Franchise Agreement
The original documents were scanned as an image. The original file can be downloaded at the link above.
Sample Franchise Agreement
i9 SPORTS® FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (this "Agreement") is effective as of ______________________, 200 (the "Agreement Date"), between i9 SPORTS CORPORATION
("we," "us" or "our"), whose principal place of business is located at 1723 South Kings Avenue,
Brandon, Florida 33511, and___________________________________"you" or "your), whose address
is___________________________________________(collectively, you and we are referred to as the
"parties" and individually sometimes referred to as a "party").
1. INTRODUCTION
1.1 The i9 Sports® System. We are granting franchises to qualified and capable candidates who want to operate businesses which utilize our System, the Copyrights and Marks to operate, market, sell and provide to others adult or youth, amateur sports leagues, tournaments, sports clinics, social activities, products and related services (each a " i9 Sports® Franchise" or collectively, "i9 Sports® Franchises"). i9 Sports® Franchises sell, render, perform or provide to either Adults or Youths (or both) amateur sports leagues, tournaments, sporting related camps, umpire/officials training, sporting clinics, sport related training programs, sport or social activities, and related services that we designate or approve (as applicable, the "Services") and market and sell to Adults or Youths (or both), as we designate, related products that we designate or approve, like uniforms, T-shirts, jackets, shorts, trophies, hats, caps, visors, sporting equipment, beverages and food, and other products we designate or approve from time to time (the "Products"). i9 Sports® Franchises use our distinctive formats, methods, policies, procedures, league systems, standards, specifications, information, e-commerce systems, methods for affiliation with public and private sector organizations, Computer System and Software, automated registration program, training and business relationships, all of which we, in our sole judgment, may change, alter, amend, further improve, discontinue, develop or otherwise modify from time to time (collectively, the "System").
We own, use, promote and license, or may own use, license or promote certain: trademarks, service marks (e.g., i9 Sports® and Amateur Ballplayers Association55"), logos, designs, artwork; e-names; and other commercial symbols in the operation of i9 Sports® Franchises (collectively, the "Marks"). i9 Sports® Franchises also utilize, in a manner we designate or approve, certain materials and other ideas and information presented or reduced in or to tangible form that we designate, approve, or provide (e.g., software, writings, sound, compositions, pictures, drawings, calendars, league rules, codes, sporting and event calendars, posters, artwork, websites, designs and the like), which we have sought or may seek copyright protection in or to (the "Copyrights"). We may in the future, at any time, register, develop, change, cancel, alter, amend, further improve, discontinue, enhance or modify certain aspects of the System, the Marks or Copyrights, and we may create, use and license additional copyrights, trademarks, service marks, logos, designs, artwork, e-names and other commercial symbols in conjunction with the operation of i9 Sports® Franchises, which we may deem to be included as part of the Marks or the Copyrights.
You want to acquire the right to operate an i9 Sports® Franchise, using the System, the Copyrights and the Marks, and act as our independent representative, to market, sell or distribute the Products and to market, sell, provide, render or perform the Services for participants, purchasers and others we identify and target from time to time ("Customers") primarily in connection with events or activities of the type, or relating to amateur "Youth" or "Adult" sports leagues, tournaments, clinics, games, training or conditioning programs and, other recreational leagues, sporting or social events, tournaments and the like that we designate or approve in connection with the sale or distribution of the Products or the Services (collectively, "Events"). We limit both: the number and type of sports authorized for such Events (and the Products and Services associated with them) (collectively, the
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"Authorized Sports"), and the type of Customers you may offer them to (i.e., Adult, Youth, or both); depending on the amount of your Initial Fee. We grant to persons who meet our qualifications and are willing to undertake the investment and effort the right to own and operate an i9 Sports® Franchise using the System, the Copyrights and the Marks. "Adult" means persons who are age 18 or over. "Youth" means a person below the age of 18.
The business you conduct as an i9 Sports® Franchise is referred to as your or the "i9 Sports® Franchise." You recognize our legitimate business interest in preserving the Customer base for the Products and the Services and the associated Customer goodwill, as well as our relationships with other i9 Sports® Franchises, suppliers, Customer-affiliated organizations, designees or affiliates. This Agreement contains the terms and conditions of your performance as one of our i9 Sports® Franchises and our obligations to you.
1.2 Acknowledgments. This Agreement is being presented to you because you expressed the desire to own and operate an i9 Sports® Franchise. You understand that the terms of this Agreement are reasonably necessary to maintain our high standards of quality and service and the uniformity of those standards at all i9 Sports® Franchises, and to protect and preserve the goodwill of the Marks, the Copyrights and the System. In signing this Agreement, you acknowledge:
(a) the importance of operating your i9 Sports® Franchise in strict conformity with our standards;
(b) that you have conducted an independent investigation of your i9 Sports® Franchise and recognize that, like any other businesses, their nature may evolve and change over time;
(c) that an investment in an i9 Sports® Franchise involves business risks,
(d) that the success of this business venture is primarily dependent on your business abilities and efforts;
(e) in all of their dealings with you, our officers, directors, employees and agents act only in their representative, not in an individual, capacity. All business dealings between you and us and such persons in connection with entering into or as a result of this Agreement are solely between you and us;
(f) any information you acquire from other i9 Sports® Franchises relating to their sales, profits or cash flows does not constitute information obtained from us, nor do we make any representation as to the accuracy of such information;
(g) we have advised you to have this Agreement and our Franchise Offering Circular reviewed and explained to you by an attorney and your business advisors.
2. APPOINTMENT, TERM AND LOCATION
2.1 Appointment. We grant to you a franchise (the "Franchise") during the Term:
(a) to own and operate an i9 Sports® Franchise using the System, the Marks, and the Copyrights in accordance with our System Standards, to market, sell and distribute the Products and to market, sell, perform, render or provide the Services for the type of Customers, and for the type of sports we designate located where the Services will be rendered, provided or performed
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within or where the Products will be delivered in the geographic area within the following counties or Zip Code areas as follows:_____________________________________________
_________________________________________________________________(the "Network
Area"). Check box D if map or additional description is attached.
(b) You are granted the Franchise to offer or sell Products or to provide, produce, perform, or render Services for only the following types of Customers (i.e., Adult, Youth, or both) and for only the following Authorized Sports:
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Authorized Snorts |
Customer TvDe |
2.2 Additional Customer Types or Sports. Your i9 Sports® Franchise is limited to the type of Customers and to Events offering only the Authorized Sports shown above. If you wish to add additional Authorized Sports to the types of Events we permit you to offer, or add additional types of Customers, you must request to do so in writing. Within 30 days of such notice, we will notify you in writing if we decide, in our sole judgment, to grant you the right to offer additional sports or sell or provide services to additional types of customer(s). We have no obligation to offer you the opportunity to add other Authorized Sports or types of Customers to your Franchise. If we agree, you must execute our Sports Expansion Addendum and pay an additional fee. We may publish these fees for additional Authorized Sports in the Manuals from time to time.
2.3 Location. You must locate the offices of your i9 Sports® Franchise within your territory unless otherwise approved by us. But, you must not sell, provide, render or distribute the Products or provide the Services outside of your Network Area without our prior written consent.
2.4 Term. Your appointment to own, and operate as an i9 Sports® Franchise begins on the Agreement Date and ends on its 10lh anniversary of the Franchise (the "Term"), unless sooner terminated pursuant to this Agreement. The word "Term" means the initial time period and any renewal or extension of that time period, unless the context is otherwise.
2.5 Full Term Performance. You agree to perform your obligations under this Agreement faithfully and honestly, and to continuously exert your best efforts to promote and enhance your i9 Sports® Franchise and the System, for the full term of this Agreement. Furthermore, you agree not to engage in any other business or activity that may conflict with your obligations under this Agreement. You must not offer any other line of business, services or products without our prior written consent. You may use the Marks, the Copyrights and the System only for purposes of operating as an i9 Sports® Franchise for the marketing and sale of, and to perform, render, provide or distribute the Products and the Services in accordance with this Agreement and our System Standards.
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3. TERRITORIAL RIGHTS AND RESTRICTIONS
3.1 Exclusivity / Restrictions. During the Term, we will neither appoint another i9 Sports® Franchise, nor grant anyone else the right to, nor ourselves, operate an i9 Sports® Franchise to trade with the type of Customers for or in connection with Events offering the same Authorized Sports as you are authorized to offer: (a) located in your Network Area; (b) for which the Services are to be provided within your Network Area; or (c) where the Product is to be delivered in your Network Area. However, such restriction will not include Customers whose businesses, employment or organization to which they are affiliated with or belong have offices or Events outside of the Network Area. In return, you must not, without our prior written consent, sell, distribute, perform, render or provide the Products or the Services: to Customers for whom you are not authorized; for Events located or doing business outside of the Network Area or offering sports for which you are not authorized; or for any Services to be performed outside the Network Area. You may market the Products or Services anywhere.
3.2 Rights We Reserve. Except as described in Section 3.1 above, we retain the right, on behalf of ourselves and our affiliates, in our discretion and without granting any rights to you, to:
(a) provide, market, promote, sell or distribute, products and services authorized for i9 Sports® Franchises (either ourselves or through affiliate owned businesses or through independent contractors);
(b) operate and grant to others the right to operate i9 Sports® Franchises on such terms and conditions as we deem appropriate;
(c) operate and grant franchises to others to operate businesses, wherever located, specializing in the sale of products or provision of services other than those typically offered by an i9 Sports® Franchise and pursuant to such terms and conditions as we deem appropriate;
(d) if your Franchise is only for Youth Customers for your Authorized Sports, ourselves operate or grant to others franchises for i9 Sports® Franchises servicing Adult Customers for or in connection with those Authorized Sports or other sports, inside or outside the Network Area using the Marks, Copyrights or System;
(e) if your Franchise is only for Adult Customers for your Authorized Sports, ourselves operate or grant to others franchises for i9 Sports® Franchises servicing Youth Customers for or in connection with those Authorized Sports or other sports, inside or outside the Network Area using the Marks, Copyrights or System;
(f) we may operate ourselves or grant franchises to others to operate i9 Sports® Franchises in the Network Area offering sports for which you are not authorized at their Events (regardless of the type of Customer);
(g) operate catalog sales businesses or websites using the Marks, Copyrights or System or otherwise offering any products or services which may be delivered within or outside your Network Area;
(h) ourselves operate, or grant franchises to others to operate i9 Sports® Franchises offering, to any type of Customer, sports for which your Events are not authorized, inside or outside the Network Area, using the Marks, Copyrights or System;
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(i) ourselves operate or grant franchises to others to operate i9 Sports® Franchises servicing any type of Customer and offering any sport, outside of the Network Area, using the Marks, Copyrights or System or not using the Marks, Copyrights or System; and
(j) retain some or all of the profits derived from the sale of On-Line Retail Products
and to distribute to i9 Sports® Businesses who qualify for and participate in the OLRDP some or all of those monies on a periodic basis and according to the rules we establish for the OLRDP from time to time, in our sole judgment.
3.3 Territorial Rights. You agree that we have the right to solicit Customers located in your Network Area, whether or not you currently sell distribute, render, perform or provide the Products, the Services or other products or services to them. We may do so without violating any of your territorial rights as described in this Agreement.
4. FEES AND COMPETITION
4.1 Franchise Fee. On the Agreement Date, you must pay to us an initial franchise fee in the amount of $_________ (the "Franchise Fee"). The Franchise Fee is fully earned by us and nonrefundable when paid. In return for your payment of the Franchise Fee to us, we grant the Franchise to you, authorize you, in connection with or for Authorized Sports, to provide the Events, to offer and sell the Products, and to offer, sell, render, provide or perform the Services we authorize for the type of Customers we authorize, and provide the Initial Training.
In the States of Maryland and Minnesota only, we will defer the payment of the initial franchise fee, development fee and any other initial payment until all of our material pre-opening obligations have been satisfied, and until you open your business and it is operating. However, you must execute the Franchise Agreement prior to looking for a site or beginning training.
4.2 Population Fee. On the Agreement Date, you must pay to us a population fee in the amount of $_________(the "Population Fee"). The Population Fee is fully earned by us and nonrefundable when paid. In return for your payment of the Population Fee to us, we grant the Territory to you, authorize you, in connection with or for Authorized Sports, to provide the Events, to offer and sell the Products, and to offer, sell, render, provide or perform the Services we authorize for the type of Customers we authorize, and provide the Initial Training.
4.3 Marketing Contributions. You will contribute to it such amounts as we designate from time to time ("Marketing Contributions"), beginning 90 days following the Agreement Date. The Marketing Contribution will be $275 per month for franchisees designated as "Metropolitan Area" and $150 per month for all other franchisees. You must pay the Marketing Contributions on such date(s) (Payment Days) and in such manner and at such times as we may designate from time to time. We, at our option, may deduct them from Commissions otherwise due you or require you to pay the Marketing Contributions to us.
4.4 Billing System. We will, to the extent we designate from time to time, be responsible for and provide administrative, Customer account coordination, and commission payment services, and Product or Service ordering, billing and distribution systems as we designate from time to time in our Manuals (collectively, the "Billing System"). We may, at our option, operate the Billing System through such e-commerce methods as we designate from time to time. Accordingly, during the term of this Agreement, through the Billing System, we may handle in accordance with System Standards certain of the billing and invoicing for the Products and the Services you sell or provide through the i9 Sports® Franchise as we may designate from time to time. Any of the Products or the Services which we
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designate for sale or directly to the Customers must be reported to us in accordance with our Systems Standards. With respect to those Network Revenues we designate for our collection through the Billing System, we will exercise all reasonable efforts as we consider appropriate to collect amounts due for the Products or the Services you sell, render, provide or perform in conducting the i9 Sports® Franchise. We may utilize our experience and policies developed for i9 Sports® Franchise, compromise, settle, discount, factor, write-off, assign to collection agencies or pursue through legal action, all amounts due for services provided by you. You understand that in fulfilling this obligation, at our expense, we may use other firms or designees and supervise their performance. In general, you will enter into an agreement with each Customer under which you will agree to provide the Products and the Services, and such other services as you and the Customer mutually agree. You and the Customer or its designee will mutually agree on the fees paid to you for the sale or distribution of the Products or you're performing, rendering or providing such Services. In all instances where third parties make payments directly to you, all monies due to us relating to such Network Revenues paid to you, or which you receive in connection with the i9 Sports® Franchise, must be paid to us via electronic funds transfer in the manner we designate.
4.5 Timing and Collection. From time to time our Manuals will designate the dates of each month on which we will make payment to you of the commission that you receive from On-Line Retail Profits and other amounts due us (the "Payment Day"). We may extend the date to pay you the commission until the next business day if the Payment Day is a holiday, Saturday or Sunday. The timing and collectability of the receivables is affected by other persons and events beyond our control, including the Customers you choose to service. Some accounts are more reputable and credit-worthy than others. We do not warrant the timing or collectability of any amounts owed by anyone even if we introduce the Customer to you.
4.6 Royalty Fees. On or prior to each Payment Day during the Term, you must pay to us a fee in the amount equal to 7.5% of the Network Revenues or $375 per month, whichever is greater, of your i9 Sports® Franchise for the immediately preceding month (the "Royalty Fees") after the agreement date. The minimum royalty of Three Hundred Seventy-Five Dollars ($375) shall begin 90 days after the agreement date. We may collect this Royalty Fee directly from you or via the Billing System. For purposes of calculating the Royalty Fees only, Network Revenues do not include the monies or other remuneration you receive from the sale, lease, barter or exchange of sporting goods, uniforms and other items we designate in the Manuals from time to time as "On-Line Retail Items" (i.e., gross sales of On-Line Retail Items).
4.7 On-Line Revenues. We will permit i9 Sports® Franchisees who qualify based on the rules and policies we develop for our On-Line Revenues Distribution Program (the "OLRDP") from time to time to participate in the OLRDP. From time to time, in our sole judgment, we may designate certain sporting goods and related items sold through the on-line retail sales functionalities under the OLRDP of our website, as "On-Line Retail Products." If we do so, we may, in our sole judgment, place some or all of the profits we receive from the sale of such On-Line Retail Products into a fund (the "On-Line Revenues Fund"). The On-Line Revenues Fund is not a trust fund and we have no fiduciary duties or otherwise to you with respect to the On-Line Revenues Fund. If we maintain the On-Line Revenues Fund, we will do so only as a convenience to us for accounting purposes. We may, in our sole judgment, distribute monies in the On-Line Revenues Fund to i9 Sports® Franchisees participating in the OLRDP on a annual basis on the date we designate, and in accordance with the rules we establish from time to time for such distributions.
4.8 Network Revenues. The term "Network Revenues" means all revenue derived from operating your i9 Sports® Franchise, including, but not limited to, all amounts you or we receive in connection with your i9 Sports® Franchise at or away from the i9 Sports® Franchise from: the sale, distribution, rendering, performing or provision of the Products or the Services and any other products,
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services or activities whatsoever including any that are in any way associated with the System, Marks or Copyrights; or the use, leasing, barter or sale of any Products or Services, and whether from cash, check, barter, credit or debit card or credit transactions, including the redemption value of gift certificates redeemed by you regardless of whether such gift certificates are issued by you or someone else; but excluding: (a) all federal, state or municipal sales, use or service taxes collected from Customers and paid to the appropriate taxing authority; (b) Customer refunds, adjustments, credits and allowances actually made by the i9 Sports® Franchise; (c) complimentary Products or Services actually provided to Customers or others; (d) the value of gift certificates and the amounts paid for them; (e) the amount of over-rings, allowances, discounts to Customers, tips to employees, if approved by us (including discounts attributable to coupon sales, provided they have been included in Network Revenues); (f) isolated sales of non-inventory items or the bulk sales of the business itself; and (g) any amounts we receive from third parties indirectly related to your i9 Sports® Franchise which we designate in the Manuals as payments to us (like certain fees from Preferred Vendors under Preferred Vendor Agreements and fees from Approved Suppliers under Approved Supplier Agreements). If you participate in the OLRDP, your Network Revenues will not include revenues we or you receive in connection with the sale of On-Line Retail Products.
4.9 Event Personnel. You must pay the compensation due your Event Personnel, and other employees, subject to all conditions of this Agreement.
4.10 Post-Termination Compensation. If our relationship with you, an Event Personnel or any of your other personnel ends for any reason, we will pay you that Event Personnel or other employee all of the Commission you or they earn prior to the date of termination within 45 days of termination.
4.11 Marketing-Start-Up Fee When you sign your Franchise Agreement, you must pay us a Marketing Start-Up Fee of Four Thousand Dollars ($4,000). This fee includes business stationary, marketing materials, vinyl banners, polo and t-shirts, and items utilized at Game Day, in-person registration meetings, and promotional events.
4.12 Training Fee When you sign your Franchise Agreement, you must pay us a Training Fee of Four Thousand Dollars ($4,000). This fee includes the cost for us to train up to 2 persons and the training, travel, and accommodations for an i9 Sports Franchise Support Consultant to train in the franchisee territory
5. TRAINING
5.1 Initial Training. Prior to opening your i9 Sports® Franchise, you and up to 1 other
persons who are your employees, principal owners or independent contractors, whom you choose ("Trainees"), must attend and satisfactorily complete the initial training program we hold for our i9 Sports® Franchise owners and their staff (the "Initial Training"). As part of our Initial Training, we will provide: (a) training concerning the marketing of Events, the sale of the Products and the Services and the procedures and techniques for the advertisement, marketing or sale of the Products and the Services ("Sales Training"); and (b) training concerning the Services and the procedures and techniques for the delivery of the Products, planning, development and operation of Events, contracting of officials, league officials, coaches, and other Event Personnel, use of our automated division alignment, scheduling, league standing and statistics management systems, field permit management tools, parks and recreation programs, operation of the Billing System, and programs for awards and distribution of other benefits to customers ("Operations Training"). We provide to you and up to one of your personnel the Initial Training at a location we designate for up to 5 days of Initial Training, and one field visit in your territory for two (2) days of Field Training. Your principal owners must be among the Trainees. We provide the Initial Training and Field Training for up to 2 Trainees and are responsible for our personnel's travel and
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living expenses in connection with such Training. However, you must pay all travel expenses of the Trainees incurred in connection with such Training: including, travel, local transportation expenses and wages.
5.2 Additional or Periodic Training. We may require you, or your managers, principal owners, Event Personnel or other staff to attend additional, periodic or refresher training courses at locations we designate, from time to time ("Additional Training"). You must also give us reasonable assistance in providing Additional Training other i9 Sports® Franchises in the manner we designate from time to time. We will reimburse you your reasonable out-of-pocket expenses for assisting us with providing such Additional Training to other i9 Sports® Franchises in accordance with our System Standards. We will charge you, and you must pay to us upon our invoice to you, our then current Additional Training Fees and you are responsible for all of your and your personnel's wages, travel, living and miscellaneous expenses incurred in connection with such Additional Training. We may limit certain aspects of the training to you, your principal owners or Event Personnel and other aspects of training may be provided to all of your Trainees.
5.3 Additional Assistance. To the extent we deem appropriate, if we provide you additional assistance of the type we designate in the Manuals as subject to additional assistance fees, at any location we designate or approve in your Network Area, you will pay to us $500 per day per person we train or provide in connection with such additional advice or assistance, plus be responsible for travel, meals and lodging for them. If we provide Additional Training at any location in your Network Area, you will pay to us the fees as we designate from time to time for Additional Training, plus any travel, meals and lodging expenses incurred by the trainer(s). if we require you or your personnel to travel to a location outside of your Network Area, or if the trainer is training other i9 Sports® Franchises at the same time as your i9 Sports® Franchise, you must pay to us our then current Additional Training Fees for training outside of your Network Area or joint training. These fees are fully earned and non-refundable when paid.
6. EVENT PERSONNEL
6.1 Personnel Development. You must, in accordance with our System Standards and to the extent we designate from time to time, recruit, train and develop, as employees or independent contractors, the Event coordinators, umpires, referees, coaches, league officials, operations staff, and any other personnel as may be needed to distribute the Products or render, provide or perform the Services (the "Event Personnel"). You must not either: (a) charge Event Personnel any fee, charge or other consideration for the right to become one of your Event Personnel, for training or anything else; nor (b) pay them any consideration or compensation for recruiting other Event Personnel.
6.2 Compensation. You will decide the compensation to be paid your Event Personnel. However, any such compensation is subject to the conditions we impose under this Agreement for eligibility, chargebacks, timing of payment, National Accounts, and the like. However, we will not be responsible for payment of any Compensation to you, any sales associates, Event Personnel or other staff.
6.3 Staff Confidentiality Agreements. Your principal owners who we train, employees or managers we designate, including each of your sales personnel and Event Personnel must sign a Staff Confidentiality and Non-solicitation Agreement ("SCNA Agreement") in form and content we prescribe. Among other things, the SCNA Agreement may include: (i) provisions for automatic assignment of such agreements to us, at our option, if this Agreement is terminated; (ii) confidentiality and competitive restrictions; (iii) compensation eligibility conditions; (iv) our designation as a third party beneficiary with the right (but not the obligation) to enforce it; and (v) other terms we deem appropriate.
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6.4 Other Training. You will, in addition to the Initial Training & Field Training we provide, (a) train your Event Personnel in the manner we designate with respect to the Products and the Services and business generally, and (b) furnish support and marketing services and materials to your sales staff and Event Personnel. You must follow our System Standards for and implement, at your expense, the training programs we designate from time to time for the training of Customers (or if you are authorized only for Youth Customers, their parents or guardians) who will assist you and the Events by serving as umpires, referees, league officials and others who will assist you with the operation or organization of Events; work cooperatively with your Event Personnel to obtain field or activity permits, and other approvals necessary for the Events, communicate with field or facility owners, parks and recreation departments of municipalities, school districts and sporting associations, and otherwise assist you with facilitating and promoting the Events ("Customer Liaisons"). You must follow our System Standards and MRPs (as defined herein) we designate from time to time for charging any such Customer Liaisons fees for any training or certifications you provide them.
6.5 Indemnification. You will indemnify us, hold us harmless from, and defend us against any and all liabilities, losses, expenses, and obligations that we may incur to any of your Event Personnel, other staff or any Customer Liaisons arising out of any claim, cause of action, complaint, proceeding (in litigation, arbitration or administrative) relating to your obligations to pay them any compensation, remuneration or other employment relationship with the Event Personnel other staff or Customer Liaisons, unless and solely to the extent we have not paid them compensation otherwise due under this Agreement without right of setoff. You and we understand and acknowledge that we are under no obligation or liability to any of your sales associate, Event Personnel, other staff or any Customer Liaisons for any remuneration, compensation, commission, employment or any other duty, responsibility, liability or obligation. Your indemnification obligations: (i) include reimbursement to us of any and all of our attorneys' fees and costs in defending any such claim from your sales associates, Event Personnel other staff or Customer Liaisons and (ii) survive expiration or termination of this Agreement.
7. BUSINESS EXPENSES. You must pay all of your own business expenses in connection with the operation of your i9 Sports® Franchise, the operation or development of Events, the marketing, sale and distribution of the Products and the marketing, sale, performance, provision and rendering of the Services pursuant to this Agreement. You are responsible for paying for any supplies or any other Business Materials or the Services that you need or that we designate for use by i9 Sports® Franchises, and we are not responsible for reimbursing you for any of such items. However, we will provide you with certain marketing materials, brochures and manuals at no cost to you and may provide others to you at our then current fees for them, as designated in the Manuals from time to time.
8. MANUALS AND GUIDANCE
8.1 Manual. During the Term, we will lend you one copy of our operations manual or other publications in which we designate our System Standards (collectively, the "Manual"). At our option, instead of or in addition to loaning you a copy of the Manual, we may make the Manual (or parts of it) accessible to you via electronic format, e.g., CD-Rom, or via Intranet/Internet. The Manual will contain, among others: MRPs; Commission Schedules; pricing for marketing and delivery of certain marketing materials; mandatory and suggested specifications, standards; billing practices; insurance requirements; rules governing the use of operation of the i9 Sports® Franchise, including the Billing System, Computer System, e-commerce, marketing, sale, distribution and performance, rendering or provision of the Products and the Services; and operating procedures which we prescribe from time to time for i9 Sports® Franchises ("System Standards"), as well as information about other obligations you have in the operation of an i9 Sports® Franchise. The Manual may be modified by us from time to time to reflect changes in the System Standards. Our revisions to the Manual will be effective on delivery to you (including via electronic format), unless we specify a later Agreement Date for a particular revision. You
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must keep your copy of the Manual current by (if printed) immediately inserting all new and modified pages we furnish to you (or by periodically monitoring changes to any electronic format version). If the Manual is lost, stolen or damaged, you must obtain a replacement from us for $500. If a dispute develops with respect to the contents of the Manual, the master copy we maintain at our principal office (or the electronic version of the Manual we designate) will be controlling. You must keep the Manual in a secure location. You must not:
(a) permit any part of the Manual to be copied, transmitted, "posted" or downloaded;
(b) disclose it or any of its contents to anyone not having a need to know its contents for purposes of operating your i9 Sports® Franchise; and/or
(c) remove it from your business office without our permission.
8.2 Guidance and Assistance. During the Term of this Agreement, we will from time to time furnish you guidance and assistance with respect to the System Standards. This guidance and assistance will be furnished in the form of the Manuals, bulletins, written reports and recommendations, other written or electronic materials, telephone consultations, electronic mail, training programs, meetings, conferences and/or personal consultations at our offices, your offices or at a mutually convenient place. As we determine necessary from time to time, our guidance and assistance may relate to:
(a) the marketing of the services offered by i9 Sports® Franchises and the use of System Standards;
(b) coordinating the activities of all i° Sports® Franchises, and individual or related Events;
(c) establishing and conducting employee and Customer Liaison training programs;
(d) development and implementation of local advertising and promotional programs;
(e) furnishing information dealing with trends and developments in the laws and regulations affecting the Adult, amateur, corporate, and Youth sports and recreation, tournaments, sporting clinics and other sports and parks and recreation-related industries;
(f) types, supplies and methods of our approval process for Business Materials or the Services;
(g) operation of and coordination with parks and recreation management programs;
(h) awards distribution and achievement programs for Customers;
(i) rules and regulations for Events and methods for automated division alignment, scheduling and the management and reporting of league, tournament, sporting clinics and other Event-related statistics and standings
(j) changes in any of the above that may occur from time to time.
8.3 Approved Equipment and Supplies. We may designate or require our approval of the types, models, formats, providers, performers or suppliers of any Products or Services, and any of the
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equipment, uniforms, trophies, insurance carriers, supplies, financial services, employee benefit plans, merchant accounts and gateway services, and other services, assets, products, or materials utilized by you to operate your i9 Sports® Franchise, which we may change, alter, or amend from time to time (collectively, "Business Materials or Services"). We may designate or require our approval of suppliers of Business Materials or Services, We may require that you, at your expense, enter into agreements ("Approved Supplier Agreements") with approved or designated suppliers of Business Materials or Services ("Approved Suppliers") under which we receive remuneration from the Approved suppliers based on purchases from them. If you wish to suggest a new or alternative Approved Supplier, you must reimburse us our expenses in evaluating the Supplier, not to exceed $1,000. We will notify you within 60 days if we reject or approve the proposed Approved Supplier. If we do not notify you of our decision within 60 days, we are deemed to have rejected the proposed Approved Supplier.
8.4 Preferred Vendors. We have, and continue to, negotiate programs with certain Approved Suppliers ("Preferred Vendors") so that i9 Sports® Franchises may receive preferred pricing, delivery, credit or other terms (the "Preferred Vendor Program"). As long as you are not in breach of any of your Franchise Agreements, comply with the rules and policies (the "Program Rules") of the Preferred Vendor Program, and sign all agreements we or the Preferred Vendors require (e.g., "Preferred Vendor Agreements"), you are eligible to participate in the Preferred Vendor Program. We may terminate your participation in the Preferred Vendor Program without terminating any of your Franchise Agreement if you breach any agreement with us or a Preferred Vendor or otherwise fail to comply with the Program Rules.
8.5 Maximum Retail Prices. We may, from time to time, designate the maximum retail prices you may charge for the Products or the Services ("MRPs"), but we will not designate minimum retail prices. Our current MRPs will be listed in the manuals. We may change MRPs upon notice to you or via updates to the Manuals.
9. SYSTEM TECHNOLOGIES
9.1 Computer System. You must, in the manner we designate, acquire, license and use, in developing and operating your i9 Sports® Franchise a laptop computer with wireless network card and communications system (collectively, the "Computer System") consisting of the computer services, components, equipment, computer hardware, telecommunications equipment, and software designated or approved by us from time to time, which you must bring with you to our Phase 1 Training. The software designated by us in connection with and as part of the Computer System will include software we designate for the operation of the Billing System and other billing, administrative, business management, e-commerce, Product purchase and distribution, customer registration field and facility management tools, and sports statistics and standings tracking functions, or services we designate or approve (the "Software"). We may require you to obtain as part of the Computer System specified computer and communications hardware, equipment, components or Software and services (like DSL, Frac, T-l, Road Runner or ISP) and may reasonably specifications for and components of the Computer System from time to time. Our modifications and specifications for components, equipment, services, operating or communications and Software of the Computer System may require you to incur cost to purchase, lease or license new or modified Software or computer or communications hardware, equipment, components or software and to obtain service and support for the Computer System during the Term of this Agreement. As part of or as otherwise in connection with you Computer System, we may require you to utilize a merchant account and gateway provided by an Approved Supplier. You agree to incur such costs in connection with obtaining the computer or communications hardware, equipment, components, services and Software comprising the Computer System (or additions or modifications) operating it in accordance with our System Standards and ensuring that it is compatible with, and capable of participation in and performing the functions we designate for the Billing System, operation of and
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engaging in any form of e-commerce we designate or approve, as long as the Computer System we specify for use is the same Computer System that we or our affiliates then currently use in i9 Sports® Franchises that we or they own and operate. Within 60 days after you receive notice from us, you must obtain the components of the Computer System that we designate and require. The Computer System must be capable of connecting with our Computer System performing the functions we designate for the Billing System, permitting us to review the results of your i9 Sports® Franchise's operations, and engaging in any e-commerce activities that we designate or approve. We also have the right to charge you reasonable systems fees for modifications of and enhancements made to any proprietary software that we license to you and other maintenance and support services that we or our affiliates furnish to you related to the Computer System.
9.2 Software License. Subject to the terms and conditions of this Agreement, we grant to you a non-exclusive, non-transferable and non-sublicensable license to use the Software during the Term as follows:
(a) You may use the Software during the Term solely within the scope of your operation of your i9 Sports® Franchise under this Agreement for your internal operations and business purposes in accordance with this Agreement. The Software may be installed or used only on your owned or controlled computers which are part of the Computer System and only in accordance with System Standards. Software may be installed and used only to enable you and your employees to use the Software in accordance with this Agreement.
(b) The Software may be used only up to the capacity for which you have been authorized to use it under this Agreement and as may be more fully described in the Manuals from time to time. You are responsible for all use of the Software and for compliance with this Agreement; any breach by you or any user or third party whom you authorize to use the Software or provide access to it will be deemed to have been incurred by you.
(c) We may permit you to make a reasonable number of copies of the Software if you follow all of our System Standards for doing so for backup purposes. However, you must notify us of your intent to do so and obtain our prior written permission before doing so. Portions of the Software may not be used independently of the Computer System and your operation of your i9 Sports® Franchise.
9.3 No Reverse Engineering. You must not decompile or reverse engineer any executable code we provide (e.g., to reveal the corresponding source code), except to the minimum extent permitted by law. You will not avoid, circumvent, or disable any security device, procedure, protocol, or mechanism that we may include, require or establish with respect to the Software. You will not delete, alter, cover, or distort any copyright, trademark or other proprietary rights notice placed by us on or in the Software, and will ensure that all such notices are reproduced on all copies of the Software.
9.4 Reservation of Rights. The Software may not be used except as expressly authorized in this Agreement. We reserve all rights not expressly granted.
9.5 Ownership. The Software (and all copies and derivatives) is, and at all times will remain, our (and our licensors') sole and exclusive property, including all copyrights and other intellectual property rights in or to such Software. Except as otherwise expressly provided, you agree that neither you nor any third party will obtain any express or implied rights in or to any part of the Software. We deem the Software to be part of the Copyrights.
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9.6 Protection from Unauthorized Use. You will take all reasonable steps to protect the Software from any use, reproduction, publication, disclosure or distribution that is not specifically authorized by this Agreement. You will ensure that you and your agents or employees not disclose their user IDs and passwords to any person or entity other than on a need to know basis. You will be responsible for the security of its user IDs and passwords, and will immediately notify us of any suspected or actual theft, loss or fraudulent use of them.
9.7 Computer System Updates and Support Services. During the Term of this Agreement, we will provide limited Software support services to the extent we deem practicable in the manner we designate from time to time in the Manuals. All updates, patches, bug fixes, modifications, enhancements and new versions of the Software and all other deliverables and work product we develop for such Software and i9 Sports® Franchises provided to you will be subject to the terms and conditions of this Agreement, unless otherwise expressly agreed in writing by us. Our Software support services for such Software, if any, extend only to the Software free of any additions or modifications that have not been made by us or our agents, or approved by us in writing. Further, such support services extend only to the most current version of the Software as used on or in the hardware, platforms and operating environment(s) designated by us for use with the Software. Our support services also do not include the following and we have no responsibility or liability for:
(a) Addressing errors, defects, or damage in or to the Software resulting from causes other than those arising in the ordinary permitted use of the Software, or from the use of third party software, firmware or data, or from the use of hardware not meeting our minimum recommended configuration;
(b) Providing hardware-related services;
(c) Providing training to your personnel except as described in this Agreement; or
(d) Developing or otherwise providing you with additional features, functionality, or customizations to the Software.
9.8 Your Responsibility. You agree to fully cooperate with us in the performance of our Software support services, including by providing us with such timely, accurate and complete information and reasonable access to your personnel and facilities as we may require or request. To the extent you delay or fail to satisfy your obligations to us, we will be relieved of our obligations under this Agreement.
9.9 Discontinuation of Use. We will have no responsibility for: (x) any use of the Software after we have notified you to discontinue use; (y) the combination or use of the Software with content, assets, technology or other materials not supplied by us; or (z) alteration of the Software or use of a version of the Software that has been superseded by a newer version.
9.10 Warranty Limitations. WE, AND OUR AFFILIATES, IF ANY, DISCLAIM ANY WARRANTIES OF ANY NATURE WHATSOEVER, WHETHER EXPRESS, WRITTEN, ORAL, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NONINFRINGEMENT, OR ANY WARRANTIES ARISING UNDER THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT, HOWEVER ENACTED IN ANY STATE OR JURISDICTION AND ANY WARRANTIES UNDER ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE (AS APPLIED IN FLORIDA OR ANY STATE) WITH RESPECT TO THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE), OR ANY OTHER PRODUCTS, EQUIPMENT OR SUPPLIES YOU OBTAIN FROM US OR OTHERS AND THE SERVICES
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AND FUNCTIONS THEY PERFORM AND THEIR DESIGN. NEITHER WE NOR OUR AFFILIATES ARE LIABLE UNDER ANY CIRCUMSTANCES TO YOU FOR ANY CONSEQUENTIAL, SPECIAL, EXEMPLARY, INDIRECT, INCIDENTAL OR COLLATERAL DAMAGES OF ANY NATURE WHATSOEVER IN CONNECTION WITH THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE) OR ANY OTHER PRODUCTS, EQUIPMENT OR SUPPLIES YOU OBTAIN FROM US OR OTHERS AND THEIR DESIGN (INCLUDING YOUR RIGHT TO USE, DELIVERY, INSTALLATION AND YOUR USE OF THEM), THE SERVICE AND FUNCTIONS THEY PERFORM (OR FAIL TO PERFORM), THEIR DESIGN AND THIS AGREEMENT, WHETHER BY REASON OF IMPERFECTION OR DEFECT IN THEM OR IN THEIR PERFORMANCE, OUR (OR ANY OF OUR AFFILIATES') BREACH OR OTHERWISE, EVEN IF WE (OR OUR AFFILIATE) ARE ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, REGARDLESS OF WHETHER THEY ARE BASED IN TORT OR IN CONTRACT. IF WE (OR OUR AFFILIATES) DO NOT CAUSE THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE) OR ANY OTHER EQUIPMENT OR SUPPLIES YOU RECEIVE FROM US OR ANY OF OUR AFFILIATES TO PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS, THEN YOUR SOLE RECOURSE AND REMEDY WILL BE FOR US (OR OUR AFFILIATES), AT OUR (OR THEIR) ELECTION, TO REPLACE THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE), ANY OTHER PRODUCTS, EQUIPMENT OR SUPPLIES YOU RECEIVE FROM US OR OUR AFFILIATES WITH ANOTHER ONE WHICH PERFORMS IN ACCORDANCE WITH SPECIFICATIONS. IN NO CASE WILL OUR LIABILITY EXCEED THE COST OF THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE) OR ANY OTHER PRODUCTS, EQUIPMENT OR SUPPLIES WHICH YOU RECEIVE FROM US OR OUR AFFILIATES ON WHICH A CLAIM FOR DAMAGES IS BASED. HOWEVER, WE WILL ASSIGN TO YOU ANY WARRANTIES FROM THE MANUFACTURERS OF ANY OF THE COMPONENTS OF THE COMPUTER SYSTEM (INCLUDING ITS SOFTWARE), OR ANY OTHER PRODUCTS, EQUIPMENT OR SUPPLIES YOU RECEIVE FROM US OR OUR AFFILIATES. THESE WARRANTIES MAY BE VOIDED BY MISUSE, ACCIDENT, MODIFICATION AND FAILURES FOR WHICH WE ARE NOT DIRECTLY RESPONSIBLE.
9-11 Websites. We have the right to control all use of URL's, domain names, websites, addresses, metatags, links, key words, e-mail addresses and any other means of electronic identification or origin ("e-names"). We may require you to, at your expense, participate in the Billing System and otherwise operate certain aspects of the i9 Sports® Franchise that we designate from time to time through e-commerce methods that we designate, and in the manner we designate from time to time. We also have the right to designate, approve, control or limit all aspects of your use of the Internet, Intranet, World Wide Web> wireless technology, digital cable, use of e-names, e-mail, websites, home pages, bulletin boards, chatrooms, e-mail, linking, framing, on-line purchasing cooperatives, marketplaces, barter exchanges, and related technologies, methods, techniques, registrations, networking, and any electronic communication, commerce, computations, or any means of interactive electronic documents contained in a network of computers or similar devices linked by communications software (collectively, "e-commerce"). You must follow all of our policies and procedures for the use and regulation of e-commerce. We may require that you provide graphical, photographic, written or other forms of artistic or literary content to us for use in e-commerce activities associated with the Marks, the Copyrights or the System which we may designate. We may restrict your use of e-commerce, or your Customer's use of e-commerce in connection with Events and the Product and the Services purchases to a centralized website, portal or network or other form of e-commerce designated by us operated by us or our designee. We may require that you provide information to us and arrange Product or Service sales or distribution via e-commerce. We may require you to coordinate your e-commerce activities with us. We may charge you our then current fees for such e-commerce activities which we designate. We may require you to obtain the services of and pay the then current fees for ISP and ASP services and the like. We may require that
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your Customers be provided access to certain e-commerce activities that we designate from time to time, and may require that your Customers purchase the Products and the Services directly from us through a website or portal designated by us. If we do so, we will allocate Network Revenues to you or other i9 Sports® Franchises from such purchases to you in the manner we designate from time to time in our System Standards, subject to our System Standards. You recognize and agree that between you and us, we own all rights to all interest in and to any data collected via e-commerce related to the System, the Copyrights and the Marks, including any Customer data, click-stream data, cookies, user data, hits and the like: such information is deemed by us to be and constitutes our Confidential Information.
10. MARKS AND COPYRIGHTS
10.1 Ownership and Goodwill. You also recognize that various materials we give you are subject to copyrights we own or license from others. Your right to use the Marks and Copyrights is derived solely from this Agreement and is limited to the operation of your i9 Sports® Franchise pursuant to and in compliance with this Agreement and all applicable standards and operating procedures we prescribe during the Term of this Agreement. If you make any unauthorized use of any of the Marks or Copyrights, it will constitute a breach of this Agreement and an infringement of our rights in and to the Marks or Copyrights. Your use of the Marks or Copyrights and any goodwill established by your use, will inure to our benefit exclusively. This Agreement does not confer any goodwill or other interests in the Marks or Copyrights on you (other than the right to operate your i9 Sports® Franchise in compliance with this Agreement).
10.2 Additional Marks. All provisions of this Agreement which apply to the Marks or the Copyrights will apply to any additional trademarks, service marks, commercial symbols, designs, artwork, trade dress, logos and other copyrights we may authorize and license you to use during the Term of this Agreement.
10.3 Limitations on Use. You must use the Marks we designate as the sole trade identification of your i9 Sports® Franchise, except that you must also identity yourself as an independent owner in the form we prescribe. You must not: (a) use any Mark or Copyright as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms, designs, or symbols, or in any modified form; (b) use any Mark or Copyright or any commercial symbol similar to any Mark or the Copyrights in connection with the performance or sale of any unauthorized services or products, or in any other manner we have not expressly authorized in writing; (c) employ any of the Marks or the Copyrights in any manner that we have determined may result in our liability for any indebtedness or obligation of yours. You will display the Marks or Copyrights in the manner we prescribe at your i9 Sports® Franchise and in connection with advertising and marketing materials, along with any notices of copyright, trademark and service mark ownership registrations that we specify. You will also be required to obtain any fictitious name, assumed name or "doing business as" registrations that may be required under applicable law.
10.4 Infringements and Claims. You must notify us immediately in writing of any apparent infringement of or challenge to your use of any Mark or Copyright, or claim by any person of any rights in any Mark or Copyright or similar copyright, trade name, trademark or service mark of which you become aware. You must not communicate with anyone except us and our attorneys in connection with any such infringement, challenge or claim. We have sole discretion to take whatever action we deem appropriate. We have the sole right to control exclusively any U.S. Patent and Trademark Office, U.S. Copyright Office, litigation or other proceeding or any other litigation or other proceeding arising out of any infringement, challenge or claim relating to any Mark or Copyright. You must sign any documents, give any assistance, and do any acts that our attorneys believe are necessary or advisable in order to protect and maintain our interests in any litigation or proceeding related to the Marks or Copyrights or
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otherwise to protect and maintain our interests in the Marks or Copyrights. You may not, at any time, contest the validity or ownership of any of the Marks or Copyrights, or assist any other person in contesting the validity or ownership of any of the Marks or Copyrights.
10.5 Discontinuance of Use. If it becomes advisable at any time in our sole judgment for your i9 Sports® Franchise to modify or discontinue the use of any of the Marks or Copyrights or for your i9 Sports® Franchise to use one or more additional or substitute trademarks or service marks, you agree at your expense to comply with our directions to modify or otherwise discontinue the use of such Mark or Copyright, or use one or more additional or substitute trademarks or service marks, within a reasonable time after our notice to you.
10.6 Indemnification. We will indemnify you against and reimburse you for all damages for which you are held liable to third parties in any proceeding arising out of your authorized use of any Mark or Copyright, pursuant to it and in compliance with this Agreement, resulting from claims by third parties that your use of the Marks or Copyrights infringes their trademark or copyright rights, and for all costs you reasonably incur in the defense of any such claim in which you are named as a party, so long as you have timely notified us of the claim and have otherwise complied with the terms of this agreement. We will not indemnify you against the consequences of your use of the Marks or Copyrights except in accordance with the requirements of this Agreement. You must provide written notice to us of any such claim within 10 days of your receipt of such notice and you must tender the defense of the claim to us. We will have the right to defend any such claim and if we do so, we will have no obligation to indemnify or reimburse you for any fees or disbursements of any attorney retained by you. If we elect to defend the claim, we will have the right to manage the defense of the claim including the right to compromise, settle or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.
10.7 Consent. You acknowledge and agree that we may grant franchises to others to operate i9 Sports® Franchises using the Marks or Copyrights, in accordance with this Agreement. You agree that, whenever we may request from time to time, you will give your written consent to such use of the Marks and Copyrights by such i9 Sports® Franchises.
11. DUTIES AND RESPONSIBILITIES
11.1 Solicitation. No sale of any Products or Services which we may designate from time to time is final until we accept it in writing or by such other method we designate in connection with the Billing System. Although you solicit Customers for us and market the Services, the sales of certain of the Services and the Products we designate from time to time in the Manuals are made only by us. With respect to them, you do not have authority to bind us in any way and we may refuse any Customer or prospect. You agree to follow all of our policies and procedures we may develop from time to time in the Manuals for the consummation of sales of the Products or the Services.
11.2 Sales Methods. You must follow our System Standards when marketing and selling the Products or the Services. You must not make any misrepresentations to prospective purchasers regarding the qualities of the Products or the Services or concerning us or our business. Moreover, you must not alter, modify, change or misrepresent the Products or the Services or their marketing materials in any manner whatsoever. Accordingly, in marketing, promoting, selling distributing, providing, rendering or performing the Products or the Services, you will not disseminate any information, or represent to prospective Customers or others, any information that conflicts with any of the materials we provide you to assist in the sale of the Services.
11.3 Record Keeping. In order for us to monitor your performance, you must keep and maintain full and accurate records of (i) your meetings with referral sources, Customers, National
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Accounts and prospects; and (ii) all Products sold or provided or Services sold or rendered. We may keep certain of these records for you via the Billing System. However, you remain responsible for them. The records must include whatever information we consider necessary from time to time (and will include information relating to meetings, follow-up calls, etc.). We will also require you to complete and transmit to us weekly and monthly reports detailing your activities. You must supply us with weekly reports due by the Wednesday of the next succeeding week, and monthly reports due by the 10th day of each month following the end of the immediately preceding calendar month.
11.4 Access to Facilities. Notwithstanding the fact that you will be operating from your home, you must nevertheless give us access to i9 Sports Franchise for meetings with referral sources and Customers, for meetings with us, or for us to meet with your staff. We may schedule mandatory meetings for you and/or your Event Personnel or other staff at reasonable times after reasonable coordination efforts. You must follow the policies and procedures we periodically establish for operating procedures, record keeping and reporting and other matters.
11.5 Marketing Support. We will provide you with certain marketing materials including literature concerning the Products and the Services, descriptive literature, manuals, brochures and related information that we have designed or otherwise acquired to assist you in the market, sale and promotion of the Products and the Services. You must not use any other marketing materials unless we have approved them prior to your use, in writing. Upon termination or expiration of this Agreement, you must: (i) return all marketing materials, manuals, brochures and related information that we have furnished to you or that bear our tradenames; and (ii) not retain copies of these materials in any form whatsoever.
11.6 Delegation. Although you may delegate some of your duties under this Agreement to your subordinate managers, Event Personnel, Customer Liaisons or employees due to their relationships with the Customers, you remain fully responsible for your and their performance. You must use your best efforts to ensure that the sales associates or Event Personnel do not cause a breach of this Agreement and meet the standards of customer service and support.
11.7 Collections. You must assist us in the collection of amounts owed to us by Customers for the Products or the Services sold by you.
11.8 Liability Insurance. You must obtain and maintain at your expense all of the insurance polices and coverage amounts we designate from time to time. You must meet or exceed the insurance coverage criteria we designate from time to time. Your insurance coverage obligations will be designated in the Manuals, and will include, at a minimum, for each automobile your i9 Sports® Franchise utilizes or operates, the requirement for you to obtain and maintain in full force and effect with a reputable insurance company authorized to do business in the Network Area automobile liability insurance in the face amount of $300,000 for any one person, $500,000 for any one accident, and $100,000 for property damage. You will include us as one of the insureds under such policy and will furnish us with a copy of the Certificate of Insurance. You will indemnify us against any claim for injuries or damages caused by you, your sales associates, Event Personnel, Customer Liaisons or your employees while traveling in any automobile in the course of representing us or you or in connection with any Event. Your obligation to indemnify us will survive the termination of this agreement. When using a rental car, you agree to have 100% insurance coverage for any accident.
11.9 Compliance with Laws and Good Business Practices. You will secure and maintain in force in your name all required licenses, permits, approval and certificates relating to the operation of the i9 Sports® Franchise and each Event you operate, organize or develop the Products or the Services you market, sell, distribute, perform, render or provide. You will operate the i9 Sports® Franchise in full compliance with all applicable laws, ordinances and regulations, including, without limitation, all govern-
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ment regulations relating to occupational hazards and health, parks and recreational activities, sporting and social activities, privacy, worker's compensation insurance, unemployment insurance, event permitting, workplace safety, and withholding and payment of federal and state income taxes, social security taxes and sales taxes. You will, in all dealings with Customers, suppliers, us and the public, adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct. You agree to refrain from any business or advertising practice which may be injurious to our business and the goodwill associated with the System, the Marks and other i9 Sports® Franchises.
12. ADVERTISING AND PROMOTION
12.1 Local Marketing and Promotion. All your advertising must conform with all provisions of this Agreement. All advertising, promotion and marketing must be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and promotion policies that we prescribe from time to time. You must submit samples of all local advertising and promotional materials, not prepared or previously approved by us, for approval at least 14 days prior to their use. In no event will your advertising contain any statement or material which may be considered: (a) in bad taste or offensive to any group or person; (b) defamatory on any person or an attack on a competitor; (c) inconsistent with our public image; or (d) not in accord with System Standards.
12.2 Establishment of Brand Fund. Recognizing the value of advertising and marketing to the goodwill and public image of i9 Sports® Franchises, we have established a system-wide Brand Fund (the "Brand Fund") for such advertising, marketing and public relations programs and materials we deem necessary or appropriate. We reserve the right to defer or reduce Marketing Contributions of an i9 Sports® Franchise and, upon 30 days' prior written notice to you, to reduce or suspend contributions to and operations of the Brand Fund for one or more periods of any length and to terminate (and, if terminated, to reinstate) the Brand Fund. If the Brand Fund is terminated, all unspent monies on the date of termination will be distributed to our franchisees in proportion to their respective contributions to the Brand Fund during the preceding 12-month period. We and our affiliates will contribute to the Brand Fund on the same basis as franchise owners for any i9 Sports® Franchise we or they own and operate.
12.3 Use of the Funds. We or our designee will direct all programs financed by the Brand Fund, including the creative concepts, materials and endorsements, and the geographic, market and media placement and allocation. You agree that the Brand Fund may be used to pay the costs of preparing and producing video, e-commerce, audio and written advertising materials; developing and servicing corporate accounts; evaluating new Event development, operation or marketing techniques, services or products; research and development of marketing materials; administering regional and multi-regional advertising programs, including, without limitation, purchasing e-commerce rights, services, direct mail and other media advertising and employing advertising, promotion and marketing agencies; and supporting public relations, market research, establishing, developing, maintaining, servicing or hosting Websites or other e-commerce programs, and other advertising, promotion and marketing activities. The Brand Fund periodically will furnish you with samples of advertising, marketing and promotional formats and materials at no cost. Multiple copies of such materials will be furnished to you at our direct cost of producing them, plus any related shipping, handling and storage charges.
12.4 Accounting for the Fund. The Brand Fund will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the Brand Fund and its programs, including, without limitation, conducting market surveys, preparing advertising, promotion and marketing materials and collecting and accounting for contributions to the Brand Fund. We may spend, on behalf of the Brand Fund, in any fiscal year an amount greater or less than the aggregate contribution of all i9 Sports® Franchises to the
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Brand Fund in that year, and the Brand Fund may borrow from us or others to cover deficits or invest any surplus for future use. All interest earned on monies contributed to the Brand Fund will be used to pay advertising costs before other assets of the Brand Fund are expended. We will prepare a periodic statement of monies collected and costs incurred by the Brand Fund and furnish the statement to you upon written request. We have the right to cause the Brand Fund to be incorporated or operated through a separate entity at such time as we deem appropriate, and such successor entity will have all of the rights and duties specified in this Agreement.
12.5 Brand Fund Limitations. You acknowledge that if established, the Brand Fund will be intended to maximize recognition of the Marks, Copyrights and patronage of i9 Sports® Franchises. Although we will endeavor to utilize the Brand Fund to develop advertising and marketing materials and programs and to place advertising that will benefit all i9 Sports® Franchises, we undertake no obligation to ensure that expenditures by the Brand Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Brand Fund by i9 Sports® Franchises operating in that geographic area or that any i9 Sports® Franchise will benefit directly or in proportion to its contribution to the Brand Fund from the development of advertising and marketing materials or the placement of advertising. Except as expressly provided in this section, we assume no direct or indirect liability or obligation to you with respect to collecting amounts due to the Brand Fund.
12.6 Advertising and Promotion. You agree that any advertising, promotion and marketing you conduct will be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and the promotion policies which we prescribe from time to time. Samples of all advertising, promotional and marketing materials which we have not prepared or previously approved must be submitted to us for approval before you use them. If you do not receive our written disapproval or approval within 14 days after our receipt of such materials, we will be deemed not to have given the required approval. You may not use any advertising or promotional materials that we have disapproved or have not approved in writing.
12.7 Telephone Directory Advertisements. At your expense, you must obtain your telephone number and list and advertise your i9 Sports® Franchise in the principal regular (white pages telephone directory) and the classified (yellow pages) telephone directories (if any) distributed in your metropolitan area, in such directory categories as we specify, utilizing our standard forms of listing and classified directory advertisements. You must place your classified directory advertisements and listings together with other i9 Sports® Franchises operating within the distribution area of the directories. If a joint listing is obtained, the cost of the advertisements and listings will be apportioned among all i9 Sports® Franchises placed together. You must sign and deliver to us our Conditional Assignment of Telephone Numbers and Listings in the form attached as an exhibit to our Offering Circular.
13. CUSTOMER SERVICE. You are responsible for providing customer service to Customers who purchase the Products or the Services and to all referral sources. In that connection, you will act as our intermediary with Customers to timely respond to any of their concerns and questions. You agree to provide the highest standard of Customer service in connection with the provision or sale of the Services to ensure complete Customer satisfaction. You must also cooperate with us to honor any refund policies that we develop from time to time. In that connection, to the extent we refund any fees for Services we have received from Customers in the Network Area, we will be entitled to a refund (which may be exercised by setoff) of a proportionate amount of the associated Commission paid you.
14. RELATIONSHIP OF THE PARTIES
14.1 Independent Contractors. We do not have a fiduciary relationship with you. You and we are independent contractors. Neither you nor we are general or special agents, franchisees, joint
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venturers, partners or employees of the other for any purpose whatsoever. Since you are an independent contractor, you will not be entitled to workers' compensation, unemployment compensation, or any other statutory or regulatory benefit or right predicated on an employer-employee relationship. We have no obligation to carry workers' compensation coverage or pay unemployment compensation taxes or withhold any amounts from payment to you for federal income taxes or for federal social security taxes, unless otherwise required by applicable laws and regulations. You will file all federal income tax forms required of an independent contractor. We have no obligation to provide you with any employment and fringe benefits that we may provide to employees, such as health insurance, for example. The foregoing also applies to any relationship we have with your sales associates, Event Personnel, agents or other employees.
14.2 Safety. You recognize and agree that although we may provide you training, general advice or guidance regarding the manner in which you, your Event Personnel and other personnel are to conduct themselves in connection with the operation of your i9 Sports® Franchise, we do not establish, designate or approve, and you are solely responsible for training your personnel with respect to procedures and policies for the safe operation of your i9 Sports® Franchise and the provision or rendering, performance or distribution of the Products or the Services. You, not us, are solely responsible for training your personnel to conduct sporting and other activities in a manner that does not expose us, you, your personnel or others to risk of danger or prosecution. Any guidance, training or assistance we provide to you is not construed to be a designation or approval of safety techniques.
14.3 Taxes. We will have no liability for any sales, use, alcohol surcharge, service, occupation, excise, gross receipts, income, payroll, property or other taxes, whether levied upon you or your i9 Sports® Franchise, in connection with the business you conduct (except any taxes we are required by law to collect from you with respect to purchases from us). Payment of all such taxes is your responsibility.
15. INDEMNIFICATION
15.1 By You. You agree to indemnify, defend and hold harmless us, our affiliates and our respective shareholders, directors, officers, employees, agents, successors and assignees (the "Indemnified Parties") against and to reimburse any one or more of the Indemnified Parties for all claims, obligations and damages described in this Section, any and all taxes described in this Agreement (including any income tax or excise tax which we are required to pay due to your activities in any state) and any and all claims and liabilities directly or indirectly arising out of the i9 Sports® Franchise' operation (even if our negligence is alleged) or your breach of this Agreement. For purposes of this indemnification, "claims" includes all obligations, damages (actual, consequential or otherwise) and costs reasonably incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, reasonable accountants', arbitrators', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel and living expenses. We have the right to defend any such claim against us. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. Under no circumstances will we or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate our, their or your losses and expenses, in order to maintain and recover fully a claim against you. You agree that a failure to pursue such recovery or mitigate a loss will in no way reduce or alter the amounts we or another Indemnified Party may recover from you.
15.2 By Us. We must indemnify, defend and hold you harmless from and against and reimburse you only for all obligations, damages, losses, costs, expenses and liabilities for which you are held liable or which you may incur in the defense of any claim brought against you resulting or arising
i9 Sports/fa-8
20
Initials
The original documents were scanned as an image. The original file can be downloaded at the link above.