
LIABILITY, AND WILL NOT BE DEEMED LIABLE, FOR ANY AGREEMENTS, REPRESENTATIONS OR
WARRANTIES MADE BY FRANCHISEE WHICH ARE NOT EXPRESSLY AUTHORIZED UNDER THIS
AGREEMENT, NOR WILL FRANCHISOR BE OBLIGATED FOR ANY DAMAGES TO ANY PERSON OR
PROPERTY WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO THE OPERATION OF
THE FRANCHISED BUSINESS FRANCHISED HEREBY.
D. Franchisee agrees at all times to defend at its own cost, and to
indemnify and hold harmless to the fullest extent permitted by law, Franchisor,
its corporate parent, the corporate subsidiaries, affiliates, successors,
assigns and designees of either entity, and the respective directors, officers,
employees, agents, shareholders, designees and representatives of each
(Franchisor and all other hereinafter referred to collectively as "Indemnitees")
from all losses and expenses (as hereinafter defined) incurred in connection
with any action, suit, proceeding, claim, demand, investigation or formal or
informal inquiry (regardless of whether same is reduced to judgment) or any
settlement thereof which arises out of or is based upon any of the following:
Franchisee's alleged infringement or other alleged violation of any patent,
trademark or copyright or other proprietary right owned or controlled by third
parties; Franchisee's alleged violation or breach of any contract, federal,
state or local law, regulation, ruling, standard or directive or of any industry
standard; libel, slander or any other form of defamation by Franchisee;
Franchisee's alleged violation or breach of any warranty, representation,
agreement or obligation in this Agreement; any acts, errors or omissions of
Franchisee or any of its agents, servants, employees, contractors, partners,
proprietors, affiliates or representatives; latent or other defects in the
Premises, whether or not discoverable by Franchisor or Franchisee; the
inaccuracy, lack of authenticity or nondisclosure of any information by any
customer of the Franchised Business or visitor to or guest of the Premises; any
service provided by Franchisee at, from or related to the operation at the
Franchised Business or the Premises; any services or goods provided by any
affiliated or nonaffiliated participating entity; any action by any customer of
the Franchised Business or visitor to the Premises; and any damage to the
property of Franchisee or Franchisor, their agents or employees, or any third
person, firm or corporation, whether or not such losses, claims, costs,
expenses, damages or liabilities were actually or allegedly caused in part
through the active or passive negligence of Franchisor or any of its agents or
employees, or resulted from any strict liability imposed on Franchisor or any of
its agents or employees.
1. For the purpose of this Paragraph XXII.D., the term "losses
and expenses" shall be deemed to include all compensatory, consequential,
incidental, exemplary or punitive damages, losses,
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lost profits, fines, charges, costs, expenses, attorneys' fees, experts' fees,
court costs, settlement amounts, judgments, compensation for damages to
Franchisor's reputation and goodwill, costs of or resulting from delays,
financing, costs of advertising material and media time/space, and costs of
changing, substituting or replacing same, and any and all expenses of recall,
refunds, compensation, public notices and other such amounts incurred in
connection with the matters described.
2. In order to protect persons or property, or its reputation or
goodwill, or the reputation or goodwill of others, Franchisor may, at any time
and without notice as it in its judgment deems appropriate, offer, order,
consent or agree to settlements or take such other remedial or corrective
actions as it deems expedient with respect to the action, suit, proceeding,
claim, demand, inquiry or investigation if, in Franchisor's sole judgment, there
are reasonable grounds to believe that:
a. Any of the acts or circumstances enumerated in this Paragraph
XXII.D. has occurred; or
b. Any act, error or omission of Franchisee may result directly
or indirectly in damage, injury or harm to any person or any property.
3. All losses and expenses incurred under this Paragraph XXII.D.
shall be chargeable to and paid by Franchisee pursuant to its obligations of
indemnity under this Paragraph, regardless of any actions, activity or defense
undertaken by Franchisor or the subsequent success or failure of such actions,
activity or defense.
4. Indemnitees do not assume any liability whatsoever for acts,
errors or omissions of those with whom Franchisee may contract, regardless of
the purpose. Franchisee shall hold harmless and indemnify Indemnitees for all
losses and expenses which may arise out of any acts, errors or omissions of
these third parties.
5. Under no circumstances shall Indemnitees be required or obligated
to seek recovery from third parties or otherwise mitigate their losses in order
to maintain a claim against Franchisee. Franchisee agrees that the failure to
pursue such recovery or mitigate loss shall not reduce the amounts recoverable
by Indemnitees from Franchisee.
E. Franchisor shall not, by virtue of any approvals, advice or services
provided to Franchisee, assume responsibility or liability to Franchisee or any
third parties to which Franchisor would not otherwise be subject.
XXIII. APPROVALS
A. Whenever this Agreement requires the prior approval or consent of
Franchisor, Franchisee shall make a timely written request to Franchisor
therefor, and, except as otherwise provided herein, any approval or consent
granted must be in writing to be binding upon Franchisor.
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B. Franchisor makes no warranties or guarantees upon which Franchisee
may rely and assumes no liability or obligation to Franchisee or any third party
to which it would not otherwise be subject, by providing any waiver, approval,
advice, consent or services to Franchisee in connection with this Agreement, or
by reason of any neglect, delay or denial of any request therefor.
XXIV. NON-WAIVER
No failure of Franchisor to exercise any power reserved to it
hereunder, or to insist upon strict compliance by Franchisee with any obligation
or condition hereunder, and no custom or practice of the parties in variance
with the terms hereof, shall constitute a waiver of Franchisor's right to demand
exact compliance with the terms hereof. Waiver by Franchisor of any particular
default by Franchisee shall not be binding unless in writing and executed by the
party sought to be charged and shall not affect or impair Franchisor's right
with respect to any subsequent default of the same or of a different nature; nor
shall any delay, waiver, forbearance or omission of Franchisor to exercise any
power or rights arising out of any breach or default by Franchisee of any of the
terms, provisions or covenants hereof, affect or impair Franchisor's rights nor
shall such constitute a waiver by Franchisor of any right hereunder or of the
right to declare any subsequent breach or default. Subsequent acceptance by
Franchisor of any payment(s) due to it hereunder shall not be deemed to be a
waiver by Franchisor of any preceding breach by Franchisee of any terms,
covenants or conditions of this Agreement.
XXV. NOTICE
Any and all notices required or permitted under this Agreement shall be
in writing from a party to this Agreement or its attorney and shall be
personally delivered or mailed by certified mail, return receipt requested, to
the respective parties at the following addresses unless and until a different
address has been designated by written notice to the other party:
Notices to Franchisor: PICK-UPS PLUS, INC.
0000 Xxxxx Xxxxxxx Xxxx, Xxxxx 00
Xxxxx, Xxxx 00000
Copy to:
------------------------------------------------
------------------------------------------------
------------------------------------------------
Notices to Franchisee:
------------------------------------------------
------------------------------------------------
------------------------------------------------
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Copy to:
------------------------------------------------
------------------------------------------------
------------------------------------------------
Any notice by certified mail shall be deemed to have been given at the
date and time of mailing.
XXVI. COST OF ENFORCEMENT OR DEFENSE
If a claim for amounts owed by Franchisee to Franchisor is asserted in
any legal proceeding before a court of competent jurisdiction, or if Franchisor
or Franchisee is required to enforce this Agreement in a judicial proceeding,
the prevailing party shall be entitled to reimbursement of its costs, including
reasonable accounting and legal fees, in connection with such proceeding.
XXVII. ENTIRE AGREEMENT
This Agreement, any exhibit attached hereto, and the documents referred
to herein, shall be construed together and constitute the entire, full and
complete agreement between Franchisor and Franchisee concerning the subject
matter hereof, and supersede all prior agreements. No other representation has
induced Franchisee to execute this Agreement, and there are no representations,
inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein, which are of any force or effect with reference to this
Agreement or otherwise. No amendment, change or variance from this Agreement
(other than amendments to the Manual or other matters with respect to which
Franchisor has reserved the unilateral right to amend) shall be binding on
either party unless executed in writing by both parties.
XXVIII. SEVERABILITY AND CONSTRUCTION
A. Each Paragraph, part, term and/or provision of this Agreement shall
be considered severable, and if, for any reason, any Paragraph, part, term
and/or provision herein is determined to be invalid and contrary to, or in
conflict with, any existing or future law or regulation, such shall not impair
the operation of or affect the remaining portions, sections, parts, terms and/or
provisions of this Agreement, and the latter will continue to be given full
force and effect and bind the parties hereto; and said invalid sections, parts,
terms and/or provisions shall be deemed not part of this Agreement; provided,
however, that if Franchisor determines that said finding of illegality adversely
affects the basic consideration of this Agreement, Franchisor may, at its
option, terminate this Agreement.
B. Anything to the contrary herein notwithstanding, nothing in this
Agreement is intended, nor shall be deemed, to confer upon any person or legal
entity other than Franchisor or Franchisee and such of their respective
successors and assigns as may be contemplated by this Agreement, any rights or
remedies under or by reason of this Agreement.
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C. Franchisee shall be bound by any promise or covenant imposing the
maximum duty permitted by law which is contained within the terms of any
provision hereof, as though it were separately stated in and made a part of this
Agreement, that may result from striking from any of the provisions hereof any
portion or portions which a court may hold to be unreasonable and unenforceable
in a final decision to which Franchisor is a party, or from reducing the scope
of any promise or covenant to the extent required to comply with such a court
order.
D. All captions herein are intended solely for the convenience of the
parties, and none shall be deemed to affect the meaning or construction of any
provision hereof. The singular usage includes the plural and the masculine and
neuter usages include the other and the feminine.
E. The recitals set forth in this Agreement are specifically
incorporated into the terms of this Agreement and hereby constitute a part
thereof.
XXIX. APPLICABLE LAW
A. THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE AND EXECUTION BY
FRANCHISOR IN OHIO AND SHALL BE INTERPRETED AND CONSTRUED UNDER THE LAWS
THEREOF, WHICH LAWS SHALL PREVAIL IN THE EVENT OF ANY CONFLICT OF LAW, EXCEPT TO
THE EXTENT GOVERNED BY FEDERAL LAW INCLUDING, WITHOUT LIMITATION, THE UNITED
STATES TRADEMARK ACT OF 1946, AS AMENDED (XXXXXX ACT, 15 U.S.C. SECTIONS 1051 ET
SEQ.).
B. FRANCHISEE ACKNOWLEDGES THAT THIS AGREEMENT IS ENTERED INTO IN
XXXXXX COUNTY, OHIO AND THAT ANY ACTION SOUGHT TO BE BROUGHT BY EITHER PARTY,
EXCEPT THOSE CLAIMS REQUIRED TO BE SUBMITTED TO ARBITRATION, SHALL BE BROUGHT IN
THE APPROPRIATE STATE OR FEDERAL COURT SITTING IN XXXXXX COUNTY, OHIO WITH
JURISDICTION OVER THE MATTER.
C. NO RIGHT OR REMEDY CONFERRED UPON OR RESERVED TO FRANCHISOR OR
FRANCHISEE BY THIS AGREEMENT IS INTENDED TO BE, NOR SHALL BE DEEMED, EXCLUSIVE
OF ANY OTHER RIGHT OR REMEDY HEREIN OR BY LAW OR EQUITY PROVIDED OR PERMITTED,
BUT EACH SHALL BE CUMULATIVE OF EVERY OTHER RIGHT OR REMEDY.
D. NOTHING HEREIN CONTAINED SHALL BAR FRANCHISOR'S RIGHT TO OBTAIN
INJUNCTIVE RELIEF AGAINST THREATENED CONDUCT UNDER GENERAL PRINCIPLES OF EQUITY,
INCLUDING THE APPLICABLE PRINCIPLES FOR OBTAINING RESTRAINING ORDERS AND
PRELIMINARY INJUNCTIONS.
XXX. ARBITRATION
A. Any monetary claim arising out of or relating to this Agreement, or
any breach thereof, and any controversy regarding the establishment of the fair
market value of leasehold improvements and other Franchised Business assets
pursuant to Paragraph XVII.J. hereof, shall be submitted to arbitration
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in Xxxxxx County, Ohio in accordance with the rules of the American Arbitration
Association and judgment upon the award may be entered in any court having
jurisdiction thereof and shall be final, binding and unappealable. The
arbitrators are explicitly authorized to award attorneys' fees as part of their
award. Nothing contained herein shall, however, be construed to limit or to
preclude Franchisor from bringing any action in any court of competent
jurisdiction for injunctive or other provisional relief as Franchisor deems to
be necessary or appropriate to compel Franchisee to comply with its obligations
hereunder or to protect its Marks or other property rights of Franchisor. In
addition, nothing contained herein shall be construed to limit or to preclude
Franchisor from joining with any action for injunctive or provisional relief all
monetary claims that Franchisor may have against Franchisee which arise out of
the acts or omissions to act giving rise to the action for injunctive or
provisional relief. This arbitration provision shall be deemed to be
self-executing and in the event that Franchisee fails to appear at any properly
noticed arbitration proceeding, award may be entered against Franchisee
notwithstanding its failure to appear.
B. Nothing herein contained shall bar the right of either party to seek
and obtain temporary injunctive relief from a court of competent jurisdiction in
accordance with applicable law against threatened conduct that will cause loss
or damage, pending completion of the arbitration.
C. It is the intent of the parties that any arbitration between
Franchisor and Franchisee shall be of Franchisee's individual claim and that the
claim subject to arbitration shall not be arbitrated on a classwide basis.
XXXI. "FRANCHISEE" DEFINED AND GUARANTY
As used in this Agreement, the term "Franchisee" shall include all
persons who succeed to the interest of the original Franchisee by permitted
transfer or operation of law and shall be deemed to include not only the
individual or entity defined as "Franchisee" in the introductory paragraph of
this Agreement, but shall also include all partners of the entity that executes
this Agreement, in the event said entity is a partnership, and all shareholders,
officers and directors of the entity that executes this Agreement, in the event
said entity is a corporation. By their signatures hereto, all partners,
shareholders, officers and directors of the entity that signs this Agreement as
Franchisee acknowledges and accepts the duties and obligations imposed upon each
of them, individually, by the terms of this Agreement. All partners of the
entity that executes this Agreement, in the event said entity is a partnership,
and all shareholders, officers and directors of the entity that executes this
Agreement, in the event said entity is a corporation, shall execute the Guaranty
and Assumption of Obligations attached hereto as Exhibit C and made a part
hereof.
XXXII. FORCE MAJEURE
Whenever a period of time is provided in this Agreement for either
party to do or perform any act or thing, except the payment of monies, neither
party shall be liable or responsible for any delays due to strikes, lockouts,
casualties, acts of God, war, governmental regulation or control or other causes
beyond the reasonable control of the parties, and in any event said time period
for the performance of
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an obligation hereunder shall be extended for the amount of time of the delay.
This clause shall not, however, result in an extension of the term of this
Agreement.
XXXIII. CAVEAT
The success of the business venture contemplated to be undertaken by
Franchisee by virtue of this Agreement is speculative and depends, to a large
extent, upon the ability of Franchisee as an independent businessperson, and its
active participation in the daily affairs of the business as well as other
factors. Franchisor does not make any representation or warranty, express or
implied, as to the potential success of the business venture in this Agreement.
XXXIV. ACKNOWLEDGEMENTS
A. Franchisee represents and acknowledges that it has received, read
and understood this Agreement and Franchisor's Uniform Franchise Offering
Circular; and that Franchisor has fully and adequately explained the provisions
of each to Franchisee's satisfaction; and that Franchisor has accorded
Franchisee ample time and opportunity to consult with advisors of its own
choosing about the potential benefits and risks of entering into this Agreement.
B. Franchisee acknowledges that it has received a copy of this
Agreement and the attachments thereto, at least five (5) business days prior to
the date on which this Agreement was executed. Franchisee further acknowledges
that Franchisee has received the disclosure document required by the Trade
Regulation Rule of the Federal Trade Commission entitled Disclosure Requirements
and Prohibitions Concerning Franchising and Business Opportunity Ventures, at
least ten (10) business days prior to the date on which this Agreement was
executed.
C. Franchisee affirms and agrees that Franchisor may sell its assets,
its Marks or its System outright to a third party; may go public; may engage in
a private placement of some or all of its securities; may merge, acquire other
corporations, or be acquired by another corporation; may undertake a
refinancing, recapitalization, leveraged buyout or other economic or financial
restructuring; and, with regard to any or all of the above sales, assignments
and dispositions, Franchisee expressly and specifically waives any claims,
demands or damages arising from or related to the loss of said Marks (or any
variation thereof) and/or the loss of association with or identification of
PICK-UPS PLUS, INC. as Franchisor hereunder.
D. Franchisee has been advised to consult with its own advisors with
respect to the legal, financial and other aspects of this Agreement, the
business franchised hereby, and the prospects for that business. Franchisee has
either consulted with such advisors or has deliberately declined to do so.
E. The covenants not to compete set forth in this Agreement are fair
and reasonable, and will not impose any undue hardship on Franchisee, since
Franchisee has other considerable skills, experience and education which afford
Franchisee the opportunity to derive income from other endeavors.
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F. Franchisee affirms that all information set forth in any and all
applications, financial statements and submissions to Franchisor is true,
complete and accurate in all respects, with Franchisee expressly acknowledging
that Franchisor is relying upon the truthfulness, completeness and accuracy of
such information.
G. Franchisee has conducted an independent investigation of the
business contemplated by this Agreement and recognizes that, like any other
business, an investment in a Franchised Business involves business risks and
that the success of the venture is primarily dependent upon the business
abilities and efforts of Franchisee.
H. If Franchisee is a partnership it represents and warrants that:
1. Such partnership has been newly organized and its partnership
agreement provides that its activities are confined exclusively to acting as a
PICK-UPS PLUS franchisee;
2. Each of its general partners or its managing partner(s) has
executed this Agreement;
3. The partnership agreement provides that transfer of interests in
the partnership are subject to all restrictions on transfer imposed by this
Agreement;
4. No new partners shall be admitted to the partnership without
obtaining Franchisor's prior written consent after disclosure of the terms and
conditions contained herein having been made to the prospective new partners.
I. If Franchisee is a corporation, it represents and warrants that:
1. Such corporation has been newly organized and its charter
provides that its activities are confined exclusively to acting as a PICK-UPS
PLUS franchisee;
2. Each stock certificate representing outstanding shares in the
corporation has and shall have conspicuously endorsed upon it a statement
effective under applicable law that it is held subject to, and that further
assignment or transfer is subject to, all restrictions on transfer imposed by
this Agreement;
3. No new shares of common or preferred voting stock in the
corporation shall be issued without obtaining Franchisor's prior written consent
and after disclosure of the terms and conditions contained herein having been
made to the prospective new holders of the stock.
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J. FRANCHISEE UNDERSTANDS AND ACKNOWLEDGES THAT ALL REPRESENTATIONS OF
FACT CONTAINED HEREIN ARE MADE SOLELY BY FRANCHISOR. ALL DOCUMENTS, INCLUDING
FRANCHISOR'S FRANCHISE AGREEMENT AND UNIFORM FRANCHISE OFFERING CIRCULAR AND ALL
EXHIBITS THERETO, HAVE BEEN PREPARED SOLELY IN RELIANCE UPON REPRESENTATIONS
MADE AND INFORMATION PROVIDED BY FRANCHISOR, ITS OFFICERS AND ITS DIRECTORS.
FRANCHISEE FURTHER AGREES TO INDEMNIFY AND HOLD HARMLESS THE PREPARER OF ANY AND
ALL SUCH FRANCHISE AGREEMENTS, OFFERING CIRCULARS AND EXHIBITS THERETO FROM ANY
AND ALL LOSS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES), DAMAGES AND
LIABILITIES RESULTING FROM ANY REPRESENTATIONS AND/OR CLAIMS MADE BY FRANCHISOR
IN SUCH DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed and delivered this Agreement in triplicate
the day and year first above written.
ATTEST: PICK-UPS PLUS, INC.:
----------------------------------- By:
Witness -----------------------------
Title:
--------------------------
ATTEST: FRANCHISEE:
----------------------------------- By:
Witness -----------------------------
Title:
--------------------------
----------------------------------- By:
Witness -----------------------------
Title:
-------------------------
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