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EXHIBIT 10.20
EXHIBIT "B" TO OFFERING CIRCULAR
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FRANCHISE AGREEMENT
Office Number:
1. PARTIES
This Franchise Agreement ("AGREEMENT") is between XXXXXXXX and XXXXXXXX, Inc.,
a Pennsylvania corporation, which shall collectively include its affiliates and
successors in interest, where applicable ("XXXXXXXX"), and ____________________
__________________________________________("FRANCHISEE"), a
|_| Sole Proprietorship |_| Partnership |_| Limited Liability Company
|_| _______Corporation under the Laws of ______________________ with a fiscal
year that ends _______________________ and relates to a |_| Standard PS
|_| Subleased PS |_| Converted PS |_| Expansion PS |_|
Specialty PS:_________________________________________________________.
2. EXECUTION
FRANCHISEE and XXXXXXXX have executed this AGREEMENT as of ________________,
19__.
FRANCHISEE
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest: XXXXXXXX AND XXXXXXXX, INC.
By:
--------------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
Each of the PRINCIPAL OWNERS, jointly and severally, makes all of the
representations, warranties, covenants and agreements of the PRINCIPAL OWNERS
set forth in this Agreement and is obligated to perform hereunder:
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS
, 19 % (1)
------------------ -- ------- ----------------------------
Name:
--------------------------
, 19 % (2)
------------------ -- ------- ----------------------------
Name:
--------------------------
, 19 % (3)
------------------ -- ------- ----------------------------
Name:
--------------------------
, 19 % (4)
------------------ -- ------- ----------------------------
Name:
--------------------------
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TABLE OF CONTENTS
SECTION PAGE
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1. PARTIES...................................................................1
2. EXECUTION.................................................................1
3. RECITALS..................................................................5
4. DEFINITIONS...............................................................5
5. THE LICENSE RELATIONSHIP.................................................10
5(a) GRANT...............................................................10
5(b) TERM................................................................10
5(c) USE OF XXXXXXXX PROPERTY............................................11
5(d) OWNERSHIP BY XXXXXXXX OF THE XXXXXXXX PROPERTY......................11
5(e) MODIFICATION OF PROPRIETARY MARKS...................................11
5(f) INDEPENDENT CONTRACTOR..............................................11
5(g) NOTICE OF LEGAL ACTION AND INDEMNIFICATION..........................11
5(h) EMPLOYEES AND CLIENTS...............................................12
6. START-UP AND TRAINING....................................................12
6(a) OPENING.............................................................12
6(b) LOCATION AND LEASE..................................................12
6(c) LISTINGS............................................................12
6(d) MANAGER TRAINING AND OPENING AND POST-OPENING TRAINING..............12
6(e) REMEDIAL TRAINING AND ASSISTANCE....................................13
6(f) TRAINING BY FRANCHISEE..............................................13
6(g) MATERIALS...........................................................13
7. CONFIDENTIAL INFORMATION.................................................13
7(a) TRADE SECRET........................................................13
7(b) CONFIDENTIAL INFORMATION............................................13
7(c) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION..........................14
7(d) PROTECTION OF CONFIDENTIAL INFORMATION..............................14
8. OPERATION OF THE PS......................................................15
8(a) COMPLIANCE WITH LAW AND SYSTEM......................................15
8(b) TREATMENT OF PERSONNEL..............................................15
8(c) REQUIRED INSURANCE..................................................15
8(d) INSURANCE PROGRAMS..................................................16
8(e) OUTSIDE CONSULTANTS.................................................16
8(f) FULL TIME MANAGEMENT................................................16
8(g) SUBMISSION OF REPORTS...............................................16
8(h) NO OTHER BUSINESS CONDUCTED AT LOCATION.............................16
8(i) COMPLIANCE WITH MATERIALS...........................................16
8(j) MODERNIZATION.......................................................16
9. DISTRIBUTION ACCOUNT AND PROCESSING......................................17
9(a) DISTRIBUTION ACCOUNT................................................17
9(b) TRANSMISSION OF INFORMATION.........................................17
9(c) PROCESSING BY XXXXXXXX..............................................17
9(d) CREDIT AND COLLECTION...............................................17
9(d)(1) COLLECTION....................................................17
9(d)(2) CLIENT PAYMENTS MADE DIRECTLY TO XXXXXXXX.....................17
9(d)(3) ENDORSEMENT AUTHORITY.........................................18
9(d)(4) CLIENT CREDIT AND APPROVAL....................................18
9(d)(5) CLIENT AGREEMENTS.............................................18
9(d)(6) RELATED PARTIES...............................................18
9(e) ACCURATE CLASSIFICATION OF EMPLOYEES FOR WORKERS' COMPENSATION.....18
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SECTION PAGE
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9(f) SECURITY INTEREST...................................................18
10. FEES AND FINANCIAL OBLIGATIONS..........................................18
10(a) FRANCHISE FEE......................................................18
10(b) TRAINING FEE AND EXPENSES..........................................18
10(c) OVERRIDE...........................................................19
10(d) PROMOTION FUND.....................................................19
10(e) SERVICE FEES.......................................................19
10(e)(i) BASE SERVICE FEE.............................................19
10(e)(ii) NATIONAL ACCOUNT SERVICE FEE................................20
10(f) OTHER FINANCIAL OBLIGATIONS; SET-OFF...............................20
10(g) INTEREST...........................................................20
11. RECORDKEEPING; REPORTING; AUDITS........................................20
11(a) DOCUMENTS AND INFORMATION..........................................20
11(b) RECORDKEEPING AND REPORTING........................................20
11(c) FINANCIAL AUDITS...................................................20
11(d) COMPLIANCE AUDITS..................................................21
11(e) USE OF INFORMATION.................................................21
12. OWNERSHIP STRUCTURE AND TRANSFER........................................21
12(a) DISCLOSURE OF OWNERSHIP STRUCTURE..................................21
12(b) NO ALIENATION......................................................21
12(c) CONDITIONS FOR OWNERSHIP TRANSFER..................................21
12(d) RIGHT OF FIRST REFUSAL.............................................22
12(e) LOSS OF CONTROL....................................................22
12(e)(1) CHANGE OF OWNERSHIP.........................................22
12(e)(2) NEW FRANCHISE AGREEMENT.....................................22
13. TERMINATION.............................................................23
13(a) TERMINATION BY FRANCHISEE..........................................23
13(b) TERMINATION BY XXXXXXXX FOR FAILURE TO CURE BREACH.................23
13(c) TERMINATION BY XXXXXXXX WITHOUT OPPORTUNITY TO CURE BREACH........23
13(d) FRANCHISEE'S AND OWNERS' TERMINATION DUTIES........................24
13(e) TRANSFER OF EMPLOYEES..............................................26
13(f) MONEY OWED.........................................................26
13(g) WAIVERS; COSTS OF BREACH...........................................26
13(h) MULTIPLE FRANCHISE AGREEMENTS......................................26
13(i) CONTINUED EFFECT OF AGREEMENT......................................26
14. RULES GOVERNING UNFAIR TRADE PRACTICES..................................26
14(a) ACKNOWLEDGMENTS....................................................26
14(b) NO COMPETITION DURING TERM OF THIS AGREEMENT.......................26
14(c) POST-TERMINATION UNFAIR COMPETITION AND UNFAIR TRADE PRACTICES.....27
14(d) INFORMATION REQUEST................................................28
14(e) INJUNCTIONS........................................................28
14(f) INDIRECT CONDUCT...................................................28
14(g) PERSONNEL SERVICE BUSINESS.........................................28
15. GENERAL LEGAL MATTERS...................................................28
15(a) GOVERNING LAW......................................................28
15(b) MEDIATION..........................................................28
15(c) ARBITRATION........................................................29
15(d) VENUE..............................................................30
15(e) MUTUAL BENEFIT.....................................................30
15(f) AMENDMENTS TO FRANCHISE AGREEMENT..................................30
15(g) NOTICES............................................................31
15(h) PARTIES BOUND; ASSIGNMENT BY XXXXXXXX..............................31
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SECTION PAGE
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15(i) SEVERABILITY.......................................................31
15(j) ENTIRE AGREEMENT...................................................31
15(k) FORCE MAJEURE......................................................31
15(l) RULES OF CONSTRUCTION..............................................31
16. ACKNOWLEDGMENTS AND REPRESENTATIONS.....................................32
ATTACHMENT 1 STATE ADDENDUM
ATTACHMENT 2 APPROVED LOCATION
ATTACHMENT 3 GUARANTY
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3. RECITALS
3(a) As of the date of this AGREEMENT, XXXXXXXX has been in the personnel
services business for over 45 years. During that period XXXXXXXX has expended
substantial time, effort and financial resources to accumulate extensive
knowledge of and experience in the personnel services industry. On the basis of
this knowledge and experience, XXXXXXXX has developed and continues to develop
a unique and distinctive SYSTEM for the operation and management of a personnel
services business, which includes: management and personnel training;
operational procedures and techniques; advertising and promotional programs;
the MATERIALS that XXXXXXXX prepares and updates on a continuing basis; the
CONFIDENTIAL INFORMATION (as described in Section 7) that includes extremely
sensitive and personal information concerning the EMPLOYEES, JOB-SEEKERS,
CLIENTS (including specific CLIENT contacts and personal and background
information on such individuals), and XXXXXXXX'x other business relationships,
all of which is acknowledged to be the property of XXXXXXXX (as provided in
Section 5(d)). All of the components of the SYSTEM constitute valuable trade
secrets that are proprietary to XXXXXXXX.
3(b) FRANCHISEE and the PRINCIPAL OWNERS desire to use the CONFIDENTIAL
INFORMATION, the SYSTEM and the PROPRIETARY MARKS in connection with the
operation of a XXXXXXXX personnel services business, as well as to receive the
training and other assistance provided by XXXXXXXX in connection therewith.
3(c) FRANCHISEE and the PRINCIPAL OWNERS recognize that the value of
CONFIDENTIAL INFORMATION, the SYSTEM and the PROPRIETARY MARKS are enhanced by
each personnel service business in the NETWORK operating in accordance with the
SYSTEM and the highest standards of business conduct, and understand and
acknowledge the importance to XXXXXXXX and to other franchisees in the SYSTEM
of FRANCHISEE'S and the PRINCIPAL OWNERS' compliance with this AGREEMENT and
the SYSTEM. In recognition of the value of the CONFIDENTIAL INFORMATION and of
participating in the SYSTEM, FRANCHISEE has applied for a franchise to operate
the type of PS specified in Section 1. Based on its evaluation of FRANCHISEE'S
and the PRINCIPAL OWNERS' experience, capabilities and character, and in
reliance on representations and warranties FRANCHISEE and the PRINCIPAL OWNERS
made in their franchise application and on acknowledgments, representations,
warranties, promises and covenants FRANCHISEE and the PRINCIPAL OWNERS make in
this AGREEMENT, XXXXXXXX has decided to grant the license to FRANCHISEE under
the terms and conditions described below.
3(d) FRANCHISEE and the PRINCIPAL OWNERS promise to refrain from any
unauthorized use of the CONFIDENTIAL INFORMATION, the SYSTEM and the
PROPRIETARY MARKS and recognize that XXXXXXXX is entering into this AGREEMENT
in reliance on this promise. FRANCHISEE and the PRINCIPAL OWNERS also recognize
and agree that any use of the CONFIDENTIAL INFORMATION, the SYSTEM and the
PROPRIETARY MARKS other than for the operation of a XXXXXXXX personnel services
business would be a breach of that promise, this AGREEMENT and the relationship
between FRANCHISEE, the PRINCIPAL OWNERS and XXXXXXXX.
4. DEFINITIONS
As used in this AGREEMENT, the following terms shall have the meanings set
forth below:
"ADJUSTMENTS"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT for items such as bank wire
transfer fees, overnight courier packages, stop payment check charges, manual
check charges, non-sufficient fund charges, XXX-0, XXX-0, XXX-00, and similar
filing fees, credit reports and other credit or collection services deemed
appropriate by XXXXXXXX, other collection costs, any adjustments to PAYROLL
COSTS, INSURANCE COSTS, BENEFITS and any other charges to the DISTRIBUTION
ACCOUNT.
"BASE SERVICE FEE"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT with respect to TEMPORARY HELP
XXXXXXXX calculated in accordance with Section 10(e)(i) (Base Service Fee),
including any additions to such charges if the prime interest rate exceeds 12%.
"BENEFITS"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT for disability insurance, health
insurance, special hours incentive pay, holiday pay, vacation pay, and any
other benefits now or hereafter deemed mandatory or necessary by XXXXXXXX
relating to EMPLOYEES.
"XXXXXXXX"
The amount XXXXXXXX bills a CLIENT or JOB-SEEKER. XXXXXXXX shall include
CONVERSION FEES, LIQUIDATION FEES, contract temporary charges, PERMANENT
PLACEMENT and TEMP-TO-HIRE charges, retainers, consulting charges, or any other
similar fees,
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EXPENSE REIMBURSEMENTS to the extent such are not billed at cost, and any
service, sales or related taxes. "GROSS MARGIN - NATIONAL ACCOUNT XXXXXXXX" are
XXXXXXXX less (1) PAYROLL; (2) PAYROLL COSTS; (3) INSURANCE COSTS; (4)
BENEFITS; and (5) sales taxes and other taxes. "GROSS MARGIN - TEMPORARY HELP
XXXXXXXX" are XXXXXXXX less: (1)PAYROLL; (2) PAYROLL COSTS; (3) INSURANCE
COSTS; (4) BENEFITS; (5) sales taxes and any other taxes; (6) BASE SERVICE
FEES; (7) OVERRIDES; and (8) PROMOTION FUND contributions. "PLACEMENT XXXXXXXX"
are XXXXXXXX from the business of helping JOB-SEEKERS obtain PERMANENT
PLACEMENT or self-employment; helping CLIENTS obtain employees or business
associates; the writing of resumes; out placement; outsourcing business
opportunity referrals; consulting; testing, training and counseling;
advertising and payments in kind; co-op activities; and all other similar or
related products or services. "TEMPORARY HELP XXXXXXXX" are XXXXXXXX from
supplying FIELD EMPLOYEES to CLIENTS (other than NATIONAL ACCOUNTs), or
performing any other similar or related services, whether performed at
FRANCHISEE'S, CLIENT'S, or other premises (i.e., guards, security personnel,
meter readers, etc.).
"BUSINESS DAY"
Each day other than Sundays, Saturdays, and holidays, as defined in the
MATERIALS.
"CHARGEBACKS"
XXXXXXXX that are repudiated in whole or in part by a CLIENT; the amount of
XXXXXXXX that produce a negative GROSS MARGIN TEMPORARY HELP XXXXXXXX; XXXXXXXX
that remain unpaid for 60 days after their invoice date or upon termination of
this Agreement; the additional amounts due if the CLIENT is classified as a
high credit risk or the CLIENT'S unpaid XXXXXXXX exceeds XXXXXXXX'X credit
limits; or as otherwise covered in the MATERIALS.
"CLIENT"
An individual or entity that uses, or desires to use, the PS or XXXXXXXX
services.
"CLIENT REFUNDS"
Amounts due to CLIENTS relating to service guarantees, BILLING errors, CLIENT
dissatisfaction, or as otherwise authorized by the MATERIALS.
"CONFIDENTIAL INFORMATION"
All confidential information owned or licensed by XXXXXXXX or delivered to
FRANCHISEE in confidence, including information developed by the parties during
the term of this AGREEMENT, as more fully described in Section 7(b)
(Confidential Information).
"CONTROL"
An OWNERSHIP INTEREST of more than 50%, or an OWNERSHIP INTEREST of less than
50% if XXXXXXXX determines, in its sole discretion, that such OWNER has
substantial CONTROL of FRANCHISEE or the PS or the power, through any
arrangement, capital structure, delegated power, or other circumstance, to
determine the actions of the PS. XXXXXXXX may determine CONTROL by aggregating
the OWNERSHIP INTEREST, control or power of any OWNER with those of such
OWNER'S family members or any other person(s). More than one OWNER may be
deemed to have CONTROL. Unless an OWNERSHIP TRANSFER is subject to Section
12(b) (No Alienation), an OWNERSHIP TRANSFER by any OWNER who is deemed to have
CONTROL shall result in a "change" in CONTROL for purposes of Section 12
(Ownership Structure and Transfer) if, after giving effect to such OWNERSHIP
TRANSFER, such OWNER is no longer deemed to have CONTROL.
"CO-OP SPLITS"
Amounts FRANCHISEE owes to co-oping offices relating to splits of RECEIPTS for
services provided cooperatively to CLIENTS.
"COPYRIGHTED WORKS"
All MATERIALS that contain the copyright identification "(c) date XXXXXXXX and
XXXXXXXX, Inc." and all other MATERIALS entitled to the protection of the
copyright LAW.
"CONVERSION FEE"
A TEMPORARY HELP BILLING to a CLIENT related to converting a FIELD EMPLOYEE to
a CLIENT employee.
"CONVERTED PS"
A PS that was converted from an existing personnel services business that was
not a part of the SYSTEM.
"DISTRIBUTION ACCOUNT"
The account maintained by XXXXXXXX reflecting the accumulation of credits and
charges relating to the PS.
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"DOMAIN NAMES"
The Internet domain names "XXXXXXXX.XXX," "XXXXXXXXXXXX.XXX," "XXXXXXXXXXX.XXX"
and any other domain names that may be utilized by XXXXXXXX and any domain
names utilized by FRANCHISEE in connection with the PS or the PROPRIETARY MARKS
or for advertising or promotion of personnel services on the Internet.
"EMPLOYEE"
An individual employed by XXXXXXXX to provide services to a CLIENT, which
individual shall be classified as either a FIELD EMPLOYEE or LEASED EMPLOYEE. A
"FIELD EMPLOYEE" is a JOB-SEEKER who becomes an employee of XXXXXXXX when
FRANCHISEE sells their services in accordance with this AGREEMENT to one or
more CLIENTS to fill a limited, special, temporary, contract or TEMP-TO-HIRE
need. A "LEASED EMPLOYEE" is an employee of a CLIENT who becomes an employee of
XXXXXXXX pursuant to a written outsourcing agreement between XXXXXXXX and the
CLIENT under which the CLIENT has transferred all or part of its existing work
force onto XXXXXXXX'X payroll and XXXXXXXX has assumed responsibility for the
administration of payroll, benefits and other human resources activities. A
LEASED EMPLOYEE will also include any employee of XXXXXXXX who subsequently
becomes covered by such outsourcing agreement. In no case will a FIELD EMPLOYEE
be classified as a LEASED EMPLOYEE for purposes of this Agreement.
"EXPANSION PS"
See PS.
"EXPENSE REIMBURSEMENTS"
Any amounts paid to EMPLOYEES for items such as meals, parking, supplies,
travel allowances, equipment, mileage, and any other similar or related items
billed at cost to CLIENTS.
"FIELD EMPLOYEE"
See EMPLOYEE.
"GROSS MARGIN - NATIONAL ACCOUNT XXXXXXXX"
See XXXXXXXX.
"XXXXX MARGIN - TEMPORARY HELP XXXXXXXX"
See XXXXXXXX.
"INSURANCE COSTS"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT for obtaining from appropriate
insurance carriers, or any retention assumed by XXXXXXXX for workers'
compensation, commercial general liability and umbrella, errors and omissions,
crime/bond, and employment practices liability insurance coverage or any other
coverage deemed appropriate by XXXXXXXX on the EMPLOYEES, and for reimbursing
any expenses incurred, and deductibles or defense costs, in connection with
such policies or their administration. Such charges will include but are not
limited to: XXXXXXXX'X cost of obtaining insurance on EMPLOYEES, including
residual market loads and any fees or costs related to the number of claims and
loss experience of the EMPLOYEES submitted by FRANCHISEE for processing;
XXXXXXXX'X cost of administering and implementing the insurance program,
including brokerage and consulting expenses, overhead, salaries and BENEFITS,
travel, claims-handling fees and legal fees related to such claims;
deductibles; charges for misclassification of EMPLOYEES for workers'
compensation reporting and charge purposes; and taxes and any other related
fees or costs.
"INTEREST"
The interest rate designated by XXXXXXXX from time to time, but in no event
will such rate be lower than 12% per annum or higher than the maximum rate
allowed by LAW.
"JOB-ORDER"
A verbal or written notification from a CLIENT of a job opening (e.g. PERMANENT
PLACEMENT, temporary, TEMP-TO-HIRE, contract or other type).
"JOB-SEEKER"
An individual who seeks out or is sought out by FRANCHISEE, XXXXXXXX or other
franchisees, with respect to self-employment or employment by a CLIENT,
XXXXXXXX or a franchisee.
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"LAW"
The collective body of federal, state and local constitutions, statutes,
regulations, ordinances, codes, rules, official opinions, rulings, guidelines,
orders, case precedents, and other expressions or prescriptions of civil
authorities regulating conduct, property, and rights within or affecting their
jurisdictions.
"LEASED EMPLOYEE"
See "EMPLOYEE."
"LIQUIDATION FEE"
A fee charged to a CLIENT or other personnel services business for the
continued use of a former EMPLOYEE by a CLIENT through another personnel
services business.
"LISTINGS"
All telephone and facsimile numbers and related Yellow Pages(R)
listings/advertisements or other business listings or directories, and all
DOMAIN NAMES used in connection with the PS or the PROPRIETARY MARKS.
"LOCATION"
The premises from which FRANCHISEE shall operate the PS. The specific street
address of the LOCATION shall be set forth in Attachment 2.
"MANAGER"
An individual approved by XXXXXXXX to manage full time all or a portion of the
PS and who has satisfied and continues to meet XXXXXXXX'X training
requirements.
"MATERIALS"
All materials, as modified by XXXXXXXX from time-to-time, including manuals,
written directives and policy statements, COPYRIGHTED WORKS, forms, audio or
video tapes, Internet web pages whether owned or licensed by XXXXXXXX that are
to be used by FRANCHISEE in the PS.
"NATIONAL ACCOUNT"
A CLIENT designated by XXXXXXXX as a "NATIONAL ACCOUNT" and with whom XXXXXXXX
has entered into an agreement for the performance of personnel related services
by some or all of the NETWORK.
"NATIONAL ACCOUNT XXXXXXXX"
See XXXXXXXX.
"NATIONAL ACCOUNT SERVICE FEE"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT with respect to NATIONAL ACCOUNT
XXXXXXXX calculated in accordance with Section 10(e)(iii) (National Account
Service Fee).
"NETWORK"
All of the personnel services businesses licensed or owned by XXXXXXXX.
"OVERRIDE"
The fee due XXXXXXXX on all TEMPORARY HELP XXXXXXXX and RECEIPTS from PLACEMENT
XXXXXXXX as set forth in Section 10(c) (Override).
"OWNER"
Each individual or entity that, directly or indirectly, has an OWNERSHIP
INTEREST in FRANCHISEE. A "PRINCIPAL OWNER" is each OWNER who, collectively or
individually, directly or indirectly, has a 10% or more OWNERSHIP INTEREST in
FRANCHISEE or who has been designated by XXXXXXXX as a PRINCIPAL OWNER
hereunder, each of whom must execute this AGREEMENT and the Guaranty in the
form of Attachment 3.
"OWNERSHIP INTEREST"
The ultimate percentage ownership interest that an OWNER holds in FRANCHISEE.
(Example: an OWNER who owns a 25% interest in a corporation that owns a 50%
interest in FRANCHISEE would hold a 12.5% OWNERSHIP INTEREST in FRANCHISEE.)
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"OWNERSHIP TRANSFER"
Any transfer, sale, assignment, pledge or other encumbrance of all or a part of
the assets of the PS by FRANCHISEE or any transfer, sale, assignment, pledge or
other encumbrance of an OWNERSHIP INTEREST by an OWNER that effects a change in
CONTROL or results in a change in a PRINCIPAL OWNER.
"PAYROLL"
The EMPLOYEES' gross wages, including bonuses, commissions and other forms of
compensation.
"PAYROLL COSTS"
XXXXXXXX'X charges to the DISTRIBUTION ACCOUNT for the federal withholding,
FICA, state withholding, state unemployment, local taxes of any type or kind,
and unemployment consulting fees. XXXXXXXX may allocate and charge FRANCHISEE
for the unemployment claims experience of the EMPLOYEES submitted by FRANCHISEE
for processing in particular as well as the SYSTEM in general.
"PERMANENT PLACEMENT"
The placement of a JOB-SEEKER in a position with a CLIENT where such JOB-SEEKER
will be an employee of such CLIENT.
"PLACEMENT XXXXXXXX"
See XXXXXXXX.
"PRINCIPAL OWNER"
See "OWNER."
"PROMOTION FUND"
The fund established by XXXXXXXX to promote the NETWORK.
"PROPRIETARY MARKS"
The service marks "XXXXXXXX(R)," "XXXXXXXX and XXXXXXXX(R)," "XXXXXXXX SEARCH,"
and "XXXXXXXX TEMPORARIES(R);" the descriptive phrase "Licensed by XXXXXXXX and
XXXXXXXX, Inc.;" and such other trade names, trademarks, and service marks as
have been or may be designated or substituted by XXXXXXXX for use in connection
with the PS.
"PS"
The independently operated personnel services business licensed by this
AGREEMENT to operate a business of helping others to obtain employment or
self-employment; help to employers or others to obtain employees, franchisees
or business associates; the writing of resumes; outplacement; outsourcing;
business opportunity referrals; personnel consultation; employment-related
testing, counseling or training; temporary and TEMP-TO-HIRE employment;
employee leasing; and all other similar or related products or services,
whether or not considered by LAW to be employment service or employment agency
activity. An EXPANSION PS is a PS that is a new franchisee, under a separate
then-current form of XXXXXXXX franchise agreement, opened and controlled by a
PRINCIPAL OWNER of an existing XXXXXXXX licensed personnel services business. A
"SPECIALTY PS" is a PS that offers primarily PERMANENT PLACEMENT and
TEMP-TO-HIRE services in specific industries or market segments. With
XXXXXXXX'x written approval, a SPECIALTY PS may provide other personnel
services. A "STANDARD PS" is a PS that offers full-service personnel services
including PERMANENT PLACEMENT, temporary assignment and TEMP-TO-HIRE services,
consulting, counseling and other similar personnel services. A "SUBLEASED PS"
is a PS that is operated from a LOCATION that is subleased from XXXXXXXX.
"RECEIPTS"
All money and other valuable consideration, including barter, received during
or after the term of this AGREEMENT by XXXXXXXX or FRANCHISEE, STAFF EMPLOYEES,
collection agents, or other assignees, as revenue generated by the operation of
the PS. Consideration other than money shall be given its fair market value as
reasonably determined by XXXXXXXX.
"REIMBURSEMENTS"
Amounts collected from CLIENTS for XXXXXXXX that were previously treated as
CHARGEBACKS.
"SERVICE FEES"
BASE SERVICE FEE and NATIONAL ACCOUNT SERVICE FEE.
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"SERVICE FILE"
A JOB-ORDER, resume, application, work paper or other record containing
information about a JOB-SEEKER, applicant, employer, EMPLOYEE, STAFF EMPLOYEE,
CLIENT or position.
"XXXXXXXX PROPERTY"
Collectively, the SYSTEM, the PROPRIETARY MARKS, the DOMAIN NAMES, the
COPYRIGHTED WORKS, the MATERIALS, the CONFIDENTIAL INFORMATION, SERVICE FILES,
the proprietary software of XXXXXXXX and the goodwill associated with and
symbolized by them, and all improvements, enhancements, additions and
modifications to any of them.
"SPECIALTY PS"
See PS.
"STAFF EMPLOYEE"
Any individual who is employed by the PS and helps operate the PS.
"STANDARD PS"
See PS.
"SUBLEASED PS"
See PS.
"SYSTEM"
The methods, tools, MATERIALS and knowledge owned, licensed or used by XXXXXXXX
and licensed and/or provided to FRANCHISEE for the establishment, development,
and operation of personnel services businesses, with distinguishing
characteristics that include: the PROPRIETARY MARKS, the DOMAIN NAMES and
COPYRIGHTED WORKS; management and personnel training; operational procedures
and techniques; advertising and promotional programs and materials; and record
keeping and reporting. Any of these may be changed, improved, developed or
discontinued by XXXXXXXX from time to time.
"TEMP-TO-HIRE"
The placement of a FIELD EMPLOYEE on an assignment with a CLIENT that is
intended to lead to employment by such CLIENT.
"TEMPORARY HELP XXXXXXXX"
See XXXXXXXX.
5. THE LICENSE RELATIONSHIP
5(a) XXXXX
XXXXXXXX grants to FRANCHISEE, subject to the terms and conditions of this
AGREEMENT and in reliance on the representations, warranties, covenants,
agreements and acknowledgments of FRANCHISEE and each PRINCIPAL OWNER
hereunder, a nonexclusive license to use the XXXXXXXX PROPERTY solely in
connection with the operation of the type of PS specified in Section 1 from the
LOCATION(S) approved by XXXXXXXX and set forth in Attachment 2, and FRANCHISEE
accepts the rights and obligations hereunder. FRANCHISEE and the PRINCIPAL
OWNERS acknowledge and agree that the personnel service business by its nature
is highly competitive and that the market for such services is fragmented with
most personnel service providers, including successful providers, having a
minimal market share in any given market. Therefore, this grant is
nonexclusive, and FRANCHISEE, XXXXXXXX, and other XXXXXXXX franchisees may at
any time advertise, solicit, service and/or employ any CLIENTS, JOB-SEEKERS,
EMPLOYEES, or personnel, wherever located worldwide, including the area in
which the PS is located. Further, XXXXXXXX shall have the right to establish,
or authorize other persons to establish, other personnel service businesses
under the PROPRIETARY MARKS, or under any other marks, anywhere in the world,
regardless of proximity to the PS or any other personnel service business,
whether franchised or operated by XXXXXXXX.
5(b) TERM
This AGREEMENT shall remain in effect until it is terminated (i) by FRANCHISEE
in accordance with Section 13(a) (Termination by FRANCHISEE), (ii) by XXXXXXXX,
upon a default by FRANCHISEE, in accordance with Section 13(b) (Termination by
XXXXXXXX for Failure to Cure Breach) or Section 13(c) (Termination by XXXXXXXX
Without Opportunity to Cure Breach) or (iii) upon a change in CONTROL in
accordance with Section 12(c) (Conditions for Ownership Transfer) or Section
12(e) (Loss of Control).
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5(c) USE OF XXXXXXXX PROPERTY
FRANCHISEE is licensed to use the XXXXXXXX PROPERTY and shall adopt and use the
XXXXXXXX PROPERTY solely in accordance with this AGREEMENT and in the manner
prescribed by XXXXXXXX in the MATERIALS or by XXXXXXXX'X written notice.
5(d) OWNERSHIP BY XXXXXXXX OF THE XXXXXXXX PROPERTY
FRANCHISEE acknowledges and agrees that:
5(d)(1) XXXXXXXX is the OWNER of all right, title and interest in and to the
XXXXXXXX PROPERTY. Neither FRANCHISEE nor any OWNER shall contest the validity
of XXXXXXXX'X rights in the XXXXXXXX PROPERTY or take any other action that
would prejudice or interfere with the validity of XXXXXXXX'X rights with
respect to the XXXXXXXX PROPERTY. Nothing in this AGREEMENT shall give
FRANCHISEE any right, title, or interest in or to any of the XXXXXXXX PROPERTY,
except the right to use the XXXXXXXX PROPERTY in accordance with the terms and
conditions of this AGREEMENT.
5(d)(2) Any unauthorized use of the XXXXXXXX PROPERTY shall constitute an
infringement of XXXXXXXX'X rights in the XXXXXXXX PROPERTY and a material event
of default hereunder. FRANCHISEE shall execute and provide XXXXXXXX with all
documents and assistance XXXXXXXX reasonably requests to fully vest and protect
XXXXXXXX'X right, title and interest in and to the XXXXXXXX PROPERTY.
5(d)(3) XXXXXXXX reserves the right to substitute different PROPRIETARY MARKS
and DOMAIN NAMES for use in identifying the SYSTEM and the PS, if the current
PROPRIETARY MARKS or DOMAIN NAMES no longer can be used, or if XXXXXXXX, in its
sole discretion, determines that substitution of different PROPRIETARY MARKS or
DOMAIN NAMES will be beneficial to the SYSTEM. In such event, XXXXXXXX may
require FRANCHISEE, at FRANCHISEE's expense, to discontinue or modify
FRANCHISEE'S use of any of the PROPRIETARY MARKS or DOMAIN NAMES or to use one
or more additional or substitute PROPRIETARY MARKS or DOMAIN NAMES.
5(d)(4) Any improvements, enhancements, advertising or public relations
programs, marks or DOMAIN NAMES, inventions, or modifications of the XXXXXXXX
PROPERTY developed or adopted by FRANCHISEE during the term of this AGREEMENT,
even if not authorized by XXXXXXXX, which relate in any way to the operation of
the PS, shall be the exclusive property of XXXXXXXX. FRANCHISEE hereby
expressly disclaims any right, title or interest therein. FRANCHISEE shall
immediately disclose any such improvement, enhancement, program, invention or
modification to XXXXXXXX. Should XXXXXXXX, at its sole discretion and expense,
elect to file for patent, copyright, domain name registration or similar
protection relating to any such improvement, enhancement, program, invention or
modification, FRANCHISEE shall execute such documents and provide XXXXXXXX with
such information as XXXXXXXX may reasonably request in order to perfect such
filing.
5(e) MODIFICATION OF PROPRIETARY MARKS
FRANCHISEE shall identify itself as a FRANCHISEE of XXXXXXXX only as prescribed
or approved by XXXXXXXX, shall use the PROPRIETARY MARKS without any prefix,
suffix, or additional words, symbols, or punctuation, and shall use no
different or additional name or xxxx. If the LAW requires different or
additional identification, FRANCHISEE shall use the PROPRIETARY Marks only with
modifications that XXXXXXXX designates by written notice. FRANCHISEE shall use
no corporate, partnership, fictitious, trade, domain or other name without
XXXXXXXX'X written approval.
5(f) INDEPENDENT CONTRACTOR
The parties to this AGREEMENT understand and agree that this AGREEMENT does not
create a fiduciary relationship between them, that FRANCHISEE is an independent
contractor, and that nothing in this AGREEMENT is intended to make either party
an agent, legal representative, subsidiary, joint venture, partner, employee,
joint employer or servant of the other for any purpose whatsoever. During the
term of this AGREEMENT, FRANCHISEE shall hold itself out to the public as an
independent contractor operating according to a franchise from XXXXXXXX.
FRANCHISEE shall take the action necessary to do so, including exhibiting a
notice that it is operating independently in a conspicuous place at the PS
office, the content and form of which XXXXXXXX reserves the right to specify in
the MATERIALS. It is understood and agreed that nothing in this AGREEMENT
authorizes FRANCHISEE or any PRINCIPAL OWNER to make any contract, agreement,
warranty or representation on XXXXXXXX'X behalf or to incur any debt or
obligation in XXXXXXXX'X name. XXXXXXXX shall assume no liability for, or be
deemed liable under this AGREEMENT, as a result of any such action. Further, it
is understood and agreed that XXXXXXXX shall not be liable for any act or
omission by FRANCHISEE or any PRINCIPAL OWNER in conducting the PS or for any
claim or judgment arising therefrom.
5(g) NOTICE OF LEGAL ACTION AND INDEMNIFICATION
FRANCHISEE shall immediately notify XXXXXXXX of any infringement of or
challenge to FRANCHISEE's use of any PROPRIETARY XXXX, of any claim by any
person of any rights in any PROPRIETARY XXXX, or any legal, administrative,
regulatory,
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or governmental action or proceeding, including any alternative dispute
resolution proceedings, in which FRANCHISEE, XXXXXXXX, the PS, the EMPLOYEES or
STAFF EMPLOYEES are named, or that is related to the XXXXXXXX PROPERTY.
FRANCHISEE shall have no authority to accept service of process on behalf of
XXXXXXXX. FRANCHISEE and each PRINCIPAL OWNER shall at all times indemnify and
hold XXXXXXXX and its officers, directors, shareholders, partners, employees
and agents harmless from all claims, suits, demands, or other causes of action
which may arise against XXXXXXXX by reason of the operation of the PS, the sale
of any services from the PS, FRANCHISEE'S breach of this AGREEMENT or any
covenant, warranty or representation hereunder, criminal wrongs, or civil
wrongs connected with the operation of the PS, or the use of XXXXXXXX'X name,
or the XXXXXXXX PROPERTY or the acts or omissions of FRANCHISEE's agents,
employees or representatives without regard to the causes thereof or the
negligence of XXXXXXXX or any other party or parties arising in connection
therewith whether such negligence be sole, joint or concurrent, active or
passive. This obligation to indemnify and hold harmless includes all attorneys'
fees, court costs, witness fees, expenses, alternative dispute resolution
costs, collection costs, actual damages, compensatory or exemplary damages,
damages to XXXXXXXX'x reputation and goodwill, and such other amounts incurred
in connection with such matters. XXXXXXXX shall have the right to retain
separate legal counsel of its choice to represent its interests in such
matters, and the cost of such legal counsel shall be paid by FRANCHISEE. At the
expense and risk of FRANCHISEE and each of the PRINCIPAL OWNERS, XXXXXXXX may
elect to assume (but under no circumstance is obligated to undertake) the
defense and/or settlement of any such action, suit, proceeding, claim, demand,
inquiry or investigation. Such an undertaking by XXXXXXXX shall, in no manner
or form, diminish the obligation of FRANCHISEE and each of the PRINCIPAL OWNERS
to indemnify the indemnified parties and to hold them harmless.
5(h) EMPLOYEES AND CLIENTS
FRANCHISEE acknowledges and agrees that the EMPLOYEES shall be solely the
employees of XXXXXXXX and not of FRANCHISEE and that all CLIENTS who receive
services through the PS shall be solely the clients of XXXXXXXX and not of
FRANCHISEE. All FIELD EMPLOYEE and LEASED EMPLOYEE services provided through
the PS shall be provided by individuals who are employees of XXXXXXXX and not
of FRANCHISEE. XXXXXXXX reserves the right, in its sole discretion, to refuse
to (i) employ any individual referred by FRANCHISEE who does not meet the
qualifications and standards specified by XXXXXXXX in the MATERIALS, (ii) allow
FRANCHISEE to dispatch an EMPLOYEE to any job assignment or order due to any
adverse economic or safety reasons or for any CLIENT who has failed to make
payments for services to XXXXXXXX on a timely basis, (iii) provide LEASED
EMPLOYEES to a CLIENT who has not advanced to XXXXXXXX the PAYROLL and related
costs for such LEASED EMPLOYEES and (iv) enter into an agreement for LEASED
EMPLOYEES if the anticipated gross margin with respect thereto would not, in
XXXXXXXX'X sole determination, fairly compensate XXXXXXXX for providing
processing and accounting services with respect thereto.
6. START-UP AND TRAINING
6(a) OPENING
Within ninety (90) days after the date this AGREEMENT is executed by XXXXXXXX,
FRANCHISEE shall open and begin to operate the PS, unless XXXXXXXX otherwise
agrees in writing.
6(b) LOCATION AND LEASE
Prior to acquiring a site for the LOCATION, FRANCHISEE shall find a site that
satisfies XXXXXXXX'X site selection requirements for a personnel services
business and shall submit information regarding such site to XXXXXXXX for its
approval. XXXXXXXX shall have thirty (30) days to approve or disapprove a site.
No site may be used without XXXXXXXX'X written approval. The street address of
the site approved by XXXXXXXX for the LOCATION shall be set forth in Attachment
2. If FRANCHISEE will occupy the premises by lease, FRANCHISEE shall submit a
copy of the lease to XXXXXXXX for its review and approval prior to execution of
the lease and shall furnish to XXXXXXXX a copy of the executed lease within ten
(10) days after execution. No lease for the LOCATION may be used without
XXXXXXXX'X written approval.
6(c) LISTINGS
Upon the execution of this AGREEMENT and at each time as a new LISTING is
obtained, FRANCHISEE shall assign to XXXXXXXX the LISTINGS. FRANCHISEE shall
execute an assignment in the form prescribed by XXXXXXXX to evidence such
assignments. Additionally, in order to further secure its obligations
hereunder, FRANCHISEE hereby grants to XXXXXXXX a security interest in the
LISTINGS and shall execute such uniform commercial code financing statements as
XXXXXXXX may request in order to perfect or continue perfection of such
security interest.
6(d) MANAGER TRAINING AND OPENING AND POST-OPENING TRAINING
XXXXXXXX shall train at least one (1) PRINCIPAL OWNER approved by XXXXXXXX and
the prospective MANAGER on the fundamentals of all aspects of operating the PS
at a place and time designated by XXXXXXXX. The prospective initial MANAGER
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shall complete such training to XXXXXXXX'X satisfaction prior to opening the PS
and any successor MANAGER shall complete such training to XXXXXXXX'x
satisfaction before FRANCHISEE may permit any such MANAGER to manage the PS.
Depending upon the type of PS and the PRINCIPAL OWNER'S and prospective
MANAGER'S prior experience, at least one (1) PRINCIPAL OWNER and the
prospective MANAGER may also be required to complete to XXXXXXXX'X satisfaction
on the job training or opening and post-opening training provided by XXXXXXXX'X
support personnel.
6(e) REMEDIAL TRAINING AND ASSISTANCE
XXXXXXXX may, at its option, provide additional training and assistance to the
PRINCIPAL OWNERS and the MANAGER. At least one (1) PRINCIPAL OWNER, the MANAGER
and such other STAFF EMPLOYEES designated by XXXXXXXX shall attend such
additional training and seminars as XXXXXXXX may require from time to time.
XXXXXXXX reserves the right to charge a reasonable fee for any such additional
training programs and seminars, and FRANCHISEE shall be responsible for all
payroll, travel, lodging meals, etc. of such STAFF EMPLOYEES.
6(f) TRAINING BY FRANCHISEE
FRANCHISEE shall immediately and continually train the EMPLOYEES and the STAFF
EMPLOYEES according to the SYSTEM. XXXXXXXX shall have no responsibility to
train the EMPLOYEES or STAFF EMPLOYEES.
6(g) MATERIALS
XXXXXXXX shall license for the sole use of FRANCHISEE one complete set of the
MATERIALS. All MATERIALS that exist now or that may be developed or licensed by
XXXXXXXX shall remain the exclusive property of XXXXXXXX. The MATERIALS shall
not be used by FRANCHISEE except in accordance with, and during the term of,
this AGREEMENT. Upon termination of this AGREEMENT, FRANCHISEE shall
immediately return to XXXXXXXX all MATERIALS in FRANCHISEE'S possession.
7. CONFIDENTIAL INFORMATION.
7(a) TRADE SECRET
FRANCHISEE and each PRINCIPAL OWNER acknowledges, stipulates and agrees that
the CONFIDENTIAL INFORMATION, whether currently in existence or hereafter
acquired, constitutes a trade secret of XXXXXXXX, is not a matter of common
knowledge in the trade, and gives FRANCHISEE, the PS and XXXXXXXX an advantage
over other personnel service businesses, and any unauthorized use of the
CONFIDENTIAL INFORMATION by FRANCHISEE or any OWNER shall constitute unfair
business practices and a breach of confidence and a default under this
AGREEMENT. FRANCHISEE further acknowledges that in order to grant this
franchise XXXXXXXX is relying upon the acknowledgment of FRANCHISEE and each
PRINCIPAL OWNER that CONFIDENTIAL INFORMATION constitutes a trade secret of
XXXXXXXX and their promise to refrain from any unauthorized use of the
CONFIDENTIAL INFORMATION.
7(b) CONFIDENTIAL INFORMATION
The following information constitutes CONFIDENTIAL INFORMATION for purposes of
this AGREEMENT:
7(b)(i) the MATERIALS;
7(b)(ii) the identity of and any information regarding any past, current or
prospective JOB-SEEKER or FIELD EMPLOYEE, including such person's identity,
addresses, e-mail addresses, phone numbers (home, business and emergency),
curriculum vitae, resume, application, job references, various test results,
employment forms, current salary and benefits, salary expectations, employment
offers and terms thereof, responses to job offers, willingness to move/relocate
or commute, career goals, job performance and evaluations, reasons for leaving
last place of employment, job placements, work assignments, disciplinary
issues, medical information, drivers license, social security number, personal
financial data or needs and any other personnel information in which such
person has a reasonable expectation of privacy and/or which was disclosed to
FRANCHISEE, the PS and/or XXXXXXXX in confidence;
7(b)(iii) the identity of and any information regarding any CLIENT, including
personal information (e.g. birthdays, anniversaries, spouse, hobbies,
memberships, likes and dislikes, personality, etc.), contact person(s), CLIENT
lists, personnel needs, fringe benefits, hiring practices, time lines and
budgets, policies, goals and plans, usage of EMPLOYEES, customer or CLIENT
pricing for various services and types of EMPLOYEES, existing or prospective
JOB-ORDERs and CLIENT agreements and dealings with FRANCHISEE, the PS and/or
XXXXXXXX, including PLACEMENT XXXXXXXX, PAYROLL, CHARGEBACKS, REIMBURSEMENTS,
fees, expiration dates, profit margins and credit history;
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7(b)(iv) any information regarding FRANCHISEE'S business operations and
practices under the SYSTEM, including pricing and cost codes, marketing
techniques, strategic business plans and market research studies, promotional
ideas, operating reports, placement registers, and accounts receivable;
7(b)(v) the SYSTEM, SERVICE FILEs and any CLIENT and/or JOB-SEEKER lists,
including those prepared pursuant to Sections 13(d)(11) and (12) (FRANCHISEE's
Termination Duties);
7(b)(vi) any information regarding current or past EMPLOYEES or STAFF
EMPLOYEES, including the employee's personnel file, I-9's, W-4's, employment
agreements, employment history, assigned or generated CLIENTS, CLIENT
relationships and contacts, job placement history, commission structure,
compensation and benefits, performance evaluations, disciplinary history and
other proprietary personnel information or records;
7(b)(vii) any information, including a formula, pattern, compilations, program,
device, methods, technique, or process, that: (1) derives independent economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use and (2) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy; and
7(b)(viii) any other information known by FRANCHISEE or used in the PS that
could give FRANCHISEE an advantage over competitors, that is not disclosed to
the public by XXXXXXXX or that is not generally known to the public.
7(c) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
FRANCHISEE and each PRINCIPAL OWNER acknowledges that the Confidential
Information constitutes valuable trade secrets that XXXXXXXX developed at
considerable cost, in which XXXXXXXX owns the exclusive proprietary interest,
and of which FRANCHISEE and each PRINCIPAL OWNER further acknowledges that the
CONFIDENTIAL INFORMATION is received in strict confidence only by participants
in the SYSTEM and solely for their use and benefit in operating personnel
services businesses under the SYSTEM. FRANCHISEE and each OWNER having access
to the CONFIDENTIAL INFORMATION shall treat such information as confidential
and as trade secrets of XXXXXXXX, shall not disclose their contents to
unauthorized persons or allow CONFIDENTIAL INFORMATION to leave the LOCATION,
and shall return all originals and copies thereof to XXXXXXXX upon the
termination of this AGREEMENT. Neither FRANCHISEE nor any OWNER shall copy or
use the CONFIDENTIAL INFORMATION for any purpose other than as permitted by
this AGREEMENT and shall never disclose, use or misappropriate the CONFIDENTIAL
INFORMATION. FRANCHISEE acknowledges that any information provided by CLIENTS,
JOB-SEEKERS, and EMPLOYEES to FRANCHISEE is confidential because of
FRANCHISEE'S relationship with XXXXXXXX, and any use of such information other
than for the operation of the PS is a breach of confidentiality.
7(d) PROTECTION OF CONFIDENTIAL INFORMATION.
During the term of this AGREEMENT, FRANCHISEE shall institute thorough and
effective measures to protect and preserve the secrecy of the CONFIDENTIAL
INFORMATION and to protect the CONFIDENTIAL INFORMATION from any unauthorized
use, disclosure or conversion by any person including the following
precautions:
7(d)(1) FRANCHISEE shall require and obtain execution of confidentiality and
non-disclosure agreements and covenants against unfair trade practices from its
MANAGER, and all other STAFF EMPLOYEES or agents who have received or will have
access to CONFIDENTIAL INFORMATION. Such agreements shall be in the form
prescribed by XXXXXXXX and shall be executed as a condition of and before
commencement of employment. All officers, directors and OWNERS of FRANCHISEE
not required by XXXXXXXX to execute this AGREEMENT who have received or have
access to CONFIDENTIAL INFORMATION also must execute such confidentiality and
non-disclosure agreements. FRANCHISEE shall forward a copy of the
confidentiality and non-disclosure agreements to XXXXXXXX. FRANCHISEE shall not
reveal any CONFIDENTIAL INFORMATION to any MANAGER, OWNER, officer, director or
STAFF EMPLOYEE in the absence of a written obligation from such person not to
misuse or disclose the CONFIDENTIAL INFORMATION. FRANCHISEE shall consistently
and uniformly enforce its confidentiality and non-disclosure agreements with
such persons.
7(d)(2) FRANCHISEE shall permit access to the CONFIDENTIAL INFORMATION only to
those who have a need to know the information, maintain the CONFIDENTIAL
INFORMATION in a secure location and advise employees on a regular basis that
the CONFIDENTIAL INFORMATION is confidential. CONFIDENTIAL INFORMATION stored
on a computer hard drive or disk shall be protected from unauthorized access or
use by a secret password. CLIENT lists and SERVICE FILES shall be marked as
"Confidential," "Proprietary Information" or some similar designation and be
maintained in locked file cabinets or in a similar secured location.
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8. OPERATION OF THE PS
8(a) COMPLIANCE WITH LAW AND SYSTEM
FRANCHISEE shall strictly follow the SYSTEM and comply with all applicable LAW.
XXXXXXXX will not, and properly could not, render legal, accounting, or tax
advice to FRANCHISEE. FRANCHISEE shall retain independent counsel as needed in
those areas.
8(b) TREATMENT OF PERSONNEL
FRANCHISEE and each PRINCIPAL OWNER shall take all steps necessary to ensure
that all applicants, JOB-SEEKERs, EMPLOYEES and STAFF EMPLOYEES are treated
fairly and equally as required under the MATERIALS or under applicable LAW
prohibiting discrimination and harassment with respect to race, creed, color,
religion, sex, national origin, age, handicap, status as a veteran, or any
other basis in the hiring, compensation, supervision, safety, training,
discharge, dispatching, or referral for placement of such persons in connection
with the operation of the PS.
8(c) REQUIRED INSURANCE
At its expense, FRANCHISEE shall procure upon execution of this AGREEMENT and
shall maintain crime/fidelity bond, commercial general liability, workers'
compensation, errors and omission and employment practices liability insurance
and any other insurance XXXXXXXX may deem necessary protecting FRANCHISEE and
XXXXXXXX and their respective affiliates, successors and assigns and each such
entity's officers, directors, partners, agents, representatives, independent
contractors and employees against any demand or claim with respect to personal
injury, death or property damage, or any loss, liability or expense arising or
occurring in connection with PS, unless such insurance is supplied by and
charged for by XXXXXXXX, that conforms to the minimum amounts of coverage, and
special provisions required by the MATERIALS, as modified from time to time.
8(c)(1) The deductible on any required insurance coverage may not exceed Five
Hundred Dollars ($500) without XXXXXXXX'X prior written approval. The coverage
shall be underwritten by insurance companies holding a Best's Rating of not
less than B+: Class VI, and shall be in forms acceptable to XXXXXXXX.
8(c)(2) Such insurance shall name XXXXXXXX and its officers, directors,
employees, representatives, independent contractors and agents as an additional
insured.
8(c)(3) FRANCHISEE shall provide XXXXXXXX thirty (30) days prior to opening of
the PS, and thirty (30) days prior to the expiration of such policies,
certificates of insurance and other documents required by the MATERIALS
evidencing the existence and continuation of proper coverage. All insurance
policies shall expressly provide for no less than thirty (30) days written
notice to XXXXXXXX in the event of a material alteration to or cancellation of
such policy.
8(c)(4) Should FRANCHISEE elect to enter into an arrangement to lease their
STAFF EMPLOYEES, the preceding insurance requirements must be maintained by the
leasing company without regard to any reinsurance commitments. In addition, the
leasing company must be properly licensed to do business and have satisfactory
financial resources as determined in XXXXXXXX'X sole discretion.
8(c)(5) Such policies shall also include a waiver of subrogation in favor of
XXXXXXXX and its directors, officers, employees, representatives, independent
contractors and agents. All public liability and property damage policies shall
contain a provision that XXXXXXXX and its directors, officers, employees,
representatives, independent contractors and agents, although named as insured,
shall nevertheless be entitled to recover under such policies on any loss
occasioned to XXXXXXXX or its servants, agents or employees by reason of the
negligence of FRANCHISEE or its servants, agents or employees.
8(c)(6) Should FRANCHISEE, for any reason, fail to procure or maintain the
insurance required by this AGREEMENT, as such requirements may be revised from
time to time by XXXXXXXX in writing, XXXXXXXX shall have the right and
authority (without, however, any obligation to do so) immediately to procure
such insurance and to charge same to FRANCHISEE, which charges, together with a
reasonable fee for XXXXXXXX'x expenses in so acting, shall be payable by
FRANCHISEE immediately upon notice. These remedies shall be in addition to any
other remedies XXXXXXXX may have at law or in equity. FRANCHISEE's obligation
to obtain and maintain the foregoing policy or policies in the amounts
specified shall not be limited in any way by reason of any insurance which may
be maintained by XXXXXXXX, nor shall FRANCHISEE's performance of that
obligation relieve it of liability under the indemnity provisions set forth in
Section 5(g) (Notice of Legal Action and Indemnification).
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8(d) INSURANCE PROGRAMS
XXXXXXXX may, but is not required to, establish programs for the NETWORK for
any of the insurance coverages required for the PS. FRANCHISEE shall enroll and
maintain its participation in any such programs, if requested to do so by
XXXXXXXX.
8(e) OUTSIDE CONSULTANTS
In order to protect the Confidential Information, FRANCHISEE shall not retain
any consultants or advisers in connection with the operation or marketing of
the PS, other than FRANCHISEE'S legal, accounting, or tax counsel, and
advertising or public relations agency, without XXXXXXXX'X written approval.
8(f) FULL TIME MANAGEMENT
FRANCHISEE shall at all times have the PS managed by a MANAGER who devotes full
time, energy, and best efforts to the management, promotion, and growth of the
PS and maintains a presence at the LOCATION.
8(g) SUBMISSION OF REPORTS
FRANCHISEE shall submit to XXXXXXXX the following reports in the manner, form,
time frame and content prescribed by XXXXXXXX in the MATERIALS:
8(g)(1) marketing and financial report(s) for all of the operating activity of
the PS.
8(g)(2) an OVERRIDE report for RECEIPTS from PLACEMENT XXXXXXXX. This OVERRIDE
report shall be required only until XXXXXXXX informs FRANCHISEE that XXXXXXXX
shall process the XXXXXXXX and collection of RECEIPTS from PLACEMENT XXXXXXXX
for FRANCHISEE.
8(h) NO OTHER BUSINESS CONDUCTED AT LOCATION
FRANCHISEE shall ensure that no business other than the PS is conducted at the
LOCATION or is allowed to give the impression of a physical or operational
connection with the PS except that FRANCHISEE may permit, with XXXXXXXX'X
approval, the activities of another FRANCHISEE to be conducted from the
LOCATION.
8(i) COMPLIANCE WITH MATERIALS
FRANCHISEE shall comply with the standards and requirements stated in the
MATERIALS, as modified by XXXXXXXX from time to time, particularly those parts
of the MATERIALS that deal with:
8(i)(1) Utilization of new technology in the operation of the PS.
8(i)(2) Obtaining office decor, furniture, fixtures, electronic, mechanical and
communications equipment (including computer hardware, peripherals and
software, web pages, network connectivity, telephones, video conferencing
equipment, telecopiers, photocopiers, scanners, and modems), business forms,
and advertising materials (including Yellow Pages(R) and other business
directory ads) from XXXXXXXX, sources XXXXXXXX designates, or in accordance
with standards XXXXXXXX specifies from time to time.
8(i)(3) Use of motivation and recognition programs, annual planning sessions,
and formal marketing plans.
8(i)(4) Use of STAFF EMPLOYEE training and improvement programs and written
employment contracts, and hiring the levels and type of STAFF EMPLOYEES
necessary to properly penetrate the market and grow market share.
8(i)(5) Handling of Job-seekers and the hiring and dispatching of EMPLOYEES.
8(i)(6) Performance of personnel related services for NATIONAL ACCOUNTS.
8(i)(7) Compliance with national programs, such as client satisfaction
guarantees, special hours incentive pay, holiday pay, vacation pay, referral
payments, and cooperative placement systems.
8(j) MODERNIZATION.
FRANCHISEE shall, upon the request of XXXXXXXX, make other improvements to
modernize the PS premises, equipment, communications equipment, business forms
and advertising materials, office decor, fixtures, furnishings, supplies and
other products and materials required for the operation of the PS, to
XXXXXXXX'X then-current standards and specifications.
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8(k) XXXXXXXX may, but has no obligation to, develop NATIONAL ACCOUNTS with
whom XXXXXXXX has entered into an agreement for the performance of personnel
related services within the area in which FRANCHISEE's PS is located. XXXXXXXX
may offer the opportunity to perform those NATIONAL ACCOUNT services to
FRANCHISEE, XXXXXXXX may perform those services or authorize any other party to
do so. If FRANCHISEE accepts the opportunity to perform the NATIONAL ACCOUNT
services, FRANCHISEE shall perform those services in accordance with the terms
of the NATIONAL ACCOUNT AGREEMENT.
9. DISTRIBUTION ACCOUNT AND PROCESSING
9(a) DISTRIBUTION ACCOUNT
9(a)(i) FRANCHISEE'S distribution payments from the DISTRIBUTION ACCOUNT will
be initially based on XXXXXXXX but will be ultimately based on the collection
of such XXXXXXXX. FRANCHISEE will not be entitled to any distribution payments
on XXXXXXXX processed after termination of this AGREEMENT. Even though XXXXXXXX
will handle the processing of XXXXXXXX and PAYROLL, FRANCHISEE understands and
agrees that FRANCHISEE shall be financially responsible for each of the
following charges, each of which will be deducted from the DISTRIBUTION
ACCOUNT: SERVICE FEES; PAYROLL; PAYROLL COSTS; INSURANCE COSTS; BENEFITS, sales
taxes and any other taxes; EXPENSE REIMBURSEMENTS; CHARGEBACKS; OVERRIDES;
PROMOTION FUND contributions; INTEREST; CLIENT REFUNDS; CO-OP SPLITS;
ADJUSTMENTS; indemnification of XXXXXXXX and any other amounts due XXXXXXXX
under this AGREEMENT.
9(a)(ii) XXXXXXXX shall pay to FRANCHISEE the net positive amount in the
DISTRIBUTION ACCOUNT in accordance with the manner and time frames prescribed
in the MATERIALS. If the DISTRIBUTION ACCOUNT has a net negative balance,
FRANCHISEE shall, when notified in writing by XXXXXXXX, pay to XXXXXXXX within
five (5) days an amount necessary to bring the DISTRIBUTION ACCOUNT to at least
a zero balance. Failure to do so shall be a default under this AGREEMENT.
9(a)(iii) XXXXXXXX may, at any time, set off and make payment from the
DISTRIBUTION ACCOUNT of any amounts owed by FRANCHISEE to XXXXXXXX (including
penalties, interest, reasonable attorney's fees and costs of collection) or any
amounts owed to XXXXXXXX by any entity related to or affiliated with
FRANCHISEE.
9(b) TRANSMISSION OF INFORMATION
FRANCHISEE shall transmit all information required by XXXXXXXX for its
operational and financial reports, analysis and to process the PAYROLL and
XXXXXXXX in the form, manner and time frame as prescribed in the MATERIALS.
9(c) PROCESSING BY XXXXXXXX
Upon receiving the information from FRANCHISEE as required by the MATERIALS.
XXXXXXXX shall process the PAYROLL and XXXXXXXX (except that PLACEMENT XXXXXXXX
shall be processed by FRANCHISEE until written notification by XXXXXXXX), pay
all EMPLOYEES for services rendered to CLIENTS, pay all PAYROLL COSTS, provide,
when available, all required insurance on EMPLOYEES and pay all INSURANCE
COSTS, pay all BENEFITS, receive payments from CLIENTS, calculate the
distribution due FRANCHISEE, and perform other similar functions relating to
such processing.
9(d) CREDIT AND COLLECTION
FRANCHISEE agrees to XXXXXXXX'X credit and collection policy provided below and
to subsequent modifications of the procedures provided in the MATERIALS.
9(d)(1) COLLECTION
FRANCHISEE shall ensure that CLIENTS submit payments directly and promptly to
XXXXXXXX (except that payments for PLACEMENT XXXXXXXX shall be submitted to
FRANCHISEE until written notification by XXXXXXXX). XXXXXXXX, in its sole
discretion, may also contact CLIENTS regarding the collection of XXXXXXXX due
from CLIENTS. All collection costs incurred by XXXXXXXX, internally or
externally, shall be charged to FRANCHISEE as an ADJUSTMENT to the DISTRIBUTION
ACCOUNT.
9(d)(2) CLIENT PAYMENTS MADE DIRECTLY TO XXXXXXXX
All RECEIPTS shall be remitted directly to XXXXXXXX by CLIENTS. FRANCHISEE
shall not do anything whatsoever that would interfere with the CLIENTS making
payments directly to XXXXXXXX. If RECEIPTS are received by FRANCHISEE,
FRANCHISEE shall neither deposit nor cash such RECEIPTS, but shall immediately
forward them to XXXXXXXX. Failure to immediately remit to XXXXXXXX any CLIENT
payments that may come into FRANCHISEE'S possession, including any amounts
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previously treated as CHARGEBACKS, may result in a suspension of all further
DISTRIBUTION ACCOUNT payments to FRANCHISEE until XXXXXXXX receives such
payments. In addition, INTEREST shall accrue from the date FRANCHISEE received
such payments until they are received by XXXXXXXX. Failure by FRANCHISEE to
remit such payments to XXXXXXXX constitutes a conversion of XXXXXXXX'X funds
for which this AGREEMENT and any other agreement with XXXXXXXX may be
immediately terminated and for which FRANCHISEE may be subject to civil
remedies or criminal prosecution and sanctions by governmental authorities.
9(d)(3) ENDORSEMENT AUTHORITY
FRANCHISEE hereby authorizes and grants to XXXXXXXX the power to accept,
endorse, and negotiate any CLIENT payments made inadvertently or improperly to
FRANCHISEE, FRANCHISEE'S agents, affiliates, or other persons associated with
the PS.
9(d)(4) CLIENT CREDIT AND APPROVAL
FRANCHISEE shall conduct, at its expense, credit checks on all proposed
CLIENTS. XXXXXXXX shall reserve the right to conduct its own credit checks on
proposed CLIENTS on FRANCHISEE'S behalf and make ADJUSTMENTS to the
DISTRIBUTION ACCOUNT accordingly. Each CLIENT must be approved by XXXXXXXX
before FRANCHISEE provides services to such CLIENT.
9(d)(5) CLIENT AGREEMENTS
FRANCHISEE shall not execute any written agreement with a CLIENT relating to
the providing of EMPLOYEES without obtaining XXXXXXXX'X prior written approval.
9(d)(6) RELATED PARTIES
FRANCHISEE shall not transmit any information for processing pertaining to a
CLIENT in which FRANCHISEE or any OWNER has a financial or equity interest of
5% or more, without the prior written approval of XXXXXXXX.
9(e) ACCURATE CLASSIFICATION OF EMPLOYEES FOR WORKERS' COMPENSATION
FRANCHISEE is responsible for the accurate classification of EMPLOYEES for
workers' compensation reporting and charge purposes. Any misclassifications or
claims and loss experience will result in an ADJUSTMENT. Any willful or
negligent misclassifications may result in termination of this AGREEMENT
without an opportunity to cure.
9(f) SECURITY INTEREST
As security for the advancement of monies to FRANCHISEE and for the payment of
fees and other amounts owed to XXXXXXXX under this AGREEMENT, FRANCHISEE and
the PRINCIPAL OWNERS hereby convey to XXXXXXXX a security interest in all of
their present and later acquired interests in contract rights, accounts
receivable, fixed assets, general intangibles, and all of their cash or
non-cash proceeds, as security for all of their present and future obligations
to XXXXXXXX. FRANCHISEE or a PRINCIPAL OWNER, as applicable, shall execute one
or more financing statements, continuation statements, or other documents as
XXXXXXXX deems necessary.
10. FEES AND FINANCIAL OBLIGATIONS
10(a) FRANCHISE FEE
In consideration of the franchise granted in this AGREEMENT, expense incurred
by XXXXXXXX in entering into this AGREEMENT, and XXXXXXXX'X lost or deferred
opportunity to franchise others, FRANCHISEE shall pay to XXXXXXXX a franchise
fee of (i) $9,000 with respect to a STANDARD PS, payable as follows: $5,000
upon execution of this AGREEMENT and $4,000 prior to a PRINCIPAL OWNER
attending the initial training program, (ii) $13,000 with respect to a
SUBLEASED PS, payable as follows: $7,000 upon execution of this AGREEMENT and
$6,000 prior to a PRINCIPAL OWNER attending the initial training program or
(iii) $5,000 with respect to a SPECIALTY PS, payable as follows: $3,000 upon
execution of this AGREEMENT, and $2,000 prior to a PRINCIPAL OWNER attending
the initial training program. There is no franchise fee with respect to an
EXPANSION PS or a CONVERTED PS. Any portion of the franchise fee that has been
paid shall be nonrefundable.
10(b) TRAINING FEE AND EXPENSES
FRANCHISEE shall pay to XXXXXXXX an initial training fee of (i) $12,000 prior
to attending an initial training program with respect to a STANDARD PS or a
SUBLEASED PS, (ii) $7,000 prior to attending an initial training program with
respect to a SPECIALTY PS, and (iii) $12,000, payable by an additional one
percent (1%) OVERRIDE until paid in full, with respect to an EXPANSION PS.
There is no initial training fee with respect to a CONVERTED PS. In addition,
FRANCHISEE shall pay to XXXXXXXX the current charges required by XXXXXXXX for
any additional training. FRANCHISEE shall also pay for the meals, lodging and
travel expenses of the PRINCIPAL OWNERS and any current or prospective MANAGERS
and other staff employees in connection with any training, seminars, or
conventions wherever held.
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10(c) OVERRIDE
In partial consideration of the rights granted to FRANCHISEE by XXXXXXXX under
this AGREEMENT, FRANCHISEE shall pay to XXXXXXXX a 4 1/2% OVERRIDE on all
TEMPORARY HELP XXXXXXXX (which OVERRIDE will ultimately be adjusted based upon
the amount of TEMPORARY HELP XXXXXXXX actually collected) and a 7% OVERRIDE on
all RECEIPTS from PLACEMENT XXXXXXXX. There is no OVERRIDE on NATIONAL ACCOUNT
XXXXXXXX (See Section 10(e)(iii) (National Account Service Fee)). XXXXXXXX will
deduct the OVERRIDE from the DISTRIBUTION ACCOUNT. Until XXXXXXXX has
instituted the processing of RECEIPTS from PLACEMENT XXXXXXXX, FRANCHISEE shall
pay to XXXXXXXX the OVERRIDE amounts due on RECEIPTS from PLACEMENT BILLING
with such payments to be received by XXXXXXXX by the tenth day of the month
following the month in which the monies were collected.
10(d) PROMOTION FUND
XXXXXXXX has established the PROMOTION FUND for the NETWORK which will be
maintained and administered by XXXXXXXX or its designee. FRANCHISEE shall
contribute 1/2% of all TEMPORARY HELP XXXXXXXX (which contribution will
ultimately be adjusted baseD upon the amount of TEMPORARY HELP XXXXXXXX
actually collected) and 1% of all RECEIPTS from PLACEMENT XXXXXXXX to the
PROMOTION FUND. There is no contribution due the PROMOTION FUND on NATIONAL
ACCOUNT XXXXXXXX. XXXXXXXX will deduct the contribution weekly from the
DISTRIBUTION ACCOUNT. Until XXXXXXXX has instituted the processing of RECEIPTS
from PLACEMENT XXXXXXXX, FRANCHISEE shall pay the PROMOTION FUND contribution
due on RECEIPTS from PLACEMENT XXXXXXXX in the manner described in Section
10(c) (Override).
The PROMOTION FUND shall be used exclusively to pay for promotion of the
NETWORK and the SYSTEM and may be combined with similar funds maintained by
XXXXXXXX. Any sums paid by FRANCHISEE to the PROMOTION FUND may be used to
defray XXXXXXXX'X administrative costs and overhead as XXXXXXXX may incur in
activities reasonably related to the administration or direction of the
PROMOTION FUND and advertising for franchisees and the SYSTEM. FRANCHISEE
agrees that the PROMOTION FUND may be used to satisfy 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; direct mail and outdoor
billboard advertising; public relations activities; employing advertising
agencies to assist therein; and costs and expenses of XXXXXXXX'X personnel and
other departmental costs related to the PROMOTION FUND). FRANCHISEE may request
in writing a copy of the PROMOTION FUND's annual accounting. Personnel service
businesses operated by XXXXXXXX and using the PROPRIETARY MARKS shall
contribute to the PROMOTION FUND on the same basis as franchisees. XXXXXXXX
will direct all advertising, public relations, promotional programs, and
related activities, with sole discretion over the creative concepts, materials,
and media used in them and over their placement and allocation. In
administering the PROMOTION FUND, XXXXXXXX and its designees assume no
obligation to spend money for FRANCHISEE in proportion to FRANCHISEE'S
contribution or to ensure that any particular franchisee benefits directly or
proportionally from the PROMOTION FUND. The PROMOTION FUND and its earnings
shall not otherwise inure to the benefit of XXXXXXXX. The PROMOTION FUND is
operated solely as a conduit for collecting and expending the advertising fees
as outlined above. Money spent from the PROMOTION FUND shall be allocated on a
first in first out basis. Money remaining in the PROMOTION FUND on December 31
shall be used first in the subsequent year.
10(e) SERVICE FEES
10(e)(i) BASE SERVICE FEE
In consideration of the performance of certain processing, accounting and
funding services by XXXXXXXX with respect to TEMPORARY HELP XXXXXXXX, and in
addition to the OVERRIDE, FRANCHISEE shall pay to XXXXXXXX a BASE SERVICE FEE
calculated as a percentage of TEMPORARY HELP XXXXXXXX. The percentage shall be
based upon the cumulative gross amount of TEMPORARY HELP XXXXXXXX to that point
of the calendar year for the PS in accordance with the following schedule:
========================================================================
TEMPORARY HELP XXXXXXXX OUR BASE SERVICE FEE
========================================================================
First $500,000 4.00%
------------------------------------------------------------------------
Next $500,000 3.80%
------------------------------------------------------------------------
Next $500,000 3.60%
------------------------------------------------------------------------
Next $500,000 3.40%
------------------------------------------------------------------------
Next $500,000 3.20%
------------------------------------------------------------------------
Next $500,000 3.00%
========================================================================
Any non-billed hours, excluding holiday pay, processed by XXXXXXXX will be
considered TEMPORARY HELP XXXXXXXX at the pay rate of the appropriate FIELD
EMPLOYEE(s) for purposes of computing the BASE SERVICE FEE. In addition,
EXPENSE REIMBURSEMENTS paid to FIELD EMPLOYEES and any other compensation not
paid on an hourly basis will also be included as TEMPORARY HELP XXXXXXXX for
purposes of computing the BASE SERVICE FEE. The TEMPORARY HELP XXXXXXXX ranges
described
Page 19 of 32
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above shall automatically adjust to the nearest $1,000 effective January 1 of
each year to reflect the change in the United States Consumer Price Index for
All Urban Consumers - All U.S. Cities (1982-84 = 100) published by the
Department of Labor or such replacement index selected by XXXXXXXX.
If the prime interest rate as published in the Wall Street Journal equals or
exceeds 12% at the end of a week, the percentages described in the immediately
preceding paragraph shall be increased by the applicable following additional
percentage beginning the subsequent week:
========================================================================
ADDITIONAL BASE SERVICE FEE
PRIME INTEREST RATE
========================================================================
Less than 12% 0%
------------------------------------------------------------------------
at least 12% but less than 14% .25%
------------------------------------------------------------------------
at least 14% but less than 16% .50%
------------------------------------------------------------------------
at least 16% but less than 18% .75%
------------------------------------------------------------------------
at least 18% but less than 20% 1.00%
------------------------------------------------------------------------
20% or more 1.25%
========================================================================
10(e)(ii) NATIONAL ACCOUNT SERVICE FEE
In consideration of the performance of certain processing, accounting and
funding services by XXXXXXXX, and in lieu of a BASE SERVICE FEE, PROMOTION FUND
contribution and OVERRIDE, FRANCHISEE shall pay to XXXXXXXX a NATIONAL ACCOUNT
SERVICE FEE calculated as thirty percent (30%) of the GROSS MARGIN - NATIONAL
ACCOUNT XXXXXXXX of any NATIONAL ACCOUNT XXXXXXXX.
10(f) OTHER FINANCIAL OBLIGATIONS; SET-OFF
FRANCHISEE shall pay promptly and as required under this AGREEMENT any money
due XXXXXXXX or its subsidiaries, affiliates, or designees (including money
owed under a separate promissory note, contract, or other obligation) and shall
have no right to withhold or set-off any amounts owed under this AGREEMENT
because of any other claim.
10(g) INTEREST
Past due amounts due XXXXXXXX shall accrue INTEREST without waiver of any
rights of XXXXXXXX.
11. RECORDKEEPING; REPORTING; AUDITS
11(a) DOCUMENTS AND INFORMATION
FRANCHISEE shall, at its expense, provide to XXXXXXXX all documents and
information XXXXXXXX deems necessary in order to implement and maintain this
AGREEMENT within the time frames, on the forms, and in a manner, including
electronic transmission, as prescribed by XXXXXXXX. XXXXXXXX shall have the
right to electronically collect such information.
11(b) RECORDKEEPING AND REPORTING
FRANCHISEE shall provide XXXXXXXX immediate access to any information,
regardless of who possesses it, that relates in any way to the PS, including
access that allows XXXXXXXX to electronically receive and/or collect such
information. FRANCHISEE agrees to timely prepare, preserve, and report full,
complete, and accurate books, records, and accounts of the PS in accordance
with generally accepted accounting principles and the MATERIALS.
11(c) FINANCIAL AUDITS
XXXXXXXX, or its designated agent, has the right to examine or audit the PS to
verify the accuracy of the information reported. FRANCHISEE shall fully
cooperate with the individuals conducting such examinations or audits.
Ordinarily, XXXXXXXX will pay its own costs associated with the examination or
audit. If, however, (i) FRANCHISEE delays by more than five (5) BUSINESS DAYs
the time for the required examination or audit; (ii) FRANCHISEE fails to
cooperate with XXXXXXXX or its designated agent; (iii) FRANCHISEE'S financial
records require a substantial effort by XXXXXXXX or its designated agent to be
placed in a condition readily conducive to audit; or (iv) the examination or
audit reveals unreported RECEIPTS or other financial liabilities to XXXXXXXX
that total more than Two Thousand Five Hundred Dollars ($2,500), FRANCHISEE
shall be obligated to pay immediately all costs and fees associated with the
examination or audit.
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11(d) COMPLIANCE AUDITS
If FRANCHISEE fails to comply with the MATERIALS, or otherwise commits a breach
of this AGREEMENT, XXXXXXXX may perform an operational compliance audit of the
PS. FRANCHISEE shall be obligated to pay immediately all costs associated with
the audit. The performance of such an audit in no way waives or supersedes any
of XXXXXXXX'X rights under this AGREEMENT.
11(e) USE OF INFORMATION
XXXXXXXX may use all financial and operational information that it obtains
concerning the PS as XXXXXXXX deems appropriate or as required by LAW.
12. OWNERSHIP STRUCTURE AND TRANSFER
12(a) DISCLOSURE OF OWNERSHIP STRUCTURE
FRANCHISEE shall at all times keep XXXXXXXX informed in writing of the
OWNERSHIP INTEREST of all of its OWNERS and shall provide XXXXXXXX copies of
all organizational documents and other materials or statements that XXXXXXXX
may request in order to document the ownership structure of FRANCHISEE. The
initial ownership structure shall be set forth in Section 2 of this AGREEMENT.
FRANCHISEE shall provide a list of each OWNER who is not required to execute
this AGREEMENT as a PRINCIPAL OWNER. No OWNER shall have any interest in any
personnel service business other than the PS or another personnel service
business under license from XXXXXXXX; provided, however, these requirements
shall not apply to the ownership of less than one percent (1%) of the equity
securities of a publicly-held corporation.
12(b) NO ALIENATION
Neither the FRANCHISEE nor any PRINCIPAL OWNER shall effect an OWNERSHIP
TRANSFER without XXXXXXXX'X prior written consent. Any OWNERSHIP TRANSFER that
effects a change in CONTROL (other than an OWNERSHIP TRANSFER to an initial
OWNER or initial Manager that was contemplated and approved by XXXXXXXX at the
time of execution of this AGREEMENT) shall result in the termination of this
AGREEMENT. FRANCHISEE and the PRINCIPAL OWNERS understand and acknowledge that
the rights and duties set forth in this AGREEMENT are personal to FRANCHISEE,
and that XXXXXXXX has granted rights under this AGREEMENT in reliance on the
business skill, financial capacity and personal character of FRANCHISEE and the
PRINCIPAL OWNERS. Accordingly, except for a transfer for convenience of
ownership as provided in Section 12(c)(10) (Conditions for Ownership Transfer),
neither FRANCHISEE nor any PRINCIPAL OWNER, nor any successor or assign of
FRANCHISEE or any PRINCIPAL OWNER shall sell, assign, transfer, convey, give
away, pledge, mortgage or otherwise encumber any direct or indirect interest in
this Agreement.
12(c) CONDITIONS FOR OWNERSHIP TRANSFER
FRANCHISEE and each PRINCIPAL OWNER acknowledges that XXXXXXXX has legitimate
reasons to evaluate the qualifications of potential transferees and to analyze
and critique the terms of their purchase contracts with FRANCHISEE and/or
PRINCIPAL Owners. FRANCHISEE and each PRINCIPAL OWNER also acknowledges that
XXXXXXXX'X contact with potential transferees for the purpose of protecting its
business interests will not constitute improper or unlawful conduct. FRANCHISEE
and each PRINCIPAL OWNER expressly authorizes XXXXXXXX to investigate any
potential transferee's qualifications, and to analyze and critique the proposed
purchase terms with the transferee. FRANCHISEE and each PRINCIPAL OWNER waives
any claim that action XXXXXXXX takes in relation to a proposed transfer to
protect its business interests constitutes tortuous interference with
contractual or business relationships. XXXXXXXX will not unreasonably withhold
its approval, except that XXXXXXXX will not, under any circumstances, approve
an OWNERSHIP TRANSFER to any person or business entity that has an interest in
any personnel services business other than the PS or another personnel services
business licensed from XXXXXXXX (excluding ownership of less than 1% of the
equity securities of a publicly held corporation). Further, XXXXXXXX may
withhold approval to protect its business interests or if in XXXXXXXX'X sole
judgment, after giving effect to such sale, the prospective FRANCHISEE would
have inadequate financial resources or capital to fully develop the PS.
Further, XXXXXXXX may, in its sole discretion, require any or all of the
following as conditions of its approval:
12(c)(1) FRANCHISEE shall not be in breach of this AGREEMENT.
12(c)(2) FRANCHISEE shall obtain XXXXXXXX'X discretionary approval of each
person seeking to become a PRINCIPAL OWNER. FRANCHISEE shall supply XXXXXXXX
with all information it requires, including a personal interview of each such
person at XXXXXXXX'X principal place of business at no expense to XXXXXXXX.
12(c)(3) If the OWNERSHIP TRANSFER does not effect a change in CONTROL, each
new PRINCIPAL OWNER shall execute an agreement, in a form prescribed by
XXXXXXXX, assuming, and agreeing to perform from the date of transfer, all
obligations, covenants and agreements of a PRINCIPAL OWNER hereunder.
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12(c)(4) If the OWNERSHIP TRANSFER effects a change in CONTROL [except as
provided in Section 12(b) (No Alienation)], this AGREEMENT shall terminate and
the new franchisee (which may be FRANCHISEE) and each principal owner of the
new franchisee shall execute the then current form of franchise agreement in
use by XXXXXXXX, the terms of which may differ from the terms of this
AGREEMENT, including, a higher percentage OVERRIDE, PROMOTION FUND
contribution, SERVICE FEE or other expenditure requirement and the new
franchisee shall pay the then-current initial franchise fee.
12(c)(5) If the OWNERSHIP TRANSFER effects a change in CONTROL, a new PRINCIPAL
OWNER may be required (in XXXXXXXX'X sole discretion) to attend and complete to
XXXXXXXX'X satisfaction the initial training program for PRINCIPAL OWNERs and
the franchisee executing the new franchise agreement shall agree to pay to
XXXXXXXX the then-current training fee charged by XXXXXXXX to new franchisees
for the type of personnel service business to be operated.
12(c)(6) FRANCHISEE shall pay a processing fee to XXXXXXXX in the amount of One
Thousand Dollars ($1,000). XXXXXXXX will waive the processing fee if the
transfer is to an OWNER'S spouse, parent, or child or to an existing PRINCIPAL
OWNER (and the transfer does not effect a change in Control).
12(c)(7) FRANCHISEE or the transferring PRINCIPAL OWNER, as applicable, shall
provide to XXXXXXXX a copy of any buy/sell agreement or other instrument of
transfer at least thirty (30) days prior to the contemplated date of transfer,
and the transferee shall obtain XXXXXXXX'X written approval of its terms before
effecting the transfer.
12(c)(8) The transferor and XXXXXXXX shall execute a general mutual release in
a form satisfactory to XXXXXXXX of any and all existing claims against the
transferor, XXXXXXXX, and their respective affiliates, and the officers,
directors, shareholders, partners, agents, representatives, independent
contractors, servants and employees of each of them, in their corporate and
individual capacities, including claims arising under this AGREEMENT and under
any LAW.
12(c)(9) The transferee, at its expense, shall agree to renovate, modernize,
and otherwise upgrade the PS to conform to the then current standards and
specifications of the SYSTEM, and shall agree to complete the upgrading and
other requirements within the time period reasonably specified by XXXXXXXX.
12 (c)(10) If the proposed transfer (i) is to a business entity formed solely
for the convenience of ownership and (ii) does not materially change the
OWNERSHIP INTEREST of all OWNERS, XXXXXXXX'x consent may be conditioned upon
any of the requirements set forth in Section 12(c), except that the
requirements set forth at Sections 12(c)(4), (5), (6), (7), (8) and (9) shall
not apply.
12(d) RIGHT OF FIRST REFUSAL
If FRANCHISEE or a PRINCIPAL OWNER wishes to accept a bona fide offer from
anyone to buy the PS or any OWNERSHIP INTEREST, XXXXXXXX shall have the right
to purchase the PS or OWNERSHIP INTEREST substantially on the same terms within
thirty (30) days after XXXXXXXX receives notice of the offer in a form
prescribed by XXXXXXXX. XXXXXXXX shall have the right to substitute cash for
any other consideration offered and to pay the entire discounted present value
of the purchase price at the time of closing. Any material change in the terms
of any offer prior to closing shall constitute a new offer subject to
XXXXXXXX'X same right to purchase as in the case of an initial offer.
12(e) LOSS OF CONTROL
12(e)(1) CHANGE OF OWNERSHIP
When a change of CONTROL occurs because of the death, withdrawal, stock
redemption, incapacity, or other elimination of an Owner other than as a result
of a transfer as provided in Section 12(c) (Conditions for Ownership Transfer),
this AGREEMENT shall terminate ninety (90) days after the occurrence. Any time
before the termination, the remaining OWNERS and the successors, if any, of the
former OWNER may apply to XXXXXXXX to license them to continue operating the
PS. XXXXXXXX'X approval will not be unreasonably withheld, subject to the
operational history of the PS and satisfaction of XXXXXXXX'X current personnel,
business, management, and financial criteria for licensing new franchisees.
12(e)(2) NEW FRANCHISE AGREEMENT
The new license, if granted, shall be granted under the then current form of
franchise agreement being offered by XXXXXXXX to new franchisees and no
processing fee or initial franchise fee shall be payable for this transaction.
If, however, XXXXXXXX determines, in its sole discretion, that training is
required, XXXXXXXX reserves the right to require the new FRANCHISEE to pay to
XXXXXXXX its current training fee. The terms of the new franchise agreement may
differ from the terms of this
Page 22 of 32
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AGREEMENT, including, a higher percentage OVERRIDE, PROMOTION FUND
contribution, SERVICE FEE or other expenditure requirement.
13. TERMINATION
13(a) TERMINATION BY FRANCHISEE
Provided FRANCHISEE is in compliance with all of the terms and conditions of
this AGREEMENT, FRANCHISEE may voluntarily terminate this AGREEMENT by giving
at least nine (9) months written notice to XXXXXXXX, which notice, at
XXXXXXXX'x sole discretion, shall be irrevocable upon receipt by XXXXXXXX. So
that XXXXXXXX and the NETWORK may protect their goodwill and arrange to
continue service to CLIENTS, JOB-SEEKERs, and EMPLOYEES, the effective date of
FRANCHISEE'S termination shall be nine (9) months after XXXXXXXX receives
FRANCHISEE'S notice or such later date specified in FRANCHISEE'S notice,
provided that if XXXXXXXX or its designee purchases FRANCHISEE'S assets
pursuant to Section 13(a)(3), the effective date of termination shall be the
date of closing of such purchase and sale. XXXXXXXX shall continue to be
entitled to all OVERRIDES, PROMOTION FUND contributions, SERVICE FEES and other
monies owed and accruing until FRANCHISEE'S termination is effective in
accordance with this Section and in compliance with this AGREEMENT.
13(a)(1) Upon, but not prior to, the effective date of termination, FRANCHISEE
shall cease operating the PS and comply with the post-termination obligations
contained in Section 13(d) (FRANCHISEE's Termination Duties) and Section 14
(Rules Governing Unfair Trade Practices).
13(a)(2) If FRANCHISEE ceases to operate the PS under the SYSTEM in accordance
with the terms of this AGREEMENT prior to the effective date of FRANCHISEE'S
termination in accordance with Section 13(a), FRANCHISEE shall compensate
XXXXXXXX for the reasonable costs, expenses, and losses, of whatever nature or
kind, incurred by XXXXXXXX in connection with such cessation, including costs
of soliciting, locating, qualifying and training a replacement franchisee, for
the loss of any EMPLOYEES or CLIENTS, and for the loss of revenue that XXXXXXXX
would otherwise be receiving as a result of FRANCHISEE'S continued operation of
the PS until the effective date of FRANCHISEE'S termination as provided in
Section 13(a). The parties agree that such expenditures and losses may be
uncertain and difficult to ascertain and therefore agree that the compensation
specified herein reasonably represents such expenditures and losses and is not
a penalty. FRANCHISEE shall pay XXXXXXXX an amount equal to the OVERRIDES,
PROMOTION FUND contributions, and SERVICE FEES that were due and payable for
the eighteen (18) month period immediately preceding the time FRANCHISEE ceased
operating the PS under the SYSTEM (or if the PS has not been operated for an
eighteen (18) month period, an amount equal to the average monthly amounts due
during the time the PS was operated multiplied by eighteen (18)). This Section
13(a)(3) shall not be construed as a sole election of remedies by XXXXXXXX and
shall not prejudice XXXXXXXX'X rights to pursue other remedies under this
AGREEMENT, including seeking injunctive relief for a violation of Section 7
(Confidential Information), Section 13(d) (FRANCHISEE's Termination Duties) and
Section 14 (Rules Governing Unfair Trade Practices), or damages for conversion
of EMPLOYEES under Section 14(g) (Employee Solicitation).
13(a)(3) Upon receipt by XXXXXXXX of FRANCHISEE'S termination notice, XXXXXXXX
or its designee shall have the right and option, exercisable at any time after
receipt of FRANCHISEE'S termination notice and prior to the effective date of
FRANCHISEE's termination of this AGREEMENT under Section 13(a), to purchase all
of FRANCHISEE'S assets, including all furniture, fixtures, signs, equipment and
inventory of the PS, upon the same terms and conditions set forth in Section
13(d)(9) (FRANCHISEE's Termination Duties), including the requirement of
FRANCHISEE to execute an asset purchase agreement and certain PRINCIPAL OWNERs
to execute a consulting agreement with XXXXXXXX.
13(b) TERMINATION BY XXXXXXXX FOR FAILURE TO CURE BREACH
Except as provided in Section 13(c) (Termination by XXXXXXXX Without
Opportunity to Cure Breach), when FRANCHISEE receives written notice from
XXXXXXXX that FRANCHISEE has failed to comply with the terms of this AGREEMENT,
as supplemented by the MATERIALS, it shall have ten (10) days to cure the
breach and to prove such cure to XXXXXXXX. Cure of a breach must include
payment to XXXXXXXX of a Two Hundred Seventy Dollar ($270) processing fee for
its legal, administrative, and other costs in issuing the written notice and
confirming the cure, which processing fee will increase Ten Dollars ($10.00) on
each January 1 subsequent to the date this AGREEMENT was approved and executed
by XXXXXXXX. If any breach is not cured within ten (10) days, or such longer
period as the LAW may require or as XXXXXXXX may permit in its written notice,
this AGREEMENT shall terminate without further notice to FRANCHISEE, effective
on the expiration of the cure period.
13(c) TERMINATION BY XXXXXXXX WITHOUT OPPORTUNITY TO CURE BREACH
XXXXXXXX may, at its option, terminate this AGREEMENT without affording
FRANCHISEE any opportunity to cure the breach, effective when FRANCHISEE
receives XXXXXXXX'X written notice, after any of the following:
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13(c)(1) The PS fails to open as required or is closed for five (5) consecutive
BUSINESS DAYs.
13(c)(2) The designated PRINCIPAL OWNER fails to complete MANAGER training to
the satisfaction of XXXXXXXX, or the PS is operated without a MANAGER and
FRANCHISEE has not received XXXXXXXX'X written notice approving a deadline for
the hiring, training, and approval of a successor MANAGER and for the interim
management of the PS.
13(c)(3) FRANCHISEE or any OWNER is convicted of, or pleads no contest to, a
felony, a crime involving moral turpitude, or any other crime or offense that
is reasonably likely, in XXXXXXXX'X sole opinion, to adversely affect the
NETWORK or the XXXXXXXX PROPERTY, or XXXXXXXX'X interest in them.
13(c)(4) FRANCHISEE or any PRINCIPAL OWNER purports to transfer or transfers,
with or without remuneration, any of the assets of the PS, the XXXXXXXX
PROPERTY, any rights or obligations under this AGREEMENT, or any interest in
FRANCHISEE without prior written approval of XXXXXXXX.
13(c)(5) FRANCHISEE or any OWNER violates Section 7(c) (Non-Disclosure of
Confidential Information), Section 7(d) (Protection of Confidential
Information), Section 8(b) (Treatment of Personnel), Section 8(c) (Required
Insurance), Section 9(d) (Credit and Collection), Section 9(d)(2) (Client
Payments Made Directly to XXXXXXXX), or Section 14 (Rules Governing Unfair
Trade Practices) or any confidentiality agreement and non-disclosure agreement
relating to the CONFIDENTIAL INFORMATION.
13(c)(6) FRANCHISEE or any OWNER uses in any unauthorized manner or discloses
to any unauthorized party, any of the XXXXXXXX PROPERTY (including XXXXXXXX'X
proprietary software).
13(c)(7) FRANCHISEE or any OWNER acts in any way inconsistent with being a
business separate from XXXXXXXX; commits any unauthorized acts involving
XXXXXXXX; commits any act or pursues any course of conduct that brings the
SYSTEM, the NETWORK, or the PROPRIETARY MARKS into disrepute; disrupts any
function or event of the NETWORK, such as meetings, training sessions or
conventions; participates in any fraudulent activity, including any fraudulent
reporting of financial or operational information to XXXXXXXX; or willfully or
negligently misclassifies EMPLOYEES for worker's compensation reporting and
charge purposes.
13(c)(8) FRANCHISEE or any PRINCIPAL OWNER commits two (2) material breaches
under this AGREEMENT within a twelve (12) month period, whether or not such
breaches are of the same or different nature and whether or not such breaches
have been cured by FRANCHISEE after written notice by XXXXXXXX.
13(c)(9) FRANCHISEE or any PRINCIPAL OWNER loses legal control of the assets,
business affairs, or freedom of action with respect to the PS.
13(c)(10) FRANCHISEE permits EMPLOYEES to perform services or to be employed in
job classifications that are prohibited in the MATERIALS or otherwise by
XXXXXXXX.
13(d) FRANCHISEE'S AND OWNERS' TERMINATION DUTIES
If this AGREEMENT terminates, voluntarily or involuntarily, for any reason,
FRANCHISEE and the OWNERS, to the extent permitted by LAW, shall immediately
and expeditiously:
13(d)(1) Stop using all XXXXXXXX PROPERTY and all other unlicensed marks of
XXXXXXXX or any variation or colorable imitation of them, and refrain from
identifying itself as a member or former member of the NETWORK.
13(d)(2) Cancel all filings or authorizations to operate under the PROPRIETARY
MARKS, DOMAIN NAMES or any colorable imitation of them pursuant to a fictitious
name statute or any similar statute.
13(d)(3) Remove all signs bearing PROPRIETARY MARKS, DOMAIN NAMES or other
identifications related to the SYSTEM.
13(d)(4) Deliver to XXXXXXXX, at FRANCHISEE'S expense, all originals and copies
of the XXXXXXXX PROPERTY and FRANCHISEE shall not make, retain, or thereafter
use any copy thereof.
13(d)(5) Comply with the provisions of Section 14 (Rules Governing Unfair Trade
Practices).
13(d)(6) Pay in full all liabilities of the PS, including, rent, telephone,
leases, salaries, vendors, and other claims.
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13(d)(7) Cease using all LISTINGS, execute all forms and documents required by
XXXXXXXX and any service provider at any time to transfer such service and any
related LISTINGS to XXXXXXXX, and refrain from entering any "call forwarding"
or similar instruction with a service provider that has the effect of
circumventing the unconditional obligation of FRANCHISEE to surrender and cease
using all LISTINGS. Upon termination XXXXXXXX shall have the immediate right to
such LISTINGS and to have such service transferred to XXXXXXXX. Notwithstanding
Attachment 6 and the uniform commercial code financing statement and any forms
and documents which may have been previously executed by FRANCHISEE under
Section 6(c) (Listings), FRANCHISEE hereby appoints XXXXXXXX its true and
lawful agent and attorney-in-fact with full power and authority, for the sole
purpose of taking such action as is necessary to complete such assignment. The
obligations of this paragraph and this power of attorney shall survive the
termination of this AGREEMENT. FRANCHISEE and the OWNERS shall not thereafter
use the LISTINGS at or in connection with any subsequent business owned or
operated by FRANCHISEE or any OWNER.
13(d)(8) If the LOCATION is leased to FRANCHISEE, at XXXXXXXX'X option, assign
any interest FRANCHISEE has in any lease or sublease for the LOCATION to
XXXXXXXX or its designee upon XXXXXXXX'X written notice. XXXXXXXX may exercise
this option within thirty (30) days after termination of this AGREEMENT.
FRANCHISEE shall remain liable for all obligations arising prior to the date of
the assignment. If XXXXXXXX does not elect to, or is unable to exercise this
option, FRANCHISEE shall make such modifications to the premises necessary to
distinguish it from any personnel services business operating under the SYSTEM.
If FRANCHISEE fails or refuses to comply with this Section, XXXXXXXX shall have
the right to enter the LOCATION, without being guilty of any crime or tort, to
make or cause to be made the changes necessary, at FRANCHISEE'S expense, which
FRANCHISEE agrees to pay upon demand.
13(d)(9) At XXXXXXXX'X sole option, and on or before the thirtieth (30th) day
after the effective date of termination of this AGREEMENT, sell any or all of
its assets as designated by XXXXXXXX, including any furniture, fixtures, signs,
equipment and inventory of the PS to XXXXXXXX or its designee, at the lesser of
(i) fair market value or (ii) three (3) times FRANCHISEE'S annual pre-tax
earnings for the PS for its most recently completed fiscal year, computed in
accordance with generally accepted accounting principles. If the parties cannot
agree on a fair market value within thirty (30) days from the date XXXXXXXX
exercises its option, the fair market value of such assets shall be determined
by three qualified independent appraisers, one selected by XXXXXXXX, the second
selected by FRANCHISEE and the third selected by the other two appraisers. If
XXXXXXXX or its designee exercises the option to purchase FRANCHISEE'S assets,
FRANCHISEE shall execute and deliver to XXXXXXXX an asset purchase agreement in
substantially the form set forth in the disclosure document described in
Section 16(h) to evidence the purchase and sale and the closing of such
purchase and sale shall occur within thirty (30) days from the date of notice
to FRANCHISEE of the election to purchase by XXXXXXXX or its designee, or such
other date as the parties may agree. If XXXXXXXX or its designee purchases
FRANCHISEE'S assets, XXXXXXXX may require FRANCHISEE and/or its PRINCIPAL
OWNERS, to enter into a consulting agreement in substantially the form attached
to the asset purchase agreement as Exhibit A with XXXXXXXX for the operation of
the PS for a period of up to six (6) months after the sale of the PS to
XXXXXXXX or its designee. XXXXXXXX or its designee shall be purchasing
FRANCHISEE'S assets only and shall be assuming no liabilities whatsoever,
unless XXXXXXXX or its designee otherwise agrees in writing. XXXXXXXX shall
have the right to deduct from the purchase price: (i) any sums owing, as of the
date of the closing, from FRANCHISEE and any of its affiliates to XXXXXXXX and
any of its affiliates under or in connection with this AGREEMENT or any other
agreements between such entities and (ii) all reasonable expenses of XXXXXXXX
incurred in negotiating and effecting the purchase of any of the assets
(including all attorneys' fees and other expenses).
13(d)(10) FRANCHISEE hereby acknowledges that all CLIENT ACCOUNTS are the
property of XXXXXXXX and XXXXXXXX may service or dispose of such CLIENT
ACCOUNTS in any manner it deems appropriate. FRANCHISEE shall additionally
deliver to XXXXXXXX, in a form satisfactory to XXXXXXXX, such documents and
instruments which XXXXXXXX deems reasonably necessary in order to evidence
XXXXXXXX'X ownership of CLIENT ACCOUNTS and to meet the requirements of all
taxing and other government authorities. For the purpose of this Section
13(d)(10), "CLIENT ACCOUNTS" includes all accounts or other established
business relationships with every third party to whom FRANCHISEE either is
providing or has at any time during the last two years provided or made
preparations to provide personnel services or related products or services.
13(d)(11) At least five (5) days prior to the effective date of the termination
of this AGREEMENT, provide XXXXXXXX with a legible list identifying the names,
addresses, and telephone numbers of all CLIENTS serviced by the PS during the
two (2) years before the termination or that placed a JOB-ORDER for the
services offered by FRANCHISEE during the ninety (90) days before the
termination.
13(d)(12) At least five (5) days prior to the effective date of the termination
of this AGREEMENT, provide XXXXXXXX with a legible list identifying the names,
addresses, and telephone numbers of all JOB-SEEKERs and EMPLOYEES used in or
contacted by FRANCHISEE or the PS during the two (2) years before the
termination.
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13(d)(13) Preserve forever in confidence all CONFIDENTIAL INFORMATION for the
benefit of XXXXXXXX. All CONFIDENTIAL INFORMATION, whether developed by
FRANCHISEE or any OWNER in the operation of the PS or by XXXXXXXX, shall remain
the exclusive property of XXXXXXXX. FRANCHISEE shall never use, disclose, or
misappropriate, directly or indirectly, the CONFIDENTIAL INFORMATION to the
competitive disadvantage or economic injury of XXXXXXXX and/or any successor
FRANCHISEE.
13(e) TRANSFER OF EMPLOYEES
XXXXXXXX shall not be obligated to hire any STAFF EMPLOYEES. However, if
XXXXXXXX requests a transfer of any STAFF EMPLOYEES within thirty (30) days
after termination of this AGREEMENT, FRANCHISEE shall discharge and not rehire
any STAFF EMPLOYEE designated by XXXXXXXX, if XXXXXXXX or XXXXXXXX'X designee
has extended an offer to hire that person on comparable terms. FRANCHISEE shall
then assign the person's employment contracts to XXXXXXXX or XXXXXXXX'X
designee.
13(f) MONEY OWED
The termination of this AGREEMENT by FRANCHISEE, by XXXXXXXX, or otherwise,
shall not release FRANCHISEE from its obligations, and all money due or owed
shall remain payable. All XXXXXXXX that have not been collected will
immediately be treated as CHARGEBACKS and no distribution amounts will be
available to FRANCHISEE unless the net DISTRIBUTION ACCOUNT balance
subsequently becomes positive, and no other amounts are due XXXXXXXX. XXXXXXXX
may for a reasonable period of time keep a reasonable reserve and use it to pay
CLIENT or applicant refunds, CO-OP SPLITS, and other legitimate bills of
FRANCHISEE in order to protect the NETWORK and the SYSTEM'S good name.
13(g) WAIVERS; COSTS OF BREACH
All waivers relating to this AGREEMENT shall be strictly construed. If
FRANCHISEE commits a breach of this AGREEMENT, as supplemented by the
MATERIALS, and XXXXXXXX initiates any non-litigation activity or litigation
proceedings regarding the breach after FRANCHISEE has failed to cure it within
the cure period, if any, provided by this AGREEMENT, FRANCHISEE shall reimburse
XXXXXXXX for all expenses, including all attorneys' fees, that XXXXXXXX incurs
relating to the non-litigation activity or litigation proceedings. FRANCHISEE
shall also reimburse XXXXXXXX for all court costs and attorneys' fees related
to all pretrial, trial court, appellate court, and alternative dispute
resolution proceedings.
13(h) MULTIPLE FRANCHISE AGREEMENTS
If an OWNER holds CONTROL in FRANCHISEE and holds CONTROL (determined as it
would be under this AGREEMENT) in another XXXXXXXX franchisee, a breach of such
FRANCHISEE'S franchise agreement shall be a breach of this AGREEMENT.
13(i) CONTINUED EFFECT OF AGREEMENT
Provisions of this AGREEMENT that govern the parties' conduct after termination
shall continue in effect according to their terms after termination.
14. RULES GOVERNING UNFAIR TRADE PRACTICES
14(a) ACKNOWLEDGMENTS
FRANCHISEE and each PRINCIPAL OWNER acknowledges that they will receive or
develop valuable specialized training, trade secrets and CONFIDENTIAL
INFORMATION (including, without limitation, information about the SYSTEM'S
operations, sales, promotional and marketing methods and techniques) that are
beyond the present skills and experience of FRANCHISEE, PRINCIPAL OWNERS,
managers and personnel and that FRANCHISEE has the right and obligation,
arising from this AGREEMENT, to operate the PS for the benefit of the SYSTEM.
FRANCHISEE and each PRINCIPAL OWNER acknowledges that the training, trade
secrets and CONFIDENTIAL INFORMATION they receive or procure provide a
competitive advantage and are valuable to them in operating the PS and that
gaining access to such training, trade secrets and CONFIDENTIAL INFORMATION is
a primary reason why they are entering into this AGREEMENT. In consideration
for such training, trade secrets, CONFIDENTIAL INFORMATION and rights,
FRANCHISEE and each PRINCIPAL OWNER makes the covenants in this Section 14.
FRANCHISEE and each PRINCIPAL OWNER acknowledges and agrees that XXXXXXXX is
relying on the acknowledgments and covenants herein and XXXXXXXX would not have
entered into this AGREEMENT without such acknowledgments and covenants.
14(b) NO COMPETITION DURING TERM OF THIS AGREEMENT
During the term of this AGREEMENT, including the period after any termination
notice is given in accordance with Section 13(a) (Termination by FRANCHISEE),
and, with respect to each PRINCIPAL OWNER, during the term of this AGREEMENT
for so long as such individual or entity remains a PRINCIPAL OWNER, neither
FRANCHISEE nor any PRINCIPAL OWNER shall directly or indirectly own, conduct,
operate, organize, work for, or associate with any personnel services business
located within the United
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States, its territories or commonwealths, or any other country, province, state
or geographical area in which XXXXXXXX has used, sought registration of or
registered the same or similar PROPRIETARY MARKS or operates or licenses others
to operate a business under the same or similar PROPRIETARY MARKS, unless such
personnel services business is licensed by XXXXXXXX, or otherwise approved by
XXXXXXXX in writing. This Section 14(b) shall not apply to the ownership of
less than one percent (1%) of the equity securities of a publicly-held
corporation.
14(c) POST-TERMINATION UNFAIR COMPETITION AND UNFAIR TRADE PRACTICES
Except as otherwise provided in any asset purchase agreement executed pursuant
to Section 13(d)(9) (FRANCHISEE's Termination Duties), upon termination of this
AGREEMENT with respect to FRANCHISEE, and upon the earlier of (i) the
termination of this AGREEMENT or (ii) the time such individual ceases to be a
PRINCIPAL OWNER with respect to each PRINCIPAL OWNER, FRANCHISEE or any
PRINCIPAL OWNER may operate a personnel service business so long as FRANCHISEE
or any PRINCIPAL OWNER complies with the terms set forth below. FRANCHISEE and
each PRINCIPAL OWNER acknowledges and agrees that noncompliance with these
terms would constitute unfair trade practices.
14(c)(1) The former FRANCHISEE or PRINCIPAL OWNER(S), as applicable, shall not,
directly or indirectly, without the express written consent of XXXXXXXX, either
as an individual, counselor, recruiter, consultant, employee, officer,
director, or shareholder or in any other capacity, use in any manner any part
of the XXXXXXXX PROPERTY, including the use of any CONFIDENTIAL INFORMATION to
do any of the acts set forth in Section 14(c)(4).
14(c)(2) The former FRANCHISEE or PRINCIPAL OWNER, as applicable, shall deliver
to XXXXXXXX the lists described in Sections 13(d)(11) and (12) (FRANCHISEE's
Termination Duties), and shall retain a copy thereof for the sole purpose of
complying with Section 14(c)(4).
14(c)(3) The former FRANCHISEE or PRINCIPAL OWNER, as applicable, shall comply
with the termination duties as provided in Section 13 (FRANCHISEE's Termination
Duties).
14(c)(4) For a period of two years (i) after the termination of this AGREEMENT
with respect to FRANCHISEE and (ii) after the earlier of the termination of
this AGREEMENT or the time such individual ceases to be a PRINCIPAL OWNER with
respect to each PRINCIPAL OWNER, neither the FRANCHISEE or former PRINCIPAL
OWNER shall, directly or indirectly, for themselves or through, on behalf of or
in conjunction with any person or business entity do any of the following:
14)(c)(4)(i) operate any personnel service business at a location that is
within a one (1) mile radius from the LOCATION, or any other location at which
a XXXXXXXX personnel services business was ever operated in which FRANCHISEE or
PRINCIPAL OWNER, as applicable, had an interest;
14(c)(4)(ii) hire or seek to hire any EMPLOYEE or STAFF EMPLOYEE of the PS,
XXXXXXXX and/or any successor franchisee or in any other manner attempt,
directly or indirectly, to influence, induce or encourage any EMPLOYEE or STAFF
EMPLOYEE to leave the employment of the PS, XXXXXXXX and/or any successor
franchisee;
14(c)(4)(iii) contact or seek to contact or do business with any existing
CLIENT or individual or entity that was a CLIENT during the preceding two (2)
years;
14(c)(4)(iv) procure or attempt to procure, directly or indirectly, employment
for, or place a JOB-SEEKER or applicant that FRANCHISEE procured or attempted
to procure employment for, placed, or interviewed during the preceding two (2)
years;
14(c)(4)(v) refer or attempt to refer any JOB-SEEKER or other applicant for
employment on an existing or prospective JOB-ORDER that FRANCHISEE procured or
attempted to procure during the preceding two (2) years; or
14(c)(4)(vi) divert or attempt to divert, for FRANCHISEE's or PRINCIPAL OWNER'S
benefit, or for the benefit of another personnel service business, management
search consultant, or other recruitment firm, any JOB-ORDER in existence on the
date of the termination of this AGREEMENT or the date the PRINCIPAL OWNER
ceased to be a PRINCIPAL OWNER.
14(c)(5) If the FRANCHISEE or former PRINCIPAL OWNER commits a breach of
Section 14(c)(4), the two year period specified in Section 14(c)(14) shall be
tolled during the period of such breach.
14(c)(6) FRANCHISEE and each PRINCIPAL OWNER acknowledges that: the market for
personnel services businesses is competitive; no single entity dominates that
market; that the covenants described above prohibiting FRANCHISEE or the
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PRINCIPAL OWNERS from contacting CLIENTS, JOB-SEEKERS, and EMPLOYEES, from
using CONFIDENTIAL INFORMATION, MATERIALS, software and any other elements of
the SYSTEM are not intended to and would not prevent or materially impair
FRANCHISEE or a PRINCIPAL OWNER, as applicable, from obtaining a livelihood in
the personnel services business after the termination of this AGREEMENT or the
time such individual ceases to be a PRINCIPAL OWNER, as applicable; and that
the requirement prohibiting FRANCHISEE or a PRINCIPAL OWNER from operating a
personnel service business at or within one (1) mile of the LOCATION or any
other location at which a XXXXXXXX personnel services business was ever
operated in which FRANCHISEE or PRINCIPAL OWNER, as applicable, had an interest
is entirely reasonable and that such restriction will not prohibit or
materially impair FRANCHISEE or the PRINCIPAL OWNER, as applicable, from
working for or operating a personnel service business in any market they
choose.
14(d) INFORMATION REQUEST.
FRANCHISEE shall supply such information as XXXXXXXX may request in order to
ascertain whether or not FRANCHISEE has complied with, or has violated, the
confidentiality covenants contained in this AGREEMENT. FRANCHISEE shall furnish
the requested information to XXXXXXXX within a reasonable time but in no event
later than ten (10) days following FRANCHISEE'S receipt of such request.
14(e) INJUNCTIONS
FRANCHISEE and each OWNER acknowledges that a violation of any of the
provisions of this AGREEMENT, including Section 5 (The License Relationship),
Section 6(g) (Materials), Section 7 (Confidential Information), Section 12
(Ownership Structure and Transfer), Section 13(d) (FRANCHISEE's Termination
Duties) or Section 14 (Rules Governing Unfair Trade Practices), will cause
irreparable harm to XXXXXXXX and the NETWORK. XXXXXXXX shall have the right to
seek injunctive or declaratory relief to remedy any actual or threatened
violation of this AGREEMENT specifically including the equitable remedy of
specific performance.
14(f) INDIRECT CONDUCT
In this Section 14, "indirectly" includes any acts of FRANCHISEE, any OWNER or
their respective family members, household, officers, agents, servants,
employees, attorneys, estate, or heirs, and those persons in active concert or
participation with them, it being the intent of the parties that FRANCHISEE
and/or any OWNER may not perform any act indirectly which would be prohibited
if carried out directly by FRANCHISEE and/or any OWNER.
14(g) PERSONNEL SERVICE BUSINESS
In this Section 14, "personnel service business" includes any business as set
forth under the definition of PS in Section 4 (Definitions).
15. GENERAL LEGAL MATTERS
15(a) GOVERNING LAW
THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE BY XXXXXXXX IN THE STATE OF
TEXAS. TO PROMOTE CONSISTENCY WITHIN THE NETWORK, WITH RESPECT TO ALL CLAIMS,
CONTROVERSIES, DISPUTES OR ACTIONS RELATED TO THIS AGREEMENT OR THE
RELATIONSHIP CREATED THEREBY, THIS AGREEMENT AND ANY SUCH RELATED CLAIMS,
CONTROVERSIES, DISPUTES OR ACTIONS SHALL BE INTERPRETED, ENFORCED AND GOVERNED
BY THE LAW OF THE STATE OF TEXAS, WHICH LAW SHALL PREVAIL IN THE EVENT OF ANY
CONFLICT OF LAW, EXCEPT TO THE EXTENT GOVERNED BY THE UNITED STATES TRADEMARK
ACT OF 1946 ((XXXXXX ACT, 15 U.S.C., SECTION 1501, ET SEQ.).
15(b) MEDIATION
XXXXXXXX, FRANCHISEE AND ITS OWNERS AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS AND
RIDERS), OR THE RELATIONSHIP CREATED BY SUCH AGREEMENT TO NON-BINDING MEDIATION
PRIOR TO FILING SUCH CLAIM, CONTROVERSY OR DISPUTE IN ARBITRATION OR A COURT.
THE MEDIATION SHALL BE CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A
MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN
THE MEDIATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES AGREED UPON BY
THE PARTIES AND, FAILING SUCH AGREEMENT WITHIN REASONABLE PERIOD OF TIME AFTER
EITHER PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY
CLAIM, CONTROVERSY OR DISPUTE (NOT TO EXCEED FIFTEEN (15) DAYS), THROUGH
J.A.M.S./ENDISPUTE OR ITS SUCCESSOR IN ACCORDANCE WITH ITS RULES GOVERNING
MEDIATION, AT XXXXXXXX'X CORPORATE HEADQUARTERS. THE COSTS AND EXPENSES OF
MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF
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THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE
TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE WITHIN NINETY (90) DAYS AFTER THE
MEDIATOR HAS BEEN APPOINTED, THEN THE DISPUTE SHALL AUTOMATICALLY BE REFERRED
TO ARBITRATION UNDER SECTION 15(c) (ARBITRATION). NOTWITHSTANDING THE
FOREGOING, XXXXXXXX MAY BRING AN ACTION (INCLUDING SPECIFIC PERFORMANCE) (1)
FOR MONIES OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF, OR (3)
INVOLVING THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL
PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION 15(d)
(VENUE), WITHOUT SUBMITTING SUCH ACTION TO MEDIATION.
15(c) ARBITRATION
15(c)(1) EXCEPT AS PROVIDED IN THIS AGREEMENT, XXXXXXXX AND FRANCHISEE AGREE
THAT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THE
FRANCHISE, FRANCHISEE'S OPERATION OF THE PS UNDER THIS AGREEMENT (AND
ATTACHMENTS AND RIDERS) INCLUDING, BUT NOT LIMITED TO, ANY CLAIM BY FRANCHISEE,
OR ANY OF THE OWNERS, OR PERSONS CLAIMING THROUGH AND ON BEHALF OF FRANCHISEE
OR THE OWNERS, CONCERNING THE ENTRY INTO, THE PERFORMANCE UNDER OR THE
TERMINATION OF THIS AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN XXXXXXXX, OR ITS
SUBSIDIARIES OR AFFILIATES, AND FRANCHISEE, ANY CLAIM AGAINST A PAST OR PRESENT
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF XXXXXXXX, INCLUDING THOSE OCCURRING
SUBSEQUENT TO THE TERMINATION OF THIS AGREEMENT, THAT CANNOT BE AMICABLY
SETTLED AMONG THE PARTIES OR THROUGH MEDIATION SHALL, EXCEPT AS SPECIFICALLY
SET FORTH HEREIN AND IN SECTION 15(d) (VENUE), BE REFERRED TO ARBITRATION. THE
ARBITRATION SHALL BE CONDUCTED THROUGH AN ORGANIZATION OR BODY EXPERIENCED IN
THE ARBITRATION OF DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES AGREED UPON BY
THE PARTIES, AND FAILING SUCH AGREEMENT WITHIN A REASONABLE TIME AFTER THE
DISPUTE HAS BEEN REFERRED FOR ARBITRATION (NOT TO EXCEED FIFTEEN (15) DAYS).
ARBITRATION SHALL BE CONDUCTED BY J.A.M.S./ENDISPUTE OR ITS SUCCESSOR IN
ACCORDANCE WITH THE RULES OF J.A.M.S./ENDISPUTE OR ITS SUCCESSOR, AS AMENDED,
EXCEPT THAT THE ARBITRATORS SHALL APPLY THE FEDERAL RULES OF EVIDENCE. IF SUCH
RULES ARE IN ANY WAY CONTRARY TO OR IN CONFLICT WITH THIS AGREEMENT, THE TERMS
OF THIS AGREEMENT SHALL CONTROL. ALL CLAIMS, CONTROVERSIES OR DISPUTES
INVOLVING FRANCHISEE MAY ONLY BE ARBITRATED ON AN INDIVIDUAL BASIS AND MAY NOT
BE CONSOLIDATED WITH ANY CLAIM, CONTROVERSY OR DISPUTE FOR OR ON BEHALF OF ANY
OTHER FRANCHISEE OR SUPPLIER.
15(c)(2) XXXXXXXX AND FRANCHISEE SHALL EACH SELECT ONE ARBITRATOR. IF THE PARTY
UPON WHOM THE DEMAND FOR ARBITRATION IS SERVED FAILS TO SELECT AN ARBITRATOR
WITHIN FIFTEEN (15) DAYS AFTER THE RECEIPT OF THE DEMAND FOR ARBITRATION, THEN
THE ARBITRATOR SO DESIGNATED BY THE PARTY REQUESTING ARBITRATION SHALL ACT AS
THE SOLE ARBITRATOR TO RESOLVE THE CONTROVERSY AT HAND. THE TWO ARBITRATORS
DESIGNATED BY THE PARTIES SHALL SELECT A THIRD ARBITRATOR. IF THE TWO
ARBITRATORS DESIGNATED BY THE PARTIES FAIL TO SELECT A THIRD ARBITRATOR WITHIN
FIFTEEN (15) DAYS, THE THIRD ARBITRATOR SHALL BE SELECTED BY THE ORGANIZATION
AGREED UPON OR J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THERETO, UPON APPLICATION BY
EITHER PARTY. ALL OF THE ARBITRATORS SHALL BE EXPERIENCED IN THE ARBITRATION OF
DISPUTES BETWEEN FRANCHISORS AND FRANCHISEES. THE ARBITRATION SHALL TAKE PLACE
AT XXXXXXXX'X CORPORATE HEADQUARTERS. THE AWARD OF THE ARBITRATORS SHALL BE
FINAL AND JUDGMENT UPON THE AWARD RENDERED IN ARBITRATION MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION THEREOF. THE ARBITRATORS SHALL BE REQUIRED TO SUBMIT
WRITTEN FINDINGS OF FACT AND CONCLUSIONS OF LAW WITHIN THIRTY (30) BUSINESS
DAYS FOLLOWING THE FINAL HEARING SESSION OF THE ARBITRATORS. THE COSTS AND
EXPENSES OF ARBITRATION MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF. THE COSTS AND EXPENSES OF ARBITRATION, INCLUDING COMPENSATION AND
EXPENSES OF THE ARBITRATORS, SHALL BE BORNE BY THE PARTIES AS THE ARBITRATORS
DETERMINE. EACH PARTY FURTHER AGREES THAT, UNLESS SUCH LIMITATION IS PROHIBITED
BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE FOR PUNITIVE OR EXEMPLARY
DAMAGES, AND THE ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD THE SAME.
15(c)(3) NOTWITHSTANDING THE ABOVE, THE FOLLOWING SHALL NOT BE SUBJECT TO
ARBITRATION:
15(c)(3)(i) DISPUTES AND CONTROVERSIES ARISING FROM THE XXXXXXX ACT, THE
XXXXXXX ACT OR ANY OTHER FEDERAL OR STATE ANTITRUST LAW;
Page 29 of 32
30
15(c)(3)(ii) DISPUTES AND CONTROVERSIES ARISING UNDER THE XXXXXX ACT, AS NOW OR
HEREAFTER AMENDED, RELATING TO OWNERSHIP OR VALIDITY OF THE PROPRIETARY MARKS;
15(c)(3)(iii) FOR MONIES OWED; AND
15(c)(3)(iv) DISPUTES AND CONTROVERSIES RELATING TO ACTIONS TO OBTAIN
POSSESSION OF THE PREMISES OF THE PS UNDER LEASE OR SUBLEASE.
15(c)(4) IF XXXXXXXX DESIRES TO SEEK SPECIFIC PERFORMANCE OR OTHER
EXTRAORDINARY RELIEF INCLUDING, BUT NOT LIMITED TO, INJUNCTIVE RELIEF UNDER
THIS AGREEMENT AND ANY AMENDMENTS THERETO THEN ANY SUCH ACTION SHALL NOT BE
SUBJECT TO ARBITRATION AND XXXXXXXX SHALL HAVE THE RIGHT TO BRING SUCH ACTION
AS DESCRIBED IN SECTION 15(d) (VENUE).
15(c)(5) IN PROCEEDING WITH ARBITRATION AND IN MAKING DETERMINATIONS HEREUNDER,
THE ARBITRATORS SHALL NOT EXTEND, MODIFY OR SUSPEND ANY TERMS OF THIS AGREEMENT
OR THE REASONABLE STANDARDS OF BUSINESS PERFORMANCE AND OPERATION ESTABLISHED
BY XXXXXXXX IN GOOD FAITH. NOTICE OF OR REQUEST TO OR DEMAND FOR ARBITRATION
SHALL NOT STAY, POSTPONE OR RESCIND THE EFFECTIVENESS OF ANY TERMINATION OF
THIS AGREEMENT.
15(d) VENUE
EXCEPT AS STATED ABOVE, WITH RESPECT TO ALL CLAIMS SET FORTH ABOVE IN SECTION
15(c) (ARBITRATION), OR WHICH AS A MATTER OF LAW OR PUBLIC POLICY CANNOT BE
SUBMITTED TO ARBITRATION, FRANCHISEE AND THE OWNERS HEREBY IRREVOCABLY SUBMIT
THEMSELVES TO THE JURISDICTION OF THE STATE COURTS AND THE FEDERAL DISTRICT
COURT WHERE XXXXXXXX HAS ITS PRINCIPAL PLACE OF BUSINESS. FRANCHISEE AND THE
OWNERS HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION FOR THE PURPOSE OF
CARRYING OUT THIS PROVISION. FRANCHISEE AND THE OWNERS HEREBY AGREE THAT
SERVICE OF PROCESS MAY BE MADE UPON ANY OF THEM IN ANY PROCEEDING RELATING TO
OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT
BY ANY MEANS ALLOWED BY SUCH STATE OR FEDERAL LAW. FRANCHISEE AND THE OWNERS
FURTHER AGREE THAT VENUE FOR ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR THE RELATIONSHIP CREATED THEREBY SHALL BE THE COUNTY WHERE
XXXXXXXX HAS ITS PRINCIPAL PLACE OF BUSINESS; PROVIDED, HOWEVER, WITH RESPECT
TO ANY ACTION (1) FOR MONIES OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY
RELIEF (INCLUDING SPECIFIC PERFORMANCE), OR (3) INVOLVING POSSESSION OR
DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY, XXXXXXXX MAY BRING
SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION.
15(e) MUTUAL BENEFIT
EACH OF FRANCHISEE, THE PRINCIPAL OWNERS AND XXXXXXXX ACKNOWLEDGES (i) THAT
EACH PARTY'S AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM SET FORTH IN
SECTION 15(a) (GOVERNING LAW) AND SECTION 15(d) (VENUE) PROVIDE EACH OF THE
PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND
ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED
BY THIS AGREEMENT, (ii) THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR
SUCH BENEFIT AND (iii) THAT THE PROVISIONS REGARDING APPLICABLE STATE LAW AND
FORUM HAVE BEEN NEGOTIATED FOR IN GOOD FAITH AND ARE PART OF THE BENEFIT OF THE
BARGAIN REFLECTED BY THIS AGREEMENT. EACH OF FRANCHISEE, THE PRINCIPAL OWNERS
AND XXXXXXXX ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT AND ACCEPTANCE OF
THE TERMS BY THE PARTIES OCCURRED AT XXXXXXXX'X PRINCIPAL PLACE OF BUSINESS,
AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN OBLIGATIONS OF
FRANCHISEE ARISING UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE
PAYMENT OF MONIES DUE HEREUNDER, SHALL OCCUR WHERE XXXXXXXX'X PRINCIPAL PLACE
OF BUSINESS IS LOCATED AT THE TIME SUCH OBLIGATION IS DUE.
15(f) AMENDMENTS TO FRANCHISE AGREEMENT
EXCEPT FOR THOSE AMENDMENTS PERMITTED TO BE MADE UNILATERALLY BY XXXXXXXX
HEREUNDER, ANY CHANGES OR MODIFICATIONS TO THIS AGREEMENT, OR SPECIFIC WAIVERS
OF RIGHTS HEREUNDER, SHALL BE MADE ONLY IN WRITING EXECUTED BY AUTHORIZED
OFFICERS OR AGENTS OF FRANCHISEE AND XXXXXXXX AND ATTESTED BY THE (ASSISTANT)
SECRETARY OF XXXXXXXX. FRANCHISEE ACKNOWLEDGES THAT NO OFFICER, AGENT OR
EMPLOYEE OF XXXXXXXX IS AUTHORIZED TO CHANGE OR MODIFY THIS
Page 30 of 32
31
AGREEMENT VERBALLY AND THAT FRANCHISEE WILL NOT RELY ON CONVERSATIONS OR OTHER
COMMUNICATIONS WITH OFFICERS, AGENTS OR EMPLOYEES OF XXXXXXXX RELATED TO ANY
CHANGE OR MODIFICATION OF THIS AGREEMENT.
15(g) NOTICES
Any notices required or permitted by this AGREEMENT shall be in writing and
shall be directed to XXXXXXXX or FRANCHISEE at its respective last known
business address, delivered prepaid in one of the following ways: personally
delivered or mailed by expedited delivery service or certified or registered
mail, return receipt requested, first-class postage prepaid, or sent by prepaid
facsimile or telegram (provided that the sender confirms the facsimile or
telegram by sending an original confirmation copy by certified or registered
mail or expedited delivery service within three (3) BUSINESS DAYs after
transmission) to the respective parties. Any notice shall be deemed to have
been given (i) in the case of personal delivery, at the time of personal
delivery, (ii) in the case of facsimile or telegram, upon transmission
(provided confirmation is sent as described above) or (iii) in the case of
expedited delivery service or registered or certified mail, three (3) BUSINESS
DAYs after the date of mailing.
15(h) PARTIES BOUND; ASSIGNMENT BY XXXXXXXX
This AGREEMENT binds FRANCHISEE and its heirs, executors, administrators,
successors, and assigns. XXXXXXXX may assign this AGREEMENT in whole or in part
to any person or entity on written notice to FRANCHISEE.
15(i) SEVERABILITY
The provisions of this AGREEMENT are severable, it being the intention of the
parties that should any provision be found invalid, such invalidity shall not
affect the remaining provisions, which shall remain in full force and effect as
though such invalid provisions had not been contained herein.
15(j) ENTIRE AGREEMENT
This AGREEMENT, any Attachment hereto, and the documents referred to herein,
shall be construed together and constitute the entire, full and complete
agreement between XXXXXXXX and FRANCHISEE and the PRINCIPAL OWNERS concerning
the subject matter hereof, and supersede all prior agreements. No other
representation has induced FRANCHISEE or the PRINCIPAL OWNERS 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 shall be binding on either
party unless executed in writing by both parties.
15(k) FORCE MAJEURE
If circumstances beyond the control of the parties make it impossible for
either or both of them to perform their obligations under this AGREEMENT, the
obligations will be suspended during the event of force majeure (acts of
nature, strikes, lockouts or other industrial disturbances, war, riot,
epidemic, fire or other catastrophe or other forces beyond FRANCHISEE'S
control), if through no fault of FRANCHISEE the premises are damaged or
destroyed by an event as described above; provided, that FRANCHISEE applies
within thirty (30) days after such event for XXXXXXXX'X approval to relocate or
reconstruct the premises (which approval shall not be unreasonably withheld)
and FRANCHISEE diligently pursues such reconstruction or relocation Such
approval may be conditioned upon the payment of an agreed minimum fee to
XXXXXXXX during the period in which the PS is not in operation.
15(l) RULES OF CONSTRUCTION
This AGREEMENT shall be interpreted as follows:
15(l)(1) Nouns, pronouns, and variations of them refer to the masculine,
feminine, neuter, singular, or plural as the context may require.
15(l)(2) Headings and their numbers are solely for convenience and ease of
reference.
15(l)(3) The word "including" means "including without limitation."
15(l)(4) When the words of a term defined in this AGREEMENT appear without
initial capital letters and xxxxxxx, they shall be given a generic, rather than
the defined interpretation.
Page 31 of 32
32
16. ACKNOWLEDGMENTS AND REPRESENTATIONS
FRANCHISEE and each PRINCIPAL OWNER acknowledges and represents that:
16(a) prior to execution of this AGREEMENT, they investigated the SYSTEM to
their satisfaction and had the opportunity to consult with appropriate legal
and business advisors with respect to this AGREEMENT and the potential benefits
and risks of entering into this AGREEMENT;
16(b) they have not received and are not relying on any representations of any
kind from XXXXXXXX that are not contained in this AGREEMENT or any other
currently effective written agreements executed by XXXXXXXX and FRANCHISEE;
16(c) they understand that the market for personnel services is highly
competitive and that in any given market, the personnel service providers with
the largest market share may only control a small percent of such market, and,
to help XXXXXXXX capture a larger market share, XXXXXXXX may establish XXXXXXXX
personnel services businesses anywhere in the world, including anywhere in the
market where the PS is located, and that FRANCHISEE may compete directly with
any other XXXXXXXX personnel services business, and any other XXXXXXXX
personnel services business may compete directly with FRANCHISEE, including the
solicitation of CLIENTS, JOB-SEEKERs, EMPLOYEES and STAFF EMPLOYEES;
16(d) they understand the significance of this provision and hereby confirm
that XXXXXXXX has not made any representations of any kind concerning
FRANCHISEE'S potential success or earnings relating to the PS;
16(e) even though XXXXXXXX will handle the processing of XXXXXXXX and PAYROLL,
they understand that FRANCHISEE'S success, level of success or failure will be
dependent on their own efforts and judgment, including their willingness to
invest and reinvest in the PS, their willingness to devote the necessary time
and effort to the operation of the PS, and their willingness and ability to
learn and follow the SYSTEM.
16(f) prior to execution of this AGREEMENT, they notified, in writing,
XXXXXXXX'X Chief Legal Counsel of any information that any XXXXXXXX employee
gave to them, other than the information contained in the disclosure document
described in Section 16(h), that may in any way be construed as relating to the
potential sales, gross revenues, distributions, earnings, income or operating
costs of any personnel service business under the SYSTEM or the PS in
particular;
16(g) they received a complete copy of this AGREEMENT and all related
Attachments and agreements at least five (5) BUSINESS Days prior to the date on
which this AGREEMENT was executed; and
16(h) they 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.
Page 32 of 32
33
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF CALIFORNIA
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and _____________________ ("FRANCHISEE"), by adding the following language,
which shall be an intergral part of the Franchise Agreement (the "Amendment"):
CALIFORNIA LAW MODIFICATIONS
1. The California Department of Corporations requires that certain
provisions contained in franchise documents be amended to be consistent with
California law, including the California Franchise Investment Law, CAL. BUS. &
PROF. CODE Section 31000 et seq., and the California Franchise Relations Act,
CAL. BUS. & PROF. CODE Section 20000 et seq. To the extent that the Agreement
contains provisions that are inconsistent with the following, such provisions
are hereby amended:
a. California Business and Professions Code Sections 20000 through 20043
provide rights to You concerning nonrenewal and termination of the
Agreement. The Federal Bankruptcy Code also provides rights to You
concerning termination of the Agreement upon certain bankruptcy-related
events. To the extent the Agreement contains a provision that is
inconsistent with these laws, these laws will control.
b. If the FRANCHISEE is required in the Agreement to execute a release of
claims, such release shall exclude claims arising under the California
Franchise Investment Law and the California Franchise Relations Act.
c. If the Agreement requires payment of liquidated damages that is
inconsistent with California Civil Code Section 1671, the liquidated
damage clause may be unenforceable.
d. If the Agreement contains a covenant not to compete which extends
beyond the expiration or termination of the Agreement, the covenant may
be unenforceable under California law.
e. If the Agreement requires litigation, arbitration, or mediation to be
conducted in a forum other than the State of California, the
requirement may be unenforceable under California law.
f. If the Agreement requires that it be governed by a state's law, other
than the State of California, such requirement may be unenforceable.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the California law applicable to the
provision are met independent of this Amendment. This Amendment shall have no
force or effect if such jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by XXXXXXXX on _______, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
34
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF HAWAII
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ___________________ ("FRANCHISEE"), by adding the following language, which
shall be an intergral part of the Franchise Agreement (the "Amendment"):
HAWAII LAW MODIFICATIONS
1. The Director of the Hawaii Department of Commerce and Consumer Affairs
requires that certain provisions contained in franchise documents be amended to
be consistent with Hawaii law, including the Hawaii Franchise Investment Law,
Hawaii Revised Statutes, Title 26, Chapter 482E-1 Through 482E-12 (1988). To
the extent that the Agreement contains provisions that are inconsistent with
the following, such provisions are hereby amended:
a. The Hawaii Franchise Investment Law provides rights to You concerning
nonrenewal, termination and transfer of the Agreement. If the
Agreement contains a provision that is inconsistent with the Law, the
Law will control. Among those rights, the law may require that upon
termination or nonrenewal XXXXXXXX purchase for fair market value
FRANCHISEE's inventory, supplies, equipment and furnishings purchased
from XXXXXXXX or a supplier designated by XXXXXXXX; provided that
personalized materials which have no value to XXXXXXXX need not be
compensated for. If the non-renewal or termination is for the purpose
of converting the FRANCHISEE's business to one owned and operated by
XXXXXXXX, XXXXXXXX may, additionally, be obligated to compensate the
FRANCHISEE for loss of goodwill. XXXXXXXX may deduct all amounts due
from FRANCHISEE and any costs related to the transportation or
disposition of items purchased against any payment for those items. If
the parties cannot agree on fair market value, fair market value shall
be determined in the manner set forth in the Agreement. If the
Agreement does not provide for determination of the fair market value
of assets for purchase by XXXXXXXX, such amount will be determined by
an independent appraiser approved by both parties, and the costs of the
appraisal shall be shared equally by the parties.
b. If the FRANCHISEE is required in the Agreement to execute a release of
claims, such release shall exclude claims arising under the Hawaii
Franchise Investment Law.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Hawaii Franchise Investment Law
applicable to the provision are met independent of this Amendment. This
Amendment shall have no force or effect if such jurisdictional requirements are
not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by XXXXXXXX on ______, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
35
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF ILLINOIS
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("XXXXXXXX"), a Pennsylvania corporation, having its principal place of
and ________________ ("FRANCHISEE"), by adding the following language, which
shall be an intergral part of the Franchise Agreement (the "Amendment"):
ILLINOIS LAW MODIFICATIONS
1. The Illinois Attorney General's Office requires that certain provisions
contained in franchise documents be amended to be consistent with Illinois law,
including the Franchise Disclosure Act of 1987, Ill. Rev. Stat. ch. 815 para.
705/1 - 705/44 (1994). To the extent that this Agreement contains provisions
that are inconsistent with the following, such provisions are hereby amended:
a. Illinois Franchise Disclosure Act paragraphs 705/19 and 705/20 provide
rights to You concerning nonrenewal and termination of this Agreement.
If this Agreement contains a provision that is inconsistent with the
Act, the Act will control.
b. Any release of claims or acknowledgement of fact contained in Sections
16(d), 16(f) and 16(h) of the Agreement that would negate or remove
from judicial review any statement, misrepresentation or action that
would violate the Act, or a rule or order under the Act, shall be void
and are hereby deleted with respect to claims under the Act.
c. If this Agreement requires litigation to be conducted in a forum other
than the State of Illinois, the requirement is void under the Illinois
Franchise Disclosure Act.
d. If this Agreement requires that it be governed by a state's law, other
than the State of Illinois, to the extent that such law conflicts with
the Illinois Franchise Disclosure Act, the Act will control.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Illinois Franchise Disclosure Act,
with respect to each such provision, are met independent of this Amendment.
This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
IN WITNESS WHEREOF, the FRANCHISEE and its Principal Owners have duly
executed this Amendment to the Franchise Agreement, approved and executed by
XXXXXXXX on _____________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
36
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF INDIANA
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ______________ ("FRANCHISEE"), by adding the following language, which shall
be an intergral part of the Franchise Agreement (the "Amendment"):
INDIANA LAW MODIFICATIONS
1. The Indiana Securities Commissioner requires that certain provisions
contained in franchise documents be amended to be consistent with Indiana law,
including the Indiana Franchises Act, Ind. Code Xxx. Sections 1 - 51 (1994)
and the Indiana Deceptive Franchise Practices Act, Ind. Code Xxx. Section
23-2-2.7 (1985). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Indiana Deceptive Franchise Practices Act provides rights to You
concerning nonrenewal and termination of the Agreement. To the extent
the Agreement contains a provision that is inconsistent with the Act,
the Act will control.
b. If the FRANCHISEE is required in the Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act, such release shall
exclude claims arising under the Indiana Deceptive Franchise Practices
Act and the Indiana Franchises Act, and such acknowledgments shall be
void with respect to claims under the Acts.
c. If the Agreement contains covenants not to compete upon expiration or
termination of the Agreement that are inconsistent with the Indiana
Deceptive Franchise Practices Act, the requirements of the Act will
control.
d. The Indiana Deceptive Franchise Practices Act provides that substantial
modification of the Agreement by XXXXXXXX requires written consent of
the FRANCHISEE. If the Agreement contains provisions that are
inconsistent with this requirement, the Act will control.
e. If the Agreement requires litigation to be conducted in a forum other
than the State of Indiana, the requirement may be unenforceable as a
limitation on litigation under the Indiana Deceptive Franchise
Practices Act Section 23-2-2.7(10).
f. If the Agreement requires that it be governed by a state's law, other
than the State of Indiana, to the extent that such law conflicts with
the Indiana Deceptive Franchise Practices Act and the Indiana
Franchises Act, the Acts will control.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Indiana Deceptive Franchise
Practices Act and the Indiana Franchises Act, with respect to each such
provision, ar met independent of this Amendment. This Amendment shall have no
force or effect if such jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by XXXXXXXX on _________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
37
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF MARYLAND
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and _______________ ("FRANCHISEE"), by adding the following language, which
shall be an intergral part of the Franchise Agreement (the "Amendment"):
MARYLAND LAW MODIFICATIONS
1. The Maryland Securities Division requires that certain provisions
contained in franchise documents be amended to be consistent with Maryland law,
including the Maryland Franchise Registration and Disclosure Law, Md. Code
Xxx., Bus. Reg. Sections 14-201 - 14-233 (1994). To the extent that this
Agreement contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a. If the FRANCHISEE is required in this Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act, such release shall
exclude claims arising under the Maryland Franchise Registration and
Disclosure Law, and such acknowledgments shall be void with respect to
claims under the Law.
b. If this Agreement requires litigation to be conducted in a forum other
than the State of Maryland, the requirement shall not be interpreted to
limit any rights FRANCHISEE may have under Sec. 14-216 (c)(25) of the
Maryland Franchise Registration and Disclosure Law to bring suit in the
state of Maryland.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Maryland Franchise Registration and
Disclosure Law, with respect to each such provision, are met independent of
this Amendment. This Amendment shall have no force of effect if such
jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on _________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
38
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF MINNESOTA
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and __________________ ("FRANCHISEE"), by adding the following language, which
shall be an intergral part of the Franchise Agreement (the "Amendment"):
MINNESOTA LAW MODIFICATIONS
1. The Commissioner of Commerce for the State of Minnesota requires that
certain provisions contained in franchise documents be amended to be consistent
with Minnesota Franchise Act, Minn. Stat. Section 80.01 et seq., and of the
Rules and Regulations promulgated under the Act (collectively the "Franchise
Act"). To the extent that the Agreement and Offering Circular contain
provisions that are inconsistent with the following, such provisions are hereby
amended:
a. The Minnesota Department of Commerce requires that XXXXXXXX indemnify
Minnesota franchisees against liability to third parties resulting from
claims by third parties that the Franchisee's use of the Proprietary
Marks infringes trademark rights of the third party. XXXXXXXX does not
indemnify against the consequences of FRANCHISEE's use of the
Proprietary Marks except in accordance with the requirements of the
Agreement, and, as a condition to indemnification, FRANCHISEE must
provide notice to XXXXXXXX of any such claim within ten (10) days after
the earlier of (i) actual notice of the claim or (ii) receipt of
written notice of the claim, and must therein tender the defense of the
claim to XXXXXXXX. If NEWT accepts the tender of defense, XXXXXXXX has
the right to manage the defense of the claim including the right to
compromise, settle or otherwise resolve the claim, and to determine
whether to appeal a final determination of the claim. If the Agreement
contains a provision that is inconsistent with the Franchise Act, the
provisions of the Agreement shall be superseded by the Act's
requirements and shall have no force or effect.
b. Franchise Act, Sec. 80C.14, Subd. 4., requires, except in certain
specified cases, that a franchisee be given written notice of a
franchisor's intention not to renew 180 days prior to expiration of the
franchise and that the franchisee be given sufficient opportunity to
operate the franchise in order to enable the franchisee the opportunity
to recover the fair market value of the franchise as a going concern.
If the Agreement contains a provision that is inconsistent with the
Franchise Act, the provisions of the Agreement shall be superseded by
the Act's requirements and shall have no force or effect.
c. Franchise Act, Sec. 80C.14, Subd. 3., requires, except in certain
specified cases that a franchisee be given 90 days notice of
termination (with 60 days to cure). If the Agreement contains a
provision that is inconsistent with the Franchise Act, the provisions
of the Agreement shall be superseded by the Act's requirements and
shall have no force or effect.
d. If the FRANCHISEE is required in the Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Franchise Act, such release shall exclude claims arising
under the Franchise Act, and such acknowledgments shall be void with
respect to claims under the Act.
e. If the Agreement requires that it be governed by a state's law, other
than the State of Minnesota or arbitration or mediation, those
provisions shall not in any way abrogate or reduce any rights of the
FRANCHISEE as provided for in the Franchise Act, including the right to
submit matters to the jurisdiction of the courts of Minnesota.
2. Each provision of this Agreement shall be effective only to the extent
that the jurisdictional requirements of the Minnesota law applicable to the
provision are met independent of this Amendment. This Amendment shall have no
force or effect if such jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on ____________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
39
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF NEW YORK
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ______________ ("FRANCHISEE"), by adding the following language, which shall
be an intergral part of the Franchise Agreement (the "Amendment"):
NEW YORK LAW MODIFICATIONS
1. The New York Department of Law requires that certain provisions
contained in franchise documents be amended to be consistent with New York law,
including the General Business Law, Article 33, Sections 680 through 695
(1989). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the FRANCHISEE is required in the Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the General Business Law, regulation, rule or order under the
Law, such release shall exclude claims arising under the New York
General Business Law, Article 33, Section 680 through 695 and the
regulations promulgated thereunder, and such acknowledgments shall be
void. It is the intent of this provision that non-waiver provisions of
Sections 687.4 and 687.5 of the General Business Law be satisfied.
b. If the Agreement requires that it be governed by a state's law, other
than the State of New York, the choice of law provision shall not be
considered to waive any rights conferred upon the FRANCHISEE under the
New York General Business Law, Article 33, Sections 680 through 695.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the New York General Business Law, with
respect to each such provision, are met independent of this Amendment. This
Amendment shall have no force or effect if such jurisdictional requirements are
not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on ___________, 19___.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
40
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF NORTH DAKOTA
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and _____________________ ("FRANCHISEE"), by adding the following language,
which shall be an intergral part of the Franchise Agreement (the "Amendment"):
NORTH DAKOTA LAW MODIFICATIONS
1. The North Dakota Securities Commissioner requires that certain
provisions contained in franchise documents be amended to be consistent with
North Dakota law, including the North Dakota Franchise Investment Law, North
Dakota Century Code Annotated Chapter 51-19, Sections 51-19-01 through 51-19-17
(1993). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the FRANCHISEE is required in the Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Law, or a rule or order under the Law, such release shall
exclude claims arising under the North Dakota Franchise Investment Law,
and such acknowledgments shall be void with respect to claims under the
Law.
b. Covenants not to compete during the term of and upon termination or
expiration of the Agreement are enforceable only under certain
conditions according to North Dakota Law. If the Agreement contains a
covenant not to compete which is inconsistent with North Dakota Law,
the covenant may be unenforceable.
c. If the Agreement requires litigation to be conducted in a forum other
than the State of North Dakota, the requirement is void with respect to
claims under the North Dakota Franchise Investment Law.
d. If the Agreement requires that it be governed by a state's law, other
than the State of North Dakota, to the extent that such law conflicts
with the North Dakota Franchise Investment Law, the North Dakota
Franchise Investment Law will control.
e. If the Agreement requires arbitration or mediation to be conducted in a
forum other than the State of North Dakota, the requirement may be
unenforceable under the North Dakota Franchise Investment Law.
Arbitration or mediation involving a franchise purchased in the State
of North Dakota must be held either in a location mutually agreed upon
prior to the arbitration/mediation or if the parties cannot agree on a
location, the location will be determined by the arbitrator/mediator.
f. If the Agreement requires payment of a termination penalty, the
requirement may be unenforceable under the North Dakota Franchise
Investment Law.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the North Dakota Franchise Investment
Law, with respect to each such provision, are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on ________, 19___.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
41
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF RHODE ISLAND
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ________________________ ("FRANCHISEE"), by adding the following language,
which shall be an integral part of the Franchise Agreement (the "Amendment"):
RHODE ISLAND LAW MODIFICATIONS
1. The Rhode Island Securities Division requires that certain provisions
contained in franchise documents be amended to be consistent with Rhode Island
law, including the Franchise Investment Act, R.I. Gen. Law. ch. 395 Sec. 19-
28.1-1 - 19.28.1-34. To the extent that this Agreement contains provisions
that are inconsistent with the following, such provisions are hereby amended:
a. If this Agreement requires litigation to be conducted in a forum other
than the State of Rhode Island, the requirement is void under Rhode
Island Franchise Investment Act. Sec. 19.28.1-14.
b. If this Agreement requires that it be governed by a state's law, other
than the State of Rhode Island, to the extent that such law conflicts
with Rhode Island Franchise Investment Act it is void under Sec.
19-28.1-14.
c. If the FRANCHISEE is required in this Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act, such release shall
exclude claims arising under the Rhode Island Franchise Investment Act,
and such acknowledgements shall be void with respect to claims under
the Act.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Rhode Island Franchise Investment
Act, with respect to each such provision are met independent of this Amendment.
This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on _______, 19______.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
42
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF SOUTH DAKOTA
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ________________________ ("FRANCHISEE"), by adding the following language,
which shall be an intergral part of the Franchise Agreement (the "Amendment"):
SOUTH DAKOTA LAW MODIFICATIONS
1. The Director of the South Dakota Division of Securities requires that
certain provisions contained in franchise documents be amended to be consistent
with South Dakota law, including the South Dakota Franchises for Brand-Name
Goods and Services Law, South Dakota Codified Laws, Title 37, Chapter 37-5A,
Sections 37-5A-1 through 37-5A-87 (1994). To the extent that this Agreement
contains provisions that are inconsistent with the following, such provisions
are hereby amended:
a. If the FRANCHISEE is required in this Agreement to execute a release of
claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Law, or a rule or order under the Law, such release shall
exclude claims arising under the South Dakota Franchises for Brand-Name
Goods and Services Law, and such acknowledgments shall be void with
respect to claims under the Law.
b. Covenants not to compete upon termination or expiration of the
Agreement are generally unenforceable in the state of South Dakota,
except in certain limited instances as provided by law. If this
Agreement contains a covenant not to compete which is inconsistent with
South Dakota Law, the covenant may be unenforceable.
c. Regardless of the terms of the Agreement concerning termination, if
FRANCHISEE fails to meet performance and quality standards or fails to
make any royalty payments under the Agreement, FRANCHISEE will be
afforded thirty (30) days' written notice with an opportunity to cure
the default before termination.
d. If the Agreement requires payment of liquidated damages that are
inconsistent with South Dakota Law, the liquidated damage clauses may
be void under SDCL 53-9-5.
e. If the Agreement requires litigation to be conducted in a forum other
than the State of South Dakota, the requirement is void with respect to
any cause of action otherwise enforceable under South Dakota Law.
f. If the Agreement requires that it be governed by a state's law, other
than the State of South Dakota, the law regarding franchise
registration, employment, covenants not to compete, and other matters
of local concern will be governed by the laws of the State of South
Dakota; but as to contractual and all other matters, the Agreement and
all provisions of this Amendment will be and remain subject to the
application, construction, enforcement, interpretation under the
governing law set forth in the Agreement.
g. If the Agreement requires that disputes between XXXXXXXX and FRANCHISEE
be mediated/arbitrated at a location that is outside the State of South
Dakota, the mediation/arbitration will be conducted at a location
mutually agreed upon by the parties. If the parties cannot agree on
location for the mediation/arbitration, the location shall be
determined by the mediator/arbitrator selected.
h. Any provision that provides that the parties waive their right to claim
punitive, exemplary, incidental, indirect, special or consequential
damages may be unenforceable under South Dakota law.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the South Dakota Franchise Investment
Law, with respect to each such provision, are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by SNELLING on _________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
43
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF WASHINGTON
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and ______________________ ("FRANCHISEE"), by adding the following language,
which shall be an intergral part of the Franchise Agreement (the "Amendment"):
WASHINGTON LAW MODIFICATIONS
1. The Director of the Washington Department of Financial Institutions
requires that certain provisions contained in franchise documents be amended to
be consistent with Washington law, including the Washington Franchise
Investment Protection Act, WA Rev. Code Sections 19.100.010 to 19.100.940
(1991). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. Washington Franchise Investment Protection Act provides rights to You
concerning nonrenewal and termination of the Agreement. If the
Agreement contains a provision that is inconsistent with the Act, the
Act will control.
b. If the FRANCHISEE is required in the Agreement to execute a release of
claims, such release shall exclude claims arising under the Washington
Franchise Investment Protection Act; except when the release is
executed under a negotiated settlement after the Agreement is in effect
and where the parties are represented by independent counsel. If there
are provisions in the Agreement that unreasonably restrict or limit the
statute of limitations period for claims brought under the Act, or
other rights or remedies under the Act, those provisions may be
unenforceable.
c. If the Agreement requires litigation, arbitration, or mediation to be
conducted in a forum other than the State of Washington, the
requirement may be unenforceable under Washington law. Arbitration
involving a franchise purchased in the State of Washington, must either
be held in the State of Washington or in a place mutually agreed upon
at the time of the arbitration, or as determined by the arbitrator.
d. If the Agreement requires that it be governed by a state's law, other
than the State of Washington, and there is a conflict between the law
and the Washington Franchise Investment Protection Act, the Washington
Franchise Investment Protection Act will control.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Washington law applicable to the
provision are met independent of this Amendment. This Amendment shall have no
force or effect if such jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by XXXXXXXX on __________, 19__.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
44
ATTACHMENT "1" TO FRANCHISE AGREEMENT
================================================================================
ADDENDUM TO XXXXXXXX AND XXXXXXXX, INC.
FRANCHISE AGREEMENT FOR THE STATE OF WISCONSIN
This Addendum, which is executed in one or more original counterparts,
amends the Franchise Agreement between Xxxxxxxx and Xxxxxxxx, Inc.
("SNELLING"), a Pennsylvania corporation, having its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
and _____________________ ("FRANCHISEE"), by adding the following language,
which shall be an intergral part of the Franchise Agreement (the "Amendment"):
WISCONSIN LAW MODIFICATIONS
1. The Securities Commissioner of the State of Wisconsin requires that
certain provisions contained in franchise documents be amended to be consistent
with Wisconsin Fair Dealership Law, Wisconsin Statutes, Chapter 135 ("Fair
Dealership Law"). To the extent that the Agreement contains provisions that
are inconsistent with the following, such provisions are hereby amended:
a. The Wisconsin Fair Dealership Law, among other things, grants You the
right, in most circumstances, to 90 days' prior written notice of
non-renewal and 60 days within which to remedy any claimed
deficiencies. If the Agreement contains a provision that is
inconsistent with the Wisconsin Fair Dealership Law, the provisions of
the Agreement shall be superseded by the Law's requirements and shall
have no force or effect.
b. The Wisconsin Fair Dealership Law, among other things, grants You the
right, in most circumstances, to 90 days' prior written notice of
termination and 60 days within which to remedy any claimed
deficiencies. If the Agreement contains a provision that is
inconsistent with the Wisconsin Fair Dealership Law, the provisions of
the Agreement shall be superseded by the Law's requirements and shall
have no force or effect.
c. If the Agreement requires that it be governed by a state's law, other
than the State of Wisconsin, to the extent that any provision of the
Agreement conflicts with the Wisconsin Fair Dealership Law such
provision shall be superseded by the law's requirements.
2. Each provision of this Amendment shall be effective only to the extent
that the jurisdictional requirements of the Wisconsin law, with respect to each
such provision, are met independent of this Amendment. This Amendment shall
have no force or effect if such jurisdictional requirements are not met.
FRANCHISEE and its Principal Owners have duly executed this Amendment to the
Franchise Agreement, approved and executed by XXXXXXXX on ____________, 19___.
FRANCHISEE
By:
-----------------------------
Name:
----------------------------
Title: President
ATTEST: XXXXXXXX AND XXXXXXXX, INC.
By:
----------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Senior Vice President
CORPORATE SEAL OF XXXXXXXX
OWNERSHIP
DATE PERCENTAGE PRINCIPAL OWNERS:
% (1)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (2)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (3)
------------------ ---------- ----------------------------------
Name:
---------------------------------
% (4)
------------------ ---------- ----------------------------------
Name:
---------------------------------
45
ATTACHMENT "2" TO
FRANCHISE AGREEMENT
--------------
APPROVED LOCATION Office Number:
--------------
In accordance with Subsection 5(a) of the Franchise Agreement, the PS Location
shall be at the following address:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
46
ATTACHMENT "3" TO FRANCHISE AGREEMENT
GUARANTY
In consideration of, and as an inducement to, the execution of that
certain Franchise Agreement ("Agreement") between XXXXXXXX and XXXXXXXX, Inc.
("XXXXXXXX") and ("FRANCHISEE"), each of the undersigned personally and
unconditionally acknowledges, covenants and agrees as follows:
1. Each is included in the term "Principal Owner" as defined in Section 4
of the Agreement.
2. Each has read the terms and conditions of the Agreement and
acknowledges that this Guaranty and the undertakings of the Principal Owners in
the Agreement are in partial consideration for, and a condition to, the
granting of the license to FRANCHISEE, and that XXXXXXXX would not have granted
the license without the inclusion of this Guaranty and such undertakings by
each of the Principal Owners who signed the Agreement.
3. Each individually, jointly and severally, makes all of the covenants,
representations, warranties and agreements of the Principal Owners set forth in
the Agreement and is obligated to perform thereunder.
4. Each individually, jointly and severally, unconditionally and
irrevocably, guarantees to XXXXXXXX that all of FRANCHISEE's obligations under
the Agreement will be punctually paid and performed. Upon default by FRANCHISEE
or upon notice from XXXXXXXX, each will immediately make each payment and
perform each obligation required of FRANCHISEE under the Agreement.
5. Without affecting the obligations of any of the Principal Owners under
this Guaranty, XXXXXXXX may, without notice to the Principal Owners, waive,
renew, extend, modify, amend, or release any indebtedness or obligation of
FRANCHISEE or settle, adjust, or compromise any claims that XXXXXXXX may have
against FRANCHISEE. Each of the Principal Owners waives all demands and notices
of every kind with respect to the enforcement of this Guaranty, including
notice of presentment demand for payment or performance by FRANCHISEE, any
default by FRANCHISEE or any guarantor and any release of any guarantor or
other security for this Guaranty or the obligations of FRANCHISEE, XXXXXXXX may
pursue its rights against any of the Principal Owners without first exhausting
its remedies against FRANCHISEE and without joining any other guarantor hereto
and no delay on the part of XXXXXXXX in the exercise of any right or remedy
shall operate as a waiver of such right or remedy, and no single or partial
exercise by XXXXXXXX of any right or remedy shall preclude the further exercise
of such right or remedy. Upon receipt by XXXXXXXX of notice of the death of any
of the Principal Owners, the estate of the deceased will be bound by this
Guaranty, but only for defaults and obligations under the Agreement existing at
the time of death, and in such event, the obligations of the remaining
Principal Owners shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed and delivered this Guaranty.
Date:
--------------------- ---------------------------------
Name
Date:
--------------------- ---------------------------------
Name
Date:
--------------------- ---------------------------------
Name
Date:
--------------------- ---------------------------------
Name
