Operation of employment agency

Operation of employment agency. Table of Contents Parties Recitals 1 Grant of franchise 2 Training A By franchisor B By franchisee 3 Personnel A Employees B Office Manager C Effect of death or incapacity of named personnel 4 Agreement not to compete A During term of agreement B After termination of agreement C Additional restrictions 5 Payment A Franchise fees B Continuing fees 6 Records and financial inspection A Records B Inspection 7 Operations procedure A Office and hours B Fiscal year C Office supplies D Advertising 8 Trademarks and tradenames 9 Insurance 10 Independent contractor 11 Default; termination A Default resulting in termination with notice B Default resulting in termination without notice C Waiver D Obligations and procedures on termination 12 Assignment 13 Severability 14 Notices 15 Applicable law 16 Indemnity 17 Public representation as franchisee Parties Agreement made _________[date], between _________[franchisor], a _________[state] corporation, the principal business offices of which are located at _________[address], referred to as franchisor, and _________[franchisee], _________[address], referred to as franchisee. Recitals A. For many years franchisor and its predecessors have been successfully engaged in the conduct and supervision of personnel consulting and employment agency businesses, and they have developed effective and valuable methods and techniques of operating such businesses and for training others in their operation. B. Franchisee wishes to obtain from franchisor a franchise for the operation of a personnel consulting and employment agency business and, in connection with this operation, to use franchisor's name, to employ franchisor's methods and techniques, and to become part of franchisor's system. In consideration of the mutual covenants set forth below, franchisor and franchisee agree as follows: 1. Grant of Franchise Franchisor grants to franchisee the right to use the registered _________[service mark "_________" or if several service marks, so indicate], and to be identified as a member of franchisor's system, in connection with the operation of a personnel consulting and employment agency business, referred to as franchisee's business. Franchisee's business shall be conducted by franchisee at one office only, located within the limits or boundaries of the following non-exclusive franchise office location area, referred to as the franchise area: _________. Franchisee shall not open its office nor change its location without first securing the written approval of franchisor. For the purpose of this agreement, franchisee's business shall be deemed to include any and all phases of activity in the nature of assisting others to obtain employment, whether representing an employee or an employer, including, but not limited to, the writing of resumes, personnel advice and consultation, testing, advertising as related to the personnel consulting and employment agency business, and all other similar or related services, whether or not identified or construed by law as an employment agency activity. Franchisor may open or operate, or may grant to any other person, firm, or corporation the right to open or operate a “_________” [tradename] personnel consulting and employment agency office located anywhere, including locations within the franchise area. These offices may use the name "_________," and may advertise and solicit business within the franchise area or elsewhere. Franchisee releases and waives any objection to the use of the name "_________" in connection with these other operations. It is understood that the nature of the franchise system is such that there is no exclusiveness as to employer-clients or as to employee-applicants and that franchisor or any franchisee in franchisor's system may solicit clients, or process and place applicants, wherever located. 2. Training A. By Franchisor. Franchisor shall, within a reasonable time following execution of this agreement, provide the persons who will actively participate in the operation of franchisee's business with instruction, advice, and guidance with respect to the establishment of franchisee's business, and with respect to the methods and techniques developed by franchisor for it. These services are to be provided by franchisor without charge to franchisee at a place and time designated by franchisor. Franchisor reserves the right to terminate this agreement immediately should the persons to be trained fail to complete training satisfactorily. The instruction to be rendered by franchisor shall include coverage of the following subjects: _________[Interviewing of employee-applicants; evaluation of employeeapplicants; soliciting employer-clients; phone usage; preparation and placement of advertising; record-keeping; use of forms; selection of office location; office layout and furnishing; selection of office personnel; office operations]. All expenses of franchisee incident to attendance at the instruction session shall be borne by franchisee. Franchisor shall also supply to franchisee for exclusive use of franchisee and _________[his or her] employees, a quantity of training manuals that franchisor deems sufficient to commence operations. Additional manuals will be supplied at franchisor's discretion on written request by franchisee and payment of a printing and/or handling charge. All manuals shall remain the property of franchisor, and franchisee shall treat them as confidential and shall not disclose their contents to unauthorized persons. If franchisee requests training in addition to that provided for above, franchisor shall provide instruction to franchisee or franchisee's employees at time and place and for duration which is mutually convenient; provided, however, that the costs of additional training, including transportation, subsistence, and a reasonable charge for the time of services of franchisor's representative, shall be borne by franchisee and, if requested by franchisor, shall be paid in advance. B. By Franchisee. Franchisee shall train and instruct each person employed in the operation of franchisee's business (other than those instructed by franchisor) in the methods and techniques developed by franchisor. Training and instruction shall be based on and given in accordance with franchisor's training manuals, and shall be provided prior to participation by the employee in franchisee's business. Franchisee shall comply with all laws, rules, and regulations of duly-constituted governmental bodies relating to franchisee's business, and any violation of them may be deemed by franchisor to be a material breach of this agreement. To the extent not prohibited by applicable laws, rules, and regulations, franchisee shall strictly follow and comply with the procedures, methods, and standards set forth in franchisor's training manuals and any subsequent revisions, and directives that are from time to time issued by franchisor pertaining to the instruction of employees and to the operation of franchisee's business, including but not limited to the subject areas covered in subsection A, above. 3. Personnel A. Employees. This agreement is a personal service contract and is entered into by franchisor with franchisee in reliance on and in consideration of the personal qualifications and representations made with respect to _________ who, it is agreed, will be trained by franchisor in accordance with subsection A of section 2 of this agreement, and will actively participate in the operation of franchisee's business: _________[list name(s)]. Additional persons may be added from time to time on franchisor's written approval and the successful completion of franchisor's current training program. b. Office Manager. Franchisee agrees at all times to have its office managed by a person who has been trained and approved by franchisor to franchisor's satisfaction. A. Effect of Death or Incapacity of Named Personnel. In the event of the death or incapacity (for reasons of health) of _________[the person or all the persons] named in subsection A above, franchisor may at its option terminate this agreement. However, to facilitate an orderly termination of the business relationships between franchisor and franchisee and to facilitate any liquidation of franchisee's business, franchisor will defer the exercise of such right to terminate for a period, to be determined by franchisor, of not less than _________ days and not more than _________ months from the date of the death or incapacity. During the extended period franchisee or franchisee's successor will continue to operate under the terms of this agreement. 4. Agreement Not To Compete A. During Term of Agreement. Franchisee shall not conduct or operate, directly or indirectly, or be employed by or associated in any way with any personnel consulting and employment agency business other than that of franchisor during the term of this agreement. Franchisee shall not at any time, directly or indirectly, furnish any information as to franchisor's methods of operation, interviewing, advertising, publicity, promotion ideas, or any other information relative to franchisee's business, or to any other business licensed, owned, or managed by franchisor or any subsidiary thereof to anyone except franchisor. B. After Termination of Agreement. Franchisee acknowledges that the name "_________," the business reputation associated with it, the methods and techniques employed by franchisor, the training and instruction to be provided under the agreement, the knowledge of the services and methods of franchisor, and the opportunities, associations and experience established and acquired by franchisee under the agreement and as a member of the franchise system, are of considerable value. In consideration of these things, in the event of termination of this agreement for any reason whatsoever, franchisee shall not engage for a period of _________ years, either directly or indirectly, as principal or employee, alone or in association with others, in a similar business to that licensed and established under this agreement within _________ miles of: (a) Franchisee's office; or (b) Any other office now established by franchisor or any of its franchisees within the State of _________; or (c) Any other office established by franchisor or any of its franchisees within the State of _________ subsequent to this agreement, but prior to the end of the above-mentioned _________-year period; or (d) Any other office wherever located, now established by franchisor or any of its franchisees; or (e) Any other office, wherever located, established by franchisor or any of its franchisees subsequent to this agreement, but prior to the end of the above-mentioned _________-year period. The parties understand that this restrictive covenant is prepared for use in many jurisdictions with differing public policies, and accordingly agree that subparagraphs (a) through (e) of this subsection are severable. Any of these subparagraphs which are enforceable in themselves shall be enforced regardless of the enforceability of any other subparagraph. C. Additional Restrictions. Franchisee may at _________[his or her] discretion obtain from each employee, including managers, at the time of and as a condition to employment, a restrictive covenant concerning later employment. Franchisor at its sole discretion may institute or allow others to institute in its behalf action to enforce the terms of this agreement in the event that franchisee fails to take immediate appropriate action. However, nothing in this agreement shall be construed as obligating franchisor to commence any action of this type; or as making it liable in any way for not commencing or pursuing an action. Since enforcement of restrictive employment covenants differs from area to area, franchisor assumes no responsibility for the legal enforceability of covenants in the franchise area and recommends that franchisee review them through separate own legal counsel. Franchisor further reserves the right to require franchisee to obtain from each employee as a condition of employment a restrictive covenant concerning later employment, executed in _________[triplicate] in a form prescribed or approved by franchisor, an executed copy of which shall promptly be forwarded to franchisor. If requested in writing by franchisor, franchisee agrees that each covenant will contain the restrictions set forth in subsection B of this section. 5. Payment A. Franchise Fees. In consideration of the franchise granted by franchisor, franchisee shall pay to franchisor, on execution of this agreement, $_____. Franchisee understands that _________[he or she] may be required, under applicable _________[state] law, to secure permission from the appropriate government authority to operate a personnel consulting and employment agency business. It shall be franchisee's responsibility to become familiar with all applicable laws and regulations, and franchisor has made no representations as to the nature of these laws or franchisee's ability to qualify under them. If, in franchisor's opinion, franchisee makes a reasonable effort in good faith to qualify under state law and fails to do so, the above-mentioned franchise fee shall be refunded to franchisee, except that franchisor shall retain $_____ to compensate for expenses incurred in connection with this agreement. B. Continuing Fees. Franchisee shall also pay to franchisor monthly a sum representing _________ percent of the gross receipts from the operation of franchisee's business for the preceding month. These sums are to be paid to and received by franchisor on or before the _________ day of each month, commencing the month following the month in which franchisee begins business, time being of the essence. Gross receipts shall also include fees assigned for collection by franchisee to others. 6. Records and Financial Inspection A. Records. Franchisee shall furnish to franchisor reports regarding the operation of franchisee's business for the preceding month. These reports are to be received by franchisor on or before the _________ day of each month, time being of the essence. The reports shall be prepared on forms prescribed by franchisor for that purpose. Franchisee shall make and keep, on forms prescribed by franchisor, consecutively numbered invoices for each charge and service rendered in the operation of franchisee's business. Franchisee shall keep true and correct business records and books of account and shall establish and maintain these records in accordance with methods and procedures recommended by franchisor. B. Inspection. All records and books of account maintained by franchisee with respect to franchisee's business shall be open to inspection by franchisor, or franchisor's duly authorized agent, during regular business hours, or at such other times as may be mutually agreed upon. Franchisor shall have the right to examine job orders, applicant files and records of placements, both active and inactive, and any other related records. Upon request by franchisor, franchisee shall promptly furnish to it copies of social security reports, state and federal unemployment reports, federal income tax returns, state income, franchise, or other tax returns, and any other federal, state, county, or city reports requested. Each year franchisee shall have an audit, in the form prescribed by franchisor, made of its affairs by an independent certified public accountant acceptable to and approved by franchisor. Within _________ days of the end of franchisee's fiscal year, franchisee shall furnish to franchisor, without charge, a copy of the certified audit. In the event of franchisee's failure to supply a certified audit as required, franchisor may have franchisee's affairs audited by a certified public accountant appointed by it, and the cost of the audit shall be borne by franchisee. 7. Operations Procedure A. Office and Hours. Franchisee shall keep and maintain a safe, neat, clean, and orderly office at a location in keeping with the standards established in franchisor's training manuals. This office shall be open during the normal business hours prevailing in franchisee's area, but not less than _________ hours a week. B. Fiscal Year. Franchisee's fiscal year shall begin on _________ and end on _________ of each year. C. Office Supplies. To maintain uniformity within franchisor's system and to maintain the standard practices that are necessary to promote the good will of franchisor's system, franchisee shall use in the operation of the business only the standard form of reports, stationery, and printed material uniformly prescribed by franchisor for use by members of its system. Franchisee may at _________[his or her] discretion purchase all these materials from franchisor. The charge for this material if ordered from franchisor, together with all costs for postage and handling, shall be paid in advance by franchisee. Franchisor reserves the right to prohibit franchisee from using any form of reports, stationery, or printed matters purchased from other suppliers that deviate in any way, either in content or in the standards of quality that have been established by franchisor in the past or may be established by franchisor in the future. D. Advertising. Franchisee shall place in the yellow pages of the telephone directory serving its franchise area at least a _________-inch in-column advertisement in the form prescribed by franchisor. Additional yellow page advertisements may be placed by franchisee, but only in the most recent form prescribed by franchisor. 8. Trademarks and Tradenames In connection with the operation of franchisee's business, including advertising, franchisee shall: (a). Use no name or service mark other than the name "_________" or any derivative of that name. Franchisee shall identify itself as a member of the "_________" system, unless applicable law requires other or additional identification. (b). Use the name and service mark in a format and with a suffix or prefix designated by franchisor. Franchisee shall not register the "_________" trademark with any state authority, except as required under the _________[state] Assumed Business Name Act. 9. Insurance Franchisee shall purchase and maintain in effect at all times during the term of this agreement a policy or policies of insurance, naming franchisor as an additional insured on the face of each policy at franchisee's sole cost and expense, as follows: (a). Public liability in no less than the following amounts, which amounts shall be changed from time to time on written demand by franchisor: Bodily injury $_____ each person, $_____ each accident; property damage $_____ each accident. (b). Workers' compensation insurance as provided by state law. (c). Comprehensive auto liability insurance as provided by law, but in no event less than the following amounts, which shall be changed from time to time on written demand by franchisor: Bodily injury $_____ each person, $_____ each accident; property damage $_____ each accident. (d). Fidelity bond insurance covering acts of franchisee and _________[his or her] employees—$_____. All policies of insurance shall contain a statement that they cannot be canceled without _________ days prior written notice to franchisee and franchisor. Franchisee agrees to provide documentary evidence that required insurance is in full force and effect promptly on request by franchisor. Franchisee shall promptly notify franchisor of any and all claims against franchisee and/or franchisor under these insurance policies. 10. Independent Contractor This agreement is a franchise agreement, and franchisee is not authorized under it to act for or on behalf of franchisor in any matter whatsoever. Franchisee shall be responsible for, and shall promptly pay when due, all expenses of franchisee's business, including all taxes and levies of any kind in connection with franchisee's business and the income arising from it. Franchisor shall not be liable for any expenses, taxes, levies, or disbursements otherwise paid or incurred in connection with the establishment and maintenance of franchisee's business. In granting this franchise, franchisor does not authorize or empower franchisee to use franchisor's name in any capacity other than as is provided in this agreement, nor to sign franchisor's name to any contracts, documents, bills, notes, checks, drafts, leases, bonds, mortgages, bills of sale, or any other instrument in writing, or to hold itself out as a general or special agent, officer, director, or partner of franchisor. 11. Default; Termination A. Default Resulting in Termination With Notice. The occurrence of any of the following shall be deemed a default, and franchisor shall have the right to terminate this agreement if (1) Franchisee fails to comply with any of the terms of this agreement, time being of the essence; (2) Franchisee's business remains in an "inoperative state" for any period of _________ consecutive days; (3) Franchisee fails to make any payment within _________ days following the date when the payment is due in accordance with the terms of this agreement; or (4) Franchisee fails to observe or to perform any covenant set forth in this agreement. In the event of a default, as defined above, franchisor may terminate this agreement on _________ days' written notice to franchisee, unless the default is cured within the _________ -day notice period. B. Default Resulting in Termination Without Notice. Franchisee shall be deemed to be in default under this agreement, and all rights granted to franchisee under this agreement shall terminate immediately, if (1) Franchisee becomes insolvent; (2) Franchisee files a petition under any bankruptcy, reorganization, insolvency, or moratorium law, or any law for the relief of, or relating to, debtors; (3) Any involuntary petition under any bankruptcy statute is filed against franchisee, or any receiver or trustee is appointed to take possession of property of franchisee, unless the petition or appointment is set aside or withdrawn or ceases to be in effect within _________ days of the date of the filing or appointment; or (4) The real or personal property of franchisee is sold or levied upon by any sheriff or marshal. C. Waiver. The waiver of any default or defaults shall not operate as a waiver of successive defaults, and all rights on default shall continue notwithstanding one or more waivers. D. Obligations and Procedures on Termination. In the event of termination of this franchise for any reason, franchisee shall (1). Immediately cease from using (a) the service mark "_________" or any derivative of it, (b) all other names or service marks provided to franchisee pursuant to this agreement or otherwise used by franchisee in any manner whatsoever in the conduct of business under this agreement, including corporate or partnership names, (c) all slogans, trademarks, and the like of franchisor, and (d) the telephone number(s) used for franchisee's personnel placement service business. (2). Immediately cease operating as a personnel placement service at the franchise location. (3). Immediately cause the previously mentioned telephone number(s) to be transferred and assigned to franchisor or its nominee(s) or to be canceled and withdrawn, as determined by franchisor. (4). Immediately, on request, assign to franchisor any or all contracts of any nature relating to the business conducted pursuant to this agreement. (5). Immediately return to franchisor all instructions, operations manuals, applications, books, forms and materials, and other documents bearing franchisor's service mark or name or any other marks supplied to franchisee by franchisor, and turn over to franchisor any and all other books, forms, customer lists, materials, data, and records, excluding financial records, pertaining to franchisee's business under this license. Franchisor is authorized and empowered peaceably to take possession of the above documents. Franchisee appoints franchisor or any of franchisor's officers as _________[his or her] attorney-in-fact, to execute all instruments and to do all things necessary for accomplishing those acts required of franchisee under subparagraphs (3), (4), and (5) above in the event franchisee fails to perform immediately on termination. In the event of termination for any reason, all amounts still owing to franchisor, if any, including any sum due on the total franchise fee specified in Section 5, shall immediately become due and payable. After termination, franchisor shall be under no obligation to repay any amount previously paid by franchisee to franchisor. 12. Assignment The provisions of this agreement shall be binding on franchisee and _________[his or her] heirs, legal representatives, and assigns. Franchisor reserves the right to assign this agreement to any affiliated corporation or third party on serving notice to franchisee in writing. 13. Severability All of the clauses of this contract are distinct and severable, and if any clause shall be deemed illegal, void, or unenforceable, it shall not affect the validity, legality, or enforceability of any other clause. 14. Notices Any notices required to be given under this agreement can be given by _________[personal delivery, telegram, or United States certified or registered mail, return receipt requested, postage prepaid], directed to franchisor or to franchisee at their addresses as indicated above. Notice by mail shall be deemed received on the _________[second] business day following the date the same was deposited in the United States Mail. 15. Applicable Law This agreement shall be interpreted and governed by the laws of the State of _________. Nothing contained in this agreement shall bar the right of either party to obtain injunctive relief against threatened conduct that will cause loss or damage under the usual equity rules, including the applicable rules for obtaining a preliminary injunction, provided that an appropriate bond against damages is provided. 16. Indemnity Franchisee agrees to indemnify franchisor against any and all claims, suits, demands, or other causes of action, including reasonable attorneys' fees and expenses in defending the same, which may arise or be asserted against franchisor by reason of the operation of franchisee's business or by reason of franchisee's use of franchisor's name. 17. Public Representation As Franchisee Franchisee shall represent that _________[he or she] is doing business as a franchisee under the tradename and style of "_________" or as a licensed member of franchisor's system. For this purpose franchisee shall permanently display at _________[his or her] office, as long as this agreement is effective, franchisor's certificate of good standing. Dated _________, at _________. [Signatures]