USA Franchise Disclosure Document

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					            FDD
(FRANCHISE DISCLOSURE DOCUMENT)
                          FRANCHISE DISCLOSURE DOCUMENT
                                FOR ABC FRANCHISES

ABC PRODUCT/SERVICE FRANCHISE CENTERS
9600 Any Street
Any City, Any State
U.S.A. Any Zip

ABC awards franchises to operate ABC PRODUCT/SERVICE FRANCHISE CENTERS (“FRANCHISE
BUSINESS CENTERS”) in a specific Development Area. ABC may open and operate its own Business
Centers in a development area not owned by the franchisee.

 The Franchisee pays an Initial Franchise Fee of $00,000 for each Franchise Business Center they develop.
The estimated initial investment for a Franchise Business Center is $000,000 to $000,000. This sum
assumes that you will lease the premises for your Franchise Business Center and does not include land
acquisition and shell construction costs.

This disclosure document summaries certain provisions of your franchise agreement and other
information in plain English. Read this document and all accompany agreements carefully. You must
receive this disclosure document at least 14 calendar days before you can sign a binding agreement with
or make payment to the franchisor or an affiliate in connection with the proposed franchise sale. Note,
however, that no government agency has verified the information contained in this document.

(This FDD may be disclosed by electronic means.)

You may wish to receive your disclosure document in another format that is more convenient for you. To
discuss the availability of disclosure documents in different formats, contact the Franchise
Administration Department at [put in full address and contact information].

The terms of your contract will govern your franchise relationship with ABC. Don’t rely on the
disclosure document alone to understand your contract. Read your contract thoroughly and carefully.
Show your contract and disclosure document to an advisor, such as a lawyer or accountant.

Buying a franchise is a complex investment. The information in this disclosure document can help you
make up your mind. More information on franchising, such as “A Consumer’s Guide to Buying a
Franchise” which can help you understand how to use this disclosure document is available from the
Federal trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600
Pennsylvania Avenue NW, Washington, DC 20580. You can also visit the FTC’s home page at
www.ftc.gov for additional information. Call your state agency or visit your public library for other
sources of information on franchising.

There may also be laws on franchising in your state. Ask your state agency about them. Your state may
have franchise laws that require a franchisor to register or file with the state franchise administrator
before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT
MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE
INFORMATION IN THIS DISCLOSURE DOCUMENT.
If you learn that anything in this disclosure document is untrue, or for information about the franchisor
or about franchising in your state contact the Federal Trade Commission and your State authority listed
on Exhibit J.
MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY
AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH
DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS.
BEFORE YOU BUY CONSIDER WHAT RIGHTS YOU HAVE TO RENEW OUR FRANCHISE, IF ANY,
AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

RISK FACTORS:

1.   WE DO NOT HAVE THE “ABC” MARK REGISTERED WITH THE U.S. PATENT AND
     TRADEMARK OFFICE, ALTHOUGH WE HAVE FILED AN APPLICATION. SEE ITEM 13. BY NOT
     HAVING A FEDERAL REGISTRATION, WE DO NOT HAVE CERTAIN PRESUMPTIVE LEGAL
     RIGHTS GRANTED BY A REGISTRATION.

2.   THIS IS A NEW FRANCHISE OFFERING; ABC IS DEPENDENT ON THE SALE OF FRANCHISES
     AND THE ACCEPTANCE OF ITS SERVICES AND PRODUCTS IN THE MARKETPLACE; AND
     THE ABC HAS NEITHER OFFERED FRANCHISES IN THE PAST NOR OPERATED A BUSINESS
     SIMILAR TO THAT BEING FRANCHISED.

3.   THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Information about comparison of franchisors is available. Call the State Administrators listed in Exhibit J
or your public library for sources of information.

             Date of Issuance: See the following FTC Cover Page and the attached FDD Addendum
                           for the Date of Issuance and State Effective Dates
                          FRANCHISE DISCLOSURE DOCUMENT
                                FOR ABC FRANCHISES


ABC PRODUCT/SERVICE FRANCHISE CENTERS LLC
9600 Any Street
Any City, Any State
U.S.A.
Any Zip


                       INFORMATION FOR PROSPECTIVE FRANCHISEES
                     REQUIRED BY THE U.S. FEDERAL TRADE COMMISSION

                                              * * * * * * *

To protect you, we've required your franchisor to give you this information. We haven't checked it, and
don't know if it's correct. It should help you make up your mind. Study it carefully. While it includes some
information about your contract, don't rely on it alone to understand your contract. Read all of your
contract carefully. Buying a franchise is a complicated investment. Take your time to decide. If possible,
show your contract and this information to an advisor, like a lawyer or an accountant. If you find
anything you think may be wrong or anything important that's been left out, you should let us know
about it. It may be against the law.

There may also be laws on franchising in your State. Ask your State agencies about them.


                                    FEDERAL TRADE COMMISSION
                                          Washington, D.C.

                                  Date of Issuance: _____________, 200_
                        ABC PRODUCT/SERVICE FRANCHISE CENTERS LLC
                                     FDD ADDENDUM

We reserve the right to challenge the enforceability of any State law listed in this Addendum that declares
void or unenforceable any provision in the Franchise Agreement by bringing an appropriate legal action
or by raising the claim in a legal action or arbitration that you initiate.

The following states have statutes that may supersede the Franchise Agreement, and other related
agreements in your relationship with us. These statutes may affect the enforceability of provisions in the
agreements relating to termination; transfer; renewal; covenants not to compete; choice of law;
jurisdiction; venue selection; execution of waivers and releases of claims under the statutes; injunctive
relief; waiver of rights to jury trial; punitive and liquidated damages, and other remedies; arbitration; and
discrimination between franchisees: Ark. Code Ann. § 4-72-201 Michie 1993); Cal. Corp. code §§ 31000 -
31516 (West 1994); Cal. Bus. & Prof. Code §§ 20000 - 20043 (West 1994); Conn. Gen. Stat. § 42-133e (1994);
Del. Code Ann. tit. 6 § 2552 (1993) Haw. Rev. Stat. § 482E-1 - 482E-12 (1993); Ill. Rev. Stat. ch. 815 para.
705/1 - 705/44 (1994); Ind. Code §§ 1 - 51 (1994); Ind. Code Ann. § 23-2-2.7 (West. 1994); Iowa Code
§ 523H.1 - 523H.17 (1994); Md. Code Ann., Bus. Reg. §§ 14-201 - 14-233 (1994); Mich. Comp. Laws
§§ 445.1501 - 445.1545 (1994); Minn. Stat. §§ 8OC.01 - 8OC.22 (1994); Minn. Stat. §§ 80C.01 - 80C.14 (1994);
Miss. Code Ann. § 75-24-51 (1993) Mo. Ann. Stat. § 407.400 (Vernon 1994); Neb. Rev. Stat. § 87-401 (1993);
N.J. Stat. Ann. § 56:10-1 (West 1994); N.Y. Gen. Bus. Law §§ 680 - 695 (1994); N.D. Cent. Code § 51-19-01
(1993); Or. Rev. Stat. §§ 650.005 - 650.085; R.I. Gen. Laws §§ 19-28.1-1 - 19-28.1-34 (1993); S.D. Codified
Laws Ann. §§ 37-5A-1 - 37-5A-87 (1994); Tex. Rev. Civ. Stat. Ann. art. 16.01 (1994); Va. Code Ann.
§§ 13.1-557 - 13.1-574; Wa. Rev. Code §§ 19.100.010 - 19.100.940 (1994); Wis. Stat. §§ 553.01 - 553.78 (1996);
Wis. Stat. §§ 135.01 - 135.07 (1984). These and other states may have fair practice laws and other civil
statutes affecting contracts. There may also be State and Federal court decisions that affect the
enforcement of provisions in the Franchise Agreement, and other related agreements.

A provision in the Franchise Agreement that terminates this agreement on your bankruptcy may not be
enforceable under Title 11, United States Code Section 101.

This Franchise Disclosure Document is registered or on file in the following states:

                New York                          Effective date: _______________
                Virginia                          Effective date:
                Maryland                          Effective date:
                                                              TABLE OF CONTENTS

Item                                                                                                                                                                            Page

ITEM 1.    THE FRANCHISOR, ANY PARENTS, ITS PREDECESSORS AND AFFILIATES ............................................ 1
ITEM 2.    BUSINESS EXPERIENCE .......................................................................................................................................... 1
ITEM 3.     ADC/FRANCHISEE RELATIONS ......................................................................................................................... 2
ITEM 4.    LITIGATION ............................................................................................................................................................... 2
ITEM 5.    BANKRUPTCY ........................................................................................................................................................... 3
ITEM 6.    INITIAL FRANCHISE FEE........................................................................................................................................ 3
ITEM 7.    OTHER FEES ............................................................................................................................................................... 4
ITEM 8.    INITIAL INVESTMENT ............................................................................................................................................ 7
ITEM 9.    RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES ................................................................... 10
ITEM 10.    FINANCING ........................................................................................................................................................... 11
ITEM 11.    FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM AND TRAINING ...................... 11
ITEM 12.    TERRITORY ............................................................................................................................................................. 18
ITEM 13.    TRADEMARKS ....................................................................................................................................................... 19
ITEM 14.    PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION ................................................................ 20
ITEM 15.    OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE
             BUSINESS.............................................................................................................................................................. 21
ITEM 16.    RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL ......................................................................... 21
ITEM 17.    RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION .................................................. 22
ITEM 18.    PUBLIC FIGURES ................................................................................................................................................... 26
ITEM 19.    EARNINGS CLAIMS ............................................................................................................................................. 26
ITEM 20.    LIST OF OUTLETS ................................................................................................................................................. 26
ITEM 21.    FINANCIAL STATEMENTS ................................................................................................................................. 43
ITEM 22.    CONTRACTS .......................................................................................................................................................... 44
ITEM 23.    RECEIPT................................................................................................................................................................... 44



EXHIBITS

A.     Financial Statements
B.     Form of Franchise Agreement
C.     Form of Application Fee Agreement
D.     FRANCHISE BUSINESS CENTERS
E.     List of Terminated Regional Franchisors and FRANCHISE BUSINESS CENTERS
F.     Table of Contents to Franchise Business Operations Manual
G.     Table of Contents to Approved Product/Service Center Manuals
H.     List of State Administrators
I.     State law Addendum
J.     Agents for Service of Process
K.     Effective Dates
L.     Receipt
   ITEM 1.          THE FRANCHISOR, ANY PARENTS, ITS PREDECESSORS AND
                                  AFFILIATES
To simplify the language in this Franchise Disclosure Document, we refer to ABC PRODUCT/SERVICE
FRANCHISE CENTERS LLC by a first person plural pronoun (“we”, “our” or “us”) or as “ABC”. We
refer to the individual or business entity that acquires a Franchise as “you” or “Franchisee”.

ABC is an any State limited liability company (LLC) that was formed in __________,20__. Our principal
business address is 9600 Any Street, Any City, Any State, U.S.A. Any Zip; telephone number 1-800-000-
0000. We do business under the names “ABC,” “ABC International,” “ABC Team Headquarters” and
“ABC FRANCHISE BUSINESS CENTERS.” We have no predecessor or affiliates.

Our agents for service of process are identified in Exhibit I to this Franchise Disclosure Document.

ABC was formed in _____ of 20__ and began offering Franchises in ___ 20__. We do not operate any
FRANCHISE BUSINESS CENTERS. We have never engaged in or offered franchises for any other line of
business. As of the date of this Disclosure Document, we had awarded ____ Franchises, but no
FRANCHISE BUSINESS CENTERS were in operation. See Item 21.

ABC PRODUCT/SERVICE FRANCHISE CENTERS provide ___________________ [give complete
description of products, services and method of operation]. We designed the Centers to accommodate our
methods and equipment inside a building that contains approximately ______ square feet of space.

ABC fully expects direct competitors to enter the field. Franchisees also will have to compete with other
national and local businesses that offering similar products and services.

In addition to laws and regulations that apply to businesses generally, Franchise Business Center
franchisees are subject to various Federal, State and local laws and regulations. These laws include the
Americans With Disabilities Act and various laws relating to zoning and construction, employee wages,
occupational health and safety, workers’ compensation, waste disposal, and consumer weights and
measures.

All fees disclosed in this Franchise Disclosure Document are stated in U.S. dollars, and you are required
to pay all fees to us in that currency.


                             ITEM 2.          BUSINESS EXPERIENCE
The following are our officers and managing members:


Founder, President, & CEO: Mr/Mrs/Miss/Ms
Give complete history of this individual’s business experience including:

           Companies worked for/at
           Positions held and for long
           Person’s knowledge of the business

Any other person material to the success of the company

Personal information on all individuals associated with the management of the company including:




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                Officers
                Directors
                                                          *****

We do not use franchise brokers to market Franchises.




                             ITEM 3.           ADC/FRANCHISEE RELATIONS
1.           ABC does not have franchisees sign confidentiality provisions, which would have the effect of
             restraining franchisees from talking openly with prospects about the franchisees’ experiences in
             the ADC franchise system. In fact ABC encourages all franchisees to candidly discuss the
             strengths and weaknesses of the franchise system and their positive and negative experiences.

2.           The franchisees have a franchisee association . Their association can be contacted at:

                             Street address, city, state, zip, telephone number

(Note that if a franchise association does not exist this needs to be disclosed)


                                           ITEM 4.          LITIGATION
None of ABC, a predecessor, parent or affiliate who offers franchises under our principal trademark and
any person identified in item 2:

         I. Has pending:

                 a.   An administrative, criminal or material civil action alleging a violation of a franchise,
                      antitrust, or securities law, or alleging fraud, unfair or deceptive practices, or comparable
                      allegations.

                 b.   Civil actions, other than ordinary routine litigation incidental to the business, which are
                      material in the context of the number of franchisees and the size, nature or financial
                      condition of the franchise system or its business operations.

         II. Was a party to any material civil action involving the franchise relationship in the last fiscal year.
             For purposes of this section, “franchise relationship” means contractual obligations between ABC
             and franchisees directly relating to the operation of the franchised business (such as royalty
             payment or training obligations. It does not include actions involving suppliers or other third
             parties, or indemnification for tort liability.

     III. Has in the 10-year period immediately before the disclosure document’s issuance date:

                 a.   Been convicted of or pleaded nolo contendere to a felony charge.

                 b.   Been held liable in a civil action involving an alleged violation of a franchise, antitrust, or
                      securities law, or involving allegations of fraud, unfair or deceptive practices, or
                      comparable allegations. “Held liable” means that, as a result of claims or counterclaims,
                      the person must pay money or other consideration, must reduce indebtedness by the




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                     amount of the award, cannot enforce its rights, or must take action adverse to its
                     interests.

None of ABC, a predecessor, a parent or affiliate who guarantees the franchisor’s performance, an
affiliate who has offered or sold franchises in any line of business within the last 10 years, or any other
person identified in item 2 of this part is subject to a currently effective injunctive or restrictive order or
decree resulting from a pending or concluded action brought on by a public agency and relating to the
franchise or to a federal, state or Canadian franchise, securities, antitrust, trade regulation, or trade
practice law.

(FOR EACH ACTION IDENTIFIED IN THE PARAGRAPHS ABOVE OF THIS ITEM 4, STATE THE
TITLE, CASE NUMBER OR CITATION, THE INITIAL FILING DATE, THE NAME OF THE PARTIES,
THE FORUM, AND THE RELATIONSHIP OF THE OPPOSING PARTY TO THE FRANCHISOR (FOR
EXAMPLE, COMPETITOR, SUPPLIER, LESSOR, FRANCHISEE, FORMER FRANCHISEE, OR CLASS
OF FRANCHISEES). EXCEPT AS PROVIDED IN THE PARAGRAPH BELOW ON THIS ITEM 4,
SUMMARIZE THE LEGAL AND FACTUAL NATURE OF EACH CLAIM IN THE ACTION, THE RELIEF
SOUGHT OR OBTAINED, AND ANY CONCLUSIONS OF THE LAW OR FACT. IN ADDITION
STATE:

         I. For pending actions, the status of the action.

         II. For prior actions, the date when judgment was entered and any damages or settlement terms.

     III. For injunctive or restrictive orders, the nature, terms and conditions of the order or decree.

     IV. For convictions or pleas, the crime or violation, the date of conviction and the sentence or
         penalty imposed.

FOR ANY OTHER FRANCHISOR-INITIATED SUIT IDENTIFIED IN I. OF THE FIRST PARAGRAPH
OF THIS ITEM 4, YOU MAY COMPLY WITH THE REQUIREMENTS OF THIRD PARAGRAPH (I)-(IV)
OF THIS ITEM 4 BY LISTING INDIVIDUAL SUITS UNDER ONE COMMON HEADING THAT WILL
SERVE AS THE CASE SUMMARY (FOR EXAMPLE, “ROYALTY COLLECTION SUITS”).

No litigation is required to be disclosed in this Franchise Disclosure Document.


                                       ITEM 5.          BANKRUPTCY
No person identified in Items 1 or 2 of this Franchise Disclosure Document has been involved as a debtor
in proceedings under U.S. bankruptcy law that is required to be disclosed in this Item.


                                ITEM 6.          INITIAL FRANCHISE FEE
You are required to pay us an Initial Franchise Fee of $00,000 for each Approved Product/Service Center
franchise that you or your affiliates acquire.

You are not required to pay us any other fees or to buy or lease any goods or services from us as a
condition to acquiring a Franchise.




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                                   ITEM 7.          OTHER FEES

         Name of Fee            Amount (Note 1)             Due Date                   Remarks
 Royalty                  X% of the Gross Sales       Weekly, on or before
                          of    the    Franchise      Saturday of the week
                          Business Center             following the week for
                                                      which the fee is due
 National Advertising     Y% of Gross Sales of        Weekly, on or before
 Fund                     the Franchise Business      Saturday of the week
                          Center                      following the week for
                                                      which the fee is due
 Local Advertising and    Up to 5% of Gross Sales     At your election           We recommend that
 Promotions               of    the    Franchise                                 you spend 5% of your
                          Business Center                                        Gross Sales on local
                                                                                 advertising        and
                                                                                 promotion
 Audit Fees               Cost of audit               Upon billing after audit   Payable only if audit
                                                                                 shows                an
                                                                                 understatement of at
                                                                                 least 2% of Gross Sales

 Transfer                 $00,000 transfer fee;       Payable on transfer of     You             allocate
 Fee/Training Fee         $00,000 training fee        your rights under a        responsibility       for
                                                      Franchise Agreement        paying     these    fees
                                                                                 between yourself and
                                                                                 the transferee

 Refresher     Training   $0,000                      30 days before the         Payable in lieu of a
 Fee                                                  expiration of the term     renewal fee if you
                                                      of    the     Franchise    elect to renew the
                                                      Agreement.                 Franchise Agreement
 Insurance                $0,000 to $0,000 for        When premiums are          See note 5
                          annual premiums             due
 Collection Charges       Varies                      Upon demand                You must pay all
                                                                                 collection     charges
                                                                                 associated with our
                                                                                 efforts in collecting
                                                                                 any amounts owed to
                                                                                 us       under     the
                                                                                 Franchise Agreement
 Currency Conversion      Varies                      Upon payment of fees       Applies only to non
 Costs                                                and other charges in       U.S.         Franchise
                                                      U.S. dollars               Business        Center
                                                                                 franchisees
 Fees on Default and      Attorneys’ fees, costs,     Upon demand                Payable in addition to
 Indemnity                interest, audit costs                                  other payments to
                                                                                 ABC




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          Name of Fee              Amount (Note 1)              Due Date                  Remarks
  Subsequent Training        Our reasonable costs         10 days      prior    to   See Item 11
  Fees                       (currently,                  training
                             approximately $000 per
                             day plus expenses for
                             travel            and
                             accommodations)

  Annual      Conference     Pro-rata share to attend     Prior to conference        See Item 11
  Fees                       two mandatory annual
                             conferences, plus $1500
                             to $1700 or more for
                             travel expenses and
                             accommodations

  Interest                   The lesser of 1¾% per        Upon demand
                             month or the highest
                             rate permitted under
                             applicable law
  Dishonored       Check     $50 per dishonored or        Upon demand
  Charge                     returned check that
                             you forward to us.

Notes:

(1)       Except where otherwise noted, all fees are payable to ABC in U.S. dollars and are nonrefundable.

(2)       You must pay us a weekly royalty consisting of X% Gross Sales from any FRANCHISE
          BUSINESS CENTERS you operate for your own account. All legal costs associated with pursuing
          the delinquent franchisee shall be paid by the franchisee.

(3)       We currently administer a National Co-op Ad Fund on behalf of all Franchisees, with the advice
          of the National Advertising Council (which consists of representatives from all franchisees and
          marketing employees of ABC). Y% of Gross Sales from any Franchise Business Center you
          operate for your own account. The annual expenditure budget for the National Co-op Fund is
          set by us in consultation with the Franchise Advisory Council, with a two-thirds majority vote
          required to approve the expenditure budget. We set the time and place of meetings and
          determine whether they will occur in person or by telephone conference call in which all
          participants will be able to speak to and hear each other.

(4)       Gross Sales includes all revenues and receipts from the sale of all services and products from an
          Approved Product/Service Center, excluding sales taxes.

(5)       You must purchase and maintain from an insurance carrier who maintains a Best’s Insurance
          Guide rating of A/VIII or higher and who otherwise satisfies our qualifications comprehensive
          general liability insurance in an aggregate amount that we designate from time to time, but not
          less than $1,000,000 per occurrence. As noted in Item 8, we reserve the right to require that you
          purchase certain types of insurance only from a single insurance carrier that we determine is
          capable of meeting the needs of the ABC System. You must buy your insurance from that carrier,
          unless we approve another insurance carrier that meets the qualifications stated in the Franchise



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         Agreement. We estimate that the average annual premiums for your insurance coverage will be
         $0,000 to $0,000 (possibly more). If you fail to maintain the required insurance, we may obtain it
         on your behalf, and you must reimburse us for the costs we incur and premiums we pay.




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                           ITEM 8.             INITIAL INVESTMENT
                                      Center Franchise Start-up Investment

 Category                Estimated             Method        of   When Due           To Whom Payment
                         Amount (1)            Payment                               is to be made
 Initial Fees

 Initial Franchise Fee   $00,000             Two                  $00,000    when    Us
                                             installments         you       submit
                                                                  your franchise
                                                                  application;

                                                                  $0,000    upon     Us
                                                                  signing     the
                                                                  Franchise
                                                                  Agreement




 Leasehold               $000,000              As Incurred        Before Opening     Landlord          or
 Improvements                                                                        Suppliers
 (Note 3)
 Equipment         and   $000,000       to     Lump Sum           When               Suppliers or Lessors
 Signs (Note 4)          $000,000                                 Purchased
 Initial Inventory       $00,000        to     Lump Sum           When               ABC and Suppliers
 (Note 5)                $00,000                                  Purchased
 Initial Promotional     $00,000        to     Lump Sum           When               Suppliers
 Materials               $00,000                                  Purchased
 (Note 6)

 Opening Marketing       $00,000        to     Lump Sum           When               Suppliers
 Investment              $00,000                                  Purchased
 Training Costs          $0                    Us                 While              none
 (Note 7)                                                         Attending
                                                                  Training

 Insurance               $0,000         to     As Incurred        Before opening     Insurance Company
 (Note 8)                $0,000
 Professional            $0,000         to     As Incurred        Before opening     Suppliers
 Services                $0,000
 (Note 9)
 Security   Deposits     $00,000        to     Lump Sum           Before opening     Landlord and other
 and          Prepaid    $00,000                                                     Suppliers
 Building Rent
 (Note 10)
 Additional Funds -      $00,000        to     Lump Sum           Monthly      as    Employees       and
 6            months     $000,000                                 Needed             Suppliers
 (Note 11)




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  Category                   Estimated           Method      of     When Due           To Whom Payment
                             Amount (1)          Payment                               is to be made
  TOTAL                      $000,000      to
                             $000,000

Notes:

(1)       Except where otherwise noted, all fees that you pay to us are nonrefundable. Third-party lessors,
          contractors, suppliers and lenders will decide if payments to them are refundable.

(2)       The initial franchise fee for the right to operate a single Approved Product/Service Center is
          $00,000. For each additional Approved Product/Service Center you wish to develop and operate
          in your Protected Area, the initial franchise fee is $00,000.

          If you sign an Area Development Agreement, you will pay an Area Development Fee equal to
          $00,000 multiplied by the number of FRANCHISE BUSINESS CENTERS to be developed and
          operated under the Area Development Agreement. You will also pay a franchise fee for each
          Approved Product/Service Center, on the day each Approved Product/Service Center opens for
          business. That amount is $00,000 less the franchise fee Credit of $00,000.

          See Item 6 for additional information regarding the initial franchise fee.

(3)       The Approved Product/Service Center land and building will ordinarily be leased rather than
          owned, although you are permitted to buy them if you so desire. We estimate that the average
          Approved Product/Service Center will have approximately 00,000 square feet. Your initial
          investment for leasehold improvements, will vary depending upon local labor and materials
          costs. These variables affect how different obligations will be distributed between landlords and
          tenants under different lease agreements and the costs of acquisition and construction. Although
          the cost of leasehold improvements will vary depending upon the above-described factors, we
          estimate that the average cost of leasehold improvements will range between $__ and $__ per
          square foot. Note, we have allocated $__ per square foot as our estimate of investment
          requirements. Landlords may pay a tenant finish-out allowance as a cash incentive to do business
          with them. This payment will reduce or eliminate your leasehold improvements, and varies
          greatly on market conditions, but will range from $_ to $__ per square foot. This would result in a
          net investment (after finish-out allowance) for you of between $__ and $__ per square foot. We
          must approve all leasehold improvements prior to construction.

          Land development costs vary depending on the condition of the land, and the degree of
          development required, the city land development fees, and the region of the country involved,
          although typically this added cost is built into the lease by the landlord. We must approve all
          land development prior to construction. Although the costs of land development will vary, and
          may be paid for by the landlord, we estimate that the average cost of land development will
          range between $00,000 and $000,000.
          Land purchase costs vary tremendously depending on the condition of the land, and the degree
          of development required, and the price of available land although typically this added cost is
          built into the lease by the landlord. Although the costs of land purchase will vary, and normally
          will be leased, we estimate that the average cost of land purchase will range between $000,000
          and $000,000 per acre, with a minimum land required of one acre to a maximum of four acres for
          each Approved Product/Service Center site.




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          Building development costs vary depending on local labor and materials costs, although typically
          this added cost is built into the lease by the landlord. We must approve all building development
          prior to construction. Although the costs of building development will vary, and may be paid for
          by the landlord, we estimate that the average cost of building development will range between
          $000,000 and $0,000,000.

(4)       This represents the purchase of equipment, fixtures and signs needed to operate the franchise
          (including computer system and software).

(5)       You must purchase the initial inventory, which you will sell through the Product/Service Center.

(6)       The initial supply of promotional materials consists of brochures, rack cards and newsletters
          describing programs and other promotional materials to educate the customer.

(7)       We conduct a two-week franchisee training program at our team headquarters in any city You
          must arrange, with our approval, for up to two people to receive the initial training in the System
          and our methods of operation. While the cost of initial training for two people is included in the
          initial franchise fee, you are responsible for airfare, hotel accommodations, meals for two people
          and other incidental expenses incurred by your trainees. These costs will vary depending on such
          factors as the number of persons that attend training and personal habits. (See Item 11 for
          additional information regarding training.)

(8)       See Item 6 for additional information on insurance.

(9)       You will have to pay fees to professional service providers such as business advisors,
          accountants, attorneys or other professionals with whom you consult prior to making any
          decision to purchase the franchise.

(10)      This amount includes an estimate of the deposits and/or prepaid rent, which may be required by
          the lease and for utilities for the premises of your Approved Product/Service Center. Rent for
          your Approved Product/Service Center premises will vary depending on where you are located
          and the cost of land, land development, building and leasehold improvements. Leases also
          usually impose other charges on tenants including insurance charges, real estate taxes and special
          assessments, security charges and other similar charges.

(11)      This amount represents an estimate of the capital reserve you will need during the initial phase of
          your business, which we estimate to be six months. You may need this reserve to pay rent,
          wages, utility charges and other operating expenses. This figure will vary among locales and may
          increase, depending on such factors as sales volume, management costs, and local economic
          conditions.

          These amounts are estimates only, and specific amounts will vary depending upon local market
          conditions, which are outside our control. We cannot guarantee that you will not have additional
          expenses starting the business. Your costs will depend on factors such as: your development
          obligations; how much you follow our methods and procedures; your management skill,
          experience and business acumen; local economic conditions; the local market for our service, the
          prevailing wage rate; competition; and the sales level reached during the initial period.

          This total is an estimate of your initial investment and is based upon our estimate of average
          costs and market conditions prevailing as of the date of this Franchise Disclosure Document and
          our experience in the business. You should review the figures carefully with a business advisor,
          accountant or attorney before making any decision to purchase the franchise.


-9    -
                                                   - 10 -




       ITEM 9.      RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
To help assure a uniform image and uniform quality of products and services throughout the ABC
system, you must maintain and comply with our quality standards as defined in the our Operations
Manual. The Approved Product/Service Center sites in your Development Area must meet our
standards for franchise sites and be improved and equipped with our then current approved layout and
design specifications and standards. In addition, it is your responsibility to ensure that any building plans
comply with the Americans With Disabilities Act and all other Federal, State, or local laws. You must also
use goods, services, supplies, inventory, equipment (which may include hardware and software for a
computerized point-of-sale (POS) system), signage, fixtures, furnishings and marketing and sales
promotion materials that meet our specifications and standards. We will describe these specifications and
standards in our Operations Manual.

The Franchise Agreement requires that you sell or use only those products and services that we approve in
writing. The purpose of this requirement is to insure that all Franchise Business Center franchisees adhere
to the uniformity requirements and quality standards associated with the ABC system. We will suggest
approved suppliers for many of the items you will need to purchase. Lists of approved suppliers will be
given to you before you begin operating your business. As of the date of this Franchise Disclosure
Document neither ABC nor any person affiliated with ABC is an approved supplier, although we reserve
the right to designate this in the future. Also we may modify these lists from time to time to add or delete
approved other suppliers.

If you want to purchase products from suppliers other than those we have approved, you must receive our
approval before doing so. Before giving our approval, we may ask the supplier to provide samples of
products they wish to provide to you, and we may investigate the ability of the supplier to provide
products that meet our specifications and/or standards and otherwise meet the needs of our Franchise
Business Center Franchisees. We do not impose any fee either on you or the supplier for conducting this
investigation. We will usually be able to tell you within 30 days whether or not the supplier is approved,
but the actual time will depend upon the cooperation we receive from the supplier in responding to our
questions. We may also ask the supplier to sign confidentiality and supplier agreements. We may revoke
our appointment of an approved supplier if we determine that the supplier is not meeting our
requirements.

In addition to purchasing items from approved suppliers or items that must meet our specifications and
standards, there are certain products and services that you and must purchase from ABC or a designated
supplier. You will be required to buy initial inventory items and special promotional items, such as
advertising materials, complementary products, shirts, hats, water bottles, uniforms, clothing, and rubber
mat flooring for the Approved Product/Service Center from ABC or designated suppliers. In addition,
during the operation of the business, you must purchase supply items from us, most of which have our
logo on them, in order to create a consistent image throughout the ABC system. Any items we sell to you
will be at a pre-set mark up of either zero, ten percent or twenty percent, based upon the work to handle
and cost of inventory, with no additional mark-up for profit. From time to time, ABC or another
designated supplier may be the only approved supplier for a specific item because of the lack of requests
for approval of alternative supplies.

ABC may negotiate special pricing arrangements or discounts with our suppliers. The arrangements may
include reduced prices from the suppliers' standard wholesale prices, free shipping, priority shipping
turnaround and the availability of products exclusive to FRANCHISE BUSINESS CENTERS. We also
have made arrangements with most of our suppliers to provide credit terms for qualifying franchisees.




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                                                        - 11 -


Any special price arrangements or promotional allowances with our outside suppliers are passed on
directly to you, although certain suppliers may contribute to the marketing funds described in Item 10.

You must purchase and maintain insurance in aggregate amounts that we designate periodically, as
described in Item 6, and any other insurance required by law or any agreement related to the franchise
business. We intend to designate a single insurance carrier to provide certain types of insurance coverage
to all ABC franchisees. We intend to select this carrier on the basis of its ability to satisfy the needs of the
ABC network on the basis of the lowest reasonable premium structure. You must use this designated
insurance carrier unless you propose, and we approve, another carrier that meets the qualifications and
criteria ABC sets in the Franchise Agreement. You also may use only marketing and promotional
materials which we have approved (see Items 6 and 11 for more information on marketing).

During the 20__ fiscal year (which equals the calendar year), ABC did not derive any revenue from the
sale of products. As noted above, although we may from time to time derive revenue from the sale of
products, we sell those products at our cost, plus a maximum 20% mark-up.

ABC estimates that your purchase of equipment, products, supplies, and marketing materials from us, or
which meet our specifications and standards will represent approximately 18% to 34% or more of the cost
to establish the franchise business and 5% to 11% or more of the cost to operate the franchised business
on an ongoing basis.

When your Franchise is up for renewal, among the factors ABC will consider is your compliance with
your Franchise Agreement and support of our programs and policies, which would include compliance
with the requirements, described in this Item 9.

We have not organized any purchasing or distribution cooperatives that handle products you might use
in your franchised business.


                                          ITEM 10.        FINANCING
ABC does not offer direct or indirect financing and will not guarantee your note, lease or obligation. We
do not represent that you will be able to secure financing for the Franchise, nor do we make any
representations as to the possible terms for such financing.




           ITEM 11.        FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER
                                   SYSTEM AND TRAINING
Except as listed below, ABC need not provide any assistance to you.

Pre-opening Assistance. Before you open your Franchise Business Center, ABC will:

             1.   Designate your exclusive Development Area (Section _, Franchise Agreement).

             2.   Specify or approve the equipment, fixtures, furnishings, inventory and supplies to be utilized
                  in the FRANCHISE BUSINESS CENTERS, as described in Item 8 (Section _, Franchise
                  Agreement).

             3.   Assist you in opening your Franchise Business Center (Section _, Franchise Agreement).




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                                                     - 12 -


           4.   Provide to you the “ABC” Franchise training program, as further described below, within 120
                days of signing the Franchise Agreement.

           5.   Loan to you a copy of the Operations Manual. This Operations Manual and other proprietary
                information is confidential and remains the sole property of ABC, and may be reasonably
                modified at any time by ABC.

On-going Assistance. After your Franchise Business Center opens, ABC will:

           1.   Continue to counsel and offer advice, guidance and experience to you, answer your
                questions and provide ongoing consultation (Section _, Franchise Agreement).

           2.   Periodically furnish you updated and revised material for the Operations Manual (Section _,
                Franchise Agreement).

           3.   Periodically furnish you updated information on brochures, ad templates and other products
                and supplies you will need to market Approved Product/Service Center franchises (Section
                _, Franchise Agreement).

           4.   Prior to the opening of your first Approved Product/Service Center, provide an aBC’ trainer
                to (i) conduct on-site training; and (ii) train you on how to conduct subsequent on-site
                trainings (Section _, Franchise Agreement).

           5.   Host an annual training conference (Section _,Franchise Agreement).

           6.   Assist in evaluating potential Approved Product/Service Center sites (Section __ Franchise
                Agreement).

           7.   Administer, or delegate to third parties the administration of, the Approved Product/Service
                Center Advertising Fund, as further described below (Section __ Franchise Agreement).

ABC or its designee will establish and conduct various marketing programs through the Co-op Ad Funds
and Internet advertising as follows:

National Co-op Ad Fund. During 20__, we established a National Co-op Ad Fund that we administer to
promote the ABC name and the marketing of ABC Approved Product/Service Center franchisees.

As of the date of this Franchise Disclosure Document, ABC formulates, develops and conducts the
marketing programs for the National Co-op Ad Fund, although in the future we may use an in-house
advertising department or a national or local advertising agency. The annual expenditure budget for the
Fund will be set by us in consultation with the Franchise Advisory Council, of which you may be a
member. We and representative franchisees will have one vote in determining the manner in which
annual contributions to the National Co-op Ad Fund will be spent. This determination will require a two
thirds majority vote of those who vote.

Your contributions to the National Co-op Ad Fund will be payable in U.S. dollars. ABC has the power to
form, change, dissolve or merge the National Co-op Ad Fund. The National Co-op Ad Fund will not be
audited, but we will furnish annual, unaudited statements of receipts and disbursements for your review.
The National Co-op Ad Fund is not a trust or escrow account, and ABC has no fiduciary duty with
respect to the Fund.




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                                                    - 13 -


The media in which advertising for Approved Product/Service Center franchises may be disseminated
may be print, radio, television, or any other media. The media coverage may be local, regional, national
or international in scope, depending on the type of advertising.

We have established a Franchise Advisory Council to serve in an advisory capacity only on advertising
and marketing programs. Representative franchisees are invited to participate on the Franchise Advisory
Council. It is advisory only and carries no binding authority. We have the power to change or dissolve
this Council and to form other councils.

Neither ABC nor our affiliates receive payment for providing services to the National Co-op Ad Fund,
other than reimbursement for our direct expenses in connection with market research, market studies,
development of advertisements, and development of marketing strategies and programs. We established
the National Co-op Ad Fund in May 20__. In 20__ we spent $00,000, as follows:

                Media advertising         -       $00,000      (00.0%)
                Web development           -        $0,000      (00.0%)
                Marketing Research        -       $00,000      (00.0%)

Local Advertising Although not required, we recommend that you spend at least 5% of your annual
Gross Sales to advertise and promote Approved Product/Service Center franchises locally. You may use
only the advertising materials that we make available or approve. We will not unreasonably withhold
approval of any advertising materials that you propose to use, if your materials are factually correct, in
good condition and accurately depict the “ABC” trademarks.

Local and regional advertising will be primarily spent on local and regional marketing efforts in each
area. We have no obligations to spend any amount on national advertising in the area where you are
located. If all fees paid into the National Co-op Ad Fund are not spent in the fiscal year, the excess will be
carried over for future use.

Internet Advertising. We advertise ABC franchises and the products and services that FRANCHISE
BUSINESS CENTERS offer through various websites that we maintain at www.________. We have set up
a “site locator” page on the Website that will show the names of Franchisees and the addresses and
telephone numbers of FRANCHISE BUSINESS CENTERS in our network. At your request, and upon our
prior written approval, you can design interior pages that feature and promote your Development Area
and link them to the locator page. If you do, you must use a template that we provide, submit your pages
for our approval before you post them, and agree to abide by our terms of use. You may not use the ABC
name or trademarks on the Internet in any other way. You must pay to develop and maintain your own
pages. We will not charge you a fee for the Website’s maintenance and improvement, but we call allocate
part of the National Co-op Ad Fund’s budget to that purpose. (Section __ Franchise Agreement).

Point of Sale System. As described in Item 7, you will be required to purchase or lease a point of sale
system. The franchisor has determined the point of sale system most appropriate for the operation of the
franchise business. The point of sale system cost is $_____________.
The point of sale system to be used will be used to keep track of sales and customers and will gather and
summarize data that will allow sales and cost data to be tabulated and reported to ABC. You must
provide ABC independent access to this information and data without limitation (See Section __ of the
Franchise Agreement).

You will have an obligation to upgrade hardware and software frequently during the term of your
Franchise. There are no contractual limitations on the frequency and cost of the obligation.




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                                                      - 14 -


Computer System and Software. ABC has developed a proprietary software package that is to be used in
the management of the franchise business. ABC has also determined the most effective computer system
to use with its software. The computer and software page costs are $______________. A monthly
maintenance fee of $ ____________ is charged for the maintenance and support of the software.

You will have an obligation to upgrade hardware and software frequently during the term of your
Franchise. There are no contractual limitations on the frequency and cost of the obligation.


Operations Manual. Our confidential Franchise Business Center Operations Manuals consists of several
separate manuals that franchisees use to establish and operate a Franchise Business Center. The tables of
contents of the Franchise Business Center Operations Manuals are attached to this Franchise Disclosure
Document as Exhibit F.

Time Between Signing of Franchise Agreement and Opening. We estimate the typical time between the
signing of a Franchise Agreement and the time you begin Franchise Business Center operations is
between __ and __ months.


                                              Training Program

Initial Franchisee Training. Initial training for Approved Product/Service Center franchisees takes place
at the ABC training center in any city, or at another location we designate. Franchisee training covers all
major aspects of operating an Approved Product/Service Center. The training normally occurs over a
period of XX days. This initial training will be without charge to you and to your designated manager,
and you will pay for airfare, lodging, meals and other incidentals. The curriculum is described below.

                                         Initial Training for a Franchisee

                                                        INSTRUCTION          CLASS      ON        THE
           SUBJECT                 TIME BEGUN           MATERIAL             TIME       JOB
           ABC     Corporate       Day 1 / 9:00 AM      Welcome To Team      3 Hrs      0
           Culture                                      Manual
           Mission Statement       Day 1 / 1:00 AM      Mission Statement    1 Hrs      1
           Development                                  Handout
           What you do once a      Day 1 / 3:00 PM      Head        Coach    3 Hours    3 Hrs
           month                                        Manual,
                                                        Computer
           What you do twice a     Day 2 / 1:00 PM      Head        Coach    1 Hr       1 Hr
           month                                        Manual, Computer
           What you do once a      Day 2 / 3:00 PM      Head       Coach     1 Hr       1 Hr
           week                                         Manual, Computer
           What you do twice a     Day 2 / 5:00 PM      Head       Coach     1.5 Hrs    1.5 Hrs
           week                                         Manual
           Open your facility at   Day 3 / 11:00 AM     Head       Coach     3 Hrs      3 Hrs
           start of day                                 Manual, Computer
           How to operate your     Day 4 / 9:00 AM      Head       Coach     3.5 Hrs    3.5 Hrs
           facility during the                          Manual, Computer
           day




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                                                          - 15 -


                                                            INSTRUCTION             CLASS     ON    THE
            SUBJECT                   TIME BEGUN            MATERIAL                TIME      JOB
            Closing your facility     Day 4 / 5:00 PM       Head       Coach        3 Hrs     3 Hrs
            at the end of the day                           Manual, Computer
            Registering               Day 5 / 3:00 PM       Creating Members        3 Hrs     3 Hrs
            Memberships                                     Manual, Computer
            Staff      recruiting,    Day 6 / 1:00 PM       Great Employees         5 Hrs     0 Hrs
            interviewing      and                           Manual,
            hiring.
            Staff Training            Day 7 / 9:00 AM       Great Employees         4 Hrs     4 Hrs
                                                            Manual,      Players
                                                            Program Manual,
                                                            Goal        Program
                                                            Manual
            Employee                  Day 8 / 9:00 AM       Great Employees         4 Hrs     0 Hrs
            Management                                      Manual
            Financial                 Day 8 / 1:00 PM       Great Head Coach        4 Hrs     0 Hrs
            Management                                      Manual, Handouts,
                                                            Computer
            Office Management         Day 8 / 5:00 PM       Great Head Coach        3 Hrs     0 Hrs
                                                            Manual,        Filing
                                                            System
            Facilities                Day 9 / 11:00 PM      Facilities Manual       3 Hrs     0 Hrs
            Management
            Sales Building            Day 9 / 3:00 PM       Marketing Manual        4 Hrs     0 Hrs

            Running Operations        Day 10 / 10:00 AM     Open Book               3 Hrs     0 Hrs
            Test
            Sales Building Test       Day 10 / 1:00 PM      Open Book               3 Hrs     0 Hrs

            Summary                   Day 10 / 5:00 PM      Marked           up     2 Hrs     0 Hrs
                                                            feedback on test
            Totals                                                                  58 Hrs    23 Hrs



Initial In-Center Pre-Opening Marketing Training: We will provide you two days of on-site training at
your first franchisee's Approved Product/Service Center. The training will take place as soon as the
franchise has been awarded and the franchisee has paid his initial franchise fee. The training will be
conducted under our supervision. Your instructors will be in attendance at the training for the entire
duration. The goal will be to train you on how to teach you how to conduct effective pre-opening
marketing for your FRANCHISE BUSINESS CENTER. Each party will pay its own travel and lodging
expenses.

                                     Initial In-Center Pre-Opening Marketing Training

           SUBJECT                TIME BEGUN             INSTRUCTION                  CLASS      ON THE
                                                         MATERIAL                     TIME       JOB
           Intro          and     Day 1 / 9:00 AM        Welcome to the Team          1 Hrs      0 Hrs
           Overview,        &                            Manual



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                                                  - 16 -


           SUBJECT            TIME BEGUN         INSTRUCTION                CLASS       ON THE
                                                 MATERIAL                   TIME        JOB
           Review

           Dream Week Time    Day 1 / 10:00 AM   Great    Head      Coach   2 Hrs       0 Hrs
           Management                            Manual, Filing System
           System
           Center Marketing   Day 1 / 1:00 PM    Marketing       Manual,    4 Hrs       0 Hrs
           Systems                               Computer
           Telephone          Day 2 / 9:00 AM    Using The Telephone        1 Hr        0 Hrs
           Management                            Manual
           Center Marketing   Day 2 / 10:00 AM   Marketing Manual,          4 Hrs       0 Hrs
           con’t.                                Computer
           Summary            Day 2 / 4:00 PM    All Manuals                1 Hrs       0 Hrs

           Totals                                                           13 Hrs      0 Hrs



Initial In-Center Opening Training: We will provide you with XX days of on-site training in Training
Center operations at your first franchisee’s Approved Product/Service Center. The training will take
place three days immediately prior to opening and four days following opening for all Center employees
and management personnel. The training will be conducted under our supervision. Each party will pay
its own travel and lodging expenses. The training program is conducted when construction of the
Approved Product/Service Center is completed.




- 16   -
                                                        - 17 -



                                          Initial In-Center Opening Training

           SUBJECT               TIME BEGUN           INSTRUCTION                   CLASS   ON THE
                                                      MATERIAL                      TIME    JOB
           Facilities            Day 1 / 9:00 AM      Facilities Manual             0 Hrs   5 Hrs
           Management
           Office                Day 1 / 3:00 PM      Great    Head      Coach      0 Hrs   3 Hrs
           Management                                 Manual, Filing System
           Financial             Day 2 / 9:00 AM      Great    Head      Coach      0 Hrs   3 Hrs
           Management                                 Manual, Computer
           Telephone             Day 2 / 1:00 P.M.    Using The Telephone           0 Hrs   1 Hr
           Management                                 Manual
           Sales Building        Day 2 / 2:00 PM      Marketing Manual,             0 Hrs   7 Hrs
                                                      Computer
           Monthly               Day 3 / 1:00 PM      Head Coach Manual,            0 Hrs   7 Hrs
           Operations                                 Computer
           Procedures
           Twice    Monthly      Day 4 / 11:00 AM     Head Coach          Manual,   0 Hrs   2 Hrs
           Operations                                 Computer
           Procedures
           Twice      Weekly     Day 4 / 1:00 PM      Head Coach Manual             0 Hrs   2 Hrs
           Operations
           procedures
           Once       Weekly     Day 4 / 3:00 PM      Head Coach          Manual,   0 Hrs   3 Hrs
           Operations                                 Computer
           Procedures
           Employee              Day 5 / 9:00 AM      Great Employees Manual        0 Hrs   2 Hrs
           Management
           Coach Training        Day 5 / 11:00 AM     Great     Employees           0 Hrs   20 Hrs
                                                      Manual,
           Daily      Facility   Day 7 / 1:00 PM      Head Coach Manual,            0 Hrs   1 Hr
           Opening                                    Computer
           Procedures
           Daily Operations      Day 7 / 2:00 PM      Head Coach Manual,            0 Hrs   7 Hrs
           Procedures                                 Computer
           Daily      Facility   Day 7 / 9:00 PM      Creating     Members          0 Hrs   2 Hrs
           Closing                                    Manual, Computer
           Procedures
           Summary               Day 7 / 10:00 AM     All Manuals                   2 Hrs   0

           Totals                                                                   2 Hrs   55 Hrs



Mr. Smith and Mr. Jones are responsible for the training programs. Their experience is set forth in Item 2
of this Franchise Disclosure Document. Other instructors with knowledge in particular areas may assist
from time to time.

You may be required to attend additional training from time to time if we require it, at a cost of up to
approximately $000 per day, plus travel and accommodations. In addition, we hold one mandatory


- 17   -
                                                    - 18 -


annual training conference, most often in conjunction with a major trade show, conference. You should
budget for $000 to $000 in fees, plus travel, meals and accommodations, to attend each conference.

You may also be invited to attend four Franchise Advisory Council meetings each year, at your own
expense. The total cost may exceed $0,000 per meeting. Although not required, we urge you to attend
these meetings.

If you replace a designated manager we will provide the replacement’s Initial In-Center Opening
Training without charge in any city. You will be responsible for the cost of accommodations, meals and
travel. The new manager must satisfactorily complete this training within 30 days after being named your
designated to his or her position, or at the next available training session.

                                      ITEM 12.         TERRITORY
Subject to the terms of the Franchise Agreement, you receive the exclusive right within your
Development Area to open and operate your own Centers pursuant to separate Franchise Agreements.
Your Development Area will encompass a large enough area to enable you to have a market servicing
XXX population.

Provided you remain in compliance with the minimum franchise advertising fee commitments in Section
__ of your Franchise Agreement and with all other terms of the Franchise Agreement or any other
agreement between you and ABC, we do not require you to meet minimum specific development
obligations and we will not establish or license anyone else to establish FRANCHISE BUSINESS
CENTERS or other businesses offering similar Approved Product/Service services under a different
trademark within your Development Area. If you fail to satisfy the minimum franchise advertising fee
commitments you may lose your exclusive rights in all or part of the Development Area. In that case, we
will have the right to establish or license others to establish FRANCHISE BUSINESS CENTERS or other
businesses offering similar Approved Product/Service services under a different trademark in the part of
the Development Area that we remove from your franchise.

The competitive protection you receive under the Franchise Agreement will not prohibit or otherwise
restrict ABC or its affiliates from marketing the availability of or selling franchises for territories outside
your Development Area to residents of the Development Area. You will not have any competitive
protection against competition from other franchisees whose FRANCHISE BUSINESS CENTERS are
located outside of your Development Area, even if these FRANCHISE BUSINESS CENTERS market their
products and services in or draw customers from your Development Area. Similarly, there are no
limitations on your ability to advertise and promote the FRANCHISE BUSINESS CENTERS you operate
to customers outside your Development Area.

Finally, the competitive protection you receive under the Franchise Agreement will in no way limit ABC
or its affiliates from selling proprietary merchandise, services, memorabilia and other products to
customers inside the Development Area through catalogues, telemarketing campaigns, an Internet
website, retail sales (non-ABC locations), direct sales, multi-level marketing sales, distribute catalogues
and similar sales solicitation materials, broadcast television and radio commercials for direct-order
merchandise and services, initiate telephone contact with and accept telephone orders, and fill customer
orders for direct-order merchandise and services in the Development Area. However, if we sell any of the
above products and services to a customer in a Zip Code that lies within your protected market, we will
distribute the “net profits” that derive from sales of those products and services to you or, if no
Franchisee's market area encompasses the customer's address, to an advertising cooperative to which
Franchisees in the market contribute.




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                                                  - 19 -


The Franchise Advisory Council will assist us in developing an appropriate definition of “net profits”.

ABC does not now nor does it plan to operate a competing distribution system of similar goods or
services to those being franchised at present.


                                   ITEM 13.        TRADEMARKS
The Franchise Agreement licenses you to use the ABC™ trademark, as well as our other trademarks,
service marks, trade names, trade dress and commercial symbols (collectively, the “Marks”). We claim
common law trademark rights for all of the Marks, including the ABC trademark. ABC will determine
what trademarked services and products you will be permitted to offer and sell from any FRANCHISE
BUSINESS CENTERS in your Development Area. The principal Marks relating to the Franchise are
described in the following chart.


   Trademark, Service Mark     Registration     Principal/     Date         of   Comment
   or Design                   (Application)    Supplementa    Registration
                               Number           l Register     or
                                                               (Application)

   ABC (BLOCK LETTERS)                          Principal                        Application pending


   ABC (BLOCK LETTERS)                          Principal
   ABC logo
                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__

                                                                                 We intend to file in 20__


NOTE: BY NOT HAVING A PRINCIPAL FEDERAL REGISTRATION FOR THE ABC TRADEMARK, WE DO NOT HAVE
CERTAIN PRESUMPTIVE LEGAL RIGHTS GRANTED BY A REGISTRATION.


Your Franchise Agreement will indicate which Marks you are licensed to use. These Marks may change
from time to time. The use of the Marks by you and any goodwill inures to ABC’ exclusive benefit, and
you acquire no rights in the Marks except those of a licensee. You retain no rights in the Marks upon
termination of the Franchise Agreement. You are not permitted to make any changes or substitutions of
any kind in or to the use of the Marks, unless ABC directs in writing.



- 19   -
                                                   - 20 -


There are no currently effective determinations of the U.S. Patent and Trademark Office, the U.S.
Trademark Trial and Appeal Board, the trademark administrator of any State or any court, or any
pending infringement, opposition or cancellation proceeding, or any pending material litigation,
involving the principal Marks. There are no infringing uses known to ABC that could materially affect
your use of the Marks, and there are currently no agreements in effect that significantly limit our rights to
use or license the use of any Marks in any manner material to a Franchise.

ABC will indemnify and defend you against all claims or actions arising out of your use of the Marks as
authorized by ABC, including reasonable attorneys’ fees and expenses, if you have properly used the
Marks. ABC reserves the right to control any trademark litigation and will be the sole judge whether suit
will be brought or settled in any instance when any person or entity infringes the Marks. You must notify
ABC promptly of any infringement or unauthorized use of the Marks of which you become aware and to
cooperate with any action that we undertake.

If ABC decides that it is advisable at any time for you to modify or discontinue the use of any of the
Marks, including the ABC trademark, or to use one or more additional or substitute trade or service
marks, you must comply with ABC’ directions to modify or discontinue the use of the Mark or use one or
more additional or substitute trade or service marks within a reasonable time after notice. ABC will
reimburse you for any reasonable, direct out-of-pocket expenses you incur to implement such
modifications or substitutions, including costs for new signs, stationary, marketing materials and other
similar expenses for which you provide appropriate documentation to ABC. ABC, however, is not
obligated to reimburse you for any loss of goodwill or revenue associated with any modified or
discontinued Mark.

       ITEM 14.     PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION
There are no patents or copyrights that are material to a Franchisee. ABC, however, does claim copyright
and/or trade secret protection for its business system, advertising, business processes and Operations
Manual. ABC will file and renew relevant copyright registrations as appropriate.

You must notify us immediately if you learn about an infringement or challenge to your use of any
patents or copyrights. However, we do not contract with you to protect patents or copyrights, to protect
you against infringement or unfair competition claims arising out of your ’ use of patents or copyrights,
or to participate in your defense and/or indemnify you. We reserve the right to control any patent or
copyright litigation and will be the sole judge whether suit will be brought or settled in any instance
when any person or entity infringes ABC’ patents or copyrights. You may not contest ABC’ interests in
patents or copyrights.

There are no currently effective determinations of the Copyright Office (Library of Congress), Patent and
Trademark Office, Trademark Trial and Appeal Board, the trademark administrator of any State or any
court, or any pending infringement, opposition or cancellation proceeding or any pending material
litigation involving any patents or copyrights. There are currently no agreements in effect that
significantly limit the rights of ABC to use or license the use of any patents or copyrights in any manner
material to the Franchisee. There are no infringing uses actually known to ABC, which could materially
affect your ’ use of any patents or copyrights.

You must keep confidential during and after the term of the Franchise Agreement all proprietary
information and trade secrets, including our systems, advertising, processes and manuals (collectively,
the “Proprietary Materials”). You must not duplicate or disseminate any Proprietary Materials to any
party other than, during the term of the Franchise Agreement, your ’ employees who need to use such
Proprietary Materials. Before you disseminate any Proprietary Materials to any of your employees,
however, you must have such employees sign a form of nondisclosure agreement acceptable to ABC.



- 20   -
                                                  - 21 -


Upon termination of the Franchise Agreement, and/or the applicable Franchise Agreement or Area
Development Agreement, you must return to ABC all Proprietary Materials then in your ’ possession or
control or previously disseminated to your ’ employees, and all other material copyrighted by ABC. You
must notify ABC immediately if you learn about an unauthorized use of any Proprietary Materials. ABC
is not obligated to take action, and will be the sole judge as to the appropriate response to any
information regarding the unauthorized use of any Proprietary Materials.

You must comply with all changes to the ABC manuals at your cost.




 ITEM 15.         OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF
                           THE FRANCHISE BUSINESS
You must participate personally in the management of the Franchise Business Center for at least the first
three years of operation. During that time you are required to manage it on a full time basis. After the
first three years, you may designate a full-time manager to assume your responsibilities. If you do, the
manager must devote his or her full time, energy and effort to the management and operation of the
Franchise Business Center.

If at any time you wish to change your designated manager, you must first notify and receive our written
approval. Each designated manager must agree to comply with the covenants not to compete described
in Section __ of the Franchise Agreement. A manager need not, however, have any equity interest in the
Franchise if you are a business entity.

Personal guarantees are required by all owners/partners of the Franchise. Spouses that do not own
shares or interest in the Franchise are not required to sign personal guarantees. In addition all
owners/partners, managers, and spouses will sign Confiden
				
DOCUMENT INFO
Description: USA franchisors, provide all of your franchisee applicants with this Franchise Disclosure Document (FDD), as required by FTC regulations. The FDD discloses all relevant information about the franchisor and the franchise business, including: - the franchisor's corporate structure and history, - the business experience of the principals of the franchisor, - any current or potential litigation involving the franchisor, - initial franchise fees and other fees to be paid by a franchisee, - restrictions on sources of products and services, and restrictions on what the franchisee may sell, - assistance and training programs offered by the franchisor, - trademarks, patents, copyrights and proprietary information of the franchisor, - provisions for renewal, transfer and termination of the franchise agreement, - dispute resolution, - financial statements and information, - other information that a franchisee needs in order to evaluate the business opportunity. - The FDD also includes a list of addenda for State-specific requirements. This USA Franchise Disclosure Document is available as a downloadable and fully editable Microsoft Word template.
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