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Title: |
Franchise Agreement |
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Entities: |
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Date: |
2001 |
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Preview shows 24KB of 162KB total |
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$48 |
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ID: |
#1520585 |
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PAK MAIL CENTERS OF AMERICA, INC.
FRANCHISE AGREEMENT
Franchisee:
-----------------------------
Date:
-----------------------------
Franchised Location:
--------------------
----------------------------------------
<PAGE>
PAK MAIL CENTERS OF AMERICA, INC.
FRANCHISE AGREEMENT
TABLE OF CONTENTS
1. PURPOSE...............................................................1
2. GRANT OF FRANCHISE....................................................1
2.1. Grant of Franchise...........................................1
2.2. Scope of Franchise Operation.................................1
3. FRANCHISED LOCATION AND TERRITORIAL RIGHTS............................2
3.1. Franchised Location..........................................2
3.2. Protected Territory..........................................2
3.3. Limitation on Franchise Rights...............................2
3.4. A.M. P.M. MOVERS Program.....................................2
3.5. Franchisor's Reservation of Rights...........................2
4. INITIAL FRANCHISE FEE.................................................3
4.1. Initial Franchise Fee........................................3
5. DEVELOPMENT OF FRANCHISED LOCATION....................................3
5.1. Approval of Franchised Location..............................3
5.2. Approval of Lease............................................3
5.3. Conversion and Design........................................4
5.4. Signs........................................................4
5.5. Equipment....................................................4
5.6. Permits and Licenses.........................................4
5.7. Commencement of Operations...................................6
6. TRAINING..............................................................6
6.1. Initial Training Program.....................................6
6.2. Length of Training...........................................6
6.3. Additional Training..........................................6
7. DEVELOPMENT ASSISTANCE................................................8
7.1. Franchisor's Development Assistance..........................8
8. OPERATIONS MANUAL.....................................................9
8.1. Operations Manual............................................9
8.2. Confidentiality of Operations Manual Contents................9
8.3. Changes to Operations Manual.................................9
9. OPERATING ASSISTANCE..................................................9
9.1. Franchisor's Services........................................9
9.2. Additional Franchisor Services..............................10
10. FRANCHISEE'S OPERATIONAL COVENANTS...................................10
10.1. Business Operations.........................................10
11. ROYALTIES............................................................12
11.1. Monthly Royalty.............................................12
11.2. Royalty Based Revenues......................................12
11.3. Royalty Payments............................................12
11.4. Application of Payments.....................................13
<PAGE>
12. ADVERTISING..........................................................13
12.1. Approval of Advertising.....................................13
12.2. Marketing Material Beginning Inventory......................14
12.3. Advertising Contribution....................................15
12.4. Regional Advertising Programs...............................16
13. QUALITY CONTROL......................................................16
13.1. Compliance with Operations Manual...........................16
13.2. Standards and Specifications................................18
13.3. Inspections.................................................18
13.4. Restrictions on Services and Products.......................18
13.5. Approved Suppliers..........................................18
13.6. Request to Approve Supplier.................................18
13.7. Shopping Service............................................19
14. MARKS, TRADE NAMES AND PROPRIETARY INTERESTS.........................19
14.1. Marks.......................................................19
14.2. No Use of Other Marks.......................................19
14.3. System......................................................19
14.4. Mark Infringement...........................................20
14.5. Franchisee's Business Name..................................20
14.6. Change of Marks.............................................20
15. REPORTS, RECORDS AND FINANCIAL STATEMENTS............................20
15.1. Franchisee Reports..........................................20
15.2. Verification................................................21
15.3. Books and Records...........................................21
15.4. Audit of Books and Records..................................21
16. TRANSFER.............................................................22
16.1. Transfer by Franchisee......................................22
16.2. Pre-Conditions to Franchisee's Transfer.....................22
16.3. Franchisor's Approval of Transfer...........................23
16.4. Right of First Refusal......................................23
16.5. Specific Types of Transfers.................................24
16.6. Assignment by the Franchisor................................24
16.7. Franchisee's Death or Disability............................24
17. TERM AND EXPIRATION..................................................26
17.1. Term........................................................26
17.2. Continuation................................................26
17.3. Rights Upon Expiration......................................26
17.4. Exercise of Option for Successor Franchise..................26
17.5. Conditions of Refusal.......................................27
18. DEFAULT AND TERMINATION..............................................27
18.1. Termination by Franchisee...................................27
18.2. Termination by Franchisor - Effective Upon Notice...........27
18.3. Termination by Franchisor - Thirty Days Notice..............28
18.4. Right to Purchase...........................................29
18.5. Obligations of Franchisee Upon Termination or Expiration....30
18.6. Acknowledgement.............................................31
18.7. State and Federal Law.......................................31
<PAGE>
19. BUSINESS RELATIONSHIP................................................31
19.1. Independent Businesspersons.................................31
19.2. Payment of Third Party Obligations..........................32
19.3. Indemnification.............................................32
20. RESTRICTIVE COVENANTS................................................32
20.1. Non-Competition During Term.................................32
20.2. Post-Termination Covenant Not to Compete....................33
20.3. Confidentiality of Proprietary Information..................33
20.4. Confidentiality Agreement...................................33
21. INSURANCE............................................................34
21.1. Insurance Coverage..........................................34
21.2. Proof of Insurance Coverage.................................34
22. MISCELLANEOUS PROVISIONS.............................................34
22.1. Governing Law/Consent to Venue and Jurisdiction.............34
22.2. Modification................................................34
22.3. Entire Agreement............................................35
22.4. Delegation by the Franchisor................................35
22.5. Effective Date..............................................35
22.6. Review of Agreement.........................................35
22.7. Attorneys' Fees.............................................35
22.8. Injunctive Relief...........................................36
22.9. Payment of Taxes............................................36
22.10. No Waiver...................................................36
22.11. No Right to Set Off.........................................36
22.12. Invalidity..................................................36
22.13. Notices.....................................................36
22.14. Acknowledgement.............................................36
EXHIBITS
--------
I. Addendum to Franchise Agreement - Location Approval
II. Guaranty and Assumption of Franchisee's Obligations
III. Statement of Ownership
IV. Authorization Agreement for Prearranged Payments
V. Build-Out Program Addendum
VI. Amendment to Franchise Agreement - Renewal
<PAGE>
PAK MAIL CENTERS OF AMERICA, INC.
FRANCHISE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this ____ day of ________, 20___,
by and between PAK MAIL CENTERS OF AMERICA, INC., a Colorado corporation,
located at 7173 South Havana Street, Suite 600, Englewood, Colorado 80112 (the
"Franchisor") and ______________________________________________________________
___________________________________________________, located at
________________________ _______________________________________________________
(the "Franchisee"), who, on the basis of the following understandings and
agreements, agree as follows:
1. PURPOSE
1.1. The Franchisor has developed methods for establishing, operating and
promoting stores offering a variety of packaging, shipping, crating, freight
forwarding, mailing, communications and information services ("PAK MAIL Centers"
or "Centers") which use the service mark "PAK MAIL" and related trade names and
trademarks ("Marks") and the Franchisor's proprietary methods of doing business
("System").
1.2. The Franchisor grants the right to others to develop and operate a PAK MAIL
Center, under the Marks and pursuant to the System.
1.3. The Franchisee desires to establish a PAK MAIL Center at a location
identified herein or to be later identified, and the Franchisor desires to grant
the Franchisee the right to operate a PAK MAIL Center at such location under the
terms and conditions which are contained in this Agreement.
2. GRANT OF FRANCHISE
2.1. Grant of Franchise.
-------------------
The Franchisor grants to the Franchisee, and the Franchisee accepts from
the Franchisor, the right to use the Marks and System in connection with the
establishment and operation of a PAK MAIL Center, at the location described in
Article 3 of this Agreement. The Franchisee agrees to use the Marks and System,
as they may be changed, improved, and further developed by the Franchisor from
time to time, only in accordance with the terms and conditions of this
Agreement.
2.2. Scope of Franchise Operation.
-----------------------------
The Franchisee agrees at all times to faithfully, honestly and diligently
perform the Franchisee's obligations hereunder, and to continuously use best
efforts to promote the PAK MAIL Center. The Franchisee agrees to utilize the
Marks and System to operate all aspects of the business franchised hereunder in
accordance with the methods and systems developed and prescribed from time to
time by the Franchisor, all of which are a part of the System. The Franchisee's
PAK MAIL Center shall offer all products and services as the Franchisor shall
designate and shall be restricted from offering or selling any products and
services not previously approved by the Franchisor in writing.
<PAGE>
3. FRANCHISED LOCATION AND TERRITORIAL RIGHTS
3.1. Franchised Location.
--------------------
The Franchisee is granted the right and franchise to own and operate a PAK
MAIL Center at the address and location which shall be set forth in Exhibit I,
attached hereto ("Franchised Location"). If, at the time of execution of this
Agreement, the Franchised Location cannot be designated as a specific address
because a location has not been selected and approved, then the Franchisee shall
promptly take steps to choose and acquire a location for its PAK MAIL Center
within the Designated Area, set forth in Exhibit I. In such circumstances, the
Franchisee shall, within 90 days after the execution of this Agreement, select
and propose to the Franchisor for the Franchisor's prior approval a specific
location for the Franchised Location which, once approved by the Franchisor,
shall hereinafter be set forth in the rider to Exhibit I.
3.2. Protected Territory.
--------------------
So long as the Franchisee is in compliance with this Agreement, the
Franchisor shall not establish or license another person or entity to establish
a PAK MAIL Center within a certain geographic area as set forth in Exhibit I
("Protected Territory").
3.3. Limitation on Franchise Rights.
-------------------------------
The rights that are granted to the Franchisee are for the specific
Franchised Loc ation and Protected Territory and cannot be transferred to an
alternative Franchised Location or Protected Territory, or any other location,
without the prior written approval of the Franchisor, which approval shall not
be unreasonably withheld. The Franchisee shall not operate another Center or
offer services which are part of the System at any site other than the
Franchised Location without the Franchisor's prior written approval, which
approval can be withheld for any reason, in the Franchisor's sole discretion.
3.4. A.M. P.M. MOVERS Program
------------------------
The Franchisor may offer the Franchisee the opportunity to participate in
the "A.M. P.M. MOVERS Program," whereby local moving services for individuals
and small business customers are either provided by the Franchisee or arranged
by the Franchisee with a third party using the A.M. P.M. MOVERS Mark. The
Franchisee may not participate in the A.M. P.M. MOVERS Program without the
Franchisor's prior written permission, which will be given when the Franchisor
and the Franchisee sign the Franchisor's then current A.M. P.M. MOVERS Program
Amendment to this Agreement.
3.5. Franchisor's Reservation of Rights.
-----------------------------------
The Franchisee acknowledges that its franchise rights as granted are
non-exclusive and that the Franchisor retains the rights, among others: (1) to
use, and to license others to use, the Marks and System in connection with the
operation of a PAK MAIL Center, at any location other than in the Protected
Territory; (2) to use the Marks to identify services and products other than
those which the Franchisee sells, to identify promotional and marketing efforts
and related items, and to identify services and products similar to those which
the Franchisee sells, made available through alternative channels of
distribution, at any location; and (3) to use and license the use of other
proprietary marks or methods in connection with the sale of products and
services similar to those which the Franchisee will sell, whether in alternative
2
<PAGE>
channels of distribution or in connection with the operation of packaging and
mailing businesses at any location, which businesses are the same as, or similar
to, or different from PAK MAIL Centers, on any terms and conditions as the
Franchisor deems advisable.
4. INITIAL FRANCHISE FEE
4.1. Initial Franchise Fee.
----------------------
In consideration for the right to develop and operate one PAK MAIL Center,
the Franchisee agrees to pay to the Franchisor an initial franchise fee of
$27,950 as of the date of execution of this Agreement. The Franchisee
acknowledges and agrees that the initial franchise fee represents payment for
the initial grant of the rights to use the Marks and System, that the Franchisor
has earned the initial franchise fee upon receipt thereof and that the fee is
under no circumstances refundable to the Franchisee after it is paid, unless
otherwise specifically set forth in this Agreement.
5. DEVELOPMENT OF FRANCHISED LOCATION
5.1. Approval of Franchised Location.
--------------------------------
The Franchisee shall follow the Franchisor's site selection procedures in
locating a Franchised Location for the PAK MAIL Center. The Franchisee shall
seek the Franchisor's approval of any site proposed as a Franchised Location, by
submitting a complete site submittal package, including demographics and other
materials requested by the Franchisor, containing all information reasonably
required by the Franchisor to assess a proposed Franchised Location. The
Franchisor will not unreasonably withhold approval of a proposed site that meets
all of the Franchisor's site selection criteria.
5.2. Approval of Lease.
------------------
The Franchisee shall obtain the Franchisor's prior written approval before
executing any lease or purchase agreement for the Franchised Location. Any lease
for the Franchised Location shall, at the option of the Franchisor, contain a
provision: (1) allowing for assignment of the lease to the Franchisor in the
event that this Agreement is terminated or not renewed for any reason; (2)
giving the Franchisor the right to cure any default by the Franchisee under such
lease; and (3) providing the Franchisor with the right, exercisable upon and as
a condition of the approval of the Franchised Location, to execute the lease
agreement or other document providing entitlement to the use of the Franchised
Location in its own name or jointly with the Franchisee as lessee and, upon the
exercise of such option, the Franchisor shall provide the Franchisee with the
right to use the premises as its sublessee, assignee, or other similar capacity
upon the same terms and conditions as obtained by the Franchisor. The lease
shall be collaterally assigned to the Franchisor as security for the
Franchisee's timely performance of all obligations under this Agreement; the
Franchisee shall obtain the lessor's consent to such collateral assignment. The
Franchisee shall deliver a copy of the signed lease for the Franchised Location
to the Franchisor within 15 days of its execution. The Franchisee acknowledges
that approval of a lease for the Franchised Location by the Franchisor does not
constitute a recommendation, endorsement or guarantee by the Franchisor of the
suitability or profitability of the location or the lease and the Franchisee
should take all steps necessary to ascertain whether such location and lease are
acceptable to the Franchisee.
3
<PAGE>
5.3. Conversion and Design.
----------------------
The Franchisee acknowledges that the layout, design, decoration and color
scheme of PAK MAIL Centers are an integral part of the Franchisor's proprietary
System and accordingly, the Franchisee shall convert, design and decorate the
Franchised Location in accordance with the Franchisor's plans and specifications
and with the assistance of contractors and suppliers designated by or otherwise
approved by the Franchisor. The Franchisee shall obtain the Franchisor's written
consent to any conversion, design or decoration of the premises before
remodeling or decorating begins, recognizing that any related costs are the
Franchisee's sole responsibility. It shall be the Franchisee's responsibility to
have prepared all required construction plans and specifications to suit the
shape and dimensions of the Franchised Location and to insure compliance with
applicable laws and the lease.
5.4. Signs.
------
The Franchisee shall purchase or otherwise obtain for use at the Franchised
Location and in connection with the PAK MAIL Center signs which comply with the
standards and specifications of the Franchisor as set forth in the Operations
Manual, as that term is defined in Section 8.1. It is the Franchisee's sole
responsibility to insure that any signs comply with applicable local ordinances,
mall regulations, building codes and zoning regulations. Any modifications to
the Franchisor's standards and specifications for signs which must be made due
to local ordinances, codes or regulations shall be submitted to the Franchisor
for prior written approval. The Franchisee acknowledges the Marks, or any other
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