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A MEMBER OF THE
OK FRANCHISE GROUP
F r a n c h i s e P r o s p e c t u s
This advertisement and the pages contained herein provides information only on the business concept and the system. It is not intended to be advertising for the sale of franchises. This advertisement is not a solicitation, an offer to sell, or an offer to buy a franchise. OK Franchise Group Inc (the "Company") only offers and sells franchises in accordance with procedures designed to ensure that the Company complies with laws governing the offer and sale of franchises. These procedures always include the delivery of a written disclosure document to the prospective franchisee before the Company can begin to discuss the possibility of selling a franchise. Disclosure documents have to be filed in all states in the U.S. that require filing or registration as a requirement for the offer or sale of a franchise. This advertisement is not an Offering.
A member of the
Items Included In Your Initial Franchise Package
Uniform & safety items
Stock of supplies
Local marketing and advertising
Comprehensive training
Cleaning hand tools
Cleaning equipment conversion
Franchise license and protected territory
COST OF THE INITIAL PACKAGE $19,750
Financial Assistance Available for Veterans (subject to status and acceptance)
*The cost is exclusive of any initial vehicle down payment, or equipment bond.
Quality training Experienced trainers Join A Professional Team
Buying a franchise is a great way to get into business. A good franchise opportunity provides a proven business model, established branding along with help and support from the Franchisor. If you believe the idea of being your own boss meets your current and future needs, then may be cleaning garbage cans for householders and businesses, could deliver what you are looking for?
Garbage can cleaning is increasingly in demand with higher hygiene standards being demanded by residents and businesses. Our mobile can cleaning system meets this growing business need. Franchise packages are designed for franchisees according to their individual needs. So, whether you want to own and operate just one franchise area, which has room for two cleaning units that can easily clean up to 150 cans a day at a minimum price of $5.00 each, or multiple cleaning units in adjoining areas, we can design a package to meet your particular needs?
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Would You Like To Be The Boss
Since the formation of the company our tried and tested business franchise opportunity has expanded internationally. We based our plan on knowing that the established trash can business is worth many billions of dollars a year in repairs, supplies, cleaning and maintenance. The can cleaning business alone is said to attract billions of dollars a year in the USA. Our system is devised to meet the highest standards of safety and environmental awareness in our mobile can cleaning units. These units are admired and acclaimed for their simplicity, ruggedness and ease of operation. Importantly, our designers and fabricators are constantly improving the current high standards of our mobile can cleaning unit. Our specialist mobile can cleaning method allows franchisees great flexibility over the number of cans they want to clean each day. Each unit, with two crew, is capable of cleaning between 150 and 200 cans a day. At a minimum price of $5.00 per clean, that is a lot of potential earnings, with high profit margins. However, it is important to stress that the overall earnings for this business is dependent on the commitment of the franchisee, as they can increase the overall numbers of customers serviced each month, if the business is managed with multiple mobile can cleaning units, by employing staff to drive and clean, so as to meet the customers’ needs.
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Our purpose built mobile “Clean A Can” units are specifically designed and manufactured to our unique specification so that they are environmentally safe and simple to operate. Some of the outstanding features of our mobile can cleaning units are:
They can be vehicle mounted, or towed and are easy to use. It enables you to quickly clean any size of trash can. Residents trash cans are cleaned inside and out, within the unit. The whole process can take as little as 3 minutes for each can. It is environmentally safe to use in residential areas. The operation is approved by many local authorities and businesses. It has built-in storage for the water, waste and materials used. It has large capacity clean and waste water tanks. It is secure so that waste water cannot escape during the process. It produces its own electricity to work the pressure washer and lights.
As a result of these, and its many other design features, we remain the market leader in the field of franchised mobile can cleaning.
Safe working
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Not only is our can cleaning service unique but the business opportunity is quite exceptional. Existing franchisees have been attracted to our can cleaning service not just for the unique and comprehensive business equipment and services which they receive as part of the initial franchise fee, but also for the other benefits that make our franchise not only the best value for money, but it also most likely has the most successful track record in its field.
COMPARISON OF BENEFITS Included Extra
No royalty fee for the first 12 months.
Start-up supplies package included in the initial fee.
Start-up uniform package included in the initial fee.
Start-up marketing package included in the initial fee.
No ongoing Customer & Route planning fees payable.
Option to lease and not buy the hosting vehicle, or trailer.
Free approval of new products or services included.
Cleaning equipment hire arranged, no finance required.
Start-up training package included in the initial fee.
Initial adverts prepared as part of the initial fee.
Large protected territory provided as standard.
Equipment is purpose built and exclusive to franchisees.
Hand tools package included in the initial fee.
Right to service both residential & business customers.
Early termination option avilable.
We set the standards so others may follow!
What is the initial investment?
• Subject to the franchisees status, the initial investment is between $25,000 and $50,000. This normally covers the cost of the initial franchise fee, franchise start-up package, travel costs and working capital.
What is your franchise fee?
• For first time agreements it is $19,750.
What are the royalties?
• These can be variable or fixed , with an option for no Royalty fees for the first 12 months?.
Do I get help with selecting the area?
• We work with you to select an area of 50,000 households for your territory. This gives you enough room for two cleaning units, without needing to buy another area?
Do I get a protected territory?
• Yes. Terms of protection are set out in the franchise agreement. You also get the right to first refusal on any adjoining areas.
Can I purchase multiple territories?
• Yes. With the initial franchise license, you have an option, subject to availability, to reserve as many additional franchise territories as you want.
How long will it take to become a franchisee?
• Between 8 to 12 weeks, subject to host vehicle, or trailer availability.
What other costs will I be charged to start-up?
• The franchise package included in the initial investment, contains everything you need to get started, and includes the training, uniform, materials, hand tools, stationery, equipment conversion, as well as a business computer and software.
What other on-going costs will I have to pay?
• All businesses have on-going monthly costs. Your business will be no different. You may need to pay for a vehicle lease, equipment hire, gas, materials, insurance, maintenance and marketing.
How long is the franchise agreement?
• 10 years, with a continuing right to a further 10 years, with no renewal fee.
How do I learn how to operate my business?
• You will spend at least two weeks at the “Clean A Can” head office learning all that you need to know, from how to clean trash cans, to marketing for customers, operating customer records and general business management skills.
What happens once my business starts?
• “Clean A Can” provides ongoing support in training, operations and marketing through a telephone help line and email to help franchisees with questions, as well as newsletters and meetings.
I am interested. What do I do now?
• Before you decide if you want to be one of our franchisees, we need to get to know each other to see if we are compatible as a team as our relationship must be built on knowledge and trust. Therefore, you need to call us to make the next step which is to and arrange a no-obligation Discovery Day at our head office. For we will not call you unless you ask us to? During the visit you will meet the team to discuss in detail the system, the equipment and your needs. Therefore, when you are ready, make the call as you have nothing to lose and everything to gain by coming to a no-obligation Discovery Day.
Telephone: +1 (407) 505-2030 or Email: [email protected]
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Be The Boss
1. Receive and review the “Clean A Can” information package, which includes copies of our Franchise Prospectus, Franchise Disclosure Document and Franchise Agreement to study at home. Once you receive all the information, our policy is not to contact you again, unless you ask us to answer questions, or provide further information. Our contact details are:
Tel: +1 (407) 505-2030, or Email: [email protected].
2. After you carry out your due diligence, if you still believe that our business opportunity meets your needs and you would like to proceed further, then contact us to arrange a no-
obligation Discovery Day visit to meet the team.
3. Our franchise manager will send you an invitation to visit our Headquarters in Orlando, Florida for a day of discovery. During your visit you will meet the team, review all aspects of our franchise, discuss in detail the Franchise Disclosure
Document, the system, the equipment and the Franchise Agreement.
4. Discovery Day visits are by appointment only and are held on Tuesdays, Wednesdays and Thursdays of each week, subject to availability. This gives you the opportunity, if you wish, to combine the visit with a long weekend in Orlando
with the family and discover the attractions, including visiting Disney World.
5. Upon returning home after the Discovery Day, if you then firmly believe that our franchise opportunity is the one to meet your future needs, then you contact us
to ask to become a franchisee.
6. Subject to your application being accepted, we will confirm your appointment as a Franchisee, the Franchise Agreement is signed, the initial franchise fee is paid
and the franchise territory is agreed.
7. Once any lease and rental funding is secured for the vehicle and equipment, then a training date is agreed. If the equipment is mounted and not towed, the
vehicle has to be delivered to the fabricators for the equipment to be fitted.
8. Advertising promotion program is agreed, including a local area marketing
strategy.
9. Franchisee’s equipment build is completed and you take it over the day you
arrive to start your two weeks training program at the Franchisor’s office.
10. Grand Opening advertising is placed including a local area marketing blitz
YOUR FRANCHISE IS OPEN FOR BUSINESS
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This brochure can only provide a glimpse of the successful business opportunity which our franchise package can provide. Whether you are looking for a single unit franchise, or a managed multiple unit territory, we cannot recommend strongly enough that you study all the information we have provided, as well as book a ‘no-obligation’ Discovery Day visit to discuss in person the business opportunity.
During the visit you will be given a full presentation of our unique “Clean A Can” franchise, along with the opportunity to discuss our Customer Scheduling and Collection systems.
The detailed information which you have received, will better prepare you when you are ready to decide on whether our franchise business is best meets your needs. You will also have plenty of time to ask any questions you may have about our successful franchise opportunity. The following are some of the benefits to you from visiting us.
This could be your business.
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A MEMBER OF THE
OK FRANCHISE GROUP
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THE FRANCHISOR
The Franchise trades under the name “Clean A Can” and is a member of the OK Franchise Group Inc which is a corporation registered under the Laws of the United States of America. Our principal business address is 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744.
We do business under our corporate names, our franchise brand names and copyrighted and registered trademarks. The OK Franchise Group Inc sells and trades its brands and affiliates of, “Clean A Can, Mr Clean A Can” and “Southern Hydraulics Mobile”.
Business History
“Clean A Can” was created in June 2013. It sells and grants franchises to qualified candidates in the United States of America for the operation of businesses, which sells services and products in the specialized area of cleaning, disinfecting, repair and supply of residential and commercial trash and garbage cans and other associated trash and garbage can service for customers. In the USA and the United Kingdom, the OK Franchise Group and its affiliates has offered franchises since 2010 and we currently have 44 outlets. “Clean A Can” and its affiliates are most probably the largest and most experienced trash and garbage can cleaning service franchise in the International market and have spent over 10 years developing and perfecting its equipment and processes to ensure simplicity, quality and reliability throughout all aspects of the system. Our simplified equipment has been developed through experience learned from the market over many years and as such we pride ourselves in the knowledge that the equipment, although robust and more than capable of doing the job, it remains easy to operate whilst requiring minimal maintenance. Our managers and trainers are some of the most experienced in their particular field of operation. They take great pride in the knowledge that they have been responsible for developing new franchisees into becoming true entrepreneurs, who in turn now own and manage their trash & garbage can cleaning business.
Qualified Operators
Towed System Enclosed System
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We offer a 'Standard Franchise’, which is designed for franchisees just looking to be
their own boss and want to start with a single “Clean A Can” cleaning unit.
We offer a 'Development Franchise’, which is designed to give an entrepreneurial
franchisee the opportunity to expand their business into a managed business operating more
than one “Clean A Can” cleaning unit in the future.
We also offer a ‘Veterans Package’, which is designed to give vocational assistance
to Veterans of the Armed Forces who meet the qualifying criteria and are looking for
financial assistance and additional long term benefits.
Items Included In The Franchise Package
Your uniform & safety items
Your initial stock of supplies
Your own operating manual
Your comprehensive training
Your cleaning tools
Your franchise license
COST OF THE PACKAGE $19,750
Figures do not include any vehicle cost which is subject to status,
or any refundable equipment security bond
You are now wondering what the benefits of our ‘Franchise Package’ are when
compared to other similar franchise business offers.
Then turn the page to see the benefits to you
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Not only is our “Clean A Can” service unique but also the business opportunity is quite exceptional. Existing franchisees have been attracted to our “Clean A Can” service, not just for the unique and comprehensive business equipment and services which they receive, but also for the other benefits that make our franchise not only the best value for money, but also the most experienced in the country.
VALUE OF BENEFITS AND OPTIONS AVAILABLE
No management Fee for 6 months, then only $100.00 per month. Options for a fixed, or variable royalty fee, with an option of not fee for first 12 months. Start-up supplies package in the initial fee.
You only need to pay 50% deposit for additional development areas.
Start-up uniform package included in the initial fee.
Exclusive specialized mounted, or towed equipment only available to franchisees. Equipment rental arranged for the whole term, no financing required. Regular development meetings and master classes. You pay no additional monthly management service fee for 2nd, 3rd, 4th or more units.
No ongoing fees to approve products or services.
Proprietary customer and route planning software provided free. Start-up training package included in the initial fee.
Initial advertising and area marketing included in the package. A no penalty early termination option available.
Computer, printer and necessary software package included in the initial fee Hand tools package included in the initial fee.
An option to sell franchise development areas within the agreed Franchise area.
Right to service both residential and business customers.
Only fresh water used during the whole process. Large protected operational area included in the initial fee.
Trailer Mounted Version Vehicle Mounted Version
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PROJECTED EARNINGS & COSTS
Based on 1 Cleaning Unit + 2 Crew + 150 Cans cleaned a day
Description
Annual Total
Notes (1)
Projected Earnings $180,000 Projected figures based on an average of 150 cans cleaned a day, 5 days a week, 48 weeks a year, at an average price of $5.00 a clean.
Less Overheads Annual Totals Notes (2)
Wages – Crew Only $24,000 1 x Driver = 1 x Runner
Insurance – Vehicle $4,164 Standard Pick-up, or truck
Insurance - Business $708 Non-hazardous business
Purchases $3,000 Disinfectant, liners, consumables.
Fuel $3,600 Diesel and Gas
Advertising $3,000 Tags, Door Hangers & Handouts
Phone/Internet $780 Mobile & Broadband
Accountant $600 Bookkeeper/Accountant
Management Fee $1,200 Fixed Fee
Royalty Fee £1,800 Fixed Fee (single unit)
Vehicle Lease Fee $7,764 Subject to status!
Equipment Hire Fee $3,000 Fixed Fee (excludes maintenance)
Total overheads per Year $53,616 Costs may vary State to State.
Projected Annual Profit $126,384 Projected profits are before tax and may be higher, or lower, depending on individual’s
commitment.
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EARNINGS FORECAST COSTS IN 2ND YEAR – 1 UNIT
AVERAGE 8 CANS A DAY 20 CANS A DAY 32 CANS A DAY 46 CANS A DAY TOTAL
Average charge $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 $5
Daily washes 54 58 62 66 70 74 78 82 86 92 96 100
Total 5,400 5,800 6,200 6,600 7,000 7,400 7,800 8,200 8,600 9,200 9,600 10,000 91,800
Expenditure
13 $
14 $
15 $
16 $
17 $
18 $
19 $
20 $
21 $
22 $
23 $
24 $
TOTAL $
Vehicle Ins 347 347 347 347 347 347 347 347 347 347 347 347 4,164
Business Ins 59 59 59 59 59 59 59 59 59 59 59 59 708
Purchases 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Gas 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Leaflets etc 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Phone/Internet 65 65 65 65 65 65 65 65 65 65 65 65 780
Accountant 50 50 50 50 50 50 50 50 50 50 50 50 600
Management Fee 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Royalty Fee 150 150 150 150 150 150 150 150 150 150 150 150 1,800
Vehicle Fee 647 647 647 647 647 647 647 647 647 647 647 647 7,764
Equipment Fee 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Sub total 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 27,816
Balance 3,082 3,482 3,882 4,282 4,682 5,082 5,482 5,882 6,282 6,882 7,282 7,682 63,984
Note: All figures above have been prepared on the assumption that the franchisee decides to lease a new vehicle to carry the mounted cleaning unit as an alternative to the cleaning unit being towed by a suitable vehicle. The figures are a guide and although care has been taken they should not be interpreted as a guarantee that they will not be higher or lower than this. They are based on our operating experience and knowledge of the market and may be lower or greater and will depend on the business management of the franchise. The costs are based on a single unit franchise. We do not provide specific earnings forecasts as these differ from franchisee to franchisee, and are therefore determined by the type of area, the local culture, type of franchise and the ability, skills and commitment of the individual franchisee.
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BREAKEVEN TABLE
STANDARD FRANCHISE PACKAGE – 1 UNIT
Overheads And
Items
Costs Per
Month
Expenditure Only Breakeven Point
Cans Washed Per Day
$100,000 Earnings
Breakeven Point Cans Washed
Per Day
Wages $0
Earnings needed $1,553
per month
Assuming an average
of 20 cleaning days per month and cleans are
charged at $5.00 each
Earnings needed $10,652
per month
Assuming an average
of 20 cleaning days per month and cleans are
charged at $5.00 each
Insurance – Vehicle $347
Insurance - Business $59
Purchases $250
Fuel $300
Leaflets $100
Phone/Internet $65
Accountant $50
Management Fee $100
Royalty Fee £150
Vehicle Lease Fee $647
Equipment Hire Fee $250
Total overheads per month $2,318 15 107
Note: All figures are based on a 5-day week and 20 days per month. They have been prepared as a guide and although care has been taken they should not be interpreted as a guarantee that they will be the same for every franchisee. They are based on our International operating experience and knowledge of the market and may be lower or greater and will depend on the business management of the franchise and the financial status of the Franchisee.
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Figures are based on average of 3 new Silver Service customers each day.
Week Total Earnings
1 15 BLUE = NEW CUSTOMER 15 $450
2 15 15 $450 3 15 RED = REPEAT CUSTOMERS 15 $450 4 15 15 $450 5 15 15 30 $450 6 15 15 30 $450 7 15 15 30 $450 8 15 15 30 $450 9 15 15 15 45 $450
10 15 15 15 45 $450 11 15 15 15 45 $450 12 15 15 15 45 $450 13 15 15 15 15 60 $450 14 15 15 15 15 60 $450 15 15 15 15 15 60 $450 16 15 15 15 15 60 $450 17 15 15 15 15 15 75 $450 18 15 15 15 15 15 75 $450 19 15 15 15 15 15 75 $450 20 15 15 15 15 15 75 $450 21 15 15 15 15 15 15 90 $450 22 15 15 15 15 15 15 90 $450 23 15 15 15 15 15 15 90 $450 24 15 15 15 15 15 15 90 $450 25 15 15 15 15 15 15 15 105 $900
26 15 15 15 15 15 15 15 105 $900 27 15 15 15 15 15 15 15 105 $900 28 15 15 15 15 15 15 15 105 $900 29 15 15 15 15 15 15 15 15 120 $900 30 15 15 15 15 15 15 15 15 120 $900 31 15 15 15 15 15 15 15 15 120 $900 32 15 15 15 15 15 15 15 15 120 $900 33 15 15 15 15 15 15 15 15 15 135 $900 34 15 15 15 15 15 15 15 15 15 135 $900 35 15 15 15 15 15 15 15 15 15 135 $900 36 15 15 15 15 15 15 15 15 15 135 $900 37 15 15 15 15 15 15 15 15 15 15 150 $900 38 15 15 15 15 15 15 15 15 15 15 150 $900 39 15 15 15 15 15 15 15 15 15 15 150 $900 40 15 15 15 15 15 15 15 15 15 15 150 $900 41 15 15 15 15 15 15 15 15 15 15 15 165 $900 42 15 15 15 15 15 15 15 15 15 15 15 165 $900 43 15 15 15 15 15 15 15 15 15 15 15 165 $900 44 15 15 15 15 15 15 15 15 15 15 15 165 $900 45 15 15 15 15 15 15 15 15 15 15 15 15 180 $900 46 15 15 15 15 15 15 15 15 15 15 15 15 180 $900 47 15 15 15 15 15 15 15 15 15 15 15 15 180 $900 48 15 15 15 15 15 15 15 15 15 15 15 15 180 $900 49 15 15 15 15 15 15 15 15 15 15 15 15 15 195 $1,350 50 15 15 15 15 15 15 15 15 15 15 15 15 15 195 $1,350
51 15 15 15 15 15 15 15 15 15 15 15 15 15 195 $1,350
52 15 15 15 15 15 15 15 15 15 15 15 15 15 195 $1,350
53 15 15 15 15 15 15 15 15 15 15 15 15 15 15 210 $1,350
54 15 15 15 15 15 15 15 15 15 15 15 15 15 15 210 $1,350
55 15 15 15 15 15 15 15 15 15 15 15 15 15 15 210 $1,350
56 15 15 15 15 15 15 15 15 15 15 15 15 15 15 210 $1,350
57 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 225 $1,350
58 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 225 $1,350
59 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 225 $1,350
60 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 225 $1,350
61 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 240 $1,350
62 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 240 $1,350
63 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 240 $1,350
64 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 240 $1,350
65 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 255 $1,350
66 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 255 $1,350
67 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 255 $1,350
68 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 255 $1,350
69 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 270 $1,350
70 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 270 $1,350
71 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 270 $1,350
72 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 270 $1,350
73 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 285 $1,800 Note: The potential earnings from the above table could be lower or higher than indicated and are based on a Customers on a Silver Service at a minimum pre-paid charge of $5.00 for each clean.
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A MEMBER OF THE
OK FRANCHISE GROUP
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FRANCHISE DISCLOSURE DOCUMENT
OK FRANCHISE GROUP INC ___
INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY FEDERAL TRADE COMMISSION
Date of Issuance: January 1, 2017
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 YOU THINK 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. 20580
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FRANCHISE DISCLOSURE DOCUMENT
“Clean A Can” 1506 Kelley Ave, Suite 2, Kissimmee, Florida 34744
Telephone: (407) 505-2030 Email: [email protected] Web: www.cleanacan.com
“We Clean Garbage Cans”
OK Franchise Group offers the following franchise opportunity: “Clean A Can” - Franchisees clean, sanitize and deodorize garbage and trash cans.
1. The minimum total investment necessary to begin the operation of a “Clean A Can” franchise is $30,000. This includes the $19,750 that must be paid to the franchisor or affiliate.
2. This disclosure document summarizes certain provisions of your franchise agreement and other
information in plain English. Read this disclosure document and all accompanying agreements carefully. You must receive this disclosure document at least 14 calendar-days before you sign a binding agreement with, or make any payment to, the franchisor or an affiliate in connection with the proposed franchise sale.
Note: No governmental agency has verified the information contained in this document. You may wish to receive your disclosure document in another format that is more
convenient for you. To discuss the availability of disclosures in different formats, contact OK Franchise Group Inc, at 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744 and Tel: 1-(407) 505-2030
3. The terms of your contract will govern your franchise relationship. Don’t reply on the disclosure document
alone to understand the contact. Read your entire contract carefully. Show your contract and this disclosure document to an advisor, like a lawyer or an accountant.
4. 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, D.C. 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.
5. There may also be laws on franchising in your state. Ask your state agencies about them.
6. Date of Issuance: January 1, 2017
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TABLE OF CONTENTS
ITEM PAGE 1 The Franchisor and any Parents, Predecessors, and Affiliates 4 2 Business Experience 5 3 Litigation 5 4 Bankruptcy 5 5 Initial Fees 6 6 Other Fees 6 7 Estimated Initial Investment 8 8 Restrictions on Sources of Products and Services 11 9 Franchisee’s Obligations 14 10 Financing 15 11 Franchisor’s Assistance, Advertising, Computer Systems and Training 15 12 Territory 17 13 Trademarks 17 14 Patents, Copyrights and Proprietary Information 18 15 Obligation to Participate in the Actual Operation of the Franchise Business 19 16 Restrictions on What the Franchisee May Sell 19 17 Renewal, Termination, Transfer, and Dispute Resolution 19 18 Public Figures 23 19 Financial Performance Representations 23 20 Outlets and Franchisee Information 25 21 Financial Statements 26 22 Contracts 26 23 Receipts 27 Exhibits: A. List of State Administrators
B. List of State Agents for Service of Process C. Franchise Agreement D. Area Development Agreement
E Equipment Hire Agreement F. Financial Statements G. International Franchisees Roster H. Franchisees Who Left the System I. Operations Manual Table of Contents
(The remainder of this page is intentionally left blank.)
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ITEM 1
THE FRANCHISOR, PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language in this disclosure document uses, “we”, “us”, “our”, “OK Franchise Group”, “OKfranchisegroup.com”, “Clean A Can” to mean the OK Franchise Group Inc, the franchisor. “You” and “Your” means the person or other entity who is awarded an OK Franchise Group franchise and includes your owners if you are a corporation, partnership or other business entity. “Your franchised business” means any franchise you are awarded by us in our business. Franchisor, Parent, and Affiliates We conduct business under the name “Clean A Can”. Our principal business address is 1506 Kelley Ave, Suite 2, Kissimmee, Florida 34744. We are a Florida corporation that was incorporated on August 10th 2004. We do not conduct business under any other name. Agent for Service of Process Our agent for service of process is the President, OK Franchise Group Inc. Their principal business address is 1506 Kelley Ave, Suite 2, Kissimmee, Florida 34744. Prior Experience The company, or its affiliates, started operating trash and garbage can cleaning businesses in 1996 internationally. We started to sell can cleaning franchises in 2010. We currently own and operate two can cleaning outlets. Each of these outlets is located in urban areas. We also sell services and products in the specialized area of cleaning, disinfecting, repair and supply of residential and commercial garbage cans and other associated trash can services for customers. Since 2010, OK Franchise Group Inc has been providing trash can cleaning franchises. We also offer franchises for “Southern Hydraulics Mobile”. Our mobile tubes and hoses franchises sell services and products in the specialized area of hydraulic tubes, hoses and cylinder repairs for customers. We have no other business activities and do not offer franchises in any other areas, although our affiliates may do. The Business We Offer Your “Clean A Can” cleaning service franchise will clean, disinfect and supply residential and commercial garbage cans and other associated trash can services to householders and businesses. Our franchisees often operate their “Clean A Can” cleaning service franchise from their home. The market for trash and garbage can cleaning is fully developed. You will generally have to compete with any other providers of similar services. The market is potentially wide, but has not been fully exploited so far. It is therefore developing and competitive in most markets. Applicable Regulations You must also comply with all local, state and federal laws that apply generally to businesses. You will need to determine which local laws may regulate activities of the franchised business in each jurisdiction where you plan to operate. Under the Franchise Agreement, you alone are responsible for complying with all applicable laws and regulations despite any advice or information that we may give you. You should investigate the application of these laws further.
ITEM 2
BUSINESS EXPERIENCE
President: Kevyn Lloyd Kevyn has been the Founder, Owner and President of the OK Franchise Group Inc under US law since June 2006. He is also the Founder, Owner and CEO of the OK Franchise Group Ltd under the laws of England and Wales since November 2010. He is also the Vice President of Southern Hydraulics Mobile Inc under US since May 2014. He is also the Founder, Owner and CEO of the Wheelie Bin Cleaning Service Ltd under the laws of England and Wales since February 1994. Vice President: Gareth Lloyd Gareth has been the East Coast Area Development Manager of OK Franchise Croup Inc under US law since June 2010. He is also employed as the Area Development Manager for the OK Franchise Group Ltd under the laws of England and Wales since November 2006.
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Information Manager: Justin Lloyd Justin has been the I.T Development Manager of OK Franchise Croup Inc under US law since June 2010. He is also employed as the I.T. Development Manager for the OK Franchise Group Ltd under the laws of England and Wales since November 2006.
ITEM 3
LITIGATION
OK Franchise Group Inc has never been subject to any form of litigation.
ITEM 4
BANKRUPTCY
No person previously identified in Items 1 or 2 of this disclosure document has been involved as a debtor in proceedings under the US Bankruptcy Code that must be disclosed in this Item.
ITEM 5
INITIAL FEES
The initial franchise fee is $19,750 (US Dollars) for a Franchise Agreement. The Area Development Fee is $10,000 (US Dollars) for each additional operational area in the agreed territory that is subject to an Area Development Agreement.
ITEM 6
OTHER FEES
Below is a detailed description of other recurring or isolated fees or payments that you must pay to us or that we impose or collect for a third party under the terms of the Franchise Agreement.
Type of fee Amount Due Date Remarks
Management Services Fee
$100 per month or less if agreed or stated in the procedures manual
Monthly on the 7th day of each month
Payable only for the 1st franchise agreement commencing in the 7th month of the term
Marketing Fund Contribution
$0 As arranged We may require Marketing Fund Contributions to be used in cooperative advertising
Local Advertising
A minimum of 1% of monthly turnover
Monthly Some of your marketing materials will be purchased from us. We may require Local Advertising expenditure to be used in cooperative advertising.
Telephone Directory Advertising
Varies according to area and type of listing
As arranged You may be required to maintain advertisements in “white pages” and “yellow pages”
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Type of fee Amount Due Date Remarks
of your local directory
Additional Area Development Fee
$10,000 for each additional operational area in the agreed territory
Deposit of $5,000 for each additional area in the agreed territory, payable before signing Area Development Agreement. Balance at least 28 days before ordering each additional operational vehicle
Initial $5,000 non-refundable deposit for each additional area in the agreed territory, the balance to be paid on the due date
Additional Training Cost
$2,000 Before training starts Used by the franchisee to pay their travel and accommodation costs
Transfer Fee
The greater of 10% of all consideration received or receivable from the assignment, or a $15,000 training fee. Plus $1,500 administrative fee for each assigned franchise unit
Before transfer You must make this payment to cover our expenses and training costs
Ongoing Purchases of Operating Materials
Will vary under the circumstances
As invoiced You will need to replenish your supply of operating materials
Renewal Fee Our reasonable legal and administrative costs
At least 28 days before expiration
Audit Expenses All costs and expenses associated with audit
Upon demand Audit costs payable only if audit shows an understatement in amounts due to us
Royalty Fee $150 per month per operational vehicle or less if agreed or stated in the procedures manual
Monthly on the 21st day of each month
Payable for each franchise unit/route operating in the agreed territory commencing in the 13th month from when each franchise unit goes operational
Vehicle Conversion Cost
$0 to $5,000 for each operational vehicle conversion
Upon demand Payable for each vehicle converted to carry the rented equipment.
Equipment Rental Fee
$0 to $250 per month per operational unit as agreed or stated in the procedures manual
Monthly on the 7th day of each month
Payable for each rented franchise equipment unit, commencing in the 4th month of the term
Equipment Bond $1,000 to $5,000 subject to financial status
As Arranged Payable as a refundable security bond for the initial issued equipment
Insurances Policies
Amount of unpaid premiums plus our reasonable
Upon demand Only payable if you fail to maintain required insurance
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Type of fee Amount Due Date Remarks
expenses in obtaining the policies
coverage and we elect to obtain coverage for you
Vehicle/Trailer Lease Fee
$0 to $750 Monthly from the start of the lease term.
Subject to credit status and payable for each leased vehicle to vehicle lender
Interest on Late Payments
2% per month Due only if payments are overdue
Calculated on a daily basis on any sums due but not paid
Temporary Management Assistance
Market rates, currently $250 per day, plus expenses
Each month it applies
Following the death or incapacity of an owner of the Franchised Business, if necessary at our discretion we may assume operation of the Franchise Business until the deceased or incapacitated owner’s interest is transferred to a third party approved by us
Ongoing Training Programs
You are required to pay your expenses as well as your employees’ expenses in attending
At the time of program
No tuition or training fees are assessed. Attendance will be more than 1 time per year and collectively will not exceed 2 days in any year unless agreed by both parties
Additional Training
Rates are published in the Manual. Currently they are $250 per day plus our expenses and your expenses as well as your employees’ expenses in attending
At the time of service
We provide approximately 14 days of training in the Initial Franchise Fee for you and one additional person for franchisees. You pay for travel and accommodation expenses and any other additional training if you request it
Cost of Enforcement
All costs including attorneys’ fees
Upon demand You must reimburse us for all costs in enforcing obligations if we prevail
Indemnification An amount equal to the value of all damages, losses, claims, costs, demands, expenses and liabilities (including all professional fees) and expenses incurred by us
On being incurred by us
You indemnify us if we incur these as a result of your breach of any obligations under Articles 8 and 19 (no partnership or agency) and 29 (warranties without authority) of the Franchise Agreement
Sales Tax 6% added where applicable to non-service sales
On being incurred by us
You must pay any sales tax imposed by the state of Florida as well as your home state
All the above fees are imposed by and payable to us except the vehicle lease and equipment hire agreements, which are payable to the Lessor/Rentor. All fees are generally non-refundable.
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No other fees or payments are to be paid to us, nor do we impose or collect any other fees or payments for any other third party. TAX if applicable means any tax that may have to be imposed by a State on the payments you make.
ITEM 7
ESTIMATED INITIAL INVESTMENT*
We anticipate that you will incur the following estimated initial expenditure in the establishment of a single area franchise unit consisting of approximately 50,000 households.
Type of expenditure
Amount Low-High Range
Method of payment When due To whom payment is to be
made
Franchise Fee (1) $19,750 Cashier’s Check Upon Signing Franchise Agreement
Us
Vehicle/Trailer Lease/Purchase (2)
$0 - $55,000 On signing lease/purchase
agreement
As Arranged Third Parties
Equipment Bond (3) $1,000 - $5,000 Cashier’s Check As Arranged Affiliated Third Parties
Initial Advertising (4) $0 - $2,000 As incurred As Arranged Third Parties
Travel, Lodging and Meals for Training (5)
$1,000 - $5,000 As Incurred As Arranged Third Parties
Supplies (stationery, business cards, brochures, etc.) (6)
$0 - $1,000 As Invoiced As Arranged Us Affiliated
Third Parties
Business Licenses, Permits, etc 1st year (7)
$1,000 - $5,000 Before Beginning Operations
As Arranged Third Parties
Insurance (8) $1,000 - $5,000 As Incurred As Arranged Third Parties
Additional Funds - 3 months (9)
$5,000 - $10,000 As Incurred As Arranged You Determine
Legal & Accounting (10)
$1,000 - $2,000 Before Beginning Operations
As Arranged Attorney, Accountant
TOTALS (11) $29,750 - $115,000
* All fees imposed by and payable to us are earned and non-refundable when paid.
Notes:
(1) Franchise Fee. You must pay an initial franchise fee when you sign the Franchise Agreement. (2) Vehicle/Trailer. The figure is the cost to lease/purchase a specific vehicle, or trailer to carry the mounted
cleaning equipment, or to provide a vehicle suitable to pull a towable cleaning unit and is subject to finance status.
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(3) Equipment Bond. The figure is the refundable security bond held by OK Franchise Group for the initial supply of equipment and is subject to financial status.
(4) Initial Advertising. Advertising estimates shown are for 3 months and are based on Local mail shots.
Actual amounts may vary by market. Additionally, while determined market-by-market, you should plan for additional advertising amounts for the first 6 to 12 months of operation to help establish your new business locally. This additional amount should be at least equal to the established monthly advertising budget for the first 3 to 6 months of operation.
(5) Travel, Lodging and Meals for Training. Your travel expenses for attending our Training will vary based
on your location and choice of travel methods and accommodations. The estimated figures reflect travel and related expense for one person to attend Training. We may extend the Training program for additional days at our discretion. The figures above do not include costs and expenses relating to such an extension. Typically, the owner, general manager and/or the managing Owner and the accountant will attend Training.
(6) Supplies. This figure represents an estimate of your initial supply of letterhead, envelopes, brochures,
business cards, invoices, marketing materials and ancillary business forms you will use in operating the Franchised Business.
(7) Business Licenses, Permits, etc. You will need to obtain certain state and local business and insurance
licenses and permits to operate the Franchised Business. The cost of these permits vary by city and state. It is suggested you seek the advice of local counsel and inquire with your state about these requirements.
(8) Insurance. You must purchase the type and amount of insurance specified in the Franchise Agreement
in addition to any other insurance that may be required by applicable law, any lender or leasor. (9) Additional Funds. In addition to the franchise fee and other investment needs listed above, you will need
additional funds to operate the Franchised Business during the start-up phase of the Franchised Business. At a minimum you will need working capital cash reserves of $5,000 to $10,000 depending on the size and location of the market. In some markets, the working capital requirement may need to be substantially in excess of $20,000 to $30,000. You must provide us evidence of the availability of the working capital at the time you sign the Franchise Agreement and we also reserve the right to request such evidence at the time of Opening. For purposes of this Disclosure Document, we have provided additional fund estimates for a start-up period of 3 months for telephone service, utilities, legal and accounting costs, salaries and benefits to your employees, advertising and promoting the Franchised Business, monthly payments for insurance and other miscellaneous expenses. These costs will vary depending on the location and time of year you start the business. We have not included any amounts for debt service or salaries or compensation. We recommend that you calculate your estimated expenses for these items based on anticipated costs in your market.
(10) Legal & Accounting. You will need to employ an attorney, and accountant and other consultants to assist
you in establishing your Franchise Business. These fees vary from location to location depending upon the prevailing rates of local attorneys, accountants and consultants.
(11) Totals. In compiling this chart, we relied on our and our Affiliate’s combined indirectly experience and
experience in operating OK Franchise Group businesses since 2004. These figures are estimates and we cannot assure you that you will not have additional expenses starting the Franchised Business. Your actual costs will depend on factors such as your management skill, experience and business acumen, local economic conditions, the local market for products, the prevailing wage rate, competition, and the sales level reached during the start-up phase. We cannot guarantee that you will not have additional expense in starting the Franchise Business.
Area Development Agreement The following chart provides an estimate of your initial investment to open your first Franchised Business if, for example, you sign an Area Development Agreement for the development of 5 Franchise Operational Unit Businesses.
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Type of expenditure
Amount Low-High Range
Method of payment
When due To whom payment is to be
made
Franchise Fee (12) $19,750 Cashier’s Check Upon Signing Franchise Agreement
Us
Area Development Fee (13)
$40,000 50% deposit as a Cashier’s Check.
Balance as incurred
Upon Signing Area Development Agreement
Us
Other Expenditures For 1st Business (14)
$10,000 - $70,000 As Disclosed in Preceding Table
As Disclosed in Preceding Table
As Disclosed in Preceding Table
TOTALS (15) $69,750 - $135,000
* All fees imposed by and payable to us are earned and non-refundable when paid.
Notes:
(12) Franchise Fee. As described above (13) Area Development Fee. A deposit of 50% of the fee is required at the signing of the Area Development
Agreement and the balance for each additional area is only required when the respective additional area is developed with an operational unit.
(14) Other Expenditures. As described above.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Standards and Specifications; Approved Suppliers. You must comply with all standards and specifications which we may impose for supplies, materials, equipment, computer systems, software programs, Internet web services and other services and products used or offered for sale at the Franchised Business. We have the right to amend these standards and specifications, at our sole discretion. Except for the items described below, if we have approved suppliers for any such item, you may be required to obtain these items from those suppliers. Approved suppliers are those who demonstrate the ability to meet our then-current standards and specifications for items used or offered for sale at OK Franchise Group Businesses. If you wish to purchase, lease or use any items from an unapproved supplier, you or the supplier must submit a written request for our approval. All supplier approvals are issued in writing. We do not impose a fee for supplier approval requests. You must maintain in sufficient supply and use and sell at all times only such products and services that conform to our specifications and refrain from deviating from our standards and specifications without our prior written consent. Products and Services. You must sell or offer for sale all products, supplies and services we require and only such products, supplies and services which we approve in writing and in the manner and style and using the methods we prescribe, and refrain from selling or offering for sale any products and services (including any service facilities) operating in conjunction with the Franchised Business we do not expressly approve or require in the manner and style or under any methods we prohibit. Such products and services may consist of those provided by a supplier, which we designate. Any service contract other than our approved product must be approved by us. We may change such products and services, manner, style and methods at any time and from time to time. You must maintain in sufficient supply and use and sell at all times only such products and services that conform to our specifications. See Item 16 for a description of additional restrictions on what you may sell.
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Insurance. You must obtain and maintain in full force and effect at all times during the term of the Franchise Agreement, at your expense, insurance policies protecting you and us, our affiliates, franchisees of our affiliates, and the officers, directors, members, shareholders, partners, agents, representatives, independent contractors, employees, successors and assigns of each of them, against any demand or claim with respect to personal injury, death or property damage, or any loss, liability or expense whatsoever arising or occurring on or in connection with the Franchised Business. These policies must be written by a responsible carrier and must include the following, as well as any additional coverage’s and higher policy limits that we may reasonably specify from time to time: (1) Commercial general liability insurance covering all operations by you or on your behalf with limits of
$1,000,000 combined single limit for bodily injury and property damage each occurrence; $1,000,000 aggregate for products - completed operations; and $1,000,000 general aggregate. If you operate at more than one location, the general aggregate limit must apply separately to each location. It must be broad form coverage and provide all coverage’s generally found in the commercial general liability policy.
(2) Fire legal liability, with a minimum coverage limit of $50,000, unless you own the premises or have a cross-
waiver of subrogation with your landlord; (3) Fire, extended coverage, vandalism, malicious mischief and special extended peril insurance at no less
than the actual cost of replacement of the Franchised Business building, if owned, and the contents and improvements of the Franchised Business;
(4) Worker’s compensation insurance in amounts required by applicable state law; (5) Any other insurance that may be required by the state or locality in which the Franchised Business is
located; and (6) Any other insurance that may be required by the terms of any contract relating to the Franchised Business. You may, with our prior written consent, elect to have reasonable deductibles in connection with the above coverage’s. These policies must also include a waiver of subrogation in favor of us, our affiliates and the officers, directors, members, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them. Your obligation to obtain and maintain the above-described policies in the amounts specified is not limited in any way by reason of any insurance which we may maintain nor will your performance of that obligation relieve you of liability under the indemnity provisions of the Franchise Agreement. All insurance policies, except workers’ compensation, must name us, our affiliates, franchisees of our affiliates, and the officers, directors, members, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional insured’s, and must expressly provide that their interest will not be affected by your breach of any policy provisions. All public liability and property damage policies must contain a provision that us, our affiliates, franchisees of our affiliates, and the officers, directors, members, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, although insured’s, will nevertheless be entitled to recover under such policies on any loss occasioned to us or our servants, agents or employees by reason of your negligence or the negligence of your servants, agents, employees or owners. On the execution of the Franchise Agreement and thereafter within 30 days before the expiration of any insurance policy required under the Franchise Agreement, you must deliver to us certificates of insurance evidencing the existence and continuation of proper coverage with limits not less than those required. In addition, if we request, you must deliver to us a copy of the required insurance policy. All insurance policies required under the Franchise Agreement must expressly provide that no less than 30 days’ prior written notice must be given to us in the event of a material alteration to or cancellation of the policies. If you should fail to obtain or maintain the insurance required by the Franchise Agreement for any reason, we have the right and authority (without, however, any obligation to do so) to procure the insurance and to charge you a
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reasonable fee for doing so, which fee you must pay immediately upon notice. This remedy is in addition to any other remedies we may have. Unless we approve in writing, suppliers of the insurance must have an AM Best rating of A-V or better or as required from time to time in the Operations Manual and be an admitted carrier in the state in which you do business in order to be an approved provider of insurance. Computer System. We may require you to obtain computer software (whether or not proprietary) we designate for use by the System, including all modifications, additions and enhancements that we may from time to time designate. If required, you must incorporate any required modifications or additions at your expense within 30 days after receiving written notice from us, unless a longer time period is stated in the notice. Purchases from Us. As noted above, we may require you to purchase certain items, used in the Franchised Business in accordance with our specifications. It is our practice to sell items at a cost to you that are equal to or below the cost you could obtain the items from other sources. You may, but are not required to, purchase these other items and materials from us. Retail Financing. If you qualify, we may require you to participate in various retail finance programs we develop to offer financing to your customers. Terms and conditions vary from lender to lender and credit approvals or denials are at the sole discretion of the lender. State law may govern which retail programs may be offered. Some of our approved vendors may not be available in your state. Though you are not required to send our approved lenders any retail finance credit applications, you must establish them in your automated system and make them available to your customers. Local Directory Advertising. You are required to continuously maintain at least one listing in the local directory pages for the Franchised Business. From time to time, we may require you to purchase local directory pages display advertising in the primary directory serving the local market area or as determined by us. You may purchase your local directory pages advertising from our approved supplier, or an alternative supplier who meets our specifications. See Item 11. Approved Suppliers. We may from time to time, require you to submit sufficient specifications, photographs, drawings and/or other information and samples to determine whether the items meet our specifications as stated in the Operations Manual, and the supplier meets our criteria for approved suppliers. Any supplier who is able to provide items meeting our specifications may apply to become an approved supplier. We do not have a contractually required time frame in which we have to respond to your supplier approval requests, but we generally expect to respond within 5 business days. If we determine that the supplier does not meet our criteria, we will notify you in writing of the reasons for disapproval. Purchase Arrangements. Although we have no contractual obligation to do so, we may negotiate purchase arrangements, including price terms, with approved suppliers on behalf of the System. As of the date of this Disclosure Document, there are no purchasing or distribution cooperatives for any of the items described above in which you are obligated to participate. Revenues from Franchise Purchases. We do not currently, but we may receive discounts and rebates on certain purchases from unaffiliated approved suppliers of products and services. For the year ended December 31, 2011, we had total revenue of $225,000, of which $29,250 or 13% came from franchisee purchases from us, including insurance, advertising services, supplies and rebates from affiliates and suppliers. Required Purchases. The purchase of insurance and supplies required to be purchased or leased by you from us or our affiliates, or from unaffiliated approved suppliers from whom we receive rebates will vary substantially depending on whether you purchase your supplies or insurance through us, and will represent approximately 5% to 15% of the cost to establish the Franchised Business and 5% to 15% of the cost to operate the business. We estimate that your purchase of the above described products and services in accordance with our specifications or from approved suppliers will represent approximately 5% to 15% of the cost to establish the Franchised Business and 5% to 15% of the cost to operate the business.
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When determining whether to grant new or additional franchises, we consider many factors, including whether you have complied or will comply with the requirements described above. See Items 5, 6, 7, and 11 for a description of other obligations affecting your purchases.
ITEM 9
FRANCHISEE’S OBLIGATIONS
THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND OTHER AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS DISCLOSURE DOCUMENT.
Obligation Section Section in Franchise Agreement
Section in Disclosure Document
a. Site selection and acquisition/lease
Article 5 Items 8 and 11
b. Pre-opening purchases/leases Article 5 Items 7 and 8
c. Site development and other pre-opening requirements
Article 5 Items 8 and 11
d. Initial and ongoing requirements Article 8 Items 7 and 11
e. Opening Article 5 Item 11
f. Fees Article 4 Items 5 and 6
g. Compliance with standards and policies/Operating Manual
Article 8 Items 8 and 11
h. Trademarks and Proprietary information
Article 12 Items 13, 14, 16 and 17
i. Restrictions on products/services offered
Article 10 Items 8, 11 and 16
j. Warranty and customer service requirements
Article 21 Item 16
k. Territorial development and sales quota
Article 8 Item 12
l. Ongoing product/service purchase
Article 10 Item 8
m. Maintenance, appearance and remodeling requirements
Article 8 Item 7
n. Insurance Article 18 Items 7 and 8
o. Advertising Article 9 Items 5, 6, 7, 8, 11 and 12
p. Indemnification Article 19 Item 15
q. Owner’s participation/ management/staffing
Article 6 Item 15
r. Records and reports Article 11 Item 6
s. Inspections and audits Article 11 Item 6
t. Transfer Article 15 Item 17
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Obligation Section Section in Franchise Agreement
Section in Disclosure Document
u. Renewal Article 3 Items 6 and 17
v. Post-termination obligations Article 16 Item 17
w. Non-competition covenants Article 13 Items 15, 16 and 17
x. Dispute resolution Article 21 Item 17
y. Commence business within 28 days of training or receipt of vehicle and equipment
Article 5 Item 17
ITEM 10
FINANCING
Item
Financed Source of financing
Down payment
Amount financed
Term (Yrs)
Interest rate
Monthly payment
Pay Penalty
Security required
Liability upon default
Loss of legal right on default
Initial fee None
Equipment Hire
OK Services None $0 10 0% $250 None Personal Guarantee
Equip removal, past and future due payments, collection costs, including attorney’s fees, loss of franchise.
Loss of all defenses.
Vehicle, or Trailer Lease
(note 1)
Personal Guarantee
Loss of franchise, vehicle removal, overdue payments, collection costs, including attorney’s fees.
Loss of all defenses
Opening Inventory
None
Other Financing
None
We do not guarantee any notes, leases or obligations related to your franchise. We do not receive payments from any person for the placement of financing, although in the future, we may accept referral fees. We do not require any security interests to be given to obtain financing. Note: (1) Specific vehicles for conversion can be leased, or purchased from appointed vehicle provider. The
terms agreed with the vehicle provider are subject to status. Suitable vehicles for towing can be provided by the franchisee, or their appointed provider.
ITEM 11
FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, OK Franchise Group Inc is not required to provide you with any assistance under the Franchise Agreement or Area Development Agreement. Before you open your business, we will: 1. Provide you with initial training lasting up to 14 days at our cost although the cost of travel and your living
expenses whilst attending training will be borne by you 2. Provide you with a copy on loan of the Operations Manual together with other training materials 3. Provide you with or arrange for you to have the vehicle and equipment and initial stock of products and
stationery (this is subject to you making payment of the initial fee and entering into if necessary a vehicle lease agreement as well as an equipment hire agreement
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4. Providing some advice and sample leaflets to assist with the launch of your Franchised Business 5. Provide you with advice and assistance in obtaining an initial stock package of products, although the products
themselves will be paid for by you Initial training program summary
Subject Hours of Classroom Training
Hours of On-The-Job-Training
Location
WEEK ONE
Practical system maintenance and application
30 10 Company
WEEK TWO
Practical system maintenance and application
30 10 Company
Our trainers have extensive knowledge of the maintenance and operation of the business concept and equipment. A detailed training program is individually tailored to each franchisee to ensure that their skills and business development is matched to their strengths and weakness so that they have the confidence and belief in their abilities to make a success of their business. The training program will cover all of the following disciplines:
- Infrastructure set up - Permits, health and safety - Marketing and customer care - Planning and recruitment - Practical system maintenance and application - Driving operations and maintenance - Equipment operations and maintenance - Quality control and payment processing - Route planning and maintenance
During the operation of the Franchised Business, we will: 1. Provide you with advice, know-how and guidance on the management, finance, promotion and methods of
operation to be employed in the Franchised Business 2. Make available to you (at your cost and subject to our standard terms and conditions) the products, point of
sale advertising material, stationery and replacement stationery, and replacements/spare parts for the equipment
3. Make available to you (at your cost) standard forms of contracts for use with customers 4. Carry out quality inspections of you and our other franchisees in order to ensure maintenance of high quality
standards in the business 5. Provide you with any improvements and additions to the business system and provide (at your expense)
additional training on this if required 6. Provide marketing and promotional advice to you to enable you develop a program for local promotion of the
business
ITEM 12
TERRITORY
You will receive a protected territory with up to 50,000 households and businesses. We will determine the territory based on various market and economic factors such as an evaluation of market demographics, the market
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penetration of the System and similar businesses and the growth trends in the market. The area, which the territory covers, will vary significantly depending on those factors. The territorial rights granted to you under the Franchise Agreement are not dependent on you achieving certain sales volumes, market penetration or other contingency, and the territory may not be altered before the Franchise Agreement expires or terminates without the express written agreement of the Franchisor. We will not award a franchise to any other person to operate a similar “Clean A Can” franchise business in your territory, or provide services in the territory ourselves, unless you fail to perform your obligations under the Franchise Agreement and in our reasonable opinion, fail to fully exploit the territory. Except when operating co-operatively with appropriate franchisees, you cannot advertise or solicit orders within another franchisee’s territory. You do not receive the right to acquire additional franchises within your area except under an Area Development Agreement
ITEM 13
TRADE MARKS
We grant franchisees the right to operate “Clean A Can” businesses under the brand names of the registered franchise, which are the principal Mark used to identify the System. Franchisees may also use any other current or future Mark to operate their Franchised Business that we designate in writing, including the logo on the front of the Disclosure Document and the trademarks listed below. By “Mark” we mean any trade name, trademark, service mark or logo used to identify a “Clean A Can” franchise business. As at this date OK Franchise Group and its affiliates have copyrighted marks for the following:
Copyright Marks
www.cleanacan.com www.mrcleanacan.com www.okfranchisegroup.com www.wheeliebin.com
There are no agreements currently in effect, which significantly limit our rights to use or license the use of our Marks in a manner material to the franchise. There are no currently effective material determinations of the PTO, the Trademark Trial and Appeal Board, the trademark administrator of any state or any court, nor are there any pending infringement, opposition or cancellation proceedings or material litigation, involving the principal trademarks. This logo and words are copyrighted in the United States of America, United Kingdom and the Republic of Ireland. You must take all necessary steps to ensure that all advertising and promotional materials, signs, decor, paper goods and other items (including all contracts, forms and stationery) used in the Franchised Business, that we designate to display the Marks, bear the Mark, as specified in our standards and guidelines and present the Marks, in the form, color, location and manner we prescribed. You must sign any documents we require to protect the Marks or to maintain their continued validity and enforceability. You must notify us immediately of any apparent infringement or challenge to your use of any Mark, or of any claim by any person of any rights in any Mark, and you may not communicate with any person other than us, our attorneys and your attorneys concerning any infringement, challenge or claim. We have sole discretion to take action as we deem appropriate and the exclusive right to control any litigation, PTO proceeding or any other administrative proceeding arising from the infringement, challenge or claim or otherwise relating to any Mark. We
26
may assume, at our cost and expense, the defense of any litigation or proceeding. You must sign any instruments and documents, provide any assistance and take any action that, in the opinion of our attorneys, may be necessary or advisable to protect and maintain our interests in any litigation or PTO or other proceeding or otherwise to protect and maintain our interests in the Marks. We will indemnify you against and reimburse you for all damages for which you are held liable in any proceeding arising out of your use of any of the Marks (including settlement amounts), provided that your conduct involving any proceeding and use of the Marks is in full compliance with the terms of the Franchise Agreement. If it becomes advisable at any time in our sole discretion for us and/or you to modify or discontinue the use of any Mark and/or use one or more additional or substitute trade or service marks, you must comply with our directions. We will not be obligated to reimburse you for any expenses of changing the signs or any loss of revenue attributable to any modified or discontinued Mark used at the Franchised Business or for any expenditures you make to promote a modified or substitute trademark or service mark. We do not actually know of either superior prior rights or infringing uses that could materially affect your use of our principal trademark in any state.
ITEM 14
PATENTS, COPYRIGHT AND PROPRIETARY INFORMATION
We have no patents that are material to the franchise described in this Disclosure Document. However, we claim all statutory copyrights that attach to all or any part of any original materials used in the System, including the Operations Manual, advertising and promotional materials, signs, menus, training materials and all other written materials we provide you. There is no presently effective determination of the U.S. Copyright Office (Library of Congress) or any court affecting our copyrights. There is no currently effective agreement that limits our right to use and/or license our copyrights. We are not obligated by the Franchise Agreement, or otherwise, to protect any rights you have to use the copyrights. We have no actual knowledge of any infringements that could materially affect the ownership, use or licensing of the copyrights. Although we have not filed an application for copyright registration for the Operations Manual, we claim a copyright and the information is proprietary. Breach of the confidentiality of the Operations Manual or other confidential information by you or your employees is grounds for termination of the Franchise Agreement. You will be provided with a copy of the Operations Manual, but you may not copy it yourself, and you must return it to us at the end of the term of the Franchise Agreement. You are not under any legal obligation to notify us of any infringements you know about and any action we choose to take is discretionary. We will control any litigation. We consider our method of cleaning and our equipment to be confidential information too.
ITEM 15
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
You must devote your whole time and attention to the Franchised Business and not work for or spend time on any other business without our consent. If you cannot continue to serve or no longer qualify to act in the designated capacity during the term of any Agreement, you must promptly notify us and designate a replacement within 30 days after any such person ceases to serve. This replacement will be subject to the same qualifications and restrictions listed above and must attend and complete Training to our satisfaction. We reserve the right to decrease the period of time or geographic scope of the non-competition covenants described in the attachments or eliminate the non-competition covenants altogether for any person that is required to sign such an agreement (see Items 14 and 17).
ITEM 16
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RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
We require you to offer and sell only those services that we have approved. You must offer all services that we designate as required for all franchisees: currently these required services are the cleansing and deodorizing of trash and garbage cans (dumpsters). We reserve the right to add additional authorized services that you must offer. As long as you meet your minimum sales targets, we will not restrict you from soliciting any customers in your territory. Failure to meet this minimum is a default under your Franchise Agreement and grounds for termination of your franchise (see Item 17).
ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the Agreements attached to this disclosure document.
THE FRANCHISE RELATIONSHIP
Provision Section of franchise or other agreement
Summary
a. Length of term of the franchise
Article 3 10 years unless otherwise agreed
b. Renewal or extension of the term
Article 3 Renewal for further ten year term if certain conditions are met and you’re not in breach of the agreement
c. Requirements for franchisee to renew or extend
Article 3 Give notice, bring vehicle and equipment up to date, submit to refresher training, execute legal documentation and pay legal costs
d. Termination by franchisee As allowed under applicable law
e. Termination by franchisor without cause
None
f. Termination by franchisor with ‘cause’
Article 16 We may terminate for failure to cure or for incurable defaults
g. ‘Cause’ defined – curable defaults
Article 16 You have 30 days to cure: failure to commence business or obtain our consent where required; hurt the goodwill in our name or proprietary marks; disclose confidential information or the operations manual; change control/management of your company; commit a crime or be certified mentally ill; breach hire agreements; fail to pay; fail to give us accounting information; fail to comply with manual/business system.
h. ‘Cause’ defined – defaults which cannot be cured
Article 16 Your company or you become insolvent or anyone takes action to enforce a mortgage or lien
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Provision Section of franchise or other agreement
Summary
i. Franchisee’s obligations on termination/non-renewal
Articles 17 Obligations include disassociation; non-competition (see r. below); payment of monies due; return of certain items, including vehicle; turn over customer lists
j. Assignment of contract by franchisor
Article 15 We may assign this Agreement without your consent provided that the assignee agrees to comply with our obligations instead of us
k. ‘Transfer’ by franchisee – defined
None
l. Franchisor approval of transfer by franchisee
Article 15 We will approve transferee subject to conditions in (m.) below
m. Conditions for franchisor approval of transfer
Article 15 Buyer must reach our standards; you must pay transfer fee and any introduction commission; you cannot be in breach of Agreement; you must pay our legal costs
n. Franchisor’s right of first refusal to acquire franchisee’s business
Article 15
o. Franchisor’s option to purchase franchisee’s business
Article 15 At market value and only in the event of your death or disability where your personal representatives have not arranged a sale or transfer.
p. Death or disability of franchisee
Article 15 We can take over management of your Franchised Business pending recovery or sale. Your representatives can sell or transfer to a relative or beneficiary. We must approve buyer/transferee in accordance with Article 16.
q. Non-competition covenants during the term of the franchise
Article 13 You cannot compete with, or seek to divert custom from us
r. Non-competition covenants after the franchise is terminated or expires
Article 17 You cannot compete for 1 year within your territory or employ any other franchisee or senior staff member or solicit customers
s. Modification of the Agreement
None No modifications generally although Operations Manual may be changed
t. Integration/merger clause Article 21 Franchise Agreement constitutes only agreement
u. Dispute resolution by arbitration or mediation
Article 9
v. Choice of forum Article 21 Any litigation must be pursued in courts located in Osceola County, Florida
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Provision Section of franchise or other agreement
Summary
w. Choice of law Article 21 Florida Law applies, except that disputes over the Marks will be governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sec. 1051 et seq.)
Development Agreement
Provision Section of franchise or other agreement
Summary
a. Term of the development rights
Sections 4 10 years unless otherwise agreed
b. Renewal or extension of the term
Sections 4 Renewal for further ten year term if certain conditions are met and you’re not in breach of the Agreement
c. Requirements for franchisee to renew or extend
Sections 4 Give notice, bring vehicle and equipment up to date, submit to refresher training, execute legal documentation and pay legal costs
d. Termination by franchisee As allowed under applicable law
e. Termination by franchisor without cause
None
f. Termination by franchisor with ‘cause’
Section 9 We may terminate for failure to cure or for incurable defaults
g. ‘Cause’ defined – curable defaults
Section 9 You have 30 days to cure: failure to commence business or obtain our consent where required; hurt the goodwill in our name or proprietary marks; disclose confidential information or the operations manual; change control/management of your company; commit a crime or be certified mentally ill; breach hire agreements; fail to pay; fail to give us accounting information; fail to comply with manual/business system.
h. ‘cause’ defined – defaults which cannot be cured
Section 9 Your company or you become insolvent or anyone takes action to enforce a mortgage or lien
i. Franchisee’s obligations on termination/non-renewal
Section 8 Obligations include disassociation; non-competition (see r. below); payment of monies due; return of certain items, including vehicle; turn over customer lists
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Provision Section of franchise or other agreement
Summary
j. Assignment of contract by franchisor
Section 7 We may assign this Agreement without your consent provided that the assignee agrees to comply with our obligations instead of us
k. Franchisor approval of transfer by franchisee
Section 7 We will approve transferee subject to conditions in (l.) below
l. Conditions for franchisor approval of transfer
Section 7 Buyer must reach our standards; you must pay transfer fee and any introduction commission; you cannot be in breach of Agreement; you must pay our legal costs
m. Non-competition covenants during the term of the franchise
Section 8 You cannot compete with, or seek to divert custom from us
n. Non-competition covenants after the franchise is terminated or expires
Section 8 You cannot compete for 1 year within your territory or employ any other franchisee or senior staff member or solicit customers
o. Modification of the Agreement
Section 8 No modifications generally although Operations Manual may be changed
p. Choice of forum Section 11 Any litigation must be pursued in courts located in Osceola County, Florida
q. Choice of law Section 11 Florida Law applies, except that disputes over the Marks will be governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sec. 1051 et seq.)
These states have statutes that may supersede the Franchise Agreement concerning your relationship with us, including the areas of termination, renewal and transfer of the franchise and dispute resolution of the franchise:
State Reference
Arkansas Ark. Code. Ann. Sections 4-72-201 to 4-72-210
California Cal. Bus & Prof. Code. Sections 20000 to 20043
Connecticut Conn. Gen. Stat. Ann. Sections 42-133e to 42-133h
Delaware Del. Code. Ann. Tit. Sections 2551 to 2556
Florida Stat. Section 542.335
Hawaii Haw. Rev. Stat. Sections 482E-1 to 482E-12
Illinois Illinois Complied Statutes 815 ILCS 705/1-44
Indiana Ind. Code. Ann. Sections 23-2-2.7-1 to 23-2-2.7-7
Iowa Iowa Code. Ch. 523H. Sections 523H.1 to 523H.17
Louisiana La. Rev. Stat. Ann. Tit. 23. Sections 921(E) and Tit. 12. Section 1042
Michigan Mich. Comp. Laws. Sections 445.1527 & 445.1535
Minnesota Minn. Stat. Section 80C.14 and Minn. Rules. Dept. Comm. Section 2860.4400
Mississippi Miss. Code. Ann. Sections 75-24-51 to 75-24-63
Missouri Mo. Rev. Stat. Sections 407.400 to 407.420
Nebraska Neb. Rev. Stat. Sections 87-401 to 87.410
New Jersey N.J. Rev. Stat. Sections 56:10-1 to 56:10-12
North Carolina Chapter 22B. Sec. 3
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South Dakota S.D. Code. Laws. Section 37-5A-51
Virginia Va. Code. Ann. Sections 13.1-557 to 13.1.574
Washington Wash. Rev. Code. Sections 19.100.180 to 19.100.190
Wisconsin Wis. Stat. Sections 135.01 to 135.07
These and other states may have statutes court decisions that supersede the terms of the Franchise Agreement, including the termination, renewal, transfer and dispute resolution provisions.
ITEM 18
PUBLIC FIGURES
We do not use any public figure to promote our franchise.
ITEM 19
FINANCIAL PERFORMANCE REPRESENTATION
The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. The following income figure is only an estimate of what we think you can earn. There is no assurance that you’ll do as well. If you rely upon these figures, you must accept the risk of not doing as well. This projected income figure is derived from the actual historical performance of can cleaning franchisees in the second year. Half of existing can cleaning franchisees are in large metropolitan areas. There is no assurance you’ll do as well. These sales figures are derived from the actual historical performance of can cleaning franchisees in large metropolitan areas. The market where your “Clean A Can” outlets are located, however, may be in a smaller urban or suburban area. Accordingly, the results achieved by these franchisees may not be typical for those in your area. Further, each of the franchises studied has been in business at least three years. Apart for the following information, we do not furnish or authorize our salespeople to furnish any other oral or written information concerning the actual or potential sales, costs, income or profits of a “Clean A Can” franchise. Actual results vary from unit to unit and franchisee to franchisee. We cannot estimate the results of any particular franchise or particular concept.
“Clean A Can” Cost Claims For One Unit At End Of Year 2
AVERAGE 8 CANS A DAY 20 CANS A DAY 32 CANS A DAY 46 CANS A DAY TOTAL
MTH MTH MTH MTH MTH MTH MTH MTH MTH MTH MTH MTH
Month 13 $
14 $
15 $
16 $
17 $
18 $
19 $
20 $
21 $
22 $
23 $
24 $
TOTAL $
Avg price per clean 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Avg bins per day 54 58 62 66 70 74 78 82 86 92 96 100
Turnover per month 5,400 5,800 6,200 6,600 7,000 7,400 7,800 8,200 8,600 9,200 9,600 10,000 91,800
Less
Vehicle Insurance 347 347 347 347 347 347 347 347 347 347 347 347 4,164
Business Insurance 59 59 59 59 59 59 59 59 59 59 59 59 708
Purchases 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Gas 300 300 300 300 300 300 300 300 300 300 300 300 3,600
Leaflets etc 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Phone/Internet 65 65 65 65 65 65 65 65 65 65 65 65 780
Accountant 50 50 50 50 50 50 50 50 50 50 50 50 600
Management Fee 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Royalty Fee 150 150 150 150 150 150 150 150 150 150 150 150 1,800
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Vehicle Fee 647 647 647 647 647 647 647 647 647 647 647 647 7,764
Equipment Fee 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Sub total 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 2,318 27,816
Balance 3,082 3,482 3,882 4,282 4,682 5,082 5,482 5,882 6,282 6,882 7,282 7,682 63,984
All figures above have been prepared on the assumption that the franchisee decides to lease a new vehicle to carry the mounted cleaning unit, as to the alternative of the cleaning unit being towed by a truck. The figures are a guide and although care has been taken they should not be interpreted as a guarantee that they will not be higher or lower than this. They are based on our operating experience and knowledge of the market and may be lower or greater and will depend on the business management of the franchise. The costs are based on a single unit franchise. We do not provide specific earnings forecasts as these differ from franchisee to franchisee, and are therefore determined by the type of area, the local culture, type of franchise and the ability, skills and commitment of the individual franchisee.
“Clean A Can” Earnings Projection For One Unit After Two Years
BREAKEVEN TABLE
SINGLE UNIT FRANCHISE PACKAGE
Overheads And
Items
Costs Per
Month
Expenditure Only Breakeven-Point
Cans Cleaned Per Day
$100,000 Earnings Breakeven-Point
Cans Cleaned Per Day
Wages $0
Earnings needed = $1,553 per month
Assuming an average
of 20 cleaning days per month and cleans are
charged at $5.00 each
Earnings needed = $10,652 per month
Assuming an average
of 20 cleaning days per month and cleans are
charged at $5.00 each
Insurance - Vehicle $347
Insurance - Business $59
Purchases $250
Gas $300
Leaflets $100
Phone/Internet $65
Accountant £50
Management Fee $100
Royalty Fee £150
Vehicle Lease Fee $647
Equipment Hire Fee $250
Total overheads per month $2,318 15 107
All figures are based on a 5-day week and 20 days per month. They have been prepared as a guide and although care has been taken they should not be interpreted as a guarantee that they will be the same for every franchisee. They are based on our International operating experience and knowledge of the market and may be lower or greater and will depend on the business management of the franchise and the financial status of the Franchisee.
ITEM 20
OUTLETS AND FRANCHISEE INFORMATION
System Wide Outlet Summary For Years 2014 to 2016
Outlet Type Year Outlets at the Start of the Year
Outlets at the End of the Year
Net Changes
Franchised 2014 39 39 0
2015 39 40 +1
2016 40 42 +2
Company Owned 2014 2 2 0
2015 2 2 0
2016 2 2 0
Total Outlets 2014 41 41 0
2015 41 42 +1
2016 42 44 +2
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Transfer of Outlets from Franchisees to New Owners (other than the Franchisor)
For Years 2014 to 2016 State Year Number of Transfers
USA 2014 0
2015 0
2016 0
UK 2014 1
2015 2
2016 2
TOTALS 2014 1
2015 2
2016 2
Status of Franchised Outlets For Years 2014 to 2016
State Year Outlets At Start Of Year
Outlets Opened
Terminations
Non-Renewals
Reacquired by
Franchisor
Ceased Operations-Other
Reasons
Outlets at End of
Year
USA 2014 4 0 0 0 0 0 4
2015 4 0 0 0 0 0 4
2016 4 0 0 0 0 0 4
UK 2014 35 0 0 0 0 0 35
2015 35 +1 0 0 0 0 36
2016 36 +2 0 0 0 0 38
TOTALS 2014 39 0 0 0 0 0 39
2015 39 +1 0 0 0 0 40
2016 40 +2 0 0 0 0 42
Status of Company Owned Outlets For Years 2014 to 2016
State
Year
Outlets at Start of
Year
Outlets Opened
Outlets Reacquired From Franchisees
Outlets Closed
Outlets Sold to
Franchisees
Outlets at End of Year
USA 2014 0 1 0 0 0 1
2015 1 0 0 0 0 1
2016 1 0 0 0 0 1
UK 2014 1 0 0 0 0 1
2015 1 0 0 0 0 1
2016 1 0 0 0 0 1
TOTALS 2014 1 1 0 0 0 2
2015 2 0 0 0 0 2
2016 2 0 0 0 0 2
Projected Openings As Of December 31 2017 State
Franchise Agreements Signed But Outlet Not
Opened
Projected New Franchised Outlet in the
Next Fiscal Year
Projected New Company-Owned Outlets in the Next
Fiscal Year
USA 0 6 0
UK 0 6 0
TOTALS 0 12 0
OK Franchise Group is an International company and operates in the United States of America and the United Kingdom. Including Master Franchisees, we have 38 franchised and 2 owned outlets, nationally and internationally. Our franchisees do not normally operate from business premises. Attached to this disclosure document, as Exhibit G is a list of all our franchisees. Also attached to this disclosure document as Exhibit H is a list of franchisees who have had an outlet terminated, cancelled, not renewed or otherwise voluntarily or involuntarily ceased to do business under the Franchise Agreement during the last fiscal year or who has not communicated with us in the 10 weeks before the application date. If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.
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ITEM 21
FINANCIAL STATEMENTS
Attached as Exhibit E are our financial statements for the last 2 fiscal years. Our fiscal year ends December 31.
ITEM 22
CONTRACTS
The following agreements and other required exhibits are attached to this disclosure document in the pages immediately following:
Exhibit C is the Franchise Agreement Exhibit D is the Area Development Agreement Exhibit E is the Equipment Hire Agreement
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ITEM 23
RECEIPTS
THIS DISCLOSURE DOCUMENT SUMMARIZES CERTAIN PROVISIONS OF THE FRANCHISE AGREEMENT AND OTHER INFORMATION IN PLAIN ENGLISH. READ THIS DISCLOSURE DOCUMENT AND ALL AGREEMENTS CAREFULLY. IF THE OK FRANCHISE GROUP OFFERS YOU A FRANCHISE, THE OK FRANCHISE GROUP MUST PROVIDE THIS DISCLOSURE DOCUMENT TO YOU BY THE EARLIEST OF:
1. THE FIRST PERSONAL MEETING TO DISCUSS OUR FRANCHISE; OR
2. FOURTEEN CALENDAR DAYS BEFORE SIGNING OF A BINDING AGREEMENT; OR
3. FOURTEEN CALENDAR DAYS BEFORE ANY PAYMENT TO THE FRANCHISOR OR AFFILIATE IN CONNECTION WITH THE FRANCHISE SALE.
IF THE OK FRANCHISE GROUP DOES NOT DELIVER THIS DISCLOSURE DOCUMENT ON TIME OR IF IT CONTAINS A FALSE OR MISLEADING STATEMENT, OR A MATERIAL OMISSION, A VIOLATION OF FEDERAL AND STATE LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE COMMISSION, WASHINGTON, D.C. 20580 AND THE RELEVANT STATE AGENCY. OK Franchise Group Inc.’s sales agent for this offering is Kevyn Lloyd, 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744 Tel: 1 (407) 505-2030 I have received a Franchise Disclosure Document dated: January 1, 2017. This disclosure document included the following exhibits: A. List of State Administrators
B. List of State Agents for Service of Process C. Franchise Agreement D. Area Development Agreement
E Equipment Hire Agreement F. Financial Statements G. International Franchisees Roster H. Franchisees Who Left the System I. Operations Manual Table of Contents
_________________ _________________ _________________ Your name Your signature Date You should return one copy of the signed receipt either by signing, dating, and mailing it to OK Franchise Group Inc, 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744. You may keep the second copy for your records. OK Franchise Group Inc furnishes disclosure documents electronically via email and/or through a password protected website. To access the website, you will need Internet access and a password from us. The disclosure document is in PDF format. Accordingly, in order to read the disclosure document, your computer must have Adobe Reader.TM
[RETURN TO US]
36
ITEM 23
RECEIPTS
THIS DISCLOSURE DOCUMENT SUMMARIZES CERTAIN PROVISIONS OF THE FRANCHISE AGREEMENT AND OTHER INFORMATION IN PLAIN ENGLISH. READ THIS DISCLOSURE DOCUMENT AND ALL AGREEMENTS CAREFULLY. IF THE OK FRANCHISE GROUP OFFERS YOU A FRANCHISE, THE OK FRANCHISE GROUP MUST PROVIDE THIS DISCLOSURE DOCUMENT TO YOU BY THE EARLIEST OF:
4. THE FIRST PERSONAL MEETING TO DISCUSS OUR FRANCHISE; OR
5. FOURTEEN CALENDAR DAYS BEFORE SIGNING OF A BINDING AGREEMENT; OR
6. FOURTEEN CALENDAR DAYS BEFORE ANY PAYMENT TO THE FRANCHISOR OR AFFILIATE IN CONNECTION WITH THE FRANCHISE SALE.
IF THE OK FRANCHISE GROUP DOES NOT DELIVER THIS DISCLOSURE DOCUMENT ON TIME OR IF IT CONTAINS A FALSE OR MISLEADING STATEMENT, OR A MATERIAL OMISSION, A VIOLATION OF FEDERAL AND STATE LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE COMMISSION, WASHINGTON, D.C. 20580 AND THE RELEVANT STATE AGENCY. OK Franchise Group Inc.’s sales agent for this offering is Kevyn Lloyd, 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744 Tel: 1 (407) 505-2030. I have received a Franchise Disclosure Document dated: January 1, 2017. This disclosure document included the following exhibits: A. List of State Administrators
B. List of State Agents for Service of Process C. Franchise Agreement D. Area Development Agreement
E Equipment Hire Agreement F. Financial Statements G. International Franchisees Roster H. Franchisees Who Left the System I. Operations Manual Table of Contents
_________________ _________________ _________________ Your name Your signature Date You should return one copy of the signed receipt either by signing, dating, and mailing it to OK Franchise Group Inc, 1506 Kelley Ave, Suite 2, Kissimmee, FL 34744. You may keep the second copy for your records. OK Franchise Group Inc furnishes disclosure documents electronically via email and/or through a password protected website. To access the website, you will need Internet access and a password from us. The disclosure document is in PDF format. Accordingly, in order to read the disclosure document, your computer must have Adobe Reader.TM
[KEEP FOR YOUR RECORDS]
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EXHIBIT A
LIST OF STATE ADMINISTRATORS
The following is a list of state administrators responsible for registration and review of franchises. We may register in one or more of these states. California Minnesota Department of Commerce Department of Corporations 85 7th Place East, Suite 500 71 Stevenson Sweet, Suite 2100 St. Paul, Minnesota 55101 San Francisco, California 94105 New York Connecticut Bureau of Investor Protection and Securities Connecticut Banking Commissioner New York State Department of Law Department of Banking 120 Broadway, 23rd Floor Securities & Business Investments Division New York, New York 10271 260 Constitution Plaza Hanford, Connecticut 06103 North Dakota North Dakota Securities Department Hawaii State Capitol 5th Floor Business Registration Division 600 East Boulevard Commissioner of Commerce and Consumer Affairs Bismarck, North Dakota 58505 335 Merchant Street, Room 203 Honolulu, Hawaii 96813 Oregon Secretary of State, Corporation Division Illinois 255 Capitol Street Northeast Illinois Attorney General Salem, Oregon 97310 500 South Second Street Springfield, Illinois 62706 Rhode Island Division of Securities, Suite 232 Indiana 233 Richmond Street Indiana Secretary of State Providence, Rhode Island 02903 Securities Division 302 West Washington Sweet, Room E 111 South Dakota Indianapolis, Indiana 46204 Department of Revenue and Regulation Division of Securities Maine 445 East Capitol Avenue Securities Administrator Pierre, South Dakota 57501 Maine Office of Securities 121 State House Station Virginia August, Maine 04333-0121 State Corporation Commission Division of Securities and Retail Franchising Maryland Tyler Building, 9th Floor Office of the Attorney General 1300 East Main Street Securities Division Richmond, Virginia 23219 200 St. Paul Place Baltimore, Maryland 21202 Washington Department of Financial Institutions Michigan Securities Division Department of the Attorney General 150 Israel Road Southwest Consumer Protection Division, Franchise Unit Olympia, Washington 98501 525 Ottawa Street G. Mennen Williams Building, 6th Floor Wisconsin Lansing, Michigan 48909 Division of Securities Department of Financial Institutions 345 West Washington Avenue Madison, Wisconsin 53703
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EXHIBIT B
LIST OF STATE AGENTS FOR SERVICE OF PROCESS
The following state agencies are designated as our agent for service of process in accordance with the applicable state laws. We may register in one or more of these states. California Minnesota Department of Corporations Minnesota Department of Commerce 71 Stevenson Street, Suite 2100 85 7th Place East, Suite 500 San Francisco, California 94105 St. Paul, Minnesota 55101 Connecticut New York Connecticut Banking Commissioner Secretary of the State of New York Department of Banking 41 State Street Securities & Business Investments Division Albany, New York 12231 260 Constitution Plaza Hartford, Connecticut 06103 North Dakota North Dakota Securities Department Hawaii State Capitol 5th Floor Commissioner of Commerce and Consumer Affairs 600 East Boulevard Business Registration Division Bismarck, North Dakota 58505 335 Merchant Street, Room 203 Honolulu, Hawaii 96813 Oregon Secretary of State Illinois Corporation Division Illinois Attorney General 255 Capitol Street Northeast 500 South Second Street Suite 157 Springfield, Illinois 62706 Salem, Oregon 97310 Indiana Rhode Island Indiana Secretary of State Division of Securities Securities Division Suite 232 302 West Washington Street, Room B-Ill 233 Richmond Street Indianapolis, Indiana 46204 Providence, Rhode Island 02903 Maine South Dakota Securities Administrator Department of Revenue and Regulation Maine Office of Securities Division of Securities 121 State House Station 445 East Capitol Avenue August, Maine 04333-0121 Pierre, South Dakota 5750 Maryland Virginia Maryland Securities Commissioner Clerk, State Corporation Commission Office of Attorney General Tyler Building, 1st Floor Securities Division 1300 East Main Street 200 St. Paul Place Richmond, Virginia 23219 Baltimore, Maryland 21202 Washington Michigan Director, Department of Financial Institutions Michigan Department of Commerce Securities Division Corporations and Securities Bureau 150 Israel Road Southwest P.O. Box 30054 Olympia, Washington 98501 6546 Mercantile Way Lansing, Michigan 48909 Wisconsin Commissioner of Securities 345 West Washington Street, 4th Floor Madison, Wisconsin 53703
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A MEMBER OF THE
OK FRANCHISE GROUP
40
EXHIBIT C
FRANCHISE AGREEMENT
Dated 2017
OK FRANCHISE GROUP INC (1)
(“the Company”)
- and -
AN OTHER (2)
(“the Franchisee”)
“We Clean Garbage Cans”
1506 Kelley Ave, Suite 2
Kissimmee
Florida 34744
Tel: +1 (407) 505-2030
F R A N C H I S E A G R E E M E N T
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FORM OF
“CLEAN A CAN”
FRANCHISE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 GRANT
2.1 Grant
2.2 No Sublicensing Rights
2.3 No Exclusive Territory
ARTICLE 3 TERM
3.1 Initial Term
3.2 Renewal
3.3 Form and Manner of Renewal
3.4 Conditions Precedent to Renewal
3.5 Notice Required by Law
ARTICLE 4 PAYMENTS
4.1 Initial Franchise Fees
4.2 Continuing Royalty
4.3 Advertising Fee
4.4 Pre-Authorized Payments.
4.5 Other Payments
4.6 Application of Funds
4.7 Interest and Charges for Late Payments
ARTICLE 5 CONSTRUCTION AND COMMENCEMENT OF BUSINESS
5.1 Location
5.2 Company Site Selection Assistance
5.3 Lease of Premises
5.4 Commencing Operations
5.5 Maintaining and Upgrading of “Clean A Can” Service Units
ARTICLE 6 TRAINING AND ASSISTANCE
6.1 Initial Training Program
6.2 Additional Training
6.3 Other Assistance
ARTICLE 7 OBLIGATIONS OF COMPANY
7.1 General
7.2 Company Default
7.3 No Other Obligations
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ARTICLE 8 MANUALS AND STANDARDS OF FRANCHISEE QUALITY,
CLEANLINESS AND SERVICE
8.1 Product Line and Service
8.2 Containers, Fixtures and Other Goods
8.3 Inventory
8.4 CSD System
8.5 Manuals
8.6 Hours
8.7 Compliance with Applicable Law
8.8 Signs, Designs and Forms of Publicity
8.9 Uniforms and Employee Appearance
8.10 Vending or Other Machines
8.11 Co-Branding
ARTICLE 9 ADVERTISING AND CO-OPS
9.1 General Requirements
9.2 Local Advertising
9.3 Co-op Advertising
9.4 Advertising Program
9.5 Telephone Numbers and Directory Advertising
9.6 Promotional Campaigns
ARTICLE 10 DISTRIBUTION AND PURCHASE OF EQUIPMENT, SUPPLIES, AND
OTHER PRODUCTS
10.1 Brand Products and Materials
10.2 Proprietary Products and Materials
10.3 Non-Proprietary Products and Materials
10.4 Purchases from Company, Extensions of Credit
10.5 Purchase/Distribution Programs
10.6 Test Marketing
ARTICLE 11 REPORTS, BOOKS AND RECORDS, INSPECTIONS
11.1 General Reporting
11.2 Inspections
11.3 Audits
ARTICLE 12 MARKS
12.1 Use of Marks
12.2 Non-Use of Trade Name
12.3 Use of Other Marks
12.4 Non-ownership of Marks
12.5 Defense of Marks
12.6 Prosecution of Infringers
12.7 Modification of Marks
12.8 Acts in Derogation of the Marks
12.9 Assumed Name Registration
ARTICLE 13 COVENANTS REGARDING OTHER BUSINESS INTERESTS
13.1 Non-Competition
13.2 Confidential Information
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13.3 Franchisee’s Affiliates
ARTICLE 14 INTERFERENCE WITH EMPLOYMENT RELATIONS
14.1 Prohibitions During Term
14.2 Prohibitions After Term
14.3 Prohibitions Applicable to Company
ARTICLE 15 NATURE OF INTEREST, ASSIGNMENT
15.1 Assignment by Company
15.2 Assignment by Franchisee
15.3 Business Entity Franchisee
ARTICLE 16 DEFAULT AND TERMINATION
16.1 General
16.2 Automatic Termination Without Notice
16.3 Option to Terminate Without Notice
16.4 Termination With Notice and Opportunity To Cure
16.5 Reimbursement of Company Costs
16.6 Cross-Default
16.7 Notice Required By Law
ARTICLE 17 RIGHTS AND OBLIGATIONS UPON TERMINATION
17.1 General
17.2 Survival of Obligations
17.3 No Ownership of Marks
17.4 Government Filings
ARTICLE 18 INSURANCE
18.1 Insurance
18.2 Use of Proceeds
18.3 Proof of Insurance
ARTICLE 19 RELATIONSHIP OF PARTIES, DISCLOSURE
19.1 Relationship of Franchisee to Company
19.2 Indemnity by Franchisee
ARTICLE 20 NOTICES
20.1 General
ARTICLE 21 MISCELLANEOUS PROVISIONS
21.1 Company’s Right To Cure Defaults
21.2 Waiver and Delay
21.3 Survival of Covenants
21.4 Successors and Assigns
21.5 Joint and Several Liability
21.6 General Release
21.7 Governing Law/Consent to Jurisdiction
21.8 Waiver of Punitive Damages and Jury Trial
21.9 Limitations of Claims
21.10 Entire Agreement
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21.11 Titles For Convenience
21.12 Gender And Construction
21.13 Severability
21.14 Counterparts
21.15 Fees and Expenses
21.16 Counsel
ARTICLE 22 SUBMISSION OF AGREEMENT
22.1 General
ARTICLE 23 ACKNOWLEDGMENT
23.1 General
23.2 Due Execution
Exhibit A - Minimum Hours of Operation
Exhibit B - Franchisee Information
Exhibit C - Guaranty and Subordination Agreement
Exhibit D – Notary Form
(The remainder of this page is intentionally left blank)
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”CLEAN A CAN”
FRANCHISE AGREEMENT
THIS AGREEMENT is made this …………… day of …………………….…… 20…………..,
(the “Effective Date”) by and between “Clean A Can” a trading name of the OK Franchise
Group, Inc, a Florida corporation, located at 1506 Kelley Ave, Suite 2, Kissimmee, Florida
34744, (“Company”), and, …………………………….……………………………….. an
individual OR …………………………..….. a ………………………………………… organized
under the laws of ………...…………. (the “Franchisee”), with reference to the following facts:
A. Company owns certain proprietary, other property rights and interests in and to the “Clean
A Can” copyright mark, and such other trademarks, service marks, logo types, insignias, trade
dress, designs, and commercial symbols as Company may from time to time authorize or direct a
Franchisee to use in connection with the operation of the “Clean A Can” franchise (the “Marks”).
B. Company has developed and continues to develop a system for the operation of trash and
garbage can cleaning services, products and merchandising of the “Clean A Can” Authorized
Products, which system features distinctive signs, processes, and various trade secrets and other
confidential information, and in some cases also includes architectural designs, trade dress,
uniforms, equipment specifications, layout plans, record-keeping and marketing techniques (the
“System”).
C. Franchisee desires to obtain a license and franchise to operate a single “Clean A Can”
Service Unit under the Marks and in strict accordance with the System, and the standards and
specifications established by Company, and Company is willing to grant Franchisee such license
and franchise under the terms and conditions of this Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
In this Agreement the following capitalized terms shall have the meanings set forth below, unless
the context otherwise requires:
“Applicable Law” means and includes applicable common law and all applicable statutes, laws,
rules, regulations, ordinances, policies and procedures established by any Governmental
Authority governing the operation of the “Clean A Can” Service Unit, including all immigration,
labor, disability, food and drug laws, health and safety regulations, and Americans With
Disabilities Act requirements, as in effect on the Effective Date hereof, and as may be amended,
supplemented or enacted from time to time.
“Assignment” shall have the meaning set forth in Section 15.2.
“Authorized “Clean A Can” Service Products” means the specific trash and garbage can cleaning
products and other items, which may include trash and garbage can cleaning equipment, hats, t-
shirts and novelty items, as specified by Company from time to time in Company's Manuals, or as
otherwise directed by Company in writing, for sale from the Franchisee's “Clean A Can” Service
Unit, offered and provided in strict accordance with Company's procedures, quality standards and
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specifications, including specifications as to processes, brand names, procedures and
presentation.
“Business Entity” means any Partnership, Limited Liability Company, and any Association,
Corporation or other entity, which is not an individual.
“Competitive Activities” shall mean to, own, operate, lend to, advise, be employed by, or have
any financial interest in any business that engages in the cleaning of trash and garbage cans; the
sale of products produced by third parties; or the production or sale at retail or wholesale of any
trash and garbage can cleaning service or product, featured by the “Clean A Can” Service Unit.
“Confidential Information” shall have the meaning set forth in Section 13.2.
“Continuing Royalty” shall have the meaning set forth in Section 4.2
“Designated Franchisee Representative” shall have the meaning set forth in Section 6.1.1.
“Clean A Can” Service Branded Product is any product now existing or developed in the future
that bears, is offered or is packaged under any of Company's Marks.
“Clean A Can” Service Unit shall refer to the service location or vehicle operated pursuant to this
Agreement under Company's Marks and in accordance with the System and specializing in the
sale of Authorized “Clean A Can” Service Products.
“Effective Date” means the date indicated in the first paragraph of this Agreement.
“Franchisee” shall mean the person or Business Entity identified in the first paragraph of this
Agreement, and for purposes of Article 13 only, shall include Franchisee's spouse and minor
children and its Owners, officers and directors if Franchisee is a Business Entity.
“Governmental Authority” means and includes all Federal, state, county, municipal and local
governmental and quasi-governmental agencies, commissions and authorities.
“Gross Sales” means gross revenues (excluding allowances and sales taxes) received or
receivable by Franchisee as payment, whether in cash or for credit or barter (and, if for credit or
barter, whether or not payment is received therefor), for all trash and garbage can services, sold or
offered by a Franchisee's “Clean A Can” Service Unit, or which are promoted or sold under any
of the Marks.
“Internet” means collectively the myriad of computer and telecommunications facilities,
including equipment and software, which comprise the interconnected worldwide network of
networks that employ the TCP/IP (Transmission Control Protocol/Internet Protocol), or any
predecessor or successor protocols to such protocol, to communicate information of all kinds by
fiber optics, wire, radio, or other methods of transmission.
“Initial Fee” shall have the meaning set forth in Section 4.1
“Lease” shall have the meaning set forth in Section 5.3.
“Commencing Operations” shall have the same meaning set forth in Section 5.4.1.
“Location” shall have the meaning set forth in Section 5.1.1.
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“Manuals” means Company's “Clean A Can” Service Operations Manual and Support Manual,
and all related manuals now or hereafter created by Company for use in the operation of a “Clean
A Can” Service Unit, as the same may be amended and revised from time to time, including all
bulletins, supplements and ancillary manuals.
“Marks” shall have the meaning set forth in Recital A above.
“Owner” means any shareholder, member, general or limited partner, trustee, or other equity
owner of a Business Entity; except that if Company has any ownership interest in Licensee, the
term “Owner” shall not include or refer to the Company or its Owners or affiliates, and no
obligation or restriction upon the “Franchisee”, or its Owners, directors or officers shall bind
Company, its Owners or affiliates, or their respective Owners, directors or officers.
“Partnership” means any general partnership, limited partnership or limited liability company.
“Partnership Rights” means voting power, property, profits or losses, or partnership interests of a
Partner.
“Permits” means and include all applicable franchises, licenses, permits, registrations, certificates
and other operating authority required by Applicable Law.
“Premises” means, in the case of a trash and garbage can cleaning service location, from which
the Franchisee's “Clean A Can” Service Unit is operated from, including, unless otherwise
expressly provided, any ancillary common areas, buildings and other structures associated with
the Premises.
“Restricted Persons” means the Franchisee (if the franchisee is an individual), each officer,
director, or direct or indirect Owner of an interest in Franchisee (if franchisee is a Business
Entity); and the spouse and family members who live in the same household of each of the
foregoing persons.
“Supplier” shall have the meaning set forth in Section 10.3.
“System” shall have the meaning set forth in Recital B.
“Term” shall have the meaning set forth in Section 3.1, including any extensions thereof.
“Transfer Fee” shall have the meaning set forth in Section 15.2.12.
“Week” shall refer to the 7 day period ending on Sunday of each calendar week, or such other
reporting period hereafter specified by Company.
ARTICLE 2
GRANT
2.1 Grant
2.1.1 Company hereby awards Franchisee the right and license during the Term, upon the
terms and subject to the provisions of this Agreement, to use and display the Marks, and to use
the System, to operate on, and only on, an agreed “Clean A Can” Service Unit
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2.1.2 Franchisee may not use or operate any permanent or temporary vehicle or other
equipment in connection with any “Clean A Can” Service Unit pursuant to this Agreement,
except with Company's prior written consent and pursuant to a separate addendum hereto on a
form specified by Company.
2.2 No Sublicensing Rights
Franchisee shall not sub franchise, sublicense, subcontract, sublease, or enter any management
agreement providing for the right to operate the “Clean A Can” Service Unit or to use the System
granted pursuant to this Agreement.
2.3 No Exclusive Territory
The license and franchise granted to the Franchisee under this Agreement is non-exclusive, and
does not grant Franchisee any protected trading area or territory, nor any rights to obtain
additional franchises from Company. Without limiting the generality of the foregoing, the
Company expressly reserves the exclusive, unrestricted right, in its sole and absolute discretion,
directly and indirectly:
(a) to own or operate, and to franchise and license others to own, operate or co-
brand, trash and garbage can cleaning services at any location other than at the
specific Location identified in Section 5.1.1, regardless of its proximity to the
“Clean A Can” Service Unit operated pursuant hereto; and
(b) to produce, promote, license, distribute and market products, whether or not they
bear any of the Marks, at wholesale or retail, through its employees, affiliates,
representatives, licensees, franchisees, assigns, agents and others, products;
clothing; books, souvenirs and novelty items, through any outlet or channel of
commerce, regardless of their proximity to Franchisee's “Clean A Can” Service
Unit, sales by means of the Internet, mail order catalogs, direct mail advertising,
vending machines and other distribution methods.
ARTICLE 3
TERM
3.1 Initial Term
Subject to earlier termination pursuant to Article 16, the “Term” of this Agreement shall begin on
the Effective Date and continue for a period of 10 years.
3.2 Renewal
Subject to the conditions contained in Section 3.4, at the expiration of the Term hereof,
Franchisee shall have the right (the “Renewal Right”) to enter into a new franchise agreement in
the form then generally being offered to prospective “Clean A Can” Service franchisees (the
“Renewal Franchise Agreement”) for one 10 year period (the “Renewal Term”). The term of the
Renewal Franchise Agreement shall commence upon the date of expiration of the Term hereof;
provided, however, notwithstanding the terms of Company's then-current form of Franchise
Agreement: (a) Franchisee shall not have the right to renew or extend the term thereof or enter
into any additional Renewal Franchise Agreement for a period following the Renewal Term; and
(b) the Renewal Franchise Agreement shall be modified to conform to the Renewal Rights
granted above.
3.3 Form and Manner of Renewal
Franchisee shall exercise its Renewal Right, if at all, strictly in the following manner:
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3.3.1 Between 9 months and 12 months before the expiration of the Term, Franchisee shall
notify Company in writing (“Renewal Notice”) that it intends to exercise its Renewal Right and
no sooner than 10 business days nor more than 20 business days after Franchisee receives
Company's Offering Circular, if applicable, and execution copies of the Renewal Franchise
Agreement, Franchisee shall execute the copies of said Renewal Franchise Agreement and deliver
them to Company together with the then-current initial fee due to Company.
3.3.2 If Franchisee shall have exercised its Renewal Right in accordance with Section 3.3.1
and satisfied all of the conditions contained in Section 3.4, Company shall execute the Renewal
Franchise Agreement executed by Franchisee and at or prior to the expiration of the Term deliver
one fully executed copy thereof to Franchisee.
3.3.3 If Franchisee fails to perform any of the acts, or deliver any of the notices required
pursuant to the provisions of Sections 3.3 or 3.4, in a timely fashion, such failure shall be deemed
an election by Franchisee not to exercise its Renewal Right and shall automatically cause
Franchisee's said Renewal Right to lapse and expire.
3.4 Conditions Precedent to Renewal
Franchisee's Renewal Right is conditioned upon Franchisee's fulfilment of each and all of the
following conditions precedent:
3.4.1 At the time Franchisee delivers its Renewal Notice to Franchisor and at all times
thereafter until the commencement of the Renewal Term, Franchisee shall have fully performed
all of its material obligations under this Agreement, the Manuals and all other agreements then in
effect between Franchisee and Company (or its affiliates) including, but not limited to, Area
Development Agreement(s), Franchise Agreement(s), or Sublease Agreement(s).
3.4.2 Without limiting the generality of Section 3.4.1, Franchisee shall not have committed 2
or more material breaches of this Agreement during the 12 month period immediately preceding
the date of the Renewal Notice for which Franchisor shall have delivered a notice of default,
whether or not such default was cured.
3.4.3 Without limiting the generality of Section 3.4.1, Franchisee shall not have committed 2
or more material breaches of this Agreement during any 12 month period during the Term of this
Agreement for which Franchisor shall have delivered notice of default, whether or not such
defaults were cured.
3.4.4 Without limiting the generality of Section 3.4.1, Franchisee shall not have committed 4
or more material breaches of this Agreement during the Term of this Agreement for which
Franchisor shall have delivered notice of default, whether or not such defaults were cured.
3.4.5 Franchisee shall, and Franchisee shall cause its Owners and affiliates to, execute and
deliver to Franchisor a general release, on a form prescribed by Franchisor of any and all known
and unknown claims against Franchisor and its affiliates and their officers, directors, agents,
shareholders and employees.
3.4.6 At Company's request, Franchisee shall, prior to the date of commencement of the
Renewal Term, undertake and complete at its expense the upgrading, updating or modernization
of the Vehicle and Equipment on the “Clean A Can” Service Unit operated pursuant hereto to
comply with the Company's then-current specifications and standards for new “Clean A Can”
Service Units.
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3.5 Notice Required by Law
If Applicable Law requires that Company give notice to Franchisee prior to the expiration of the
Term, this Agreement shall remain in effect on a week to week basis until Company has given the
notice required by such Applicable Law. If Company is not offering new franchises, is in the
process of revising, amending or renewing its form of franchise agreement or offering circular, or
is not lawfully able to offer Franchisee its then-current form of franchise agreement, at the time
Franchisee delivers its Renewal Notice, Company may, in its sole subjective discretion, (i) offer
to renew this Agreement upon the same terms set forth herein for a renewal term determined in
accordance with Section 3.2 hereof, or (ii) offer to extend the Term hereof on a week to week
basis following the expiration of the Term hereof for as long as it deems necessary or appropriate
so that it may lawfully offer its then-current form of franchise agreement.
ARTICLE 4
PAYMENTS
4.1 Initial Franchise Fees
Franchisee shall pay to Company an initial franchise fee (the “Initial Fee”) equal to $19,750. The
Initial Fee shall be payable in good funds upon signing this Agreement, and shall be deemed fully
earned by Company upon the execution of this Agreement by Company and Franchisee and shall
be non-refundable, in whole or in part, under any circumstances. If Franchisee is party to an Area
Development Agreement with Company, then Franchisee shall pay to the Company an Area
Development Fee equal to $10,000, for each additional “Clean A Can” Service Unit in the agreed
Development Area in accordance with that Area Development Agreement.
4.2 Continuing Royalty
Franchisee shall pay to Company each month during the Term, an amount equal to $150 (the
“Continuing Royalty”). Franchisee shall cause its Continuing Royalty for each month to be
actually received by Company on or before the 7th day of the following month.
4.3 Management Fee
Franchisee shall pay to Company each month during the Term, simultaneously with its
Continuing Royalty payments and in the manner described in Section 4.2, a management fee
equal to $100 (the “Management Fee Rate”).
4.4 Pre-Authorized Payments
4.4.1 If Franchisee fails to pay the amounts due into the Company account on a timely basis
in accordance with Section 11.1, Company may in the absence of payment use the Franchisee's
pre-authorized checks or other instruments or authority.
4.4.2 At Company's request, Franchisee shall instruct its bank to pay the amount of its
monthly Continuing Royalty, Management Fee and other fees directly to Company from
Franchisee's account, by electronic funds transfer or such other automatic payment mechanism
which Company may designate and upon the terms and conditions set forth in the Operations
Manual, and promptly upon Company's request, Franchisee shall execute or re-execute and
deliver to Company such pre-authorized check forms and other instruments or drafts required by
Company's bank, payable against Franchisee's bank account, to enable Company to draw
Franchisee's Continuing Royalty, Management Fee and other sums payable under the terms of
this Agreement.
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4.5 Other Payments
In addition to all other payments provided herein, Franchisee shall pay to Company, its parent
companies, subsidiaries, affiliates and designees, as applicable, promptly when due:
4.5.1 All amounts advanced by Company or which Company has paid, or for which Company
has become obligated to pay on behalf of Franchisee for any reason whatsoever.
4.5.2 All sums due on account of the purchase of products or services by or for the account of
Franchisee.
4.5.3 The amount of all sales taxes, use taxes, personal property taxes and similar taxes,
which shall be imposed upon Franchisee and required to be collected or paid by Company on
account of Continuing Royalties, Management Fees or Initial Fees collected by Company from
Franchisee (but excluding ordinary income taxes). Company, at its sole discretion, may collect
the taxes in the same manner as franchise fees are collected herein and if Company collects such
taxes, Company shall promptly pay the tax collections to the appropriate governmental authority;
provided, however, that it shall be Franchisee's responsibility to pay any sales, use or other taxes
now or hereinafter imposed on Initial Fees, Continuing Royalties, and Management Fees imposed
by any Governmental Authorities.
4.6 Application of Funds
If Franchisee shall be delinquent in the payment of any obligation to Company hereunder, or
under any other agreement with Company, Company shall have the absolute right to apply any
payments received from Franchisee to any obligation owed, whether under this Agreement or
otherwise, notwithstanding any contrary designation by Franchisee as to application.
4.7 Interest and Charges for Late Payments.
4.7.1 If Franchisee shall fail to pay to Company the entire amount of the Continuing Royalty,
Management Fee or any other sums owed to Company, promptly when due, Franchisee shall pay
to Company, in addition to all other amounts which are due but unpaid, interest on the unpaid
amounts, from the due date thereof, at the rate of 2% per month, or the highest rate allowable
under applicable law, whichever is less.
4.7.2 If any check, draft, electronic or otherwise, is unpaid because of insufficient funds or
otherwise, then Franchisee shall pay Company's expenses arising from such non-payment,
including bank fees in the amount of at least $30.00, hourly staff charges arising from such
default, and any other related expenses incurred by Company.
ARTICLE 5
CONSTRUCTION AND COMMENCEMENT OF BUSINESS
5.1 Location
5.1.1 Franchisee's “Clean A Can” Service Unit shall be located at the following address:
[…………………………….………………………………………………………………………
……………………………………………….……………………………………]
5.1.2 Franchisee may not relocate the “Clean A Can” Service Unit, to any other location,
without Company's prior written consent. Any attempt to do so shall be a material breach hereof.
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5.2 Company Site Selection Assistance
Company may voluntarily (without obligation) assist Franchisee in identifying a Unit
route. Company's said assistance, if any, shall not be construed to insure or guarantee
the profitable or successful operation of the Unit’s route by Franchisee, and Company
hereby expressly disclaims any responsibility therefore. Franchisee acknowledges that it
is its sole responsibility to find a suitable Unit route, that the location of the “Clean A
Can” Service Unit route will be a critical factor in the success of Franchisee's business,
and that Company is not obligated to directly or indirectly identify or obtain a Unit route
for Franchisee.
5.3 Lease on Premises
If a premises needs to be leased or subleased by Franchisee, (i) Company shall have the right of
approval of such lease or sublease, as applicable (the “Lease”), a true and correct copy of which
shall be delivered to Company at least 15 days prior to the execution thereof; (ii) the term of said
Lease shall be for a period which is not less than the Term of this Agreement, unless Company
shall approve, in writing, a shorter term; (iii) Franchisee shall neither create nor purport to create
any obligations on behalf of Company, nor grant or purport to grant to the landlord thereunder
any rights against Company, nor agree to any other term, condition, or covenant which is
inconsistent with any provision of this Franchise Agreement; (iv) Franchisee shall duly and
timely perform all of the terms, conditions, covenants and obligations imposed upon him under
the Lease; (v) the Location shall be constructed and improved pursuant to the provisions of
Section 5.4 hereof; (vi) the Lease shall grant Company an option, without cost or expense to
Company, to assume the Lease in the event of termination or expiration of this Franchise
Agreement for any reason, and shall expressly provide that Company shall have the right (but not
the obligation) to succeed to Franchisee's rights under the Lease if Franchisee fails to exercise
any option to renew, and upon Franchisee's default thereunder, and that upon any alleged breach
thereof by Franchisee, the landlord thereunder shall be obligated to notify Company in writing at
least 15 days prior to its termination or non-renewal and, in the case of a default, Company shall
have the right, but not the obligation, to cure the breach and to succeed to Franchisee's rights
under said Lease by giving written notice of such election to Franchisee and such landlord;
Franchisee hereby appoints Company as its attorney-in-fact to execute an assignment and all
other documents and instruments which Company deems necessary or appropriate to effectuate
the foregoing; (vii) a fully executed copy of said Lease shall be delivered to Company promptly
following the execution thereof; (viii) the Lease shall provide that it may not be assigned,
subleased, modified or amended without Company's prior written consent and that Company
shall be provided with copies of all such assignments, subleases, modifications and amendments,
and the landlord shall consent in advance to any assignment or sublease to Company or a “Clean
A Can” Service franchisee or licensee approved by Company during the initial term or any
renewal term of the Lease; and (ix) the Lease may not contain a non-competition covenant which
purports to restrict the Company, or any franchisee or licensee of the Company (or its affiliates),
from operating a “Clean A Can” Service Unit or any other service establishment. In all cases, the
Lease shall provide that upon expiration or termination thereof for any reason, Franchisee shall,
upon Company's demand, remove all of the Marks from the Location and Premises and modify
the decor of the Location so that it no longer resembles, in whole or in part, a “Clean A Can”
Service premises and that if Franchisee shall fail do so, Company will be given written notice and
the right to enter the Location and Premises to make such alterations, in which event Franchisee
shall reimburse Company for all direct and indirect costs and expense it may incur in connection
therewith, including attorney's fees.
5.4 Commencing Operations.
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5.4.1 Franchisee shall commence the operation of the “Clean A Can” Service Unit not later
than 6 months following the Effective Date.
5.5 Maintaining and Updating of the “Clean A Can” Service Unit
5.5.1 Franchisee at all times during the Term shall maintain the condition and appearance of
its “Clean A Can” Service Unit’s vehicle and equipment in accordance with the Manuals and
consistent with the image of a “Clean A Can” Service Unit as attractive, clean, and efficiently
operated, offering high standards and an efficient and courteous service. If at any time in the
Company's reasonable judgment, the general state of repair, appearance or cleanliness of the
vehicle and equipment (including the “Clean A Can” Service Unit and the non-service portion of
Franchisee's Location and Premises, and parking areas) does not meet the Company's standards
therefor, Franchisee shall immediately upon receipt of notice from Company specifying the
action to be taken by Franchisee to correct such deficiency, repair and refurbish the “Clean A
Can” Service Unit, Vehicle, Equipment, Location and or Premises, as applicable, and make such
modifications and additions, as may be required from time to time to maintain such condition,
appearance, efficient operation and overall image, including without limitation, replacement of
worn out or obsolete equipment, and repair of the vehicle and appurtenant parking areas (if any),
and periodic cleaning and redecorating of the premises. Franchisee shall fully implement and
complete such repairs, painting, refurbishment and changes within 90 days after receipt of said
written notice. Such maintenance shall not be deemed to constitute upgrading, as set forth below.
5.5.2 From time to time during the Term, Company may require Franchisee at Franchisee's
sole cost and expense to refurbish, upgrade and improve the “Clean A Can” Service Unit’s
Vehicle and Equipment to conform the Franchisee's trade image, and presentation of Marks to the
Company's then current public image. Such a upgrading may include extensive changes to the
“Clean A Can” Service Unit’s Vehicle and Equipment and replacement or modification as well as
such other changes as the Company may direct, and Franchisee shall undertake such a program
promptly upon notice from the Company, and shall complete any such upgrading as expeditiously
as possible, but in any event within 90 days of commencing same. Company may, on one or more
occasions, waive or defer for such period of time as Company may deem appropriate,
Franchisee's obligation to upgrade any such “Clean A Can” Service Unit’s Vehicle, Equipment
and Location, if Company determines that any such “Clean A Can” Service Unit’s Vehicle,
Equipment and Location is, on the date scheduled for commencement of such upgrading, in
substantial conformity with Company's then current standard system specifications, or if the
proposed upgrading is within the last two years prior to the expiration of the Term (subject to
Company's right to require upgrading, renovation or modernization as a condition to Franchisee's
exercise of its Renewal Right as provided in Section 3.4).
5.5.3 If the “Clean A Can” Service Unit’s Vehicle, Equipment or Premises is damaged or
destroyed by fire or any other casualty, Franchisee, within 30 days thereof, shall initiate such
repairs or reconstruction, and thereafter in good faith and with due diligence continue (until
completion not more than 120 days after such fire or other casualty) such repairs or
reconstruction, in order to restore the Unit or premises of the “Clean A Can” Service Franchise to
its original condition prior to such casualty. If, in Company's reasonable judgment, the damage or
destruction is of such a nature or to such extent that it is feasible for Franchisee to repair or
reconstruct the “Clean A Can” Service Unit’s Vehicle and Equipment in conformance with the
then standard “Clean A Can” Service specifications, the Company may require Franchisee, by
giving written notice thereof, that Franchisee repair or reconstruct the “Clean A Can” Service
Unit’s Vehicle and Equipment in conformance with the then standard System specifications.
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ARTICLE 6
TRAINING AND ASSISTANCE
6.1 Initial Training Program
6.1.1 Franchisee shall, at all times, employ one or more assistant operators and other
employees acceptable to Company each of whom shall have been trained by Company or by a
trainer certified by Company in accordance with Company's policies and standards, and at least
one of whom shall be working on the “Clean A Can” Service Unit at all times while the “Clean A
Can” Service Unit is servicing the public. At no extra charge, Company shall provide an initial
training program in the Company's System and methods of operation to up to 2 persons selected
by Franchisee and who shall include the Franchisee and assistant operator(s) of the “Clean A
Can” Service Unit. Said initial training program shall consist of up to 2 weeks of training, as
Company may determine, at one or more of the following locations: (i) Company's corporate
headquarters in Florida, (ii) at a Company-owned or franchised unit or location, (iii) at
Franchisee's Location, or (iv) at such place or places as may be designated by Company. In the
case of a Franchisee which is a Business Entity, Company may require the general manager to be
an Owner, officer or other designated representative selected by Franchisee and acceptable to,
and approved by Company (“Designated Franchisee Representative”). Subject to Sections 6.1.3
and 6.1.4, Company will bear its costs of providing the initial training program concurrently to up
to 2 persons pursuant to this Section 6.1.1, including Company's staff salaries, materials, and all
technical training tools. Franchisee shall pay all travel, living, compensation, and other expenses,
if any, incurred by Franchisee and/or Franchisee's employees in connection with attendance at
training programs. Franchisee may not operate its “Clean A Can” Service Unit until such training
shall have been successfully completed by Franchisee's general manager, assistant operator and
Franchisee's management team and staff has been certified by Company. Company shall pay no
compensation for any services performed by trainee(s) in connection with such training programs.
6.1.2 The contents of the initial training program and manner of conducting such program
shall be at Company's sole discretion and control, however, the training course will be structured
to provide practical training in the implementation and operation of a “Clean A Can” Service Unit
and may include such topics as on-site route planning, use of customers database and/or computer
systems, inventory, cash handling, “Clean A Can” service standards, personnel management,
marketing techniques, reports, equipment maintenance, safety and security, customer service
techniques and financial controls.
6.1.3 Company shall provide the initial training at no additional charge pursuant to Sections
6.1.1 and 6.1.2 only if this is the first “Clean A Can” Service Unit operated by Franchisee, and
not if Franchisee has otherwise previously received such training for this Unit or Location. Unless
otherwise agreed in writing by Company, the Designated Franchisee Representative shall become
a certified trainer and thereafter train Franchisee's “Clean A Can” Service Unit’s general
manager, assistant operators(s) and other employees pursuant to Section 6.1.4.
6.1.4 Unless waived by Company, each of Franchisee's general managers, assistant operators
and staff shall have satisfactorily completed Company's initial training program as required
pursuant to Section 6.1.1, provided, however, that if general manager or Designated Franchisee
Representative has been approved by Company as a certified trainer, Franchisee's general
manager, assistant operators or staff for the “Clean A Can” Service Unit may be trained by such
certified trainer in lieu of attending Company's initial training program as required pursuant to
Section 6.1.1. Should Company determine that any general manager's, assistant operator's or
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other employee's training is unsatisfactory, Company may require such person(s) (or a
replacement trainee acceptable to Company) to undergo further training by Company at a time
scheduled by Company, until Company is satisfied that Franchisee's trainee has satisfactorily
completed the training course and Franchisee shall advance or reimburse, at Company's option,
all direct and indirect costs and expense that Company may incur for the wages, lodging,
subsistence and travel of Company's personnel, if conducted at the “Clean A Can” Service Unit in
Company's discretion, for the duration of the extended training and Company's then current
standard training fee. Franchisee acknowledges that because of Company's superior skill and
knowledge with respect to the training and skill required to manage the “Clean A Can” Service
Unit, its judgment as to whether or not the Franchisee or his manager has satisfactorily completed
such training shall be determined by Company in its sole subjective judgment, exercised in good
faith.
6.2 Additional Training
Company may, from time to time, at its discretion, make available to Franchisee or its manager
and/or Designated Franchisee Representative, or any of them, additional optional training courses
or programs during the term of this Agreement held on a national or regional basis at locations
selected by Company to instruct Franchisee with regard to new procedures or programs which
Company deems, in its reasonable judgment, to be of material importance to the operation of the
“Clean A Can” Service Unit by its franchisees. The time and place of such training courses shall
be at Company's sole discretion. Such supplementary training may relate, by way of illustration,
to service techniques, new products or services, marketing, bookkeeping, accounting and general
operating procedures, and the establishment, development and improvement of computer
systems. Company may establish charges applicable to all franchisees similarly situated for such
optional training courses. In addition to any charge Company may establish, Franchisee shall pay
all transportation costs, food, lodging and similar costs incurred in connection with attendance at
such courses. Company shall pay no compensation for any services performed by trainee(s) in
connection with such training programs.
6.3 Other Assistance
6.3.1 Company will advise Franchisee from time to time regarding the operation of
Franchisee's “Clean A Can” Service Unit based on Franchisee's reports or Company's inspections.
Company will provide guidance to Franchisee in the Manuals; in bulletins or other written
materials; by electronic media; by telephone consultation; and/or Company's office or
Franchisee's “Clean A Can” Service Unit. If Franchisee requests and Company agrees to provide
additional or special guidance, assistance or training, Franchisee must pay Company then
applicable charges, including Company's per diem charges and any transportation costs, food,
lodging and similar costs incurred by Company and its personnel.
6.3.2 Company may, from time to time, at its discretion, cause its field representatives to visit
Franchisee's “Clean A Can” Service Unit for the purpose of rendering advice and consultation or
training, with respect to the “Clean A Can” Service Unit, its operation and performance, and
compliance by Franchisee with the Manuals. If provided at the Franchisee's request, the Company
may require the Franchisee to pay such training charges as may be then in effect, and to
reimburse Company for all transportation costs, food, lodging and similar costs incurred by
Company and its personnel in connection with such training.
6.3.3 In the event of any sale transfer, or assignment, the transferee/assignee must be trained
by Company as a condition of Company's consent to such transfer. All transfer fees and tuition
costs for such training shall be paid to Company in advance of the attendance by such transferee
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and its employees in accordance with Section 15.2.12 herein. No shall be started or re-started
until Company certifies that the transferee is approved to operate the respective “Clean A Can”
Service Unit.
ARTICLE 7
OBLIGATIONS OF COMPANY
7.1 General
Company shall perform the following obligations:
7.1.1 To review and approve or disapprove the Franchisee's proposed Location and Route;
7.1.2 To approve the initial area of Franchisee's “Clean A Can” Service Unit;
7.1.3 Subject to Section 8.5.2, to loan Franchisee a copy of its Manuals which contain
mandatory and suggested specifications, standards and procedures. The Manuals are confidential
and remains Company's property.
7.1.4 To provide the training and assistance described in Article 6.
7.2 Company Default
Company shall not, and cannot be held in breach of this Agreement until (i) Company has
received written notice from Franchisee describing in detail any alleged breach from Franchisee;
and (ii) Company has failed to remedy the breach within a reasonable period of time after such
notice, which period shall not be less than 60 days plus such additional time as reasonably
required by Company if because of the nature of the alleged breach it cannot reasonably be cured
within said 60 days, provided Company promptly commences and continues diligently to cure
such alleged breach.
7.3 No Other Obligations
Company shall not be obligated to provide any services to Franchisee except expressly provided
herein and any and all other services which Company may provide to Franchisee during the Term
shall be at its sole discretion and Company may cease to provide the same without notice of
further obligation to Franchisee.
ARTICLE 8
MANUALS AND STANDARDS OF FRANCHISEE
QUALITY, CLEANLINESS AND SERVICE
In order to promote the value and goodwill of Company's Marks and the System and to protect
Company's Marks and the other “Clean A Can” Service Franchisees who comprise The “Clean A
Can” Service franchise system, Franchisee shall conduct its business in accordance with the
standards promulgated by Company as follows:
8.1 Product Line and Service
Franchisee shall provide all and only Authorized “Clean A Can” Services and Products from the
“Clean A Can” Service Unit, all of which shall be purchased by Franchisee from a Company or a
designated or approved distributor or manufacturer, as provided in Article 10. Franchisee
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acknowledges that Authorized “Clean A Can” Service or Products may differ on “Clean A Can”
Service Units, and may vary depending on the operating season and geographic location of the
Franchisee's “Clean A Can” Service Units or other factors.
8.1.1 Franchisee shall not produce, advertise for sale, sell or give away any goods or services
unless the same service or product has been approved in the Manuals as an Authorized “Clean A
Can” Service or Product approved for sale from Franchisee's “Clean A Can” Service Units and
has not been thereafter disapproved in writing by Company.
8.1.2 All services and products sold by Franchisee shall be of the highest quality, and the
composition, specifications, and provision of such services or products shall conform strictly with
the instructions provided by Company or contained in Company's Manuals and with the further
requirements of Company as they are communicated to Franchisee from time to time.
8.2 Containers, Fixtures and Other Goods
Franchisee agrees that all products used on a “Clean A Can” Service Unit shall be kept in
approved containers bearing accurate reproductions of Company's Marks. All containers, liners,
bags, and like articles used in connection with Franchisee's “Clean A Can” Service Units shall
conform to Company's specifications, shall be imprinted with Company's Marks and shall be
purchased by Franchisee from a distributor or manufacturer approved in writing by Company, as
provided in Article 10, which approval will not be unreasonably withheld. No item of
merchandise, fittings, interior and exterior items, supplies, fixtures, equipment or tools bearing
any of Company's Marks or approved by the Company shall be used in or upon any “Clean A
Can” Service Units unless the same shall have been first submitted to and approved in writing by
Company.
8.3 Inventory
All Authorized “Clean A Can” Products and Services shall be distributed under the specific name
designated by Company. Franchisee shall not remove any Authorized “Clean A Can” Products or
Services from the Unit unless Franchisee is so instructed by Company.
8.3.1 Authorized “Clean A Can” Services and Products shall be marketed by approved
formats to be utilized on Franchisee's “Clean A Can” Service Units. The approved and authorized
format(s) may include, in Company's discretion, requirements concerning organization, graphics,
product and service descriptions, illustrations, and any other matters (except prices) related to the
service or product, whether or not similar to those listed. In Company's discretion, the service(s)
and product(s) may vary depending upon region, market size, season and other factors. Company
may change the service(s) and product(s) from time to time or region to region or authorize tests
from region to region or authorize non-uniform regions or Units within regions, in which case
Franchisee will be given a reasonable time (not longer than 60 days) to discontinue use of any old
listed services(s) and product(s) and implement use of the new service(s) and product(s).
8.3.2 Franchisee shall, upon receipt of notice from Company, add any Authorized “Clean A
Can” Services or Products according to the instructions contained in the notice. Franchisee shall
have a minimum of 30 days after receipt of written notice in which to fully implement any such
change. Franchisee shall cease selling any previously approved or discontinued service or product
within 30 days after receipt of notice that the service or product is no longer approved.
8.4 CSD System
Franchisee shall purchase, use and maintain the Customer Service Database System as specified
in the Manuals or otherwise by Company in writing. Upon at least 90 days prior written notice,
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Company may require Franchisee to computerize the CSD System and connect the CSD System
to Franchisee's telephone line(s) via modem or other communications medium. The CSD System
must accept and use the CSD System files sent from Company. In addition, the CSD System must
be able to create a CSD System sales file, in the format defined by Company. The CSD System
must be connected to a telephone line at all times and be capable of accessing the internet via a
designated third party network (such as MSN etc.) for the purpose of implementing software,
transmitting and receiving data, accessing the internet for ordering and maintaining the System.
Within a reasonable time upon Company's request, Franchisee shall apply for and maintain debit
cards, credit cards or other non-cash systems existing or developed in the future to enable
customers to purchase Authorized “Clean A Can” Services or Products via such procedure, as
specified by Company. Company may require an upgrade to the CSD hardware and/or software.
8.5 Manuals
Franchisee shall operate the “Clean A Can” Service Unit in strict compliance with the standard
procedures, policies, rules and regulations established by Company and incorporated in
Company's Manual(s). The subject matter of the Manuals may include, without limitation,
matters such as: forms, information relating to product and service specifications, cash control,
purchase orders, general operations, labor schedules, personnel, Gross Sales reports, payroll
procedures, training and accounting; safety and sanitation; design specifications and color of
uniforms; display of signs and notices; authorized and required equipment and fixtures, including
specifications therefor; Mark usage; insurance requirements; lease requirements; standards for
management and personnel; local advertising formats; standards of maintenance and appearance
of the “Clean A Can” Service Unit, Vehicle, Equipment and Premises; and required posting of
notices to customers as to how to contact the Company to submit complaints. Without limiting
the generality of the foregoing, the Company may establish emergency procedures pursuant to
which it may require Franchisee to temporarily cease operating the “Clean A Can” Service Unit
for the public, in which event Company shall not be liable to Franchisee for any losses or costs,
including consequential damages or loss profits occasioned thereby.
8.5.1 Company shall have the right to modify the Manuals at any time and from time to time
by the addition, deletion or other modification to the provisions thereof. All such modifications
shall be equally applicable to all similarly situated franchisees who are required by their franchise
agreements to comply therewith, and no such modification shall alter Franchisee's fundamental
status and rights under this Agreement. Modifications in the Manuals shall become effective upon
delivery of written notice thereof to Franchisee unless a longer period is specified in such written
notice. The Manuals, as modified from time to time as hereinabove provided shall be an integral
part of this Agreement and reference made in this Agreement, or in any amendments, exhibits or
schedules hereto, to the Manuals shall be deemed to mean the Manuals kept current by
amendments from time to time.
8.5.2 Upon the execution of this Agreement, Company shall furnish to Franchisee one copy
of the Manuals, unless Franchisee purchased the “Clean A Can” Service Franchise from an
existing franchisee or entered into this Agreement as a renewal or extension of a pre-existing
franchise agreement for the same Unit. The Manuals and all amendments to the Manuals (and
copies thereof) are copyrighted and remain Company's property. They are loaned to Franchisee
for the term of this Agreement, and must be returned to Company upon the Agreement's
termination or expiration. The Manuals are highly confidential documents which contain certain
Confidential Information of Company, and Franchisee shall never reveal, and shall take all
reasonable precautions, both during and after the Term of this Agreement, to assure that its
employees or any other party under Franchisee's control, shall never reveal any of the contents of
the Manuals or any other publication, recipe or secret provided by Company, except as is
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necessary for the operation of Franchisee's “Clean A Can” Service Units. Upon the expiration or
termination of this Agreement for any reason whatsoever, Franchisee shall immediately return the
Manuals to Company. Franchisee shall not make, or cause or allow to be made, any copies or
reproductions of all or any portion of the Manuals without Company's express prior written
consent.
8.6 Operating Days
Subject to Applicable Law to the contrary, Company and Franchisee agree that Franchisee's
“Clean A Can” Service Unit shall be operational during at least the minimum operating days set
forth on Exhibit A which is attached hereto and incorporated herein by this reference. Franchisee
shall diligently and efficiently exercise its best efforts to achieve the maximum Gross Sales
possible from its Area, and shall operate on additional days that are reasonably required to
maximize operations and sales. Without limiting the foregoing, if the days set forth in Exhibit A
are incorrect in relation to the sales potential of Franchisee's “Clean A Can” Service Unit, then
Company and Franchisee shall reasonably adjust such days by jointly establishing new days of
operation. It is acknowledged that the days of other Franchisees will vary in relation to each
respective location, and local legal restrictions, if any.
8.7 Compliance with Applicable Law
Franchisee shall operate its “Clean A Can” Service Unit as a clean, orderly, legal and respectable
franchise business in accordance with Company's business standards and merchandising policies,
and shall comply with all Applicable Laws. Franchisee shall not cause or allow any part of its
Vehicle, Unit or Premises to be used for any immoral or illegal purpose.
8.8 Signs, Designs and Forms of Publicity
Franchisee shall maintain suitable signs on the Unit’s Vehicle and/or Premises, identifying the
Location as a “Clean A Can” Service franchised business, which shall conform in all respects to
Company's specifications and requirements and the layout and design plan approved for the Unit
and Location, subject only to restrictions imposed by Applicable Law. Without limiting the
foregoing:
8.8.1 Franchisee will cause to have “Clean A Can” Service signs (a) on each Unit; (b) on any
Premises building.
8.8.2 No sign used at or in connection with the “Clean A Can” Service Franchise shall contain
any trademark, service mark, logo type or commercial symbol of any other person or Business
Entity except as expressly authorized by Company in writing.
8.8.3 No exterior or interior sign or any design, advertisement, sign, or form of publicity,
including form, color, number, location, and size, shall be used by Franchisee unless first
submitted to Company and approved in writing (except with respect to prices).
8.9 Uniforms and Employee Appearance
Franchisee shall cause all employees, while working on a “Clean A Can” Service Unit, to: (i)
wear uniforms of such color, design, and other specifications as Company may designate from
time to time, and (ii) present a neat and clean appearance. In the event the type of uniform
utilized by Franchisee is removed from the list of approved uniforms, Franchisee shall have 180
days from receipt of written notice of such removal to discontinue use of its existing inventory of
uniforms and implement the approved type of uniform.
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8.10 Vehicles or Other Equipment
Except with Company's prior written approval, Franchisee shall not cause or allow other garbage
can cleaning vehicles or equipment or any other mechanical device to be installed or maintained
in a vehicle on at the Premises.
8.11 Co-Branding
Franchisee may not install any co-brand at Franchisee's Location without Company's prior written
consent, which may be granted or withheld in its sole discretion, and, if granted may be subject to
such terms and conditions as Company may establish. For the purpose of this article, a co-brand
shall be defined as an independent operating system owned by another person or entity (and not
by Company or any affiliate) that is incorporated as an operational part within the Franchisee's
Unit and/or Premises. An example would be an independent garbage can cleaning operation
operating from the Franchisee's Location. Nothing herein shall prevent Company from co-
branding or authorizing any third party to co-brand “Clean A Can” Service Unit in conjunction
with such third party's operations.
ARTICLE 9
ADVERTISING AND CO-OPS
9.1 General Requirements
Franchisee shall conduct all local advertising and promotion in accordance with such policies and
provisions with respect to format, content, media, geographic coverage and other criteria as are
from time to time contained in the Manuals, or as otherwise directed by Company, and shall not
use or publish any advertising material which does not conform to said policies and provisions or
as to which Franchisee shall not have received Company's prior written approval; provided,
however, that if Company shall not object to any proposed advertisement submitted by
Franchisee for approval within 10 business days after Company's receipt thereof, such
advertisement shall be deemed approved subject to Company's right to subsequently withdraw its
approval. Franchisee may not develop, create, generate, own, license, lease or use in any manner
any computer medium or electronic medium (including any Internet home page, website, bulletin
board, newsgroup or other Internet-related medium) which in any way uses or displays the
Marks, in whole or part, and Franchisee shall not cause or allow the Marks, or any of them, to be
used or displayed in whole or part, as an Internet domain name, or on or in connection with any
Internet home page, website, bulletin board, newsgroup or other Internet-related activity without
Company's express prior written consent, and then only in such manner and in accordance with
such procedures, policies, standards and specifications as Company may establish.
9.2 Local Advertising
Each calendar quarter, Franchisee shall expend an amount of not less than 1% of its Gross Sales
for local advertising relating to Franchisee's “Clean A Can” Service Unit(s). Such local
advertising does include the cost of Franchisee listing its Business in the white pages or yellow
pages of such telephone directories distributed in Franchisee's area as Company authorizes or
directs in accordance with Section 9.5. Amounts contributed to an Advertising Co-op, if any,
pursuant to Section 9.3 during any calendar quarter shall be credited against Franchisee's local
advertising requirement described in this Section 9.2. Franchisee shall deliver evidence of such
expenditures in the form and manner prescribed by Company from time to time. Until further
notice from Company, Franchisee shall deliver to Company quarterly (no later than the 15th day
of the months of January, April, July, and October), copies of invoices showing that Franchisee
made the required expenditures during the preceding calendar quarter. If the invoices submitted
do not demonstrate expenditure of at least the minimum amount required for local advertising,
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Franchisee shall pay to Company the amount necessary to total 1% of Franchisee's Gross Sales
during the prior quarter, less actual expenditures on local advertising. Those funds will be used by
Company in accordance with Section 9.4, below.
9.3 Co-op Advertising
The Company shall have the right at any time to designate, and from time to time to redefine, a
region (the “Advertising Co-op Region”) within which the Units operated by Franchisee pursuant
to this Agreement is located, which region may comprise a Designated Market Areas (“DMA”)
established periodically by Company from time to time to identify the market area in which the
Franchisee's “Clean A Can” Service Unit is located, which shall function for the purpose of
creating a cohesive team (an “Advertising Co-op”) to coordinate advertising, marketing efforts
and programs and maximizing the efficient use of local and/or regional advertising media.
9.3.1 If and when Company creates an Advertising Co-op for the region in which Franchisee's
“Clean A Can” Service Unit is located, Franchisee (and, if Company owns a “Clean A Can”
Service Unit in such Advertising Co-op Region), Company shall become subscribers and
members of the Advertising Co-op and shall execute a subscription agreement on a form
prescribed by Company, and participate therein in accordance with the Subscription Agreement
and the Certificate of Incorporation and Bylaws of such Advertising Co-op. The geographic size,
configuration and content of such regions, when and if established by the Company, shall be
binding upon Franchisee, all other “Clean A Can” Service franchisees similarly situated who are
by the terms of their franchise agreements required to participate, and Company, if Company
owns and operates a Unit in such Advertising Co-op Region; provided that the Company alone
may from time to time (but not more frequently than one time per calendar year) amend the
geographic size, configuration and content of such Advertising Co-op Region. At all meetings of
such Advertising Co-op, each participating Franchisee, as well as Company, if applicable, shall
be entitled to one vote for each “Clean A Can” Service Unit owned and located within the region
of the Advertising Co-op. At any time upon reasonable notice, 20% of the total eligible member
votes, a majority of the directors of such Advertising Co-op (who shall be elected in accordance
with the Bylaws of such Advertising Co-op), or Company by itself, may call a meeting of all
members of the Advertising Co-op. Except for any amendment of the Certificate of
Incorporation, Operating Agreement or By-laws of the Advertising Co-op (which shall require
the affirmative vote of the Company), all matters concerning operation of the Advertising Co-op
shall be decided by the affirmative vote of at least 2/3's of the total eligible member votes, and
such vote shall bind all members of said Advertising Co-op, including Company.
9.3.2 Franchisee and other franchisees who are members of the Advertising Co-op will
contribute to the Advertising Co-op such amount as may be determined by vote of the
Advertising Co-op, not to exceed an amount equal to 3% of the Gross Sales of each Advertising
Co-op member's “Clean A Can” Service Unit(s) located in the region (the “Maximum
Advertising Co-op Fee”); provided that if the Advertising Fee Rate for any year shall exceed 1%,
then the percentage rate of the Maximum Advertising Co-op Fee shall be reduced for that year by
an amount equal to said excess (e.g. if the Advertising Fee Rate is increased to 2%, the Maximum
Advertising Co-op Fee shall be reduced to equal to 2% of the Gross Sales). The precise amount
of such contribution shall be established from time to time by the Advertising Co-op. Payments
will be made monthly, on the same day as the Continuing Royalty payments pursuant to Section
4.2.
9.3.3 Each Advertising Co-op will (subject to Section 9.1) decide as to the usage of funds
contributed pursuant to Section 9.3.2 for media time, production of media materials, whether for
radio, television, newspapers or materials such as flyers, or posters, or for any other type of
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advertising or marketing use, and then such Advertising Co-op shall in writing request approval
from Company to use said funds in said manner. No placement of advertising or commitment of
advertising funds on behalf of the Advertising Co-op will be made without Company's prior
written approval. Company reserves the right to establish general standards concerning the
operation of the Advertising Co-op, advertising agencies retained by the Advertising Co-op, and
advertising programs conducted by the Advertising Co-op. From time to time Company may
propose certain general or specific uses of the funds contributed pursuant to Section 9.3.2, and in
each instance Franchisee shall attend (by any means permitted by the Advertising Co-op) and
vote (by any means permitted by the Advertising Co-op) at a meeting of the Advertising Co-op
wherein such proposal shall be considered.
9.4 Advertising Program
9.4.1 Company shall administratively segregate on its books and records all Advertising Fees
received from Franchisee and all other franchisees of Company. Nothing herein shall be deemed
to create a trust fund, and Company may commingle Advertising Fees with its general operating
funds and expend such sums in the manner herein provided. For each “Clean A Can” Service
Unit that Company or any of its affiliate operates, Company or such affiliate will similarly
allocate Advertising Fees in the amount that would be required to be paid if a franchisee operated
a franchised “Clean A Can” Service Unit in the same location.
9.4.2 If Company expends less than the total of all Advertising Fees contributed by
franchisees and allocated for “Clean A Can” Service Units operated by Company and its affiliates
during any fiscal year, such excess may be accumulated for use during subsequent years. If
Company advances money for advertising, Company will be entitled to be reimbursed for such
advances, including interest at the rate equal to the Company's cost of funds. Each determination
by Company of an interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
9.4.3 Company will use Advertising Fees for national, regional, or local advertising, public
relations or promotional campaigns or programs designed to promote and enhance the image,
identity or patronage of franchised and Company-owned “Clean A Can” Service Units. Such
expenditures may include, without limitation (a) expenditures to conduct marketing studies, and
to produce and purchase advertising art, commercials, musical jingles, print advertisements, point
of sale materials, media advertising, outdoor advertising art, and direct mail pamphlets and
literature; and (b) a payment to Company or its affiliates, for internal expenses incurred to
administer the Advertising Fees. Company shall determine the cost, media, content, format, style,
timing, allocation and all other matters relating to such advertising, public relations and
promotional campaigns. Nothing herein shall be construed to require Company to allocate or
expend Advertising Fees so as to benefit any particular franchisee or group of franchisees on a
pro rata or proportional basis or otherwise. Company may make copies of advertising materials
available to Franchisee with or without additional reasonable charge, as determined by Company.
Any additional advertising shall be at the sole cost and expense of Franchisee.
9.4.4 Upon written request, Company shall furnish to Franchisee within 120 days after the
end of each calendar year, a report for the preceding year, prepared and certified correct by an
officer of the Company containing the calculations of the Advertising Fees which Company
actually expended during such calendar year and the amount remaining which shall be carried
over for use during the following year(s).
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9.5 Telephone Numbers and Directory Advertising
In addition to the Advertising Fees, local advertising, and Franchisee's required expenditures for
Co-op Advertising, Franchisee shall, at its sole expense, subscribe for and maintain throughout
the Term, or such lesser period designated by Company, one or more listed telephone numbers
which shall be listed in the white pages of such telephone directory or directories as Company
may designate or approve which service Franchisee's Location and adjacent or nearby areas.
Company reserves the right to establish general standards concerning directory and other types of
advertising.
9.6 Promotional Campaigns
From time to time during the term hereof, Company shall have the right to establish and conduct
promotional campaigns on a national or regional basis, which may by way of illustration and not
limitation promote particular service, product or marketing themes. Franchisee agrees to
participate in such promotional campaigns upon such terms and conditions as the Company may
establish. Franchisee acknowledges and agrees that such participation may require Franchisee to
purchase point of sale advertising material, posters, flyers, product displays and other
promotional material, and to the extent permitted by Applicable Law may establish the maximum
prices which Franchisee may impose for products offered in the promotion.
ARTICLE 10
DISTRIBUTION AND PURCHASE OF
EQUIPMENT, SUPPLIES, AND OTHER PRODUCTS
10.1 “Clean A Can” Service Brand Products and Materials
10.1.1 At all times throughout the Term, Franchisee shall purchase and maintain in inventory
such types and quantities of Authorized “Clean A Can” Service Products and Materials as are
needed to meet reasonably anticipated consumer demand. Franchisee shall purchase “Clean A
Can” Service Brand Products, and all chemicals, materials and products, offered or sold at from
“Clean A Can” Service Unit(s), solely and exclusively from Company or its designated third
party distributors or suppliers, and all such “Clean A Can” Service Brand Products and Materials,
which are purchased from Company or its designated third party distributors or suppliers shall be
used, offered and sold by Franchisee only on a retail basis, from the “Clean A Can” Service Unit
pursuant hereto, or at other “Clean A Can” Service Units opened by Franchisee under Company's
Marks and in accordance with the System pursuant to other validly subsisting franchise
agreements with Company.
10.2 Proprietary Products and Materials
Company may, from time to time throughout the Term hereof, require that Franchisee purchase,
use, offer and/or promote, and maintain in stock in the “Clean A Can” Service Unit in such
quantities as are needed to meet reasonably anticipated consumer demand, certain proprietary
supplies and other materials, which are manufactured in accordance with Company's proprietary
standards, specifications and/or formulas (“Proprietary Products”). Franchisee shall purchase
Proprietary Products only from Company (if it sells the same) or its designees. If Franchisee shall
purchase Proprietary Products from Company, Franchise shall purchase the same at Company's
then current published prices charged to similarly situated franchisees, which may be changed or
modified from time to time without prior notice, and which will include a profit to the Company.
Company shall not be obligated to reveal such standards, specifications and/or formulas of such
Proprietary Products to Franchisee, non-designated suppliers, or any other third parties.
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10.3 Non-Proprietary Products and Materials
Company may designate materials and other products, fixtures, equipment, uniforms, supplies,
packaging, forms, CAD and computer hardware, software, modems and peripheral equipment and
other products, supplies and equipment other than Proprietary Products which Franchisee may or
must use and/or offer and sell from the “Clean A Can” Service Unit (“Non-Proprietary
Products”). Franchisee may, but shall not be obligated to, purchase such Non-Proprietary
Products or Services from Company, if Company supplies same. Franchisee may use, offer or sell
only such Non-Proprietary Services and Products that Company has expressly authorized, or that
were purchased or obtained from Company or a producer, manufacturer or supplier (“Supplier”)
designated or approved by Company pursuant to Section 10.3.2 below.
10.3.1 Franchisee may purchase authorized Non-Proprietary Products or Services from (i)
Company, (ii) Suppliers designated by Company, or (iii) Suppliers selected by Franchisee and
approved in writing by Company prior to Franchisee making such purchase(s). Each such
Supplier designated or approved by Company must comply with Company's usual and customary
requirements regarding insurance, indemnification, and non-disclosure, and shall have
demonstrated to the reasonable satisfaction of Company: (a) its ability to supply a Non-
Proprietary Product or Service meeting the specifications of Company, which may include,
without limitation, specifications as to brand name and model, contents, quality, and compliance
with governmental standards and regulations; and (b) its reliability with respect to delivery and
the consistent quality of its products or services.
10.3.2 If Franchisee should desire to procure authorized Non-Proprietary Products or
Services from a Supplier other than Company or one previously approved or designated by
Company, Franchisee shall deliver written notice to Company of its desire to seek approval of
such Supplier, which notice shall (i) identify the name and address of such Supplier, (ii) contain
such information as may be requested by Company or required to be provided pursuant to the
Manuals (which may include reasonable financial, operational and economic information
regarding its business ), and (iii) identify the authorized Non-Proprietary Products or Services
desired to be purchased from such Supplier. Company shall, upon request of Franchisee, furnish
to Franchisee specifications for such Non-Proprietary Products or Services if such are not
contained in the Manuals. The Company may thereupon request that the proposed Supplier
furnish Company at no cost to Company product samples, specifications and such other
information as Company may require. Company or its representatives shall also be permitted to
inspect the facilities of the proposed Supplier and establish economic terms, delivery, service and
other requirements consistent with other distribution relationships for other “Clean A Can”
Service Units.
(a) Company will use its reasonable efforts to notify Franchisee of its decision within 90
days after Company's receipt of Franchisee's request for approval and other requested
information and items in full compliance with Section 10.3.2. Nothing in this Article
shall require Company to approve any distributor, and without limiting Company's
right to approve or disapprove a Supplier in its discretion, Franchisee acknowledges
that it is generally disadvantageous to the system generally from a cost and service
basis to have more than one distributor in any given market area and that among the
other factors Company may consider in deciding whether to approve a proposed
Supplier, it may consider the affect that such approval may have on the ability of
Company and its franchisees to obtain the lowest distribution costs and on the quality
and uniformity of products offered system-wide by “Clean A Can” Service
franchisees. Company may revoke its approval upon the Supplier's failure to continue
to meet any of Company's criteria.
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(b) As a further condition of such approval, Company may require such Supplier to agree
in writing: (i) to provide from time to time upon Company's request free samples of
any Non-Proprietary Product it intends to supply to Franchisee, (ii) to faithfully
comply with Company's specifications for applicable Non-Proprietary Products or
Services sold by it, (iii) to sell any Non-Proprietary Product or Services bearing the
Marks only to franchisees of Company and only pursuant to a trademark license
agreement in form prescribed by Company (which may require payment of a royalty),
(iv) to provide to Company duplicate purchase invoices for Company's records and
inspection purposes and (v) to otherwise comply with Company's reasonable requests.
(c) Franchisee or the proposed Supplier shall pay to Company in advance all of
Company's reasonably anticipated costs in reviewing the application of the Supplier to
service the Franchisee and all current and future reasonable costs and expenses,
including travel and living costs, related to inspecting, re-inspecting and auditing the
Suppliers' facilities, equipment, and products, and all product testing costs paid by
Company to third parties.
10.4 Purchases from Company, Extensions of Credit
10.4.1 Company shall not be liable to Franchisee on account of any delay or failure in the
manufacture, delivery or shipment of materials, equipment, spares or other products caused by
events or circumstances beyond Company's reasonable control including such events as labor or
material shortages, conditions of supply and demand, import/export restrictions, or disruptions in
Company's supply sources.
10.4.2 All product or service orders by Franchisee shall be subject to acceptance by Company
at Company's designated offices, and Company reserves the right to accept or reject, in whole or
in part, any order placed by Franchisee. Company will establish the payment terms upon which it
will accept Franchisee's orders, and may require Franchisee to pay for orders on a cash-in-
advance or cash-on-delivery basis.
10.4.3 Each order placed by Franchisee for any product shall be deemed to incorporate all of
the terms and conditions of this Agreement, shall be deemed subordinate to this Agreement in
any instance where any term or condition of such order conflicts with any term or condition of
this Agreement, and shall include such information as Company may from time to time specify,
and shall be submitted on such form of purchase order as my be prescribed by Company from
time to time. No purchase order submitted by Franchisee shall contain any terms except as
approved in writing by Company, nor be deemed complete unless all of the information required
by the prescribed purchase order form, as revised from time to time, is provided by Franchisee.
No new or additional term or condition contained in any order placed by Franchisee shall be
deemed valid, effective or accepted by Company unless such term or condition shall have been
expressly accepted by Company in writing.
10.5 Purchase/Distribution Programs
Franchisee agrees that at such times that Company establishes a regional purchase or distribution
program, or both, for any of the Franchisee's goods, materials or supplies, which may benefit
Franchisee by reduced price, lower labor costs, production of improved Authorized Product(s),
increased reliability in supply, improved distribution, cost control (establishment of consistent
pricing for reasonable periods to avoid market fluctuations), improved operations by Franchisee
or other tangible benefits to Franchisee, Franchisee will participate in such purchasing program in
accordance with the terms of such program.
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10.6 Test Marketing
Company may, from time to time, require Franchisee to test market products and/or services in
connection with the operation of the “Clean A Can” Service Unit. Franchisee shall cooperate with
Company in connection with the conduct of such test marketing programs and shall comply with
the Company's rules and regulations established from time to time in connection herewith.
ARTICLE 11
REPORTS, BOOKS AND RECORDS, INSPECTIONS
11.1 General Reporting.
Franchisee shall submit monthly financial reporting forms and such other financial, operational
and statistical information as Company may require to: (i) assist Franchisee in the operation of its
“Clean A Can” Service Units in accordance with the System; (ii) allow Company to monitor the
Franchisee's Gross Sales, purchases, costs and expenses; (iii) enable Company to develop chain
wide statistics which may improve bulk purchasing; (iv) assist Company in the development of
new Authorized Products and Services or the removal of existing unsuccessful products or
services; (v) enable Company to refine existing Authorized OKcancleaning.com Service Products
and Services; (vi) generally improve chain-wide understanding of the System (collectively, the
“Information”). Without limiting the generality of the foregoing:
11.1.1 Franchisee will allow Company to poll on a daily basis at a time selected by the
Company the Franchisee's “Clean A Can” Service Unit computerized CSD system to retrieve
sales, usage, and operations data.
11.1.2 On or before noon (pacific standard time) each Monday, during the Term hereof,
Franchisee shall submit a weekly sales summary, on a form prescribed by Company, reporting all
Gross Sales for the preceding week (defined as the seven day period beginning each Monday and
ending on the following Sunday) either by electronic mail (“e-mail”), by facsimile or, by any
other electronic means prescribed by Company.
11.1.3 On or before the 10th day of each month, during the Term hereof, Franchisee shall
submit a monthly sales summary signed by Franchisee, on a form prescribed by Company,
reporting all Gross Sales for the preceding month, together with such additional financial
information as Company may from time to time request.
11.1.4 On or before the 30th day following each calendar quarter during the Term hereof,
Franchisee shall submit to Company financial statements for the preceding quarter, including a
Balance Sheet and Profit and Loss Statement, prepared in the form and manner prescribed by the
Company and in accordance with generally accepted accounting principles, which shall be
certified by Franchisee to be accurate and complete. Franchisee shall also provide Company with
quarterly sales and mix data in the format and manner prescribed by Company.
11.1.5 Franchisee shall submit to Company a semi-annual Profit and Loss Statement, signed
and certified by Franchisee. The Profit and Loss Statement shall be prepared by a Certified or
Public Accountant, in accordance with generally accepted accounting principles, and shall
provide Franchisee's sales, expenses and financial status with respect to Franchisee's “Clean A
Can” Service Unit. Franchisee shall submit to Company a copy of the original signed 1120 or
1120S tax form each and every year or any other forms which take the place of the 1120 or 1120S
forms. Franchisee shall also provide Company with copies of signed original sales and use tax
forms contemporaneously with their filing with the appropriate state or local authority. Company
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reserves the right to require such further information concerning Franchisee's “Clean A Can”
Service Units as Company may from time to time reasonably request.
11.1.6 Within 60 days following the end of each calendar year, Franchisee shall submit to
Company an unaudited annual financial statement prepared in accordance with generally
accepted accounting principles, and in such form and manner prescribed by Company, which
shall be certified by Franchisee to be accurate and complete.
11.1.7 Franchisee shall immediately (in no event more than 24 hours following) notify
Company of any (a) incident that may adversely affect the operation or financial condition of
Franchisee's “Clean A Can” Service Unit, Company or its affiliates; (b) legal action (including
the commencement of a suit or proceeding, or the threat thereof), (c) issuance of any writ, order,
injunction, award or decree of any court, agency or Government authority, including any citation,
fine or closing order, or (d) any other adverse inquiry, notice, demand or sanction received by
Franchisee relating to the operation of the “Clean A Can” Service Unit or Location, including any
alleged violation of any Applicable Law, including health, safety or employment law violations,
and including any labor dispute or actual or threatened labor strike, work stoppage, lock-out or
other incident relating to any labor agreement, and shall provide Company with copies of all
related correspondence and other communications and information relating thereto.
11.2 Inspections
Company's authorized representatives shall have the right to enter Franchisee's Location and
“Clean A Can” Service Unit during business hours, with or without notice, without unreasonably
disrupting Franchisee's business operations, for the purposes of examining same, conferring with
Franchisee's employees, inspecting and checking operations, supplies, materials, furnishings,
interior and exterior decor, fixtures, and equipment, and determining whether the business is
being conducted in accordance with this Agreement, the System and the Manuals. If any such
inspection indicates any deficiency or unsatisfactory condition with respect to any matter required
under this Agreement or the Manuals, including but not limited to quality, cleanliness, service,
health and authorized product line, Company will notify Franchisee in writing of Franchisee's
non-compliance with the Manuals, the System, or this Agreement. Franchisee shall have 24 hours
after receipt of such notice, or such other greater time period as Company in its sole discretion
may provide, to correct or repair such deficiency or unsatisfactory condition, if it can be corrected
or repaired within such period of time. If not, Franchisee shall within such time period commence
such correction or repair and thereafter diligently pursue it to completion.
11.3 Audits
Upon 10 days prior written notice, Company, its agents or representatives may audit Franchisee's
books and records in accordance with generally accepted standards established by certified public
accountants. In connection with such audit(s) or other operational visits, Franchisee shall keep its
cash receipts records, monthly control forms, accounts payable records including all payments to
Franchisee's Suppliers in its “Clean A Can” Service Unit or at its business office for 5 years after
their due date, which records shall be available for examination by Company or its
representative(s), at Company's request. Without any prior written notice, Company, its agents or
representatives may inspect Franchisee's entire “Clean A Can” Service Unit and Franchisee's
daily, weekly and monthly statistical information which is required under the Manuals.
Franchisee shall make such information available for such inspections in recognition that an
operational inspection cannot succeed without review of essential statistical information. If any
audit or other investigation reveals an under-reporting or under-recording error of 5% percent or
more, then in addition to any other sums due, the expenses of the audit/inspection shall be borne
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and paid by Franchisee upon billing by Company, plus interest at the highest compound rate
authorized by law, but not to exceed the rate of 15% percent per annum.
ARTICLE 12
MARKS
12.1 Use of Marks
Subject to Section 12.7, the “Clean A Can” Service Unit herein licensed and franchised shall be
named The “Clean A Can” Service without any suffix or prefix attached thereto and Franchisee
shall use and display such of the Company's Marks and such signs, advertising and slogans as
Company may from time to time prescribe or approve. Upon expiration or sooner termination of
this Agreement, Company may, if Franchisee does not do so, execute in Franchisee's name and
on Franchisee's behalf, any and all documents necessary in Company's judgment to end and cause
the discontinuance of Franchisee's use of the Marks and Company is hereby irrevocably
appointed and designated as Franchisee's attorney-in-fact so to do.
12.2 Non-Use of Trade Name
If Franchisee is a Business Entity, it shall not use Company's Marks, or Company's trade name, or
any words or symbols which are confusingly similar to the Marks, as all or part of Franchisee's
name.
12.3 Use of Other Marks
Franchisee shall not display the trademark, service mark, trade name, insignia or logotype of any
other person or Business Entity in connection with the operation of the “Clean A Can” Service
Unit.
12.4 Non-ownership of Marks
Nothing herein shall give Franchisee any right, title or interest in or to any of the Marks, except a
mere privilege and license during the term hereof, to display and use the same according to the
terms and conditions herein contained.
12.5 Defense of Marks
If Franchisee receives notice, or is informed, of any claim, suit or demand against Franchisee on
account of any alleged infringement, unfair competition, or similar matter on account of its use of
the Marks in accordance with the terms of this Agreement, Franchisee shall promptly notify
Company of any such claim, suit or demand. Thereupon, Company shall take such action as it
may deem necessary and appropriate to protect and defend Franchisee against any such claim by
any third party; Company shall not be obligated to take any such action, however. Franchisee
shall not settle or compromise any such claim by a third party without the prior written consent of
Company. Company shall have the sole right to defend, compromise or settle any such claim, in
its discretion, at Company's sole cost and expense, using attorneys of its own choosing, and
Franchisee shall cooperate fully with Company in connection with the defense of any such claim.
Franchisee may participate at its own expense in such defense or settlement, but Company's
decisions with regard thereto shall be final.
12.6 Prosecution of Infringers
If Franchisee shall receive notice or is informed or learns that any third party, which it believes to
be unauthorized to use the Marks, is using the Marks or any variant thereof, Franchisee shall
promptly notify Company of the facts relating to such alleged infringing use. Thereupon,
Company shall, in its sole discretion, determine whether or not it wishes to take any action
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against such third person on account of such alleged infringement of the Marks. Franchisee shall
have no right to make any demand against any such alleged infringer or to prosecute any claim of
any kind or nature whatsoever against such alleged infringer for or on account of such
infringement.
12.7 Modification of Marks
From time to time, in the Manuals or in directives or bulletins supplemental thereto, Company
may add to, delete or modify any or all of the Marks. Franchisee shall use, or cease using, as may
be applicable, the Marks, including but not limited to, any such modified or additional trade
names, trademarks, service marks, logotypes and commercial symbols, in strict accordance with
the procedures, policies, rules and regulations contained in the Manuals or in written directives
issued by Company to Franchisee, as though they were specifically set forth in this Agreement.
12.8 Acts in Derogation of the Marks
Franchisee agrees that the Marks are the exclusive property of Company and Franchisee now
asserts no claim and will hereafter assert no claim to any goodwill, reputation or ownership
thereof by virtue of Franchisee's licensed and/or franchised use thereof, or otherwise. Franchisee
shall not do or permit any act or thing to be done in derogation of any of the rights of Company in
connection with the same, either during the Term of this Agreement or thereafter, and that it will
use the Marks only for the uses and in the manner licensed and/or franchised hereunder and as
herein provided. Without limiting the foregoing, Franchisee shall not interfere in any manner
with, or attempt to prohibit, the use of Company's Marks by any other franchisee or licensee of
Company.
12.9 Assumed Name Registration
Franchisee agrees to obtain any fictitious or assumed name registration required under applicable
law. Promptly upon the expiration or termination of this Agreement for any reason whatsoever,
Franchisee shall promptly execute and file such documents as may be necessary to revoke or
terminate such assumed name registration, and if Franchisee shall fail to promptly execute and
file such documents as may be necessary to effectively revoke and terminate such assumed name
registration, Franchisee hereby irrevocably appoints Company as its attorney-in-fact to do so for
and on behalf of Franchisee.
ARTICLE 13
COVENANTS REGARDING OTHER BUSINESS INTERESTS
13.1 Non-Competition
Franchisee acknowledges that the “Clean A Can” Service System is unique and distinctive and
has been developed by Company at great effort, time, and expense, and that Franchisee has
regular and continuing access to valuable and confidential information and training regarding the
“Clean A Can” Service System. Franchisee recognizes its obligations to keep confidential such
information as set forth herein. Franchisee therefore agrees as follows:
13.1.1 During the Term, no Restricted Person shall in any capacity, either directly or indirectly,
through one or more subsidiaries or affiliated companies, engage in any Competitive Activities at
any location; provided that with Company's prior written consent, which Company will not
unreasonably withhold, a Restricted Person may own and operate one or more units, or any other
business establishment, which sells garbage can cleaning services or products if and for so long
as such unit, or business establishment, does not derive 20% or more of its gross revenues from
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the sale of garbage can cleaning services and garbage can cleaning related products and
equipment, or any of them, during any day part.
13.1.2 Upon the expiration or termination of this Agreement, or if Franchisee shall make any
Assignment to any person or Business Entity, or if any Owner, officer or director of Franchisee
shall terminate his or her relationship with Franchisee, then for a period of 24 months thereafter,
each person who was a Restricted Person before that event shall not in any capacity, either
directly or indirectly, through one or more subsidiaries or affiliated companies, engage in any
Competitive Activities, (i) within the County in which any “Clean A Can” Service Unit operated
by Franchisee is or was located, or (ii) within an area within ten (10) miles from the location or
any then existing “Clean A Can” Service Unit; provided that, with Company's prior written
consent, which Company will not unreasonably withhold, the former Restricted Person may own
and operate one or more garbage can cleaning units, or any other business establishment, which
sells garbage can cleaning services or products if and for so long as such unit, or business
establishment, does not derive 20% or more of its gross revenues from the sale of garbage can
cleaning services and garbage can cleaning service related products and equipment, or any of
them, during any day part.
13.1.3 The parties have attempted in Sections 13.1.1 and 13.1.2 above to limit the Restricted
Person's right to compete only to the extent necessary to protect the Company from unfair
competition. The parties hereby expressly agree that if the scope or enforceability of Section
13.1.1 and 13.1.2 is disputed at any time by a Restricted Person, a court or arbitrator, as the case
may be, may modify either or both of such provisions to the extent that it deems necessary to
make such provision(s) enforceable under Applicable Law. In addition, the Company reserves the
right to reduce the scope of either, or both, of said provisions without the consent of Franchisee or
any Restricted Person, at any time or times, effective immediately upon notice to Franchisee.
13.2 Confidential Information
13.2.1 Company possesses and continues to develop, and during the course of the relationship
established hereunder, Franchisee shall have access to, trade secrets and other proprietary and
confidential information, including, without limitation, the Manuals, processes, secret know-how,
specifications, procedures, concepts and methods and techniques of operating the “Clean A Can”
Service Unit and providing Authorized “Clean A Can” Products and Services (the “Confidential
Information”). Company will disclose certain of its Confidential Information to Franchisee in the
Manuals, bulletins, supplements, confidential correspondence, or other confidential
communications, and through the Company's training program and other guidance and
management assistance, and in performing Company's other obligations and exercising
Company's rights under this Agreement. Confidential Information shall not include information
which: (a) has entered the public domain or was known to Franchisee prior to Company's
disclosure of such information to Franchisee, other than by the breach of an obligation of
confidentiality owed (by anyone) to Company; or (b) becomes known to Franchisee from a
source other than Company and other than by the breach of an obligation of confidentiality owed
(by anyone) to Company. The burden of proving the applicability of the foregoing will reside
with Franchisee.
13.2.2 Franchisee shall acquire no interest in the Confidential Information other than the right
to use them in developing and operating the Business during the Term of this Agreement.
Franchisee's duplication or use of any Confidential Information in any other endeavor or business
shall constitute an unfair method of competition. Franchisee shall: (i) not use the Confidential
Information in any business or other endeavor other than in connection with Franchisee's “Clean
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A Can” Service Unit; (ii) maintain absolute confidentiality of the Confidential Information during
and after the Term of this Agreement; (iii) make no unauthorized copy of any portion of the
Confidential Information, including without limitation, the Manuals, bulletins, supplements,
confidential correspondence, or other confidential communications, whether written or oral; and
(iv) operate and implement all reasonable procedures prescribed from time to time by Company
to prevent unauthorized use and disclosure of the Confidential Information, including without
limitation, restrictions on disclosure to employees and use of non-disclosure and non-competition
provisions as Company prescribes in employment agreements with employees who may have
access to the Confidential Information. Promptly upon Company's request, Franchisee shall
deliver executed copies of such agreements to Company.
13.2.3 In the event any portion of the above covenants violates laws affecting Franchisee, or is
held invalid or unenforceable in a final judgment to which Company and Franchisee are parties,
then the maximum legally allowable restriction permitted by law shall control and bind
Franchisee. Company may at any time unilaterally reduce the scope of any part of the above
covenants, and Franchisee shall comply with any such reduced covenant upon receipt of written
notice. The provisions of this Section 13.2 shall be in addition to and not in lieu of any other
confidentiality obligation of Franchisee, or any other person, whether pursuant to another
agreement, or pursuant to Applicable Law.
13.3 Franchisee's Affiliates
For purposes of this Article only, “Franchisee” shall mean and include the individual Franchisee;
Franchisee's spouse and minor children and its Owners, officers and directors if Franchisee is a
Business Entity and Franchisee shall, except as Company may otherwise agree, cause each such
person to acknowledge and agree to be bound by the provisions of Sections 13.1 and 13.2. The
provisions of this Article shall not limit, restrain or otherwise affect any right or cause of action
which may accrue to Company for any infringement of, violation of, or interference with, this
Agreement, or Company's Marks, System or Confidential Information.
ARTICLE 14
INTERFERENCE WITH EMPLOYMENT RELATIONS
14.1 Prohibitions During Term
During the Term of this Agreement, Franchisee shall not, without the prior written consent of
Company, directly or indirectly: (a) employ or attempt to employ any person who at that time is
employed by Company, an affiliate of Company, or any other franchisee or area developer of
Company, including, without limitation, any “Clean A Can” Service Unit manager or operator;
(b) employ or attempt to employ any person who within six (6) months prior thereto had been
employed by Company, an affiliate of Company, or any other franchisee or area developer of
Company; or (c) induce or attempt to induce any person to leave his or her employment with
Company, an affiliate of Company, or any other franchisee or area developer of Company.
14.2 Prohibitions After Term
The prohibitions set forth in Section 14.1 above shall also apply during the one (1) year period
after the expiration or termination of this Agreement.
14.3 Prohibitions Applicable to Company
During the Term of this Agreement, Company shall not, without the prior written consent of
Franchisee, directly or indirectly: (a) employ or attempt to employ any person who at that time is
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employed by Franchisee or an affiliate of Franchisee; or (b) induce or attempt to induce any
person to leave his or her employment with Franchisee or an affiliate of Franchisee.
ARTICLE 15
NATURE OF INTEREST, ASSIGNMENT
15.1 Assignment by Company
This Agreement is fully transferable by Company, in whole or in part, without the consent of
Franchisee and shall inure to the benefit of any transferee or their legal successor to Company's
interests herein; provided, however, that such transferee and successor shall expressly agree to
assume Company's obligations under this Agreement. Without limiting the foregoing, Company
may (i) assign any or all of its rights and obligations under this Agreement to a subsidiary or
affiliated entity; (ii) sell its assets, its Marks, or its System outright to a third party (including or
subject to this Agreement); (iii) go public; (iv) engage in a private placement of some or all of its
securities; (v) merge, acquire other corporations, or be acquired by another corporation; or (vi)
undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial
restructuring. Company shall be permitted to perform such actions without liability or obligation
to Franchisee who expressly and specifically waives any claims, demands or damages arising
from or related to any or all of the above actions (or variations thereof). Company shall have no
liability for the performance of any obligations contained in this Agreement after the effective
date of such transfer or assignment.
15.2 Assignment by Franchisee
15.2.1 The rights and duties created by this Agreement are personal to Franchisee.
Accordingly, except as otherwise may be permitted herein, neither Franchisee nor any person
with an interest in Franchisee shall directly or indirectly sell, assign, transfer, convey, give away,
pledge, mortgage, or otherwise encumber any direct or indirect interest in this Agreement or in all
or substantially all of the assets of the “Clean A Can” Service Unit, voluntarily or involuntarily,
in whole or in part, by operation of law or otherwise (an “Assignment”), without Company's prior
written consent, which consent may be withheld for any reason whatsoever in Company's sole
subjective judgment. Any such purported Assignment occurring by operation of law or otherwise
without Company's prior written consent shall constitute a default of this Agreement by
Franchisee, and shall be null and void. Except in the instance of Franchisee advertising to sell its
“Clean A Can” Service Unit pursuant to the terms hereof, Franchisee shall not, without
Company's prior written consent, offer for sale or transfer at public or private auction or advertise
publicly for sale or transfer, the fittings, spares, supplies, fixtures, equipment, Franchisee's Lease
or the real or personal property used in connection with Franchisee's “Clean A Can” Service Unit.
Franchisee shall not subfranchise, subcontract, share, divide or partition this Agreement, and
nothing in this Agreement will be construed as granting Franchisee the right to do so.
15.2.2 If Franchisee is a Business Entity, each of the following shall be deemed to be an
Assignment of this Agreement: (i) the sale, assignment, transfer, conveyance, gift, pledge,
mortgage, or other encumbrance of 50% or more in the aggregate, whether in one or more
transactions, of the capital stock, membership interests or voting power of Franchisee, by
operation of law or otherwise or any other event(s) or transaction(s) which, directly or indirectly,
effectively changes management control of Franchisee; (ii) the issuance of any securities by
Franchisee which itself or in combination with any other transaction(s) results in the
shareholders, members or partners existing as of the Effective Date, as applicable, owning 50% or
less of the outstanding shares, membership interests or voting power of Franchisee as constituted
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as of the date hereof; (iii) if Franchisee is a Partnership, the withdrawal, death or legal incapacity
of a general partner or limited partner owning 50% or more of the Partnership Rights of the
Partnership, or the admission of any additional general partner or the transfer by any general
partner of any of its Partnership Rights in the Partnership; (iv) the death or legal incapacity of any
shareholder, member or partner owning 50% or more of the capital stock, voting power, or
Partnership Rights of Franchisee; and (v) any merger, stock redemption, consolidation,
reorganization, recapitalization or other transfer control of the Franchisee, however effected.
Without limiting Company's discretion in granting or withholding its consent to any Assignment,
Company may impose any or all of the following conditions thereto:
15.2.3 Upon the execution of this Agreement and upon each direct or indirect transfer of an
interest in this Agreement or in Franchisee and at any other time upon Company's request,
Franchisee shall, within 5 days prior to such transfer or at any other time at Company's request,
furnish Company with an estoppel agreement indicating any and all causes of action, if any, that
Franchisee may have against Company or if none exist, so stating, and a list of all Owners having
an interest in this Agreement or in Franchisee, the percentage interest of Owner, and a list of all
officers and directors, in such form as Company may require;
15.2.4 Franchisee's written request for consent to any Assignment must be accompanied by an
offer to Company of a right of first refusal at the same cash price offered by any bona fide buyer
(the proposed buyer may not offer non-cash consideration). Company shall have the right and
option, exercisable within 15 days after receipt of such written notification, to send written notice
to Franchisee or such person that Company or its third-party designee, intends to purchase the
interest which is proposed to be transferred, on the same terms and conditions offered by the third
party. If Company accepts such offer, the training and transfer/administrative fees due by
Franchisee in accordance with Section 15.2.12 shall be waived by Company. Any material
change in the terms of an offer prior to closing shall cause it to be deemed a new offer, subject to
the same right of first refusal by Company, or its third-party designee, as in the case of the initial
offer. Company's failure to exercise such option shall not constitute a waiver of any other
provision of this Agreement, including any of the requirements of this Article with respect to the
proposed transfer;
15.2.5 The Franchisee is not in default under the terms of this Agreement, the Manuals or any
other obligations owed Company, and all of its then-due monetary obligations to Company have
been paid in full;
15.2.6 The Franchisee and its Owners, if the Franchisee is a Business Entity, have executed a
general release under seal, in a form prescribed by Company, of any and all claims against
Company, its affiliates, subsidiaries, shareholders, directors, officers, and employees;
15.2.7 The transferee/assignee has demonstrated to Company's satisfaction that it meets all of
Company's then-current requirements for new Franchisees or for holders of an interest in a
franchise, including, without limitation, possession of good moral character and reputation,
satisfactory credit ratings, acceptable business qualifications, and the ability to fully comply with
the terms of this Agreement;
15.2.8 The transferee/assignee has assumed this Agreement by a written assumption agreement
approved by Company, or has agreed to do so at closing, and at closing executes an assumption
agreement approved by Company;
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15.2.9 The transferee/assignee, its manager or other employees responsible for the operation of
the “Clean A Can” Service Unit have satisfactorily completed Company's training program;
15.2.10 The transferee/assignee executes such other documents as Company may require,
including a replacement franchise agreement on the form then currently being provided to
prospective franchisees, or if not then being so provided, then such form selected by the
Company which previously shall have been delivered to and executed by a franchisee or area
developer of Company.
15.2.11 The Franchisee transfers all Franchise Agreements between Franchisee and Company to
the same transferee/assignee; and
15.2.12 Upon submission Franchisee's request for Company's consent to any proposed
Assignment, Franchisee shall pay to Company a transfer fee (“Transfer Fee”) equal to the greater
of: (a) 5% of all consideration received or receivable, directly or indirectly, by Franchisee in
connection with the Assignment, or (b) the sum of (i) a $15,000 training fee (payable only for the
first assigned franchise unit’s agreement in the case of multiple franchise units being assigned
simultaneously to the same assignee) plus (ii) a $1,500 administrative/transfer fee (not limited to
the first assigned franchise unit’s agreement in the case of multiple franchise units being assigned
simultaneously to the same assignee).
15.2.13 Company's consent to a transfer shall not constitute a waiver of any claims it may have
against the transferring party arising out of this Agreement or otherwise.
15.3 Business Entity Franchisee
If a Franchisee is a Business Entity, the following provisions will apply:
15.3.1 Franchisee represents and warrants that the information set forth in Exhibit “B”, which
is annexed hereto and by this reference made a part hereof, is accurate and complete in all
material respects. Franchisee shall notify Company in writing within 10 days of any change in
the information set forth in Exhibit “B.” Franchisee promptly shall provide such additional
information as Company may from time to time request concerning all persons who may have
any direct or indirect financial interest in Franchisee.
15.3.2 All of Franchisee's organizational documents (including articles of partnership,
partnership agreements, articles of incorporation, bylaws, shareholders agreements, trust
instruments, or their equivalent) will provide that the issuance and transfer of any interest in
Franchisee is restricted by the terms of this Agreement, and that sole purpose for which
Franchisee is formed (and the sole activity in which Franchisee is or will be engaged) is the
development and operation of the “Clean A Can” Service Units, pursuant to one or more
franchise agreements from Company. Franchisee shall submit to Company, upon the execution of
this Agreement and thereafter from time to time upon Company's request, a resolution of
Franchisee (or its governing body) confirming that Franchisee is in compliance with this
provision.
15.3.3 Upon the execution of this Agreement, upon each transfer of an interest in Franchisee,
and at any other time upon Company's request, all holders of a 10% or greater interest in
Franchisee will execute a written agreement in a form prescribed by Company, the current form
of which is attached hereto as of Exhibit “C”, personally, irrevocably and unconditionally
guarantees, jointly and severally, with all other holders of a 10% or greater interest in Franchisee
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the full payment and performance of Franchisee's obligations to Company and to Company's
affiliates.
ARTICLE 16
DEFAULT AND TERMINATION
16.1 General
Company shall have the right to terminate this Agreement prior to its scheduled expiration date
pursuant to Section 3.1 only for “cause”. “Cause” is hereby defined as a material breach of this
Agreement. Company shall exercise its right to terminate this Agreement upon notice to
Franchisee upon the following circumstances and manners.
16.2 Automatic Termination Without Notice
Subject to Applicable Laws of the jurisdiction in which Franchisee's “Clean A Can” Service Unit
is located to the contrary, Franchisee shall be deemed to be in default under this Agreement, and
all rights granted herein shall automatically terminate without notice to Franchisee if: (i)
Franchisee shall be adjudicated bankrupt or judicially determined to be insolvent (subject to any
contrary provisions of any applicable state or federal laws), shall admit to its inability to meet its
financial obligations as they become due, or shall make a disposition for the benefit of its
creditors; (ii) Franchisee shall allow a judgment against him in the amount of more than $5,000 to
remain unsatisfied for a period of more than 30 days (unless a supersedeas or other appeal bond
has been filed); (iii) the “Clean A Can” Service Unit or Location, or the Franchisee's assets are
seized, taken over or foreclosed by a government official in the exercise of its duties, or seized,
taken over, or foreclosed by a creditor or lien holder provided that a final judgment against the
Franchisee remains unsatisfied for 30) days (unless a supersedes or other appeal bond has been
filed); (iv) a levy of execution of attachment has been made upon the license granted by this
Agreement or upon any property used in the “Clean A Can” Service Unit, and it is not discharged
within 5 days of such levy or attachment; (v) Franchisee permits any mechanics lien to attach to
the “Clean A Can” Service Unit or to any equipment or other Location; (vi) Franchisee allows or
permits any judgment to be entered against Company or its subsidiaries or affiliated corporations,
arising out of or relating to the operation of Franchisee's “Clean A Can” Service Unit; or (vii)
Franchisee is convicted of any felony, or any criminal misconduct relevant to the operation of the
“Clean A Can” Service Unit.
16.3 Option to Terminate Without Notice
Franchisee shall be deemed to be in default and Company may, at its option, terminate this
Agreement and all rights granted hereunder, without affording Franchisee any opportunity to cure
the default, effective immediately upon receipt of notice by Company upon the occurrence of any
of the following events:
16.3.1 Abandonment
If Franchisee shall abandon the “Clean A Can” Service Unit. For purposes of this Agreement,
“abandon” shall refer to (i) Franchisee's failure, at any time during the term of this Agreement, to
keep the “Clean A Can” Service Unit working and operating for business for a period of 5
consecutive days, except as provided in the Manuals, (ii) Franchisee's failure to keep the “Clean
A Can” Service Unit open and operating for any period after which it is not unreasonable under
the facts and circumstances for Company to conclude that Franchisee does not intend to continue
to operate the franchise, unless such failure to operate is due to fire, flood, earthquake or other
similar causes beyond Franchisee's control, and (iii) failure to actively and continuously maintain
and answer Franchisee's telephone;
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16.3.2 Assignment, Death or Incapacity
If Franchisee shall purport to make any Assignment without the prior written consent of
Company; provided, however, that on written request and on condition that the “Clean A Can”
Service Unit continues to be operated in conformity with this Agreement, (i) upon the death or
legal incapacity of a Franchisee who is an individual, Company shall allow up to 6 months after
such death or legal incapacity for the heirs, personal representatives, or conservators (the “Heirs”)
of Franchisee either to enter into a new Franchise Agreement upon Company's then current form
(except that no initial franchise fee or transfer fee shall be charged), if Company is subjectively
satisfied that the Heirs meet Company's standards and qualifications, or if not so satisfied to allow
the Heirs to sell the “Clean A Can” Service Unit to a person approved by Company, or (ii) upon
the death or legal incapacity of an Owner owning 50% or more of the capital stock, membership
interests or voting power of a corporate or limited liability company Franchisee, or a general or
limited partner owning 50% or more of any of the Partnership Rights of a Franchisee which is a
Partnership, Company shall allow a period of up to 6 months after such death or legal incapacity
for the Heirs to seek and obtain Company's consent to the transfer or Assignment of such stock,
membership interests or Partnership Rights to the Heirs or to another person acceptable by
Company. If, within said 6 month period, the Heirs fail either to enter into a new franchise
agreement or to sell the “Clean A Can” Service Unit to a person approved by Company pursuant
to Section 15.2, or fail either to receive Company's consent to the Assignment of such stock,
membership interest or Partnership Rights to the Heirs or to another person acceptable by
Company, as provided in Section 15.2, this Agreement shall thereupon automatically terminate.
16.3.3 Repeated Defaults
If Franchisee shall default in any material obligation as to which Franchisee has previously
received 3 or more written notices of default from Company setting forth the material breach
complained of within the preceding 12 months, such repeated course of conduct shall itself be
grounds for termination of this Agreement without further notice or opportunity to cure.
16.3.4 Misrepresentation
If Franchisee makes any material misrepresentations relating to the acquisition of the “Clean A
Can” Service Unit.
16.3.5 Violation of Law
If Franchisee fails, for a period of 10 days after having received notification of noncompliance
from Company or any governmental or quasi-governmental agency or authority, to comply with
any federal, state or local law or regulation applicable to the operation of the “Clean A Can”
Service Unit.
16.3.6 Health or Safety Violations
Franchisee's conduct of the “Clean A Can” Service Unit licensed pursuant to this Agreement is so
contrary to this Agreement, the System and the Manuals as to constitute an imminent danger to
the public health (for example, selling services or products knowing that the services or products
are allowing a dangerous condition arising from a failure to strictly comply with any health and
safety code or ordinance or other Applicable Law to continue despite Franchisee's knowledge of
such condition), or selling other unauthorized products and services to the public after notice of
default and continuing to sell such products and services whether or not Franchisee has cured the
default after one or more notices.
16.3.7 Unfair Competition
Any violation by Franchisee of Section 13.1; Franchisee's disclosure or use in violation of this
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Agreement of the contents of the Manual, or any other Confidential Information provided to
Franchisee by Company.
16.3.8 Under Reporting
If an audit or investigation conducted by Company hereof discloses that Franchisee has
knowingly maintained false books or records, or submitted false reports to Company, or
knowingly understated its Gross Sales or withheld the reporting of same as herein provided.
16.3.9 Criminal Offenses
If Franchisee is convicted of a felony or any other crime or offense that is reasonably likely, in
the sole opinion of Company, to adversely affect the System, the Marks, the goodwill associated
therewith, or Company's interest therein.
16.3.10 Intellectual Property
If Franchisee misuses or makes any unauthorized use of the Marks or otherwise materially
impairs the goodwill associated therewith or Company's rights therein, or which reflects
materially and unfavorably upon the operation and reputation of the “Clean A Can” Service Unit
or System.
16.3.11 Termination of Other Agreements
If Franchisee or any of its affiliates is party to any other Development Agreement, Sublease,
Management Agreement, Promissory Note, or Franchise Agreements with Company, and that
other agreement is terminated by Company for default by Franchisee (after any applicable right to
cure). Notwithstanding the foregoing, however, Company may not terminate this Agreement if
the other agreement is a Development Agreement, and the only grounds for termination of that
Development Agreement is failure by Franchisee to meet its minimum development obligations
under the Development Agreement.
16.4 Termination With Notice and Opportunity To Cure
Except for any default by Franchisee under Sections 16.2 or 16.3, or as otherwise expressly
provided in this Agreement, Franchisee shall have 10 days (5 days in the case of any default in
the timely payment of sums due to Company or its affiliates), after Company's written notice of
default within which to remedy any default under this Agreement, and to provide evidence of
such remedy to Company. If any such default is not cured within that time period, or such longer
time period as Applicable Law may require or as Company may specify in the notice of default,
this Agreement and all rights granted by it shall thereupon automatically terminate without
further notice or opportunity to cure. Franchisee shall be in material default under this Article for
any failure to comply with any of the requirements imposed by this Agreement. Such material
defaults shall include the occurrence of any one or more of the following events:
16.4.1 Franchisee's failure, refusal, or neglect to promptly pay any monies owed to Company,
its subsidiaries or affiliates, or any Advertising Co-op, when due, or to submit the financial or
other information required by Company under this Agreement;
16.4.2 Franchisee's failure to maintain the standards specified by Company in the Manual or
otherwise;
16.4.3 Franchisee's failure, refusal or neglect to obtain Company's prior written approval or
consent as required by this Agreement;
16.4.4 Franchisee's misuse or unauthorized use of Company's Marks or other material
impairment of the goodwill associated therewith or Company's rights therein;
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16.4.5 Franchisee's commencement of or conducting any business operation, or marketing of
any product, under a name or mark which, in Company's reasonable opinion, is confusingly
similar to Company's Marks;
16.4.6 Franchisee's default, without cure after the applicable grace period, under any Lease,
mortgage, or deed of trust covering the Location; or
16.4.7 Franchisee's failure to procure or maintain the insurance required by this Agreement or
in the Lease for the Location.
16.5 Reimbursement of Company Costs
In the event of a default by Franchisee, all of Company's costs and expenses arising from such
default, including reasonable legal fees and reasonable hourly charges of Company's
administrative employees shall be paid to Company by Franchisee within 5 days after cure.
16.6 Cross-Default
Any material default by Franchisee under the terms and conditions of this Agreement or any
Lease, or any other agreement between Company, or its affiliate, and Franchisee, or any default
by Franchisee of its obligations to any Advertising Cooperative of which it is a member, shall be
deemed to be a material default of each and every said agreement. Furthermore, in the event of
termination, for any cause, of this Agreement or any other agreement between the parties hereto,
Company may, at its option, terminate any or all said agreements.
16.7 Notice Required By Law
Notwithstanding anything to the contrary contained in this Article 16, in the event any valid,
Applicable Law of a competent Governmental Authority having jurisdiction over this Agreement
and the parties hereto shall limit Company's rights of termination hereunder or shall require
longer notice periods than those set forth above, this Agreement shall be deemed amended to
conform to the minimum notice periods or restrictions upon termination required by such laws
and regulations. Company shall not, however, be precluded from contesting the validity,
enforceability or application of such laws or regulations in any action, hearing or dispute relating
to this Agreement or the termination thereof.
ARTICLE 17
RIGHTS AND OBLIGATIONS UPON TERMINATION
17.1 General
Upon the expiration or termination of Franchisee's rights granted under this Agreement:
17.1.1 Franchisee shall immediately cease to use Company's Marks, and any confusingly
similar trademark, service mark, trade name, logo type, or other commercial symbol or insignia.
Franchisee shall at its own cost, make cosmetic changes to Franchisee's “Clean A Can” Service
Unit’s vehicle and location so that it no longer contains or resembles Company's proprietary
designs including, but not limited to, Franchisee shall remove all “Clean A Can” Service
identifying materials and distinctive “Clean A Can” Service cosmetic features, vehicle and
location colors, signage and “Clean A Can” Service sales equipment (which shall be deemed
proprietary to Company) from the Unit and Location as Company may reasonably direct.
17.1.2 Company may retain all fees paid pursuant to this Agreement, and Franchisee shall
immediately pay any and all amounts owing to Company, its subsidiaries and affiliates.
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17.1.3 Any and all obligations of Company to Franchisee under this Agreement shall
immediately cease and terminate.
17.1.4 Any and all rights of Franchisee under this Agreement shall immediately cease and
terminate.
17.1.5 Company shall have the option, exercisable by written notice within 30 days after the
termination of this Agreement, to take an assignment of all telephone numbers (and associated
listings) for Franchisee's “Clean A Can” Service Unit(s), Route(s) and Customer(s). Franchisee is
not entitled to any compensation from Company if Company exercises this option.
17.1.6 Franchisee shall, at Company's option, cancel or assign to Company or its designee all
of Franchisee's right, title and interest in any Internet and website home pages, domain name
listings and registrations which contain the Marks, or any of them, in whole or and part, and
Franchisee shall notify applicable domain name registrars and all listing agencies, upon the
termination or expiration hereof, of the termination of Franchisee's right to use any domain name,
web page and other Internet devise associated with Company or any “Clean A Can” Service Unit,
and authorize and instruct their cancellation or transfer to Company, as directed by Company.
Franchisee is not entitled to any compensation from Company if Company exercises its said
rights or options.
17.2 Survival of Obligations
In no event shall a termination or expiration of this Agreement affect Franchisee's obligations to
take or abstain from taking any action in accordance with this Agreement. The provisions of this
Agreement which constitute post-termination or post-expiration covenants or agreements shall
survive the termination or expiration of this Agreement.
17.3 No Ownership of Marks
Franchisee acknowledges and agrees that rights in and to Company's Marks and the use thereof
shall be and remain the property of Company.
17.4 Government Filings. In the event Franchisee has registered any of Company's Marks or
the name The “Clean A Can” Service as part of Franchisee's assumed, fictitious or corporate
name, Franchisee shall promptly amend such registration to delete Company's Marks therefrom.
ARTICLE 18
INSURANCE
18.1 Insurance
Franchisee shall obtain and maintain insurance coverage which shall in each instance designate
Company and designated parent companies, subsidiaries, and affiliates as additional named
insureds, with an insurance company approved by Company, which approval shall not be
unreasonably withheld as follows:
18.1.1 Comprehensive general liability insurance (including services and products liability);
with coverage of $1,000,000.00 to $2,000,000.00 combined single limit for death, personal
injury, and $100,000.00 property damage coverage;
18.1.2 Business interruption insurance, including Continuing Royalty coverage, for 12 months
after casualty, in amounts equal to at least $25,000 ($10,000 for each unit in where Franchisee
has is subject to a Area Development Agreement);
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18.1.3 Workers' compensation insurance as required by Applicable Law; and
18.1.4 Fire, theft and extended coverage insurance, insuring the vehicle and equipment
comprising the complete “Clean A Can” Service Unit(s) operated by Franchisee, for the full
replacement value thereof.
18.2 Use of Proceeds
In the event of damage to the “Clean A Can” Service Unit covered by insurance, the proceeds of
any such insurance shall be used to restore the “Clean A Can” Service Unit to its original
condition (but in accordance with Company's then current standards and specifications) as soon
as possible, unless such restoration is prohibited or Company has otherwise consented to in
writing. Franchisee shall promptly provide to Company proof of such insurance coverage upon
the obtaining of such insurance, and at such other times upon the request of Company.
18.3 Proof of Insurance
Franchisee shall, prior to opening its “Clean A Can” Service Unit, file with Company and
certificates of such insurance and shall promptly pay all premiums on the policies as they become
due. In addition, the policies shall contain a provision requiring 30 days prior written notice to
Company of any proposed cancellation, modification, or termination of insurance. If Franchisee
fails to obtain and maintain the required insurance, Company may, at its option, in addition to any
other rights it may have, procure such insurance for Franchisee without notice and Franchisee
shall pay, upon demand, the premiums and Company's costs in taking such action.
ARTICLE 19
RELATIONSHIP OF PARTIES, DISCLOSURE
19.1 Relationship of Franchisee to Company
It is expressly agreed that the parties intend by this Agreement to establish between Company and
Franchisee the relationship of Company and franchisee. It is further agreed that Franchisee has no
authority to create or assume in Company's name or on behalf of Company, any obligation,
express or implied, or to act or purport to act as agent or representative on behalf of Company for
any purpose whatsoever. Neither Company nor Franchisee is the employer, employee, agent,
partner or co-venturer of or with the other, each being independent. Franchisee agrees that it will
not hold himself out as the agent, employee, partner or co-venturer of Company. All employees
hired by or working for Franchisee shall be the employees of Franchisee and shall not, for any
purpose, be deemed employees of Company or subject to Company control. Each of the parties
shall file its own tax, regulatory and payroll reports, and be responsible for all employee benefits
and workers compensation payments, with respect to its respective employees and operations,
saving and indemnifying the other party hereto of and from any liability of any nature whatsoever
by virtue thereof. Neither shall have the power to bind or obligate the other except specifically as
set forth in this Agreement. Company and Franchisee agree that the relationship created by this
Agreement is not a fiduciary relationship. Franchisee shall not, under any circumstances, act or
hold itself out as an agent or representative of Company.
19.2 Indemnity by Franchisee
Franchisee hereby agrees to protect, defend and indemnify Company, and all of its past, present
and future partners, shareholders, direct and indirect parent companies, subsidiaries, affiliates,
officers, directors, employees, attorneys and designees and hold them harmless from and against
any and all costs and expenses, including attorneys' fees, court costs, losses, liabilities, damages,
claims and demands of every kind or nature on account of any actual or alleged loss, injury or
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damage to any person or Business Entity or to any property arising out of or in connection with
Franchisee's operation of the Location and “Clean A Can” Service Unit pursuant hereto.
ARTICLE 20
NOTICES
20.1 General
Except as otherwise expressly provided herein, all written notices and reports permitted or
required to be delivered by the parties pursuant hereto shall be deemed so delivered at the time
delivered by hand, one business day after confirmed transmission by facsimile, telegraph or other
electronic system (with confirmation copy sent by regular U.S. mail), or 3 business days after
placement in the United States Mail by Registered or Certified Mail, Return Receipt Requested,
postage prepaid and addressed as follows:
If to Company: “Clean A Can”
1506 Kelley Ave, Suite 2
Kissimmee
FL 34744
Attn: Vice President - Franchise Sales
Facsimile No.: (407) 378-4425
If to Franchisee:
Facsimile No.
With copy to:
Facsimile No.
Any party may change his or its address by giving 10 days prior written notice of such change to
all other parties.
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ARTICLE 21
MISCELLANEOUS PROVISIONS
21.1 Company's Right To Cure Defaults. In addition to all other remedies herein granted if
Franchisee shall default in the performance of any of its obligations or breach any term or
condition of this Agreement or any related agreement, Company may, at its election, immediately
or at any time thereafter, without waiving any claim for breach hereunder and without notice to
Franchisee, cure such default for the account and on behalf of Franchisee, and the cost to
Company thereof shall be due and payable on demand and shall be deemed to be additional
compensation due to Company hereunder and shall be added to the amount of compensation next
accruing hereunder, at the election of Company.
21.2 Waiver and Delay
No waiver by Company of any breach or series of breaches or defaults in performance by
Franchisee, and no failure, refusal or neglect of Company to exercise any right, power or option
given to it hereunder or under any other franchise agreement between Company and Franchisee,
whether entered into before, after or contemporaneously with the execution hereof (and whether
or not related to the “Clean A Can” Cleaning Unit) or to insist upon strict compliance with or
performance of Franchisee's obligations under this Agreement, any other franchise agreement
between Company and Franchisee, whether entered into before, after or contemporaneously with
the execution hereof (and whether or not related to the “Clean A Can” Service Unit) or the
Manuals, shall constitute a waiver of the provisions of this Agreement or the Manuals with
respect to any subsequent breach thereof or a waiver by Company of its right at any time
thereafter to require exact and strict compliance with the provisions thereof. Company will
consider written requests by Franchisee for Company's consent to a waiver of any obligation
imposed by this Agreement. Franchisee agrees, however, that Company is not required to act
uniformly with respect to waivers, requests and consents as each request will be considered on a
case by case basis, and nothing shall be construed to require Company to grant any such request.
Any waiver granted by Company shall be without prejudice to any other rights Company may
have, will be subject to continuing review by Company, and may be revoked, in Company's sole
discretion, at any time and for any reason, effective upon 10 days prior written notice to
Franchisee. Company makes no warranties or guarantees upon which Franchisee may rely, and
assumes no liability or obligation to Franchisee by providing any waiver, approval, consent,
assistance, or suggestion to Franchisee in connection with this Agreement, or by reason of any
neglect, delay, or denial of any request.
21.3 Survival of Covenants
The covenants contained in this Agreement which, by their terms, require performance by the
parties after the expiration or termination of this Agreement, shall be enforceable notwithstanding
said expiration or other termination of this Agreement for any reason whatsoever.
21.4 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of
Company and shall be binding upon and inure to the benefit of Franchisee and its or their
respective heirs, executors, administrators, successors and assigns, subject to the restrictions on
transfer or Assignment contained herein.
21.5 Joint and Several Liability
If Franchisee consists of more than one person or entity, or a combination thereof, the obligations
and liabilities of each such person or entity to Company are joint and several.
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21.6 General Release
If Franchisee has a currently-effective franchise agreement or area development agreement from
Company, then it shall be a condition to the effectiveness of this Agreement that Franchisee has
executed and delivered to Company a general release, in a form prescribed by Company, of all
existing claims against Company arising out of those former agreements.
21.7 Governing Law/Consent to Jurisdiction
Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15
U.S.C. §§ 1051 et seq.), this Agreement, the franchise and all other matters concerning
Franchisee and Company (and its affiliates) shall be governed by the internal laws of the state
where the Franchisee's “Clean A Can” Service Unit is located (without reference to the choice of
law and conflict of law rules of that state), except that the provisions of any law of that state
regarding franchise disclosure, registration or relationship and the regulations thereunder shall not
apply unless its jurisdictional requirements are met independently without reference to this
Section. The parties agree that, except to the extent prohibited by law, Osceola County, Florida
shall be the venue for any litigation arising under this Agreement. Franchisee irrevocably submits
to the jurisdiction of those courts and waives any objection Franchisee might have to either the
jurisdiction of or venue in those courts.
21.8 Waiver of Punitive Damages and Jury Trial
Except for Franchisee's obligation to indemnify Company under Section 19.2 and claims
Company bring against Franchisee for Franchisee's unauthorized use of the Marks or
unauthorized use or disclosure of any Confidential Information, Company and Franchisee waive
to the fullest extent permitted by law any right to or claim for any multiple, punitive or exemplary
damages against the other and agree that, in the event of a dispute between Company and
Franchisee, the party making a claim will be limited to equitable relief and to recovery of any
actual damages it sustains. Company and Franchisee irrevocably waive trial by jury in any action,
proceeding, or counterclaim, whether at law or in equity, brought by either of them.
21.9 Limitations of Claims
Except for claims arising from Franchisee's non-payment or underpayment of amounts
Franchisee owes Company or its affiliates, any and all claims arising out of or relating to this
Agreement or Company's relationship with Franchisee will be barred unless a proceeding is
commenced within one (1) year from the date on which the party asserting the claim knew or
should have known of the facts giving rise to the claim.
21.10 Entire Agreement
This Agreement contains all of the terms and conditions agreed upon by the parties hereto with
reference to the subject matter hereof. No other agreements oral or otherwise shall be deemed to
exist or to bind any of the parties hereto and all prior agreements, understandings and
representations are merged herein and superseded hereby. Franchisee represents that there are no
contemporaneous agreements or understandings relating to the subject matter hereof between the
parties that are not contained herein. No officer or employee or agent of Company has any
authority to make any representation or promise not contained in this Agreement or in any
Franchise Disclosure Document for prospective franchisees required by applicable law, and
Franchisee agrees that it has executed this Agreement without reliance upon any such
representation or promise. This Agreement cannot be modified or changed except by written
instrument signed by all of the parties hereto.
21.11 Titles For Convenience
Article and Section titles used in this Agreement are for convenience only and shall not be
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deemed to affect the meaning or construction of any of the terms, provisions, covenants, or
conditions of this Agreement.
21.12 Gender And Construction
All terms used in any one number or gender shall extend to mean and include any other number
and gender as the facts, context, or sense of this Agreement or any article or Section hereof may
require. As used in this Agreement, the words “include,” “includes” or “including” are used in a
non-exclusive sense. Unless otherwise expressly provided herein to the contrary, any consent,
approval or authorization of Company which Franchisee may be required to obtain hereunder
may be given or withheld by Company in its sole discretion, and on any occasion where
Company is required or permitted hereunder to make any judgment or determination, including
any decision as to whether any condition or circumstance meets Company's standards or
satisfaction, Company may do so in its sole subjective judgment.
21.13 Severability
Nothing contained in this Agreement shall be construed as requiring the commission of any act
contrary to law. Whenever there is any conflict between any provisions of this Agreement or the
Manuals and any present or future statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, the latter shall prevail, but in such event the provisions of
this Agreement or the Manuals thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirements of the law. If any part, article, section, sentence or
clause of this Agreement or the Manuals shall be held to be indefinite, invalid or otherwise
unenforceable, the indefinite, invalid or unenforceable provision shall (subject to Section 13.2.3)
be deemed deleted, and the remaining part of this Agreement shall continue in full force and
effect.
21.14 Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which together shall be deemed to be one and the same instrument.
21.15 Fees and Expenses
Should any party hereto commence any action or proceeding for the purpose of enforcing, or
preventing the breach of, any provision hereof, whether by judicial or quasi-judicial action or
otherwise, or for damages for any alleged breach of any provision hereof, or for a declaration of
such party's rights or obligations hereunder, the prevailing party shall be reimbursed by the losing
party for all costs and expenses incurred in connection therewith, including, but not limited to,
attorneys' fees. All sums which are due but unpaid to Company or Franchisee shall bear interest
from the date due at the highest rate permissible by applicable law.
21.16 Counsel
Franchisee and its Owners acknowledge and warrant that they understand the terms and
conditions of this Agreement and that they have had an opportunity in connection with this
Agreement to confer with counsel of their choice regarding their rights and obligations under this
Agreement.
ARTICLE 22
SUBMISSION OF AGREEMENT
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22.1 General
The submission of this Agreement does not constitute an offer and this Agreement shall become
effective only upon the execution thereof by Company and Franchisee.
ARTICLE 23
ACKNOWLEDGMENT
23.1 General
Franchisee, and its Owners, jointly and severally acknowledge that they have carefully read this
Agreement and all other related documents to be executed concurrently or in conjunction with the
execution hereof, that they have obtained the advice of counsel in connection with entering into
this Agreement, that they understand the nature of this Agreement, and that they intend to comply
herewith and be bound hereby.
23.2 Due Execution
The submission of this Agreement to Franchisee does not constitute an offer and this Agreement
shall become effective only upon the execution thereof by Company and Franchisee.
IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of the date of
execution by Company.
Company:
OK Franchise Group Inc
a Florida corporation
By:
Its: Vice President
Franchisee:
By:
Its:_
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EXHIBIT A
Minimum Days of Operation
Minimum Operating Days: 5 days per week.
EXHIBIT B
FRANCHISEE INFORMATION
Franchisee is a (check as applicable):
Corporation Limited Partnership Limited Liability Company
General Partnership Other (specify): …………………………………
The name and address of each Owner of Franchisee is:
NAME ADDRESS
NUMBER OF
SHARES OR
PERCENTAGE
INTEREST
There is set forth below the name and address of each director, member, or general partner, as
applicable, of Franchisee:
NAME ADDRESS
There is set forth below the names, and addresses and titles of Franchisee's principal officers or
partners who will be devoting their full time to the “Clean A Can” Service Unit:
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NAME ADDRESS
The address where Franchisee's Financial Records and Business Entity records (e.g. Articles of
Incorporation, Bylaws, Operating Agreement, Partnership Agreement, etc.) are maintained is:
NAME ADDRESS
(The remainder of this page is intentionally left blank)
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EXHIBIT C
GUARANTY AND SUBORDINATION AGREEMENT
SPOUSAL CONSENT
Each of the undersigned, each being the spouse or legal partner of an individual who executed
this Agreement as Franchisee (or if Franchisee is a partnership, a spouse of a general partner),
consents to all of the terms of this Agreement and the execution thereof, and agrees not to assist
any person who is a party to this Agreement to violate any of that party's duties under this
Agreement.
By: Dated:
By: Dated:
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EXHIBIT D
NOTARY FORM
For witnessing or attesting a signature:
State of _________________________________________________
(County) of______________________________________________
Signed or attested before me on (date) by (name(s) of person(s)
_______________________________________________________
_______________________________________________________
(Signature of notarial officer)
(Seal, if any)
_______________________________________________________
(Name - typed, stamped, or printed)
_______________________________________________________
Title (and Rank)
_______________________________________________________
(Residing at)
My commission expires: _________________________________
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A MEMBER OF THE
OK FRANCHISE GROUP
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EXHIBIT D
AREA DEVELOPMENT AGREEMENT
Dated 2017
“CLEAN A CAN” (1)
(“the Company”)
- and -
A N OTHER (2)
(“the Franchisee”)
“We Clean Garbage Cans”
1506 Kelley Ave, Suite 2
Kissimmee
Florida 34744
Tel: +1 (407) 505-2030
A R E A D E V E L O P M E N T A G R E E M E N T
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FORM OF
“CLEAN A CAN”
AREA DEVELOPMENT AGREEMENT
Dated: [ ]
TABLE OF CONTENTS
1. GRANT OF AREA DEVELOPMENT FRANCHISE
1.1 Grant of Area Development Franchise
1.2 No Trademark License
1.3 Definitions
2. DEVELOPER’S DEVELOPMENT OBLIGATION
2.1 Minimum Development Obligation
2.2 Force Majeure
2.3 Developer May Exceed Minimum Development Obligation
3. EXCLUSIVITY
3.1 Exclusivity
4. TERM OF AREA DEVELOPMENT AGREEMENT
4.1 Term
4.2 Limited Additional Development Right
4.3 Renewal
4.4 Exercise of Right of Additional Development.
4.5 Conditions to Exercise of Right of Additional Development
5. PAYMENTS BY DEVELOPER
5.1 Development Area Fees
6. EXECUTION OF COMMISSIONING LETTER, TRAINING
6.1 Route Approval, Execution of Commissioning Letter
6.2 Condition Precedent to Company’s Obligations
6.3 Lease of Premises
6.4 Training
7. ASSIGNMENT AND SUBFRANCHISING
7.1 Assignment By Company
7.2 No Subfranchising by Developer
7.3 Assignment by Developer
7.4 Individual Franchise Agreements
8. NON-COMPETITION, NON-SOLICITATION, TRADE SECRETS
8.1 In Term
8.2 Post-Term
8.3 Modification
8.4 Personnel
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8.5 Trade Secrets.
8.6 Developer’s Affiliates
9. TERMINATION
9.1 Termination Pursuant to a Material Breach of This Agreement.
9.2 Termination by Reason of a Material Breach of Other Agreement
9.3 Effect of Termination
10. BUSINESS ENTITY DEVELOPER
10.1 Business Entity Developer
10.2 Limitation on Activities
10.3 Guaranty and Subordination Agreement
11. GENERAL CONDITIONS AND PROVISIONS
11.1 Relationship of Developer to Company
11.2 Indemnity by Developer
11.3 Limitation of Liability
11.4 Waiver and Delay
11.5 Survival of Covenants
11.6 Successors and Assigns
11.7 Joint and Several Liability
11.8 Governing Law
11.9 Entire Agreement
11.10 Titles For Convenience
11.11 Gender And Construction
11.12 Severability
11.13 Counterparts
11.14 Fees and Expenses
11.15 Notices
12. SUBMISSION OF AGREEMENT
12.1 General
13. ACKNOWLEDGMENT
13.1 General
EXHIBIT A DEVELOPMENT AREA
EXHIBIT B MINIMUM DEVELOPMENT OBLIGATIONS
EXHIBIT C DEVELOPER INFORMATION
EXHIBIT D EXCEPTIONS TO SECTION 8.1
EXHIBIT E GUARANTY AND SUBORDINATION AGREEMENT
EXHIBIT F NOTARY FORM
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AREA DEVELOPMENT AGREEMENT
THIS AREA DEVELOPMENT AGREEMENT (the “Agreement”) is made and entered
into this day of …………………………….., …………………………………, 20……,
(the “Effective Date”) by and between “Clean A Can”, (“Company”), a Florida
corporation, and, …………………………… an individual OR …………………………
a Company organized under the laws of ……………………… (“the Developer”), with reference
to the following facts:
A. Company owns and intends to license certain proprietary and other property rights and
interests in and to the “Clean A Can” trademark and service mark, and such other trademarks,
trade names, service marks, logo types, insignias, trade dress, designs, and commercial symbols
which Company may from time to time authorize or direct Developer to use in connection with
the operation of “Clean A Can” Service Units (the “Marks”).
B. Company has developed and continues to develop a system for the operation of trash &
garbage can cleaning vehicles, equipment and merchandising of OK Franchise Group Inc
Authorized Products, which system features distinctive signs and various Trade Secrets and other
confidential information, and in some cases also includes trade dress, uniforms, equipment
specifications, inventory, record-keeping and marketing techniques (the “System”).
C. Company desires to expand and develop its system of the “Clean A Can” Service Units,
and seeks sophisticated and efficient multi-unit franchisees who will develop numerous “Clean A
Can” Service Unit within designated areas.
D. Developer desires to commission and operate “Clean A Can” Service Units, and Company
desires to grant to Developer the right to commission and operate said “Clean A Can” Service
Units in accordance with the terms and upon the conditions contained in this Agreement.
WHEREFORE IT IS AGREED
1. GRANT OF AREA DEVELOPMENT FRANCHISE
1.1 Grant of Area Development Franchise
Upon the terms and subject to the conditions of this Agreement, Company hereby grants to
Developer, and Developer hereby accepts, the right and obligation during the Term hereof, to
develop “Clean A Can” Service Units solely in areas within the Development Area.
1.1.1 Developer within thirty (30) days of execution of this Agreement, shall meet with
Company and begin preparation of a market development plan for the Development Area
(identifying and specifying key areas and trade areas in the Development Area) and all
development pursuant to this Agreement shall be in accordance with this plan (the “Market
Plan”). The Market Plan shall include proposed target trade areas where Units are to be operated,
ranking and prioritization of Units and other information customarily utilized by market planners
in the trash & garbage can cleaning industry. Developer shall propose the Market Plan and
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Company shall approve or disapprove the Market Plan in its reasonable discretion. The initial
Market Plan shall be completed and approved by Company and Developer no later than sixty (60)
days from the date of execution of this Agreement. Developer acknowledges that no extensions of
time with regard to the Minimum Development Obligation shall be granted by Company to
Developer as a result of Developer’s failure to complete a satisfactory Market Plan within sixty
(60) days of execution of this Agreement. The parties recognize that demographics, market
economics, areas, competition and other conditions may change in the Development Area over
the term of this Agreement and that such changes may impact the Market Plan. Therefore, the
parties agree that it is in their respective best interests to review the Market Plan periodically
throughout the term of this Agreement. On the first anniversary of the approval of the initial
Market Plan and at least once annually thereafter, Developer and Company shall review the
Market Plan and make such revisions as are required to maximize the successful development of
the “Clean A Can” Service Units and brand in the Development Area.
1.1.2 From time to time, Company may request updates, status reports, or other information
from Developer regarding development of the Market Area. Developer shall respond promptly,
accurately and completely to such requests within a reasonable time, but in no event more than 30
days after the request by Company. Without limiting the generality of the foregoing, the
information requested may relate to demographics, market economics, area, competition and
other conditions in the Development Area.
1.2 No Trademark License
No right or license is granted to Developer hereunder to use the Marks or the System or any other
trademarks, trade names, service marks, logotypes, insignias, trade dress or designs owned by
Company, such right and license being granted solely pursuant to Franchise Agreement(s)
executed pursuant to Section 6.1 below.
1.3 Definitions.
In this Agreement, (a) capitalized terms not otherwise defined herein shall have the meaning
given such term in the Franchise Agreement, and (b) the following capitalized terms shall have
the meanings set forth below, unless the context otherwise requires:
“Applicable Law” means and includes applicable common law and all applicable statutes, laws,
rules, regulations, ordinances, policies and procedures established by any Governmental
Authority, governing the development or operation of a “Clean A Can” Service Units, including
all immigration, labor, disability, food and drug laws, health and safety regulations, and
Americans With Disabilities Act requirements, as in effect on the Effective Date hereof, and as
may be amended, supplemented or enacted from time to time.
“Authorized Products” means the specific vehicles, equipment, cleaning materials, hand tools,
promotional products, which may include trash & garbage can making and repair equipment,
hats, t-shirts and novelty items, as specified by Company from time to time in Company’s
Manuals, or as otherwise directed by Company in writing, for sale from the Developer’s “Clean
A Can” Service Units, offered in strict accordance with Company’s procedures, quality standards
and specifications, including specifications as to processes, procedures, brand names and
presentation.
“Business Entity” means any limited liability company or Partnership, and any association,
corporation or other entity which is not an individual.
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“Competitive Activities” shall mean to, own, operate, lend to, advise, be employed by, or have
any financial interest in any business that engages in the cleaning of trash & garbage or trash
cans; the sale of products and other associated services produced or supplied by third parties; or
the production or sale at retail or wholesale of any added value service or product, or any other
items or services featured by “Clean A Can” Service Units.
“Development Area” shall mean and refer to the geographical area set forth in Exhibit “A” which
is annexed hereto and by this reference made a part hereof.
“Development Period” shall mean each of the time periods during which Developer shall have
the right and obligation to commission, equip, deploy and thereafter continue to operate “Clean A
Can” Service Units in accordance with the Minimum Development Obligation.
“OK Franchise Group Inc Branded Services and Products” is any product or service now existing
or developed in the future that is offered under any of the Marks.
“Clean A Can” Service Unit means a premises or a service vehicle fitted with trash & garbage
can cleaning equipment, operated under the Marks and in accordance with the System and
specializing in the sale of Authorized Services and Products, pursuant to a validly executed
Franchise Agreement.
“Effective Date” means the date indicated in the first paragraph of this Agreement.
“Franchise Agreement” means the then current form of agreement prescribed by Company and
used to grant to Developer (as “Franchisee”) the right to own and operate a single and multiple
“Clean A Can” Service Units in the Development Area, including all exhibits, riders, guarantees
or other related instruments, all as amended from time to time (references in this Agreement to
“Developer’s Franchise Agreements” will mean Franchise Agreements issued to Developer as
“Franchisee” under those Franchise Agreements).
“Clean A Can” Service Unit means a “Clean A Can” Service Unit consisting of a either a
premises and/or a vehicle that is fitted with trash & garbage can cleaning equipment being used to
service customers of such “Clean A Can” Service Unit.
“Governmental Authority” means and includes all federal, state, county, municipal and local
governmental and quasi-governmental agencies, commissions and authorities.
“Gross Sales” of each of Developer’s “Clean A Can” Service Units means gross revenues
(excluding allowances and sales taxes) received or receivable by Developer as payment, whether
in cash or for credit or barter (and, if for credit or barter, whether or not payment is received
therefor), for all cleaning services and products, and other goods, services, and supplies sold or
prepared from the “Clean A Can” Service Units, or which are promoted or sold under any of the
Marks.
“Internet” means collectively the myriad of computer and telecommunications facilities,
including equipment and software, which comprise the interconnected worldwide network of
networks that employ the TCP/IP (Transmission Control Protocol/Internet Protocol), or any
predecessor or successor protocols to such protocol, to communicate information of all kinds by
fiber optics, wire, radio, or other methods of transmission.
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“Lease” means the lease or sublease or other agreement or instrument pursuant to which
Developer obtains the right to operate a “Clean A Can” Service Unit, or the Premises that a
“Clean A Can” Service Unit is operated out of.
“Manuals” means Company’s training software; OK Franchise Group Inc Operations Manual and
Support Manual, and related manuals now or hereafter created by Company for use in connection
with the operation of a “Clean A Can” Service Units, as the same may be amended and revised
from time to time, including all bulletins, supplements and ancillary manuals.
“Marks” shall have the meaning set forth in Recital A.
“Minimum Development Obligation” shall mean the Developer’s right and obligation to
commission, equip, open and thereafter continue to operate on Units within the Development
Area not less than the cumulative number of “Clean A Can” Service Units set forth in Exhibit
“B,” which is annexed hereto and by this reference made a part hereof, and within each of the
Development Periods specified therein.
“Owner” means any shareholder, member, general or limited partner, trustee, or other equity
owner of a Business Entity; except that if Company has any ownership interest in Licensee, the
term “Owner” shall not include or refer to the Company or its Owners or affiliates, and no
obligation or restriction upon the “Developer”, or its Owners, directors or officers shall bind
Company, its Owners or affiliates, or their respective Owners, directors or officers.
“Partnership” means any general partnership, limited partnership or limited liability company
“Partnership Rights” means voting power, property, profits or losses, or partnership interests of a
Partner.
“Permits” means and include all applicable franchises, licenses, permits, registrations, certificates
and other operating authority required by Applicable Law.
“Premises” means, in the case of a office, route, or other location, at which such “Clean A Can”
Service Unit is located or deployed from, including unless otherwise expressly provided, any
ancillary common areas, buildings and other structures associated with the Premises.
“Term” shall have the meaning set forth in Section 4.1 including any extensions thereof.
“Then-current” as used in this Agreement and applied to the Offering Circular, Franchise
Agreement or area development agreement shall mean the form then currently provided to
prospective franchisees or area developers, or if not then being so provided, then such form
selected by the Company which previously shall have been delivered to and executed by a
franchisee or area developer of Company.
“Trade Secrets” shall have the meaning set forth in Section 8.5.1.
“System” shall have the meaning set forth in Recital B.
“Route” shall mean all types of locations where a “Clean A Can” Service Unit and system is
operated.
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2. DEVELOPER’S DEVELOPMENT OBLIGATION
2.1 Minimum Development Obligation
2.1.1 Developer shall commission, equip, and thereafter continue to operate on Unit within the
Development Area not less than the cumulative number of trash & garbage can cleaning Vehicles
and Equipment within each of the Development Periods specified in Exhibit “B”.
2.1.2 Within any 12 month period, Developer shall have the right to close one “Clean A Can”
Service Unit opened pursuant to this Agreement if Developer demonstrates to Company’s
reasonable satisfaction that the Unit has not operated profitably and is unlikely in the future to
operate profitably, provided that Developer obtains Company’s prior written consent to such
closure, which Company shall grant or withhold in Company’s reasonable business judgment.
Upon Company’s request, Developer shall promptly provide such substantiating financial data
concerning the “Clean A Can” Service Unit’s historical performance and its future prospects as
Company may require, and which may include market studies prepared by qualified, reputable
and independent third parties or other objective evidence satisfactory to Company. For purposes
of Developer’s Minimum Development Obligation, any Unit closed pursuant to this Section 2.1.2
with Company’s consent shall continue to be counted as an operating Unit for a period of 12
months following closure, and Developer shall be deemed in breach of the Minimum
Development Obligation if immediately after said 12 month period the cumulative number of
“Clean A Can” Service Units then-operating is not equal to or greater than the cumulative number
required to have been in operation as of the end of the immediately preceding Development
Period.
2.1.3 If a Unit’s Vehicle, Equipment or Premises commissioned and operated by Developer is
destroyed or damaged, other than by a voluntary act of Developer, so that such “Clean A Can”
Service Unit cannot continue to operate, the destroyed or damaged Unit shall continue to count
toward satisfaction of the Minimum Development Obligation (during the period until such
substitute route opens), but only if (i) Developer shall repair and restore such Unit’s Vehicle,
Equipment or Premises to Company’s then approved plans and specifications within 120 days
after the occurrence of such destruction or damage, subject to delays permitted by Section 2.2, or
(ii) Developer shall, within 120 days after the occurrence of such destruction or damage, open a
substitute Unit within the Development Area in accordance with Company’s then approved plans
and specifications (any such substitute route must be approved in writing in advance by Company
pursuant hereto.
2.2 Force Majeure
Should Developer be unable to meet the Minimum Development Obligation solely as the result of
“Force Majeure,” including, but not limited to strikes, material shortages, fires, floods,
earthquakes, and other acts of God, or by force of law (including, but not limited to any legal
disability of Company to deliver any Commissioning Letter required by law to be delivered as
contemplated by Section 6.1 of this Agreement), which result in the inability of Developer to
commission or operate “Clean A Can” Service Unit(s) in all or substantially all of the
Development Area, and which Developer could not by the exercise of due diligence have
avoided, Developer may request that Company extend the affected Development Periods by the
amount of time during which such Force Majeure shall exist. Company will not unreasonably
decline to extend the applicable Development Period(s) in such event, provided that Developer
shall have promptly (in any event not more than 30 days after commencement of the Force
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Majeure) submitted its request therefor in writing and promptly furnished Company such
information concerning the circumstances as Company may reasonably require. In the event of
any said legal disability of Company to deliver a Commissioning Letter, Company shall
diligently use all commercially reasonable efforts promptly to remove such legal disability.
2.3 Developer May Exceed Minimum Development Obligation
2.3.1 Provided that Company is satisfied, in its sole subjective judgment, that Developer has the
requisite skills, financial resources, management structure, personnel and other capabilities to do
so, and subject to the terms and conditions of this Agreement and the Franchise Agreements,
Developer may during the Term commission, equip, and operate more of “Clean A Can” Service
Units within the Development Area than required in the Minimum Development Obligation.
2.3.2 Although Company reserves the right to assess Developer’s capabilities to exceed the
Minimum Development Obligation, nothing in this Section 2.3 is intended to limit or restrict
Developer’s right or ability, subject to the terms of this Agreement, to commission, equip, and
operate the number of “Clean A Can” Service Unit within the Development Area required by the
Minimum Development Obligation.
3. EXCLUSIVITY
3.1 Exclusivity
3.1.1 During the Term of this Agreement, subject to Sections 3.1.2 and 3.1.3, Company shall
not operate or grant a license or franchise to any other person to operate a “Clean A Can” Service
Unit within the Development Area.
3.1.2 Company expressly reserves the exclusive, unrestricted right, in its sole and absolute
discretion, directly and indirectly, through its employees, affiliates, representatives, licensees,
assigns, agents and others, to own or operate and to franchise or license others (which may
include its affiliates and joint ventures in which it or its affiliates are participants) to own or
operate a “Clean A Can” Service Units in any area outside the Development Area, including
immediately adjacent to the Development Area.
3.1.3 In addition, Company expressly reserves the exclusive, unrestricted right, in its sole and
absolute discretion, directly and indirectly, through its employees, affiliates, representatives,
licensees, assigns, agents and others, (i) to own or operate and to franchise or license others
(which may include its affiliates and joint ventures in which it or its affiliates are participants) to
own or operate other businesses which operate under names other than “Clean A Can” Service at
any location, and of any type or category whatsoever, and whether within or outside the
Development Area, and regardless of its proximity to any “Clean A Can” Service Units
developed or under development or consideration by Developer; and (ii) to produce, promote,
license, distribute and market “Clean A Can” Service Branded Products, bearing other marks,
including products, clothing, souvenirs and novelty items, at or through any location or outlet,
(including those which may be located within the Development Area), and through any
distribution channel, at wholesale or retail, including by means of mail order catalogs, direct mail
advertising, the Internet, and other distribution methods.
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4. TERM OF AREA DEVELOPMENT AGREEMENT
4.1 Term
The Term of this Agreement shall commence on the Effective Date and, unless sooner terminated
in accordance with the provisions herein, or extended as provided in Section 2.2, shall continue
for a period of ( ) years.
4.2 Limited Additional Development Right
Within 60 days prior to the expiration of the Term, if Company shall determine that further
development of the Development Area is desirable, Company shall notify Developer in writing of
Company’s determination to develop additional “Clean A Can” Service Units in the Development
Area and a plan for such development over a five year term. Subject to the conditions set forth in
Section 4.5 of this Agreement, Developer shall have a prior right to undertake the additional
development which Company shall have set forth in its notice to Developer. This right of
additional development by Developer shall be exercised only in accordance with Section 4.4. If
such right of additional development is not exercised by Developer, Company or any franchisee
or area developer of Company may commission, equip, and operate additional “Clean A Can”
Service Units in the Development Area.
4.3 Renewal
Except to the extent otherwise provided in any area development agreement executed pursuant to
Section 4.4, Developer shall have no right to renew this Agreement and after the expiration of the
Term, or the sooner termination of this Agreement, Company, and its affiliates may commission,
equip, and operate, and license or franchise others to commission, equip, and operate additional
“Clean A Can” Service Units in the Development Area, without any restriction.
4.4 Exercise of Right of Additional Development
At the time Company delivers to Developer Company’s written notice of its determination to
undertake additional development in the Development Area, Company shall also deliver to
Developer a copy of Company’s Then-current Commissioning Letter and two copies of the Then-
current area development agreement. The new area development agreement, which may vary
substantially from this Agreement, will reflect Developer’s new development obligation
consistent with Company’s plan for additional development set forth in its notice to Developer.
Notwithstanding the foregoing or inconsistent terms of such area development agreement, (a)
upon execution thereof, Developer shall pay Company a Development Area Fee for each “Clean
A Can” Service Units required to be opened thereunder equal to the then-current Development
Area Fee and pursuant thereto shall provide for an Initial Fee and Continuing Royalty at the rates
specified in the Franchise Agreement. Within thirty (30) days after Developer’s receipt of the
Commissioning Letter and the new area development agreement, but no sooner than immediately
after any applicable waiting periods prescribed by Applicable Law have passed, Developer shall
execute two copies of the area development agreement described in the Commissioning Letter
and return them to Company together with the applicable Development Area Fee. If Developer
has so executed and returned the copies and has satisfied the conditions set forth in Section 4.5,
Company will execute the copies and return one fully executed copy to Developer.
4.5 Conditions to Exercise of Right of Additional Development
Developer’s right to additional development described in Section 4.2 shall be subject to
Developer’s fulfillment of the following conditions precedent:
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4.5.1 Developer shall have fully performed all of its obligations under this Agreement and all
other agreements between Company and Developer.
4.5.2 Developer shall have demonstrated to Company Developer’s financial capacity to perform
the additional development obligations set forth in the new area development agreement. In
determining if Developer is financially capable, Company will apply the same criteria to
Developer as it applies to prospective area developers at that time.
4.5.3 At expiration of the Term, Developer shall continue to operate, in the Development Area,
not less than the cumulative number of “Clean A Can” Service Units required by the Minimum
Development Obligation set forth in Exhibit “B”.
4.5.4 Developer and all affiliates of Developer who then have a currently effective Franchise
Agreement or area development agreement with Company shall have signed a general release on
a form prescribed by Company.
5. PAYMENTS BY DEVELOPER
5.1 Development Area Fees
Developer shall pay a “Development Area Fee” of $10,000, for each additional Unit area within
the Development Area. An initial Area Development Deposit Fee of $5,000 for each additional
Route is payable upon execution of this Agreement. The Development Area Deposit Fee shall be
deemed fully earned upon the payment thereof and shall be non-refundable under any
circumstances. Developer to pay the balance of the “Development Area Fee” with the acceptance
of each of the Company’s Route Commissioning Letters.
6. EXECUTION OF INDIVIDUAL FRANCHISE AGREEMENTS, TRAINING
6.1 Route Approval, Submission of Offering Circular, Execution of Franchise Agreement
6.1.1 After Developer has located an Route for opening a “Clean A Can” Service Unit,
Developer shall submit to Company such information regarding the proposed Route as Company
shall require, in the form which Company shall from time to time require, together with a copy of
an executed letter of intent containing the terms of the proposed Route. Company may seek such
additional information as it deems necessary within 30 days after Developer’s submission of the
letter of intent and required Route information, and Developer shall respond promptly, accurately
and completely to such request for additional information.
6.1.2 If Company shall not reject the Route in writing within 30 days, or within 30 days after a
receipt of such additional information, whichever is later, the Route shall be deemed preliminarily
accepted by Company. Company’s acceptance of a Route proposed by Developer will not be
unreasonably withheld or delayed.
6.1.3 Promptly after Company’s preliminary acceptance of each Route:
(a) Company shall, if required by Applicable Law and if it has not done so already,
transmit to Developer a Commissioning Letter pertaining to the approved Route.
Immediately upon receipt of the Commissioning Letter, Developer shall return to
Company a signed copy of the Acknowledgment of Receipt of the Commissioning
along with the payment for the balance of the applicable Development Area Fee; and
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(b) Developer shall proceed promptly to negotiate a Vehicle and Equipment Lease for the
Unit (which shall comply with Section 6.3 below) and shall submit the proposed
Vehicle and Equipment Lease to Company for review and approval. Developer shall
not execute the Vehicle and the Equipment Lease until it has been reviewed and
accepted by Company; and
(c) Following Company’s delivery of any such required Commissioning Letter and any
waiting period required by Applicable Law, but not later than the date on which
Developer executes the Vehicle and Equipment Lease which has been reviewed and
accepted by Company: (i) Developer shall execute and deliver to Company two copies
of said Commissioning Letter; (ii) Developer and each of its affiliates who then has a
currently effective Franchise Agreement or area development agreement with
Company shall execute and deliver two copies of a general release on a form
prescribed by Company, and (iii) Developer shall pay to the Company the applicable
Development Area Fee less any deposit paid therefor as provided in the Franchise
Agreement.
6.1.4 Company shall, promptly upon receipt of said documents and Development Area Fee,
execute and return to Developer one copy of the Commissioning Letter. Developer shall then
procure the Vehicle and Equipment by purchase, lease or hire, and return one copy of the fully
executed Vehicle and Equipment Lease (which shall conform to the terms approved by
Company) or, if purchased, the deed evidencing Developer’s right to the Vehicle. Developer shall
then commence commissioning and operation of the “Clean A Can” Service Unit pursuant to the
terms of the Franchise Agreement.
6.1.5 Notwithstanding the foregoing, Company’s obligation to deliver Commissioning Letter
shall be subject to Company’s legal authority to do so, and if Company is not legally able to
deliver an Commissioning Letter to Developer for any reason beyond Company’s reasonable
control, Company may delay approval of the lease for Developer’s proposed “Clean A Can”
Service Unit, Vehicle and Equipment and delivery of its Commissioning Letter until such time as
Company is legally able to deliver an Commissioning Letter. In no event shall Company be liable
to Developer for any loss, cost or expense occasioned by such delays.
6.2 Condition Precedent To Company’s Obligations
It shall be a condition precedent to Company’s obligations pursuant to Section 6.1, that
Developer shall have performed all of his obligations under and pursuant to all agreements
between Developer and Company.
6.3 Lease of Premises
If a premises is leased or subleased by Developer to operate “Clean A Can” Service Unit(s) from,
(i) Company shall have the right of approval of such lease or sublease, as applicable (the
“Lease”), a true and correct copy of which shall be delivered to Company at least 15 days prior to
the execution thereof; (ii) the term of said Lease shall be for a period which is not less than the
term of the applicable Franchise Agreement, unless Company shall approve, in writing, a shorter
term; (iii) Developer shall neither create nor purport to create any obligations on behalf of
Company, nor grant or purport to grant to the landlord thereunder any rights against Company,
nor agree to any other term, condition, or covenant which is inconsistent with any provision of
the applicable Franchise Agreement; (iv) Developer shall duly and timely perform all of the
terms, conditions, covenants and obligations imposed upon him under the Lease; (v) the site shall
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be constructed and improved pursuant to the provisions of the applicable Franchise Agreement;
(vi) the Lease shall grant Company an option, without cost or expense to Company, to assume the
Lease in the event of termination or expiration of the applicable Franchise Agreement for any
reason, and shall expressly provide that Company shall have the right (but not the obligation) to
succeed to Developer’s rights under the Lease if Developer fails to exercise any option to renew,
and upon Developer’s default thereunder, and that upon any alleged breach thereof by Developer,
the landlord thereunder shall be obligated to notify Company in writing at least 15 days prior to
its termination or non-renewal and, in the case of a default, Company shall have the right, but not
the obligation, to cure the breach and to succeed to Developer’s rights under said Lease by giving
written notice of such election to Developer and such landlord; Developer hereby appoints
Company as its attorney-in-fact to execute an assignment and all other documents and
instruments which Company deems necessary or appropriate to effectuate the foregoing; (vii) a
fully executed copy of said Lease shall be delivered to Company promptly following the
execution thereof; (viii) the Lease shall provide that it may not be assigned, subleased, modified
or amended without Company’s prior written consent and that Company shall be provided with
copies of all such assignments, subleases, modifications and amendments, and the landlord shall
consent in advance to any assignment or sublease to Company or a “Clean A Can” Service
franchisee or licensee approved by Company during the initial term or any renewal term of the
Lease; and (ix) the Lease may not contain a non-competition covenant which purports to restrict
the Company, or any developer or licensee of the Company (or its affiliates), from operating a
“Clean A Can” Service Unit or any other service outlet, unless such covenant is approved by the
Company in writing prior to the execution of the Lease. In all cases, the Lease shall provide that
upon expiration or termination thereof for any reason, Developer shall, upon Company’s demand,
remove all of the Marks from the site and modify the decor of the site so that it no longer
resembles, in whole or in part, a “Clean A Can” Service franchised unit and that if Developer
shall fail do so, Company will be given written notice and the right to enter the site to make such
alterations, in which event Developer shall reimburse Company for all direct and indirect costs
and expense it may incur in connection therewith, including attorney’s fees.
6.4 Training
At no extra charge, Company shall provide to up to 2 persons selected by Developer and
acceptable to Company an initial developer orientation program to familiarize Developer with
Company’s System and methods of operation. Said initial orientation program shall be for a
period of up to 3 days of training, as Company in its reasonable judgment may determine, at one
or more of the following locations: (i) Company’s corporate headquarters in Florida, or (ii) at
such place or places as may be designated by Company. In the case of a Developer which is a
Business Entity, Company may require the trainees to include the Developer’s general manager
and one or more Owners, officers or other designated representative selected by Developer and
acceptable to, and approved by Company (“Designated Developer Representative”). Company
will bear its costs of providing the initial orientation program concurrently to up to 2 persons
pursuant to this Section 6.4, including Company’s staff salaries, materials, and all technical
training tools. Developer shall pay all travel, living, compensation, and other expenses, if any,
incurred by Developer and/or Developer’s Owners and employees in connection with attendance
at the program. Company shall pay no compensation for any services performed by trainee(s) in
connection with such training programs.
6.4.1 The contents of the initial orientation program and manner of conducting such program
shall be at Company’s sole discretion and control, however, the training course will be structured
to provide guidance in setting up and managing new Units for “Clean A Can” Service Units in the
Development Area and an overview of the topics which will be addressed in the initial training
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program that will be provided in connection with the first “Clean A Can” Service Units opened
by Developer.
6.4.2 Pursuant to the first Franchise Agreement executed hereunder, Company shall provide an
additional initial training program for the general manager and one or more assistant managers
and other employees acceptable to Company (up to a total of 2 persons) for Developer’s first
“Clean A Can” Service Unit. Company shall also train Developer’s Designated Developer
Representative, or other person acceptable to Company, to act as Developer’s certified trainer
who will in turn train the manager, assistant manager(s) and staff of each “Clean A Can” Service
Units, other than the first one, in accordance with Company’s policies and standards. Developer
may not open any “Clean A Can” Service Units until the general manager, assistant manager and
staff shall have been certified by Company or by Developer’s Company-approved certified
trainer as having successfully completed such training.
7. ASSIGNMENT AND SUBFRANCHISING
7.1 Assignment By Company
This Agreement is fully transferable by Company, in whole or in part, without the consent of
Developer and shall inure to the benefit of any transferee or their legal successor to Company’s
interests herein; provided, however, that such transferee and successor shall expressly agree to
assume Company’s obligations under this Agreement. Without limiting the foregoing, Company
may (i) assign any or all of its rights and obligations under this Agreement to a subsidiary or
affiliated entity; (ii) sell its assets, its Marks, or its System outright to a third party (including or
subject to this Agreement); (iii) go public; (iv) engage in a private placement of some or all of its
securities; (v) merge, acquire other corporations, or be acquired by another corporation; or (vi)
undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial
restructuring. Company shall be permitted to perform such actions without liability or obligation
to Developer who expressly and specifically waives any claims, demands or damages arising
from or related to any or all of the above actions (or variations thereof). Company shall have no
liability for the performance of any obligations contained in this Agreement after the effective
date of such transfer or assignment.
7.2 No Subfranchising by Developer
Developer shall not offer, sell, or negotiate the sale of “Clean A Can” Service Unit(s) to any third
party, either in Developer’s own name or in the name and on behalf of Company, or otherwise
subfranchise, subcontract, share, divide or partition this Agreement, and nothing in this
Agreement will be construed as granting Developer the right to do so.
7.3 Assignment by Developer
7.3.1 This Agreement has been entered into by Company in reliance upon and in consideration
of the individual or collective character, reputation, skill, attitude, business ability, and financial
capacity of Developer or, if applicable, its Owners who will actively and substantially participate
in the development, ownership and operation of the “Clean A Can” Service Units. Accordingly,
except as otherwise may be permitted herein, neither Developer nor any of Developer’s Owners
shall directly or indirectly sell, assign, transfer, convey, give away, pledge, mortgage, or
otherwise encumber any direct or indirect interest in this Agreement or in all or substantially all
of Developer’s assets, voluntarily or involuntarily, in whole or in part, by operation of law or
otherwise (an “Assignment”), without Company’s prior written consent, which consent may be
withheld for any reason whatsoever in Company’s sole subjective judgment.
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7.3.2 If Developer is a Business Entity, each of the following shall be deemed to be an
Assignment of this Agreement: (i) the sale, assignment, transfer, conveyance, gift, pledge,
mortgage, or other encumbrance of 50% or more in the aggregate, whether in one or more
transactions, of the assets, capital stock, membership interests or voting power of Developer, by
operation of law or otherwise; (ii) the issuance of any securities by Developer which itself or in
combination with any other transaction(s) results in the Owners existing as of the Effective Date,
owning 50% or less of the outstanding shares, membership interests or voting power of
Developer as constituted as of the date hereof; (iii) if Developer is a Partnership, the withdrawal,
death or legal incapacity of a general partner or limited partner owning 50% or more of the voting
power, property, profits or losses, or partnership interests of the Partnership (each of which is
referred to hereinafter as a “Partnership Right”), or the admission of any additional general
partner or the transfer by any general partner of any of its Partnership Rights in the Partnership;
(iv) the death or legal incapacity of any Owner owning 50% or more of the capital stock, voting
power, or Partnership Rights of Developer; and (v) any merger, stock redemption, consolidation,
reorganization, recapitalization or other transfer control of the Developer, however effected.
7.3.3 Developer shall not in any event have the right to pledge, encumber, hypothecate or
otherwise give any third party a security interest in this Agreement in any manner whatsoever
without the express prior written permission of Company, which permission may be withheld for
any reason whatsoever in Company’s sole subjective judgment.
7.4 Individual Franchise Agreements
Developer shall not execute any Franchise Agreement, or construct or equip any “Clean A Can”
Service Units with the intent of transferring or assigning such Franchise Agreement or “Clean A
Can” Service Units. Developer acknowledges and agrees that it will not be permitted to assign
any Franchise Agreement executed pursuant to this Agreement except in conjunction with a
concurrent assignment to the same assignee of this Agreement and all of the Franchise
Agreements executed pursuant to this Agreement, and otherwise in accordance with the terms
and conditions of said Franchise Agreement(s).
8. NON-COMPETITION, NON-SOLICITATION, TRADE SECRETS
8.1 In Term
Subject to the terms and to the exceptions, if any, explicitly set forth in Exhibit “D” hereto,
during the Term, neither Developer, nor any officer, director, or direct or indirect Owner of a
Developer which is a Business Entity, shall in any capacity, either directly or indirectly, through
one or more subsidiaries or affiliated companies engage in any Competitive Activities, at any
location, whether within or outside the Development Area, unless Company shall consent thereto
in writing; provided that, with Company’s prior written consent, which Company will not
unreasonably withhold, Developer or any Owner, officer or director of Developer may own and
operate one or more trash & garbage can cleaning Units, or any other similar service or product
business, which sells trash & garbage can cleaning services, or similar services and products if
and for so long as such Units, or trash & garbage can cleaning service business or product, does
not derive 20% or more of its gross revenues from the sale of trash & garbage can cleaning
service related products and equipment, or any of them, during any day part.
8.2 Post-Term
Subject to the terms and to the exceptions, if any, explicitly set forth in Exhibit “D”, to the extent
permitted by Applicable Law, upon the expiration or termination of this Agreement, or if
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Developer shall make any Assignment to any person or Business Entity, or if any Owner, officer
or director of Developer shall terminate his or her relationship with Developer, then for a period
of 24 months thereafter, such terminating Owner, officer or director, if applicable, or in the case
of expiration, termination or Assignment, Developer, and each officer, director, and direct or
indirect Owner of Developer shall not in any capacity, either directly or indirectly, through one or
more subsidiaries or affiliated companies, engage in any Competitive Activities, (i) within the
Development Area, (ii) within the County in which any “Clean A Can” Service Units operated by
Developer is located, or (iii) within an area within ten (10) miles from the location or any then
existing “Clean A Can” Service Units, without the Company’s prior written consent. In applying
for such consent, Developer will have the burden of establishing that any such activity by it will
not involve the use of benefits provided under this Agreement or constitute unfair competition
with Company or other franchisees or area developers of the Company; provided that, with
Company’s prior written consent, which Company will not unreasonably withhold, Developer or
any Owner, officer or director of Developer may own and operate one or more trash & garbage
can cleaning service units, or any other service establishment, which sells trash & garbage can
cleaning service products if and for so long as such trash & garbage can cleaning service units, or
service establishment, does not derive 20% or more of its gross revenues from the sale of trash &
garbage can cleaning services, and related products and equipment, or any of them, during any
day part.
8.3 Modification
The parties have attempted in Sections 8.1 and 8.2 above to limit the Developer’s right to
compete only to the extent necessary to protect the Company from unfair competition. The parties
hereby expressly agree that if the scope or enforceability of Section 8.1 and 8.2 is disputed at any
time by Developer, a court or arbitrator, as the case may be, may modify either or both of such
provisions to the extent that it deems necessary to make such provision(s) enforceable under
Applicable Law. In addition, the Company reserves the right to reduce the scope of either, or
both, of said provisions without Developer’s consent, at any time or times, effective immediately
upon notice to Developer.
8.4 Personnel
8.4.1 During the Term of this Agreement, Developer shall not, without the prior written consent
of Company, directly or indirectly: (a) employ or attempt to employ any person who at that time
is employed by Company, an affiliate of Company, or any other franchisee or area developer,
including, without limitation, any Unit operator, assistant Unit operator (“Personnel”); (b) employ
or attempt to employ any Personnel who within six (6) months prior thereto had been employed
by Company, an affiliate of Company, or any other franchisee or area developer; or (c) induce or
attempt to induce any Personnel to leave his or her employment with Company, an affiliate of
Company, or any other franchisee or area developer.
8.4.2 The prohibitions set forth in Section8.4.1 above shall also apply during the one (1) year
period after the expiration or termination of this Agreement.
8.4.3 During the Term of this Agreement, Company shall not, without the prior written consent
of Developer, directly or indirectly: (a) employ or attempt to employ any person who at that time
is employed by Developer or an affiliate of Developer; or (b) induce or attempt to induce any
person to leave his or her employment with Developer or an affiliate of Developer.
8.5 Trade Secrets
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8.5.1 Company possesses and continues to develop, and during the course of the relationship
established hereunder, Developer shall have access to, proprietary and confidential information,
including processes, specifications, procedures, concepts and methods and techniques of
developing, marketing and operating trash & garbage can cleaning services, Units and other
outlets featuring trash & garbage can cleaning services and products (the “Trade Secrets”).
Certain of the Trade Secrets may be disclosed to Developer in Operating Manuals, bulletins,
supplements, confidential correspondence, or other confidential communications, and through the
Company’s training program and other guidance and management assistance, and in performing
Company’s other obligations and exercising Company’s rights under this Agreement or the
Franchise Agreements executed pursuant hereto. “Trade Secrets” shall not include information
which: (a) has entered the public domain or was known to Developer prior to Company’s
disclosure of such information to Developer, other than by the breach of an obligation of
confidentiality owed (by anyone) to Company; (b) becomes known to Developer from a source
other than Company and other than by the breach of an obligation of confidentiality owed (by
anyone) to Company; or (c) was independently developed by Developer without the use or
benefit of Company’s Trade Secrets. The burden of proving the applicability of the foregoing will
reside with Developer.
8.5.2 Developer shall acquire no interest in the Trade Secrets other than the right to use them in
developing and operating “Clean A Can” Service Units pursuant to the Franchise Agreements
executed pursuant to Section 6.1 during the Term thereof. Developer’s duplication or use of the
Trade Secrets in any other endeavor or business shall constitute an unfair method of competition.
Developer shall: (i) not use the Trade Secrets in any business or other endeavor other than in
connection with such “Clean A Can” Service Units; (ii) maintain absolute confidentiality of the
Trade Secrets during and after this Agreement’s Term; (iii) make no unauthorized copy of any
portion of the Trade Secrets, including without limitation, all or any part of the Manuals,
bulletins, supplements, confidential correspondence, or other confidential communications,
whether written or oral; and (iv) operate and implement all reasonable procedures prescribed
from time to time by Company to prevent unauthorized use and disclosure of the Trade Secrets,
including without limitation, restrictions limiting disclosure to certain employees and use of non-
disclosure and non-competition provisions as Company prescribes in employment agreements
with employees who may have access to the Trade Secrets. Promptly upon Company’s request,
Developer shall deliver executed copies of such agreements to Company. The provisions of this
Section 8.5 shall be in additional to and not in lieu of any other confidentiality obligation of
Developer, or any other person, whether pursuant to another agreement, or pursuant to Applicable
Law.
8.6 Developer’s Affiliates
For purposes of this Article only, “Developer” shall mean and include the individual Developer;
Developer’s spouse and minor children and its Owners, officers and directors if Developer is a
Business Entity and Developer shall, except as Company may otherwise agree, cause each such
person to acknowledge and agree to be bound by the provisions of Section 8.1 through 8.5. The
provisions of this Article shall not limit, restrain or otherwise affect any right or cause of action
which may accrue to Company for any infringement of, violation of, or interference with, this
Agreement, or Company’s Marks, System, trade secrets, or any other proprietary aspects of
Company’s business.
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9. TERMINATION
9.1 Termination Pursuant to a Material Breach of This Agreement
This Agreement may be terminated by Company in the event of any material breach by
Developer of this Agreement, unless such default is cured by Developer within 15 days following
written notice of the default (or 5 days in the case of a default in the payment of money);
provided that the following defaults shall be deemed incurable: (i) any attempt by Developer to
make any Assignment in violation of the terms of this Agreement, or without the written consents
required, pursuant to this Agreement; (ii) failure of Developer to meet the Minimum
Development Obligation; and (iii) any violation by Developer of Article 8.
9.2 Termination by Reason of a Material Breach of Other Agreement
This Agreement may be terminated, at the election of Company, in the event of the termination
by reason of a material breach by Developer of an individual Franchise Agreement or any other
agreement between Company and Developer, subject to the notice and the opportunity to cure, if
any, specified in the Franchise Agreement or other such agreement.
9.3 Effect of Termination
Upon the expiration of the Term, or upon the prior termination of this Agreement:
9.3.1 Developer shall have no further right to commission, equip, own, or operate additional
“Clean A Can” Service Units which are not, at the time of such termination or expiration, the
subject of a then existing Franchise Agreement between Developer and Company which is in full
force and effect; and
9.3.2 Company and its affiliates may commission, equip, operate, or franchise or license others
to commission, equip, own or operate “Clean A Can” Service Units in the Development Area,
except as may be expressly provided to the contrary in any Franchise Agreement executed
pursuant to this Agreement.
10. BUSINESS ENTITY DEVELOPER
10.1 Business Entity Developer
If Developer is a Business Entity, the following provisions will apply:
10.1.1 Developer represents and warrants that the information set forth in Exhibit “C” which is
annexed hereto and by this reference made a part hereof, is accurate and complete in all material
respects.
10.1.2 Developer shall notify Company in writing within ten (10) days of any change in the
information set forth in Exhibit “C”.
10.1.3 Developer promptly shall provide such additional information as Company may from
time to time request concerning all persons who may have any direct or indirect financial interest
in Developer.
10.2Limitation on Activities
If Developer is a Business Entity, all of Developer’s organizational documents (including articles
of partnership, partnership agreements, articles of incorporation, bylaws, shareholders’
agreements, trust instruments, or their equivalent) will provide that the issuance and transfer of
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any interest in Developer is restricted by the terms of this Agreement, and that the sole purpose
for which Developer is formed (and the sole activity in which Developer is or will be engaged) is
the development and operation of “Clean A Can” Service Units, pursuant to one or more area
development agreements and one or more franchise agreements from Company. Developer will
submit to Company, upon the execution of this Agreement, a resolution of Developer (or its
governing body) confirming that Developer is in compliance with this provision.
10.3Guaranty and Subordination Agreement
Upon the execution of this Agreement, upon each transfer of an interest in Developer, and at any
other time upon Company’s request, all holders of a 10% or greater interest in Developer will
execute a written agreement in the form of Exhibit “E”, personally guaranteeing, jointly and
severally, with all other holders of a 10% or greater interest in Developer, the full payment and
performance of Developer’s obligations to Company and to Company’s affiliates.
11. GENERAL CONDITIONS AND PROVISIONS
11.1 Relationship of Developer to Company
It is expressly agreed that the parties intend by this Agreement to establish between Company and
Developer the relationship of franchisor and franchisee. It is further agreed that Developer has no
authority to create or assume in Company’s name or on behalf of Company, any obligation,
express or implied, or to act or purport to act as agent or representative on behalf of Company for
any purpose whatsoever. Neither Company nor Developer is the employer, employee, agent,
partner or co-venturer of or with the other, each being independent. Developer agrees that he will
not hold himself out as the agent, employee, partner or co-venturer of Company. All employees
hired by or working for Developer shall be the employees of Developer and shall not, for any
purpose, be deemed employees of Company or subject to Company control. Each of the parties
agrees to file its own tax, regulatory and payroll reports with respect to its respective employees
and operations, saving and indemnifying the other party hereto of and from any liability of any
nature whatsoever by virtue thereof.
11.2 Indemnity by Developer
Developer hereby agrees to protect, defend and indemnify Company, and all of its past, present
and future direct and indirect Owners, subsidiaries, affiliates, officers, directors, employees,
attorneys and designees and hold them harmless from and against any and all costs and expenses,
including attorneys’ fees, court costs, losses, liabilities, damages, claims and demands of every
kind or nature on account of any actual or alleged loss, injury or damage to any person or
Business Entity or to any property arising out of or in connection with Developer’s operation of
“Clean A Can” Service Units pursuant hereto, except to the extent resulting from the negligence
or intentional misconduct of Company.
11.3 Limitation of Liability
11.3.1 Company shall not be liable to Developer for any consequential damages, including but
not limited to lost profits, interest expense, increased construction or occupancy costs, or other
costs and expenses incurred by Developer by reason of any delay in the delivery of Company’s
Offering Circular or Commissioning Letter caused by legal incapacity during the Term, events
beyond Company’s reasonable control, or other conduct not due to the gross negligence or
misfeasance of Company.
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11.3.2 In the event of the termination of this Agreement solely by reason of Developer’s breach
of its Minimum Development Obligation, Company shall waive its right to recover lost profits on
account of the undeveloped “Clean A Can” Service Units on condition that Developer shall abide
by its obligations under Article 8. This Section 11.3.2 shall not otherwise limit any other remedy
available to Company at law or in equity, nor limit the recovery of damages to Company, except
as provided herein.
11.4 Waiver and Delay
No waiver by Company of any breach or series of breaches or defaults in performance by
Developer, and no failure, refusal or neglect of Company to exercise any right, power or option
given to it hereunder or under any other franchise agreement between Company and Developer,
whether entered into before, after or contemporaneously with the execution hereof (and whether
or not related to the “Clean A Can” Service Units) or to insist upon strict compliance with or
performance of Developer’s obligations under this Agreement or any Franchise Agreement
between Company and Developer, whether entered into before, after or contemporaneously with
the execution hereof (and whether or not related to the “Clean A Can” Service Units), shall
constitute a waiver of the provisions of this Agreement with respect to any subsequent breach
thereof or a waiver by Company of its right at any time thereafter to require exact and strict
compliance with the provisions thereof.
11.5 Survival of Covenants
The covenants contained in this Agreement which, by their terms, require performance by the
parties after the expiration or termination of this Agreement shall be enforceable notwithstanding
said expiration or other termination of this Agreement for any reason whatsoever.
11.6 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of
Company and shall be binding upon and inure to the benefit of Developer and his or their
respective heirs, executors, administrators, successors and assigns, subject to the prohibitions
against Assignment contained herein.
11.7 Joint and Several Liability
If Developer consists of more than one person or business entity, or a combination thereof, the
obligations and liabilities of each such person or business entity to Company are joint and
several.
11.8 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, without giving effect to any conflict of laws, excepting however the provisions of Article
8 which shall be construed and enforced in accordance with the laws of the State where the
breach of said Section occurs.
THE PARTIES HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY DISPUTE ARISING UNDER THIS AGREEMENT, AND THEY AGREE THAT,
EXCEPT TO THE EXTENT PROHIBITED BY LAW, OSCEOLA COUNTY, FLORIDA
SHALL BE THE VENUE FOR ANY LITIGATION ARISING UNDER THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE REVIEWED THIS SECTION AND
HAVE HAD THE OPPORTUNITY TO SEEK INDEPENDENT LEGAL ADVICE AS TO ITS
MEANING AND EFFECT.
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11.9 Entire Agreement
This Agreement and the Exhibits incorporated herein contain all of the terms and conditions
agreed upon by the parties hereto concerning the subject matter hereof. No other agreements
concerning the subject matter hereof, written or oral, shall be deemed to exist or to bind any of
the parties hereto and all prior agreements, understandings and representations, are merged herein
and superseded hereby. Developer represents that there are no contemporaneous agreements or
understandings between the parties relating to the subject matter of this Agreement that are not
contained herein. No officer or employee or agent of Company has any authority to make any
representation or promise not contained in this Agreement or any Offering Circular or
Commissioning Letter for prospective franchisees required by Applicable Law, and Developer
agrees that he has executed this Agreement without reliance upon any such representation or
promise. This Agreement cannot be modified or changed except by written instrument signed by
all of the parties hereto.
11.10 Titles For Convenience
Article and paragraph titles used in this Agreement are for convenience only and shall not be
deemed to affect the meaning or construction of any of the terms, provisions, covenants, or
conditions of this Agreement.
11.11 Gender And Construction
All terms used in any one number or gender shall extend to mean and include any other number
and gender as the facts, context, or sense of this Agreement or any article or paragraph hereof
may require. As used in this Agreement, the words “include”, “includes” or “including” are used
in a non-exclusive sense. Unless otherwise expressly provided herein to the contrary, any
consent, approval or authorization of Company which Developer may be required to obtain
hereunder may be given or withheld by Company in its sole discretion, and on any occasion
where Company is required or permitted hereunder to make any judgment or determination,
including any decision as to whether any condition or circumstance meets Company’s standards
or satisfaction, Company may do so in its sole subjective judgment.
11.12 Severability
Nothing contained in this Agreement shall be construed as requiring the commission of any act
contrary to law. Whenever there is any conflict between any provisions of this Agreement and
any present or future statute, law, ordinance or regulation contrary to which the parties have no
legal right to contract, the latter shall prevail, but in such event the provisions of this Agreement
thus affected shall be curtailed and limited only to the extent necessary to bring it within the
requirements of the law. In the event that any part, article, paragraph, sentence or clause of this
Agreement shall be held to be indefinite, invalid or otherwise unenforceable, the indefinite,
invalid or unenforceable provision shall (subject to Section 8.3) be deemed deleted, and the
remaining part of this Agreement shall continue in full force and effect.
11.13 Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which together shall be deemed to be one and the same instrument.
11.14 Fees and Expenses
Should any party hereto commence any action or proceeding for the purpose of enforcing, or
preventing the breach of, any provision hereof, whether by arbitration, judicial or quasi-judicial
action or otherwise, or for damages for any alleged breach of any provision hereof, or for a
declaration of such party’s rights or obligations hereunder, then the prevailing party shall be
112
reimbursed by the losing party for all costs and expenses incurred in connection therewith,
including, but not limited to, reasonable attorneys’ fees for the services rendered to such
prevailing party.
11.15 Notices
Except as otherwise expressly provided herein, all written notices and reports permitted or
required to be delivered by the parties pursuant hereto shall be deemed so delivered at the time
delivered by hand, one (1) business day after confirmed transmission by facsimile or other
electronic system (with confirmation copy sent by regular U.S. Mail), or three (3) business days
after placement in the United States Mail by Registered or Certified Mail, Return Receipt
Requested, postage prepaid and addressed as follows:
If to Company:
OK Franchise Group, Inc.
1506 Kelley Ave, Suite 2
Kissimmee
Florida 34744
Attention: President Franchise Sales
Facsimile No.: (407) 505-2030
If to Developer:
Facsimile No.: ( )
With Copy to:
Facsimile No.: ( )
or to such other address as such party may designate by ten (10) days’ advance written notice to
the other party.
12. SUBMISSION OF AGREEMENT
12.1 General
The submission of this Agreement does not constitute an offer and this Agreement shall become
effective only upon the execution thereof by Company and Developer.
13. ACKNOWLEDGMENT
13.1 General
113
Developer, and its Owners, jointly and severally acknowledge that they have carefully read this
Agreement and all other related documents to be executed concurrently or in conjunction with the
execution hereof, that they have obtained the advice of counsel in connection with entering into
this Agreement, that they understand the nature of this Agreement, and that they intend to comply
herewith and be bound hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of
the first date set forth above.
ACCEPTED on this [ day of [ , ].
COMPANY:
OK Franchise Group, Inc.
By:
Its:
DEVELOPER:
By:
Its:
an Individual
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114
EXHIBIT A
DEVELOPMENT AREA
1.
2.
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115
EXHIBIT B
MINIMUM DEVELOPMENT OBLIGATIONS
Development
Period
Ending
Cumulative Number of
“Clean A Can” Service Unit
to be in Operation
1 , 20
2 , 20
3 , 20
4 , 20
5 , 20
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116
EXHIBIT C
DEVELOPER INFORMATION
Developer is a (check as applicable):
Corporation Limited Partnership Limited Liability Company
General Partnership Other (specify): …………………………………
The name and address of each Owner of Developer is:
NAME ADDRESS
NUMBER OF
SHARES OR
PERCENTAGE
INTEREST
There is set forth below the name and address of each director, member, or general partner, as
applicable, of Developer:
NAME ADDRESS
There is set forth below the names, and addresses and titles of Developer’s principal officers or
partners who will be devoting their full time to the “Clean A Can” Service Unit(s):
NAME ADDRESS
The address where Developer’s Financial Records, and Business Entity records (e.g. Articles of
Incorporation, Bylaws, Operating Agreement, Partnership Agreement, etc.) are maintained is:
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EXHIBIT D
EXCEPTIONS TO SECTION 8.1
If no exceptions are inserted above and initialed by both parties, no exceptions apply. If any
exception is described above, it is limited to the identified business as it exists on the Effective
Date of this Agreement and does not extend to or include any material change made to the
business after the Effective Date, including any change in the menu or products or services
featured by the business. In no event shall any identified exception include any business if (a) its
sales of trash & garbage can services and products, or any of them, exceeds 20% during any day
part, or (b) its sales of products exceeds 9% of all revenues derived by the business during any
day part, or (c) 85% or more of such business’ total service sales are comprised of non-services.
By way of illustration, and not limitation, even if a route is identified above, the exception will be
void if the route’s sales of services or goods exceed the stated thresholds, whether on the
Effective Date, or by reason of a subsequent change in the route’s set-up or marketing.
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118
EXHIBIT E
GUARANTY AND SUBORDINATION AGREEMENT
SPOUSAL CONSENT
Each of the undersigned, each being the spouse or legal partner of an individual who executed
this Agreement as Developer (or if Developer is a partnership, a spouse of a general partner),
consents to all of the terms of this Agreement and the execution thereof, and agrees not to assist
any person who is a party to this Agreement to violate any of that party’s duties under this
Agreement.
By: Dated:
By: Dated:
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119
EXHIBIT F
NOTARY FORM
For witnessing or attesting a signature:
State of _________________________________________________
(County) of______________________________________________
Signed or attested before me on (date) by (name(s) of person(s)
_______________________________________________________
_______________________________________________________
(Signature of notarial officer)
(Seal, if any)
_______________________________________________________
(Name - typed, stamped, or printed)
_______________________________________________________
Title (and Rank)
_______________________________________________________
(Residing at)
My commission expires: _________________________________
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120
EXHIBIT E
EQUIPMENT HIRE AGREEMENT
THIS AGREEMENT IS SUPPLIED SEPARATELY
121
EXHIBIT F
FINANCIAL STATEMENTS
The following consolidated financial statements are for the last two fiscal years for the national and international OK Franchise Group of companies.
OK FRANCHISE GROUP
BALANCE SHEET
As at December 31 2016
2016 2015 $ $ $ $ Fixed Assets Tangible assets 660,904 660,904 Current Assets Debtors 346,442 464,322 Deposits and Cash 2,819 5,918 Bank Account 25,078 29,018 Returns 0 7,204 374,339 506,462 Current Liabilities Creditors : Short Term (354,018) (405,318) Loans (98,256) (102,356) (452,274) (510,674) Current Assets less Current Liabilities (77,935) (4,212) Total Assets less Current Liabilities 582,969 656,692 Long Term Liabilities (13,589) (9,358) Total Assets less Total Liabilities 569,380 647,334 Capital & Reserves Share Capital 195,796 195,796 P&L Account 20,522 4,515 Previous Year 353,062 447,023 569,380 647,334
These financial statements were approved and signed by the director on December 31 2016.
K M Lloyd.
MR K LLOYD
President
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EXHIBIT G
FRANCHISEES ROSTER
C = Clean A Can W = Wheelie Bin S = Southern Hydraulics Mobile V = Veteran
USA FIRST NAME LAST NAME UNITS LOCATION TELEPHONE
C Tracy Evans 1 3011 N Stewart Street, Kissimmee, Florida 34746, UNITED STATES +1 (407) Ask for details
C Charlie Johnson 1 2603 Forest Drive, Moody, Alabama 35004, UNITED STATES +1 (205) Ask for details
C (V) Gareth Lloyd 1 411 Oakpoint Circle, Davenport, Florida 33837, UNITED STATES +1 (863) Ask for details
S Shawn Faust 2 1506 Kelley Ave, Suite 2, Kissimmee, Florida 24744, UNITED STATES +1.(407) Ask for details
UK NAME SURNAME UNITS LOCATION TELEPHONE
W Ian Bundle 2 167 Gander Green Lane, Sutton SM1 2EZ, ENGLAND +44 (0)208-Ask for details
W Jose Goncalves 1 50 Sycamore Drive, East Grinstead, Surry RH19 3UL, ENGLAND +44 (0)776-Ask for details
W Wayne Davis 1 Somerset, 5 Grainger Close, Westbury, Buckinghamshire NN13 5YA, ENGLAND +44 (0)128-Ask for details
W (V) Llewellyn Lloyd 1 1 Samian Crescent, Folkestone, Kent CT19 4JW, ENGLAND +44 (0)130-Ask for details
W Sharon Inwood 1 46 Cotswold Avenue, New Duston, Northampton NN5 6DR, ENGLAND +44 (0)791-Ask for details
W (V) Paul Evans 1 12 Sedgemoor Court, Lang Farm, Daventry, Northhants NN1 5WR, ENGLAND +44 (0)132-Ask for details
W Mark Earle 2 38 Farmleigh Gardens, Great Sankey, Warrington WA5 3FA, ENGLAND +44 (0)192-Ask for details
W Steve Carr 1 260 Donvale Road, Washington, Newcastle NE37 1DY, ENGLAND +44 (0)186- Ask for details
W Howard Fox 2 The Bury Farm, Weston Under Redcastle, Shropshire SY4 5JY, ENGLAND +44 (0)163-Ask for details
W Jeremy Evans 1 4 Tandorna Drive, Telford, Shropshire TF3 1QP, ENGLAND +44 (0)195-Ask for details
W (V) Jim Byers 1 46 Feering Hill, Feering, Essex CO5 9NL , ENGLAND +44 (0)137-Ask for details
W Mark Redman 1 66 Beechen Drive Fishponds Bristol BS16 4BY, ENGLAND +44 (0)117-Ask for details
W Justin Bolter 1 Lewis Arms, Heol Goch, Pentyrch, Mid Glamorgan CF15 8PN, WALES +44 (0)773-Ask for details
W David Thorn 1 4 Lansbury Crescent, Dartford, Kent, DA1 5DG, ENGLAND +44 (0)132-Ask for details
W Martin Hunt 1 50 Snake Lane, Alvechurch, Birmingham B48 7NL, ENGLAND +44 (0)121-Ask for details
W Simon Bennett 1 33 Hilcot Green, Thorpe Astley, Leicester LE3 3SX, ENGLAND +44 (0)116-Ask for details
W Gordon Bunyan 1 7 Knightsbridge Crescents, Stirchley, Telford, Shoeshine TF3 1BN, ENGLAND +44 (0)797-Ask for details
W Derek Phillips 1 76 St Marys Walk, Acklam, Middlesborough TS5 7SD, ENGLAND +44 (0)164-Ask for details
W David Holdsworth 1 29 Greenside Road, Mirfield, West Yorkshire WF14 0AS, ENGLAND +44 (0)192-Ask for details
W Jeremy Rawlins 2 Barmon, Normans Green, Plymtree, Cullompton, Devon EX15 2LA, ENGLAND +44 (0)188-Ask for details
W Nick Coome 1 42 Coleridge Court, Star Pitton Lane West, Toquay TQ2 8BL, ENGLAND +44 (0)180-Ask for details
W Richard Brennan 2 15 Melbourne Road, Bishopston, Bristol BS7 8LA, ENGLAND +44 (0)117-Ask for details
W Tricia Hampton 3 Bullions Cottage, Bullions Farm, Arith, Falkirk, FK2 8SB, SCOTLAND +44 (0)132-Ask for details
W Ian Fairgreive 1 11 Marketgate, Orminstone, East Lothian, EH35 5LS, SCOTLAND +44 (0)187-Ask for details
W Duncan Stewart 2 29 The Braies, Clayton Park, St Andrews, Fife KY16 9YE, SCOTLAND +44 (0)133-Ask for details
W Chris Lloyd 2 28 Sevenoaks Road, Ely Cardiff CF5 4PY, WALES +44 (0)292-Ask for details
W Phil David 1 7 Coity Road, Bridgend, South Glamorgan, WALES +44 (0)774-Ask for details
W Susan Watkins 1 92 Vivian Park Drive, Port Talbot, West Glamorgan SA12 6RP, WALES +44 (0)163-Ask for details
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EXHIBIT H
FRANCHISEES WHO LEFT THE SYSTEM
C = Clean A Can W = Wheelie Bin S = Southern Hydraulics V = Veterans
UK FIRST NAME LAST NAME UNITS LOCATION TELEPHONE
W Adrian Bourne 1 38 Teal Way, Iwade, Sittingbourne, Kent ME9 8QU, ENGLAND +44 (0)179-Ask for details
W (V) Jim Byers 1 46 Feering Hill, Feering, Essex CO5 9NL , ENGLAND +44 (0)137-Ask for details
W Emily Way 1 Fittleton House, Fittleton, Salisbury, Wiltshire SP4 9QA, ENGLAND +44 (0)1980-Ask for details
W Steph Conway 2 46 Mitchels Avenue, Tralee, County Kerry, IRELAND +00353-567-Ask for details
W Jane England 1 16 East Carlton Park, Market Harborough, Leicester LE16 8YD, ENGLAND +44 (0)153-Ask for details
W Tony Hart 1 53 Kithill, Crewkern, Somerset TA18 8HY, ENGLAND +44 (0)146-Ask for details
124
A MEMBER OF THE
OK FRANCHISE GROUP
125
EXHIBIT I
OPERATIONS MANUAL TABLE OF CONTENTS
“CLEAN A CAN”
TABLE OF CONTENTS 1. Introduction 2. Franchise License 3. Health & Safety 4. Equal Opportunities 5. Accounting 6. Recruitment 7. Training 8. Quality Control 9. Operating 10. Equipment & Supplies 11. Regulations 12. Example Documents
ONLY AVAILABLE TO FRANCHISEES