Franchise Agreement
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Sample Franchise Agreement
COMPUTER MEDICS OF AMERICA, INC. FRANCHISE AGREEMENT
PARTIES
THIS AGREEMENT is made by and between Computer Medics of America, Inc., an Alaska Corporation, hereinafter known as Computer Medics of America, Inc., or "Franchisor" and the persons signing as Franchisee or Guarantors' and referenced to herein individually or collectively as "Franchisee," to evidence the agreement and understanding between the parties as follows:
RECITALS
WHEREAS, Franchisor has developed, operates and has the right to license a system or business program, including expertise for conducting and operating a business under the mark Computer Medics of America, Inc.; and
WHEREAS, Franchisor has received an exclusive license for Computer Medics of America, Inc., an Alaska Corporation, dated January 1, 2003, to use certain trade names, trademarks, logos, service marks and other property in connection with the operation of business and has developed expertise (including confidential information) and a unique, distinctive and comprehensive system (the "System") for the establishment and operation of a franchised business offering:
Computer Medics of America, Inc., for the promotion and identification of the mark. Computer Medics of America, Inc. and stylized logo for the sale of products and services at Computer Medics of America, Inc. locations and other locations at the discretion of the licensee (the Computer Medics of America, Inc. hereinafter referred to as a Franchise Location or "Business"); and
WHEREAS, Franchisor has devised a uniform system for the operation of Computer Medics of America, Inc. including specifications, and procedures for operations; procedures for quality control; training and ongoing operational assistance; advertising and promotional programs; and other related benefits for use of Franchisee under the Names and Marks, all of which may be changed, improved, and further developed by Computer Medics of America, Inc. from time to time; and
WHEREAS, Computer Medics of America, Inc. identifies its System by means of certain trade names, service marks, trademarks, logos, emblems, trade dress and other indicia of origin, including but not limited to the mark "Computer Medics of
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America, Inc." and such other trade names, service marks, trademarks and trade dress as are now designated (and may hereafter be designated by Computer Medics of America, Inc. in writing) for use in connection with its System (the "Names and Marks").
WHEREAS, Computer Medics of America, Inc. continues to develop, use, and control the use of such Names and Marks to identify for the public the source of services and products marketed there under and under its System, and to represent the System's high standards of consistent quality, appearance, and service.
WHEREAS, Franchisor has established substantial goodwill and business value in its Names and Marks, expertise and System; and
WHEREAS, Franchisee desires to obtain a franchise from Franchisor for the right to use the "Names and Marks" and the expertise for operating a Computer Medics of America, Inc. and to obtain the benefits and knowledge of Franchisor's System including, but without limitation, business design, operating methods, product preparation, advertising, sales techniques and materials, signs, personnel management, control systems, bookkeeping and accounting methods, and in general a style, method and procedure of business operation utilizing the Names and Marks as a Franchisee of Franchisor; and
WHEREAS, Franchisee recognizes the benefits to be derived from being identified with and licensed by Franchisor and Franchisee understands and acknowledges the importance of Computer Medics of America, Inc. high standards of quality, cleanliness, appearance, and service and the necessity of operating the Business in conformity with Computer Medics of America, Inc. standards and specifications.
NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
I. FRANCHISEE'S ACKNOWLEDGEMENT OF BUSINESS RISK AND ABSENCE OF GUARANTEE
Franchisee (and each partner or shareholder if Franchisee is a partnership or corporation) hereby represents that he or she has conducted an independent investigation of the Franchisor's business and System and recognizes that the business venture contemplated by this Agreement involves business risks and that
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its success will depend upon Franchisee's abilities as an independent businessperson. Franchisor expressly disclaims the making of, and Franchisee acknowledges that it has not received any warranty or guarantee, express or implied, as to the potential volume, profits or success of the business contemplated by this Agreement.
11. FRANCHISEE'S ACKNOWLEDGEMENTS CONCERNING RECEIPT AND THOROUGH EVALUATION OF AGREEMENT
Franchisee acknowledges having received, read, and understood this Agreement, including the Uniform Franchise Offering Circular and attachments thereto. Franchisee further acknowledges that Franchisor has accorded Franchisee ample time and opportunity to consult with independent legal counsel and other advisors of its own choosing concerning the potential benefits and risks of entering into this Agreement. Franchisee acknowledges that it has received a completed copy of this Agreement, attachments referred to herein, and agreements relating hereto, if any, at least five (5) business days prior to the date on which this Agreement was executed. Franchisee further acknowledges that it has received the disclosure document required by the Trade Regulation Rule of the Federal Trade Commission, entitled "Information For Prospective Franchisees Required By The Federal Trade Commission," at least ten (10) business days prior to the date on which this Agreement was executed.
Franchisee acknowledges that it has read and understands this Agreement, the Attachments hereto, and any agreements relating thereto, and that Franchisee has been advised by a representative of Computer Medics of America, Inc. to consult with an attorney or advisor of Franchisee's own choosing about the potential benefits and risks of entering into this Agreement prior to its execution.
Franchisee acknowledges that any statements, oral or written, by Computer Medics of America, Inc. or its agents preceding the execution of this Agreement were for informational purposes only and do not constitute any representation or warranty by Computer Medics of America, Inc. The only representations, warranties and obligations of Computer Medics of America, Inc. are those specifically set forth in the Uniform Franchise Offering Circular and this Agreement. Franchisee must not rely on, and the parties do not intend to be bound by, any statement or representation not contained therein.
Franchisee acknowledges that Computer Medics of America, Inc. will not provide or designate locations for Franchisee, will not provide financial assistance to Franchisee and has made
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no representation that it will buy back from Franchisee any products, supplies or equipment purchased by Franchisee in connection with the Business.
III. ACTUAL, AVERAGE, PROJECTED OR FORECASTED FRANCHISE SALES, PROFITS OR EARNINGS
Earnings claims located in the Uniform Franchise Offering Circular are the only statement of sales, profits or earnings that the Franchisee should rely upon.
Franchisee, and each party executing this document hereto, acknowledges that Computer Medics of America, Inc., itself or through any officer, director, employee or agent, has not made, and Franchisee has not received or relied upon, any oral or written, visual, express or implied information, representations, assurances, warranties, guarantees, inducements, promises or agreements concerning the actual, average, projected or forecasted franchise sales, revenues, profits, earnings or likelihood of success that Franchisee might expect to achieve from operating the Business, except as set forth in the Franchise Offering Circular reviewed by Franchisee or its representatives.
IV. INDEPENDENT CONTRACTOR
A. Franchisee is an Independent Contractor
During the term of this Agreement, and any renewals or extensions hereof, Franchisee shall hold itself out to the public as an independent contractor operating its business pursuant to a franchise from the Franchisor. Franchisee agrees to take such affirmative action as may be necessary, including, without limitation, exhibiting multiple public notices of that fact, the content and display of which Franchisor shall have the right to specify. For example, such notices shall be provided on letterhead, business cards, bank account names, bank checks, and signs at the place of business. Franchisee shall select a name for their individual franchise that reflects the territory in which the franchise is located. This name will be linked to the trademarked name of the Franchisor as follows: Computer Medics
of ___________________, a Computer Medics of America, Inc.
Franchise.
It is the Franchisees responsibility to register this name with their state and obtain a federal trademark for their individual business if desired.
B. Franchisor Is Not In A Fiduciary Relationship
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With Franchisee
It is understood and agreed by the parties hereto that this Agreement does not establish a fiduciary relationship between them, and that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venture, partner, employee, or servant of the other for any purpose whatsoever.
It is understood and agreed that nothing in this Agreement authorizes Franchisee, and Franchisee shall have no authority, to make any contract, agreement, warranty, or representation on behalf of Computer Medics of America, Inc., or to incur any debt or other obligation in Computer Medics of America, Inc.'s name; and that Computer Medics of America, Inc. shall in no event assume liability for, or be deemed liable hereunder or there under as a result of any such action; nor shall Computer Medics of America, Inc. be liable by reason of any act or omission of Franchisee in its conduct of the Business or for any claim or judgment arising there from against Franchisee or Computer Medics of America, Inc.
V. FRANCHISE GRANT
Franchisor hereby grants to Franchisee, upon the terms and conditions herein contained and subject to the License Agreement, the right, license, and privilege, and Franchisee hereby accepts a franchise under the terms and conditions set forth herein for the right to operate a Business at the Location set forth in Section VI, (the "Accepted Location"), with the right to use solely in connection therewith the Computer Medics of America, Inc.'s Names and Marks, its advertising and merchandising methods, and Franchisor's System, as they may be changed, improved and further developed from time to time only at the Accepted Location as set forth in Section VI. and provided the Franchisee shall adhere to the terms and conditions hereof.
VI. EXCLUSIVE AREA OR TERRITORY
The Franchise Location shall be: within the state of
California, in the town of ___________and in the designated
service area of__________^_________r California.
The exact accepted location is:
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Franchisee shall not relocate the Business without the express prior written consent of Computer Medics of America, Inc. During the term of this Agreement, Computer Medics of America, Inc. shall not establish, nor license another party or entity to establish, a Computer Medics of America, Inc. in this designated service area. Likewise, Franchisee shall not provide service to customers located outside of this designated service area without the express consent of Computer Medics of America, Inc.
VII. TERM AND RENEWAL OF AGREEMENT
A. Term
The Franchise herein granted shall be for a term of Five (5) years from the date of execution and acceptance (the "Effective Date") of this Franchise Agreement (the "Agreement") by Computer Medics of America, Inc. and subject to earlier termination as herein provided.
B. Renewal
Franchisee may, at its option, renew this Franchise after the initial Five (5) year term. It may be renewed for an additional period of One (1), Five (5) or Ten (10) years subject to the conditions below, all of which must be met prior to renewal:
1. Franchisee shall give the Franchisor written notice of its election to renew not less than three (3) months prior to the end of the then current term;
2. Franchisee must not be in any material default under any provision of the Agreement, any amendment hereof or successor hereto, or any other agreement between Franchisor and Franchisee, and Franchisee shall have complied with all the terms and conditions of all such agreements during the terms thereof;
4. Franchisee shall have satisfied all monetary obligations owed by Franchisee to Franchisor and its affiliate, and shall have timely met these obligations throughout the previous term;
5. Franchisee shall receive and review, before the renewal term, the Franchisor's then-current form of the Franchise Agreement, which shall supersede this Agreement in all respects, and the terms of which may differ from the terms of this Agreement. Franchisor shall charge Franchisee a renewal fee of one thousand dollars ($1000); and
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6. Franchisee shall comply with Franchisor1s then current qualification and training requirements.
VIII. FRANCHISEE'S INITIAL INVESTMENT
The Franchisee's initial investment will vary depending upon the size of the Business, its geographical location, leasehold improvements required, and other factors.
Franchisee hereby certifies that he or she has reviewed the above-estimated start-up costs as detailed in the Uniform Franchise Offering Circular and has sufficient cash resources available to meet said expenses.
IX. FRANCHISEE'S INITIAL FRANCHISE FEE
A. Time Limit for Starting Business
Franchisee shall open the Franchise for business within Two (2) months of the date of execution of this Franchise Agreement.
Requests for additional time in opening the Franchise shall be submitted to the Franchisor in writing prior to the end of the Two (2) month period.
It is understood and agreed that, except as expressly provided herein, this franchise is non-exclusive except in franchise area and includes no right of Franchisee to subfranchise.
B. Cooperation Required
Franchisee shall cooperate reasonably with Franchisor to ensure that the various actions occur which are necessary to obtain acceptance by Franchisor of the Business location. In particular, Franchisee shall furnish any pertinent information as may be reasonably requested by Franchisor regarding Franchisee's business and finances.
C. Initial Franchise Fee
The initial franchise fee is $15,000.
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D. Time Limit for Approving Franchisee
Franchisor, within thirty (30) days of payment of the signing of the Franchise Agreement provided in Section IX.C. above, will approve or disapprove the Franchisee's application for a franchise.
Franchisee shall also have thirty (30) days from the signing of the Franchise Agreement to withdraw their application and receive a full refund of their franchise fee.
X. OTHER FEES
A. Base Royalty Fees
There are no Base Royalty Fees due to the Franchisor.
B. Local Advertising Plan and Expenditures
1. Local Advertising Plan
All forms of local advertising will be the responsibility of the Franchisee. Franchisor will work with the Franchisee to develop an advertising plan.
XI. FINANCING ARRANGEMENTS
Franchisor is providing no financial assistance in the sale of this franchise.
XII. GENERAL OBLIGATIONS OF FRANCHISEE
A. Follow Operations Manual and Directives of Franchisor
Franchisee agrees that use of Franchisor's System and adherence to the Operations Manual (the "Manual"), and to Franchisor's standardized design and specifications for uniformity of equipment, layouts, signs, and other incidents of the Business, is essential to the image and goodwill thereof. Franchisee shall cooperate and assist Franchisor with any customer or marketing research program that Franchisor may institute from time to time. Franchisee's cooperation and assistance shall include, but not be limited to, the distribution, display and collection of customer comment cards, questionnaires, and similar items. In order to further protect the System and the goodwill associated therewith, Franchisee shall:
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1. Operate the Business and use the Operations Manual solely in the manner prescribed by Franchisor;
2. Comply with such requirements respecting any service mark, trade name, trademark, or copyright protection and fictitious name registrations as Franchisor may, from reasonably time to time, direct;
3. Maintain in sufficient supply, and use at all times, only such products, materials and supplies to efficiently operate the Franchise.
4. Comply with all applicable Laws with respect to any employees that are hired.
5. Not engage in any trade practice or other activity or sell any product or literature which Franchisor determines to be harmful to the goodwill or to reflect unfavorably on the reputation of Franchisee or Computer Medics of America, Inc.
B. Operate Franchised Business Only
Franchisee shall use the System and the Names and Marks provided to Franchisee by Franchisor for the operation of the Business and shall not use them in connection with any other line of business or any other activity. Neither Franchisee, nor any of its employees, may conduct any business at the Business other than that authorized pursuant to this Agreement, without the prior written approval of Franchisor. Neither Franchisee, nor any of its employees, may conduct any activity at the Business or in connection therewith which is illegal or which could result in damage to the Names and/or Marks or the reputation and goodwill of Franchisor.
C. Comply With Laws
Franchisee shall comply with all federal, state and local laws and regulations, and shall obtain and at all times maintain any and all permits, certificates, or licenses necessary for full and proper operation of the Business franchised under this Agreement. Franchisor's standards may exceed any and all of the requirements of said laws.
D. Maintain Confidentiality of Proprietary Information
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Neither Franchisee nor any of its partners, officers, directors, agents, or employees shall, except as required in the performance of the duties contemplated by this Agreement, disclose or use at any time, whether during the terms of this Agreement or thereafter, any information disclosed to or known by Franchisee or any such person as a result of this Agreement. Such information, includes, but shall not be limited to, information conceived, originated, discovered, or developed by Franchisee or by any employee of Franchisee which is not generally known in the trade or industry about Franchisor * s products, services, or licenses, including information relating to discoveries, ideas, manufacturing, purchasing, accounting, engineering, marketing, merchandising or selling.
E. Maintain and Renovate Business
Franchisee shall at all times maintain the Business in a clean, orderly condition.
F. Maintain Competent Staff
Franchisor will create and make available to Franchisee training programs and other selected training materials, if applicable. If employees are hired. Franchisee shall maintain a fully trained competent staff capable of rendering courteous quality service in a manner in keeping with the standards set by Franchisor.
G. Open Business Within Time Limit
Within Sixty (60) days after execution of this Agreement, Franchisee must have a business space prepared. Franchisee shall have obtained Franchisor's approval to open and shall have opened the Business and commenced operations. If a request for an extension is required, it must be submitted in writing before the end of the Sixty (60) day period.
H. Full-Time Manager Required
It is at the Franchisee's discretion as to whether he/she wishes to hire employees. If employees are hired, Franchisee agrees to maintain a competent, conscientious, trained staff, including at least one (1) fully trained, full-time Manager and to take such steps as are necessary to ensure that its employees preserve good customer relations.
I. Dress Code
All Franchisees and employees will be required to dress neatly and professionally while working at the Business.
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J. Maintain Regular Business Hours
Franchisee shall keep the Business open and in normal
operation during normal business days and hours set by the
Franchisee. Closures for holidays will be at the Franchisees discretion.
K. Telephone Number of Business
It will be the responsibility of the Franchisee to obtain and maintain a business telephone number to be used solely for their franchise.
L. Permit Franchisor to Enter Business
Franchisee shall permit Franchisor and its agents or representatives to enter the Business at any reasonable time for the purpose of conducting inspections.
M. Additional Requirements for Corporate Franchisee
If Franchisee is or becomes a corporation, limited or general partnership or other organization or entity, the following requirements shall apply:
1. Franchisee's Certificate or Articles of Incorporation and Bylaws (or comparable governing documents) shall at all times provide that its activities are confined exclusively to operation of the Business and that the issuance, redemption, purchase for cancellation and transfer of voting stock, or other ownership interest therein, is restricted by the terms of this Agreement. Franchisee shall furnish Computer Medics of America, Inc. promptly upon request copies of Franchisee's Articles of Incorporation, Bylaws, and other governing documents, and any other documents Computer Medics of America, Inc. may reasonably request, and any amendments thereto, from time to time.
2. Franchisee shall maintain a current list of all owners of record and beneficial owners of any class of voting stock of Franchisee and shall furnish such list to Franchisor upon request.
3. Franchisee shall maintain stop transfer instructions against the transfer on its record of any equity securities (voting or otherwise) except in accordance with the provisions of Article XV. All securities issued by Franchisee shall bear the following legend, which shall be printed legibly
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and conspicuously on each stock certificate or other evidence of ownership interest:
THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE TERMS AND CONDITIONS OF A FRANCHISE AGREEMENT WITH COMPUTER MEDICS OF
AMERICA, INC. DATED ___________. REFERENCE IS MADE TO SAID
AGREEMENT AND TO THE RESTRICTIVE PROVISIONS OF THE ARTICLES AND BYLAWS OF THIS CORPORATION.
4. All shareholders of Franchisee shall jointly and severally guarantee Franchisee's performance hereunder and shall bind themselves to the terms of this Agreement, provided, however, that the requirements of this Section XII.M. Shall not apply to any corporation registered under the Securities Exchange Act of 1934 (hereinafter known as a "Publicly-Held Corporation").
5. If Franchisee is or becomes a partnership, Franchisee shall furnish Computer Medics of America, Inc. promptly upon request a copy of its partnership agreement and any other documents Computer Medics of America, Inc. may reasonably request, and any amendments thereto, from time to time.
6. Franchisee shall maintain a current list of all general and limited partners and all owners of record and all beneficial owners of any class of voting stock of Franchisee and shall furnish the list to Computer Medics of America, Inc. promptly upon request, from time to time.
7. Each individual who or entity which holds a ten percent (10%) or greater ownership or beneficial ownership interest in Franchisee, directly or indirectly, (including each individual holding a fifty (50%) or greater interest in any partnership or corporation which has a ten percent (10%) or greater interest in Franchisee) shall enter into a continuing guaranty agreement under seal, in the form attached hereto as Exhibit A, as such form may be amended or modified by Computer Medics of America, Inc., from time to time (if such guaranty agreement is to be executed subsequent to the date hereof in accordance with the terms of this Franchise Agreement).
N. Site Selection
Franchisee assumes all costs, liability, expense, and responsibility for locating, obtaining, and developing a site for the Business to be established under the Franchise Agreement.
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FRANCHISEE ACKNOWLEDGES THAT COMPUTER MEDICS OF AMERICA, INC.'s ACCEPTANCE OF A PROSPECTIVE SITE AND THE RENDERING OF ASSISTANCE IN THE SELECTION OF A SITE DOES NOT CONSTITUTE A REPRESENTATION, PROMISE, WARRANTY, OR GUARANTEE BY COMPUTER MEDICS OF AMERICA, INC. THAT A COMPUTER MEDICS OF AMERICA, INC. FRANCHISE OPERATED AT THAT SITE WILL BE PROFITABLE OR OTHERWISE SUCCESSFUL.
0. Training
Prior to Franchisee' s opening of the Business to the public. Franchisee and/or management personnel of Franchisee (or, if Franchisee is a corporation or partnership, a principal of Franchisee) shall complete to Computer Medics of America, Inc. satisfaction the management-training program offered by Computer Medics of America, Inc.
This training is provided free of charge at the headquarters of Computer Medics of America, Inc. in Eagle River, Alaska. The Franchisor shall pay for the travel and lodging expenses of the Franchisee. Any other personnel accompanying the Franchisee are responsible for their own expenses.
P. Miscellaneous
1. Franchisee shall give Computer Medics of America, Inc. advance written notice of Franchisee's intent to institute legal action against Computer Medics of America, Inc., specifying the basis for such proposed action, and shall grant Computer Medics of America, Inc. thirty (30) days from receipt of said notice to cure the alleged act upon which such legal action is to be based. Likewise, Franchisor will give Franchisee written notice of intent to institute legal action against them, specifying the basis for such proposed action, and shall grant Franchisee thirty (30) days from receipt of said notice to cure the alleged act upon which such legal action is to be based.
XXII. SPECIFIC OBLIGATIONS OF FRANCHISEE RELATING TO INSURANCE
A. Overall Coverage Required
Franchisee shall procure, prior to opening the Business, and shall maintain in full force and effect during the
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term of this Agreement at Franchisee's expense, an insurance policy fully insuring the dwelling in which the franchise is located, full business liability insurance and full automobile insurance.
XXV. SPECIFIC OBLIGATIONS OF FRANCHISEE RELATING TO ACCOUNTING AND RECORDS
A. Bookkeeping, Accounting and Records
Franchisee shall maintain during the term of this Agreement, and shall preserve for a minimum of three (3) years, full, complete accurate records of sales, closeout sheets, payroll, and accounts payable in accordance with the standard accounting system described by Franchisor in the Manual or otherwise specified in writing.
B. Submission of Financial Statements
Franchisee shall, at its expense, submit to Franchisor, within thirty (30) days of the end of each calendar quarter during the term of this Agreement, on forms prescribed by Franchisor, a brief financial statement, which may be unaudited, for the preceding quarter, including both an income statement and number of customers served during that quarter. Each financial statement shall be signed by Franchisee.
XV. SPECIFIC OBLIGATIONS OF FRANCHISEE RELATING TO USES OF NAMES AND MARKS
A. Names and Marks are Owned by Franchisor
Franchisor warrants with respect to the proprietary Names and Marks that:
1. Computer Medics of America, Inc. has been granted the exclusive right to use the Names and Marks to establish Computer Medics of America, Inc. in the United States and Canada.
2. Franchisor is taking and will take such steps as are reasonably necessary to preserve and protect the ownership and validity of such Names and Marks; and
3. Franchisor will use and permit Franchisee and other franchisees to use the Names and Marks with the System and
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standards attendant thereto, which underlie the goodwill associated with and symbolized by the Names and Marks.
4. Franchisee will have the option to name their individual franchise a name that reflects the designated area of their franchise. It is the responsibility of the franchisee to register their franchise name with their state and federally if they so choose. Such name shall be Computer Medics of
_________________________. It is the responsibility of the
Franchisee to research and register the name of their specific franchise to ensure that that name is not already in use by another business owner.
B. Franchisee is licensed to Use Names and Marks
With respect to Franchisee's franchised use of the Names and Marks pursuant to this Agreement, Franchisee agrees that:
1. Franchisee shall use only the Names and Marks as are approved in writing by Franchisor for Franchisee's use, and shall use them only in the manner authorized and permitted by Franchisor and that in any use whatsoever of the Names and Marks of Franchisor that the Names and Marks are identified as being registered to or owned by Franchisor;
2. Franchisee shall use the Names and Marks only in connection with the operation of the Business and in advertising for the Business conducted at or from the Accepted Location;
3. Franchisee shall use and display, as Franchisor may require in the operation of the Business, a notice in the form approved by Franchisor indicating that Franchisee is a "Franchised Operator" under the System and that the Names and Marks are used by Franchisee under such Franchise;
4. Unless otherwise authorized or required by Franchisor, Franchisee shall operate and advertise the Business under the Name and Mark Computer Medics
of_________________________________________;
5. Franchisee's right to use the Names and Marks is limited to such usages as are authorized under this Agreement, and any unauthorized use thereof shall constitute an infringement of Franchisor's rights;
6. Franchisee shall not use the Names and Marks to incur any obligations or indebtedness on behalf of Franchisor;
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7. Franchisee shall not use the Names and Marks or any part thereof as part of its corporate or other legal name;
8. In the event any litigation involving the Names and Marks is instituted or threatened against Franchisee, Franchisee shall promptly notify Franchisor and shall cooperate fully with Franchisor in defending such litigation.
9. During the term of this Agreement and any renewal hereof. Franchisee shall identify itself as the owner of the Business in conjunction with any use of the Names and Marks, including, but not limited to, on invoices, order forms, receipts, and contracts, as well as at such conspicuous locations on the premises of the franchise.
C. Franchisee Will Not Challenge Franchisor's Rights In Its Names and Marks
Franchisee expressly understands and acknowledges that:
1. As between the parties hereto, Franchisor is the owner of all rights, title, and interest in and to the Names and Marks and the goodwill associated with and symbolized by them;
2. The Names and Marks are valid and serve to identify the System and those who are franchised under the System;
3. Franchisee shall not directly or indirectly contest the validity or the ownership of the Names and Marks;
4. Franchisee's use of the Names and Marks pursuant to this Agreement does not give Franchisee any ownership interest or other interest in or to the Names and Marks, except the non-exclusive Franchise granted herein;
5. Franchisor reserves the right to substitute different Names and Marks for use in identifying the System, the Business and other franchised businesses operating there under; and
6. Franchisee hereby agrees not to register or attempt to register the Names and Marks in Franchisee's name or that of any other firm, person or corporation.
7. The right and license of the Names and Marks granted hereunder to Franchisee is nonexclusive, and Computer Medics of America, Inc. thus has and retains the rights, among others:
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a. To use the Names and itself in connection with selling products and services;
b- To grant other licenses for the Names and Marks, in addition to those licenses already granted to existing franchisees; and
c. To develop and establish other systems using similar Names and Marks, or any other proprietary marks, and to grant licenses or franchises thereto at any location(s) whatsoever without providing any rights therein to Franchisee.
XVI. SPECIFIC OBLIGATIONS OF THE FRANCHISEE
RELATING TO CONFIDENTIALITY OF PROPRIETARY INFORMATION
A. Franchisee Will Learn Proprietary Matters
Franchisee acknowledges that he or she will obtain knowledge of proprietary matters, techniques and business procedures from Franchisor that are necessary and essential to the operation of the Business, without which information Franchisee could not effectively and efficiently operate such business, including, without limitation, knowledge regarding the System, the layout of the Business and the Manual. Franchisee further acknowledges that such proprietary information was not known to Franchisee prior to execution of this Agreement and that the methods of Franchisor are unique and novel to the System. As used herein, "Proprietary Information" shall mean confidential information concerning:
1. Persons, corporations or other entities, which are, have been or become Franchisees of the System and any investors therein;
2. Persons, corporations or other entities, which are, have been or become customers of the Business;
3. The terms of and negotiations relating to past or current Franchise Agreements with respect to the System;
4. The operating procedures of the System, including without limitation.
5. The economic and financial characteristics of the System and Franchisees.
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6. The services and products offered to customers of Businesses, including, without limitation, the scope of services performed and services refused; and
7. All documentation of the information listed in Sections XVI.A.1. through XVI.A.7. hereof, including, without limitation, the Manual and the knowledgebase located on the website. During the term of this Agreement and for a period of five (5) years following the expiration or termination of this Agreement, Franchisee agrees not to divulge, directly or indirectly, any Proprietary Information, without the prior written consent of Franchisor. Nothing contained herein shall be construed so as to require Franchisor to divulge any secret processes, formulas, or the like.
B. Franchisee's Employees Will Not Disclose Proprietary Information
The Franchisee may disclose Proprietary Information only to such of its employees, agents and representatives, as must have access to it in order to operate the Business. Franchisee shall obtain from each such employee, representative or agent, an agreement that such person shall not during the course of his employment, representation, or agency with Franchisee, or for a period of five (5) years thereafter, use, divulge, disclose or communicate, directly or indirectly, in any form or manner, to any person, firm or corporation, any of the Proprietary Information of Franchisor.
C. Injunctive Relief is Available to Franchisor
Franchisee acknowledges that any failure to comply with the requirements of this Section XVI will cause Franchisor irreparable injury, and Franchisor shall be entitled to obtain specific performance of, or an injunction against any violation of, such requirements; Franchisee waives any requirements for the posting of any bond(s) relating thereto. Franchisee agrees to pay all court costs and reasonable attorneys' fees incurred by Franchisor in obtaining specific performance of, or an injunction against, violation of requirements of this Section XVI. The foregoing remedies shall be in addition to any other legal or equitable remedies that Franchisor may have.
D. Franchisor's Patent Rights and Copyrights
Franchisor does not own rights in or to any patents that are material to the Franchise. However, Franchisor intends to obtain copyright protection for the Manual and certain marketing, sales, and operations literature. Furthermore,
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Franchisor claims rights to certain trade secrets and confidential information as discussed above.
XVII. SPECIFIC OBLIGATIONS OF FRANCHISES RELATING TO TAXES, PERMITS AND LAWSUITS
A. Franchisee Must Notify Franchisor of Lawsuits
Franchisee shall notify Franchisor in writing within five (5) days of notice of the commencement of any action, suit, or proceeding against Franchisee, and of the issuance of any inquiry, subpoena, order, writ, injunction, award or decree of any court, agency, or other governmental instrumentality, which arises out of, concerns, or may affect the operation or financial condition of the Business, including, without limitation, any criminal action or proceedings brought by Franchisee against its employees, customers, or other persons.
B. Franchisee Must Comply With Laws
Franchisee shall, at Franchisee's expense, comply with all federal, state and local laws, rules, regulations and ordinances and shall timely obtain and shall keep in force as required throughout the term of this Agreement all permits, certificates and licenses necessary for the full and proper conduct of the Business, including, without limitation, any required permits, licenses to do business, fictitious name registrations, sales tax permits, and fire clearances. .
C. Franchisee Must Pay Taxes Promptly
Franchisee shall promptly pay when due all taxes levied or assessed, including, without limitation, unemployment and sales taxes, and all accounts and other indebtedness of any kind incurred by Franchisee in the conduct of the Business.
D. Franchisee May Contest Tax Assessments
In the event of any bona fide dispute as to any liability for taxes assessed or other indebtedness. Franchisee may contest the validity or the amount of the tax or indebtedness in accordance with procedures of the taxing authority or applicable law.
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XVIII. SPECIFIC OBLIGATION OF FRANCHISEE RELATING TO INDEMNIFICATION
Franchisee understands and agrees that nothing in this Agreement authorizes Franchisee to make any contract, agreement, warranty or representation on Franchisor's behalf, or to incur any debt or other obligation in Franchisor's name. Franchisee further understands and agrees that Franchisor shall in no event assume liability for, or be deemed liable hereunder as a result of, any such action, or by reason of any act or omission of Franchisee in its conduct of the Business or any claim or judgment arising there from against Franchisee. Franchisee shall indemnify and hold Franchisor and Franchisor's officers, directors, shareholders and employees harmless against any and all claims arising directly or indirectly from, as a result of, or in connection with. Franchisee's operation of the Business, as well as the cost, including attorney's fees, of defending against same.
Likewise, Franchisor agrees that nothing in this Agreement authorizes Franchisor to make any contract, agreement, warranty or representation on Franchisee's behalf without the prior permission of the Franchisee to do so, or to incur any debt or other obligation in Franchisee's name. Franchisor further understands and agrees that Franchisee shall in no event be deemed liable hereunder as a result of, any such action, or by reason of any act or omission of Franchisor in its conduct of the Business or any claim or judgment arising there from against Franchisor. Franchisor shall indemnify and hold Franchisee and Franchisee's officers, directors, shareholders and employees harmless against any and all claims arising directly or indirectly from, as a result of, or in connection with, Franchisor's operation of the Business, as well as the cost, including attorney's fees, of defending against same.
XIX. MISCELLANEOUS COVENANTS OF FRANCHISEE
A. Covenants are Independent
The parties agree that each covenant herein shall be construed to be independent of any other covenant or provision of this Agreement. If all or any portion of the covenants in this Agreement is held to be unenforceable or unreasonable by a court or agency having competent jurisdiction in any final decision to which Franchisor is a party. Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resultant covenant were separately stated in and made a part of this Agreement.
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B. Franchisee Will Not Compete Against Franchisor
Franchisee specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable specialized training and confidential information, including, without limitation, information regarding the operational, sales, promotional and marketing methods and techniques of Computer Medics of America, Inc. and the System. Franchisee covenants that, during the term of this Agreement, except as otherwise approved in writing by Computer Medics of America, Inc., Franchisee shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with, any person, persons, or legal entity, employ or seek to employ any person who is at that time employed by Computer Medics of America, Inc. or by any other franchisee or affiliate of Computer Medics of America, Inc., or otherwise directly or indirectly induce such person to leave his or her employment.
C. Franchisee Will Not Divert Business
During the term of this Agreement, Franchisee covenants that it will not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or legal entity:
1. Divert or attempt to divert business or customers of the Business with which or with whom Franchisee has had contact during the term of this Agreement to any competitor by direct or indirect inducement or otherwise; or
2. Do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Names and Marks or the System or both; or
3. Induce, directly or indirectly, any person who is at that time employed by Franchisor or by any other Franchisee of Franchisor, to leave his or her employment. The provisions of this Section XIX.C. shall apply only in the geographical area lying within the exclusive territory of the Business.
D. Franchisor Is Entitled to Injunctive Relief
Franchisee acknowledges that any failure to comply with the requirements of this Section XIX. will cause Franchisor irreparable injury for which no adequate remedy at law may be available, and Franchisee hereby accordingly consents to the issuance by a court of competent jurisdiction of an injunction
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The original documents were scanned as an image. The original file can be downloaded at the link above.