UFOC
The original documents were scanned as an image. The original file can be downloaded at the link above.
Sample UFOC
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FRANCHISE OFFERING CIRCULAR
MS
Sports And Fitness For Kids
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JT
DEPARTMENT OF CORPORATIONS
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D lit
APR 2 2007 SAN DIEGO OFFICE
Jumpbunch, Inc.
(A Maryland Corporation)
1160 Spa Rd, Suite 3B
Annapolis, Maryland 21403
410-703-2300
JUMPBUNCH® businesses specialize in providing sports, fitness, and physical education training and educational programs to children in preschool facilities, day care centers, other school facilities, and similar facilities.
The initial franchise fee is $30,000 to $50,000. The estimated initial investment required ranges from $35,200 to $77,200. not including real estate costs.
Risk Factors:
THE FRANCHISE AGREEMENT REQUIRES THAT ALL DISAGREEMENTS BE SETTLED BY ARBITRATION IN MARYLAND. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU MORE TO ARBITRATE WITH US IN MARYLAND THAN IN YOUR HOME STATE.
THE FRANCHISE AGREEMENT REQUIRES THAT ANY LEGAL ACTIONS BE BROUGHT IN MARYLAND. OUT OF STATE LEGAL ACTIONS MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE US IN MARYLAND THAN IN YOUR HOME STATE.
THE FRANCHISE AGREEMENT STATES THAT MARYLAND LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.
WE MAY TERMINATE YOUR FRANCHISE IF YOU PURCHASE GOODS OR SERVICES THAT ARE NOT ACCORDING TO OUR SPECIFICATIONS OR THAT ARE NOT FROM OUR APPROVED SUPPLIERS.
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YOUR FAILURE TO MEET MINIMUM GROSS REVENUE REQUIREMENTS IS A DEFAULT UNDER THE FRANCHISE AGREEMENT AND GROUNDS FOR TERMINATION OF THE AGREEMENT.
WE OR OUR AFFILIATES MAY ESTABLISH OTHER CHANNELS OF DISTRIBUTION, AND MAY SELL OR DISTRIBUTE ANY PRODUCT OR SERVICE TO THE GENERAL PUBLIC IN COMPETITION WITH THE FRANCHISE.
THERE MAY BE OTHER RISKS ASSOCIATED WITH THIS FRANCHISE.
Information comparing franchisors is available. Call the state administrators listed in Exhibit "C" or your public library for sources of information.
Registration of this franchise with the state does not mean that the state recommends it or has verified the information in this offering circular. If you learn that anything in this offering circular is untrue, contact the Federal Trade Commission and the California Corporations Commissioner, 320 West 4th Street, Suite 750, Los Angeles, California 90013-2344.
Effective Date:
JUMPBIINCH*
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JUMPBUNCH® DISCLOSURE DOCUMENT
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JUMPBUNCH® DISCLOSURE DOCUMENT
TABLE OF CONTENTS
ITEM
1. THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
2. BUSINESS EXPERIENCE
3. LITIGATION
4. BANKRUPTCY
5. INITIAL FRANCHISE FEE
6. OTHER FEES
7. INITIAL INVESTMENTS
8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
9. FRANCHISEE'S OBLIGATIONS
10. FINANCING
11. FRANCHISOR'S OBLIGATIONS
12. TERRITORY
13. TRADEMARKS
14. PATENTS. COPYRIGHTS AND PROPRIETARY INFORMATION
15. OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
16. RESTRICTIONS ON WHAT YOU MAY SELL
17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
18. PUBLIC FIGURES
19. EARNINGS CLAIMS
20. LIST OF OUTLETS
21. FINANCIAL STATEMENTS
22. CONTRACTS
23. RECEIPTS
EXHIBITS
A. FRANCHISE AGREEMENT
B. FINANCIAL STATEMENTS
C. AGENTS FOR SERVICE OF PROCESS
(State Administrators, if any)
D. APPROVED SUPPLIERS
E. OPERATIONS MANUAL TABLE OF CONTENTS
F. CALIFORNIA ADDENDUM
G. RECEIPTS
CA
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Copynrf* OTOW. JUWBUNCH. INC. All Rigfc Reared
INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY THE FEDERAL TRADE COMMISSION
regarding
JUMPBUNCH, INC.
(A Maryland Corporation)
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 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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ITEM1
THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
To simplify the language in this offering circular, Jumpbunch, Inc., the franchisor, is referred to in this disclosure document as "we," "us," or "our". A franchisee is referred to in this disclosure document as "you" and "your". If you are a legal entity, "you" includes your owners.
We are a corporation formed under Maryland law on June 7, 2001. Our principal business address is 1160 Spa Rd, Suite 3B, Annapolis, Maryland 21403. Our agent or agents to receive service of process, if any, are in attached Exhibit "C".
From July, 1997, to October, 2006, Thomas Bunchman, our President, operated our affiliate, Jumpbunch ("JB"), a Maryland sole proprietorship. In October, 2006, the sole proprietorship ceased operation after its principal assets were sold to a franchise location. Your franchise is modeled after the sports, fitness, and physical education training business that was operated by JB.
We intend to do business under our corporate name and under the JUMPBUNCH® name. We sell franchises for the operation of JUMPBUNCH® businesses. JUMPBUNCH® businesses specialize in providing sports, fitness, and physical education training and educational programs to children in preschool facilities, day care centers, other school facilities, and similar facilities. These businesses operate under the JUMPBUNCH® name and under distinctive business formats, methods, procedures, designs, layouts, standards and specifications, all of which we may improve, further develop or otherwise modify from time to time. We use, promote and license certain trademarks, service marks and other commercial symbols in the operation of JUMPBUNCH® businesses, including the JUMPBUNCH® trademarks and service marks and associated logo (collectively, the "Marks". You will operate your franchise from a specific location in a defined territory. We manage the JUMPBUNCH® network of franchisees. We do not engage in any other business activity. We do not operate JUMPBUNCH® businesses. We have been offering JUMPBUNCH® franchises since October 12, 2001.
The services our franchises sell are well recognized by consumers and available from other sources. The market for our franchisee's services is well developed. Our goods and services are sold to individuals and to businesses. Selling is not seasonal.
In addition to laws that apply to businesses generally, there may be regulations specific to the services offered by this type of business in the state or local area in which you will operate your JUMPBUNCH® franchise. It is your responsibility to investigate and to comply with any of these regulations in your state or local area.
There is competition for the services our franchisees will sell. Local independent businesses compete with our franchisees, as will regional, national or international chains.
ITEM 2
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ITEM 2 BUSINESS EXPERIENCE
Thomas Bunchman, President
Thomas Bunchman is our President, a position he held since our inception. Mr. Bunchman also owned and operated our affiliate, JumpBunch®, a position he held from July. 1997 until its sale in October, 2006.
Kathleen Bunchman, Secretary
Kathleen Bunchman is our Secretary, a position she held since our inception, and works actively with day to day JumpBunch® operations. Ms. Bunchman was a substitute teacher at St. Mary's Elementary School from August, 1996 to June, 2003.
Timothy Lee Holadia, Franchise Sales Broker
Timothy Lee Holadia is our Franchise Sales Broker, a position he has held since April, 2007. Mr. Holadia also is President and Chief Executive Officer of FRANMOGUL, in Virginia Beach, Virginia, a position he has held since July, 2006. Mr. Holadia was Vice President and Director of Franchise Development for Geeks on Call America in Norfolk Virginia, from February, 2001, to July, 2006.
ITEM 3 LITIGATION
No litigation is required to be disclosed in this offering circular.
ITEM 4
BANKRUPTCY
No person previously identified in Items 1 or 2 of this offering circular has been involved as a debtor under the U.S. Bankruptcy Code required to be disclosed in this Item.
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ITEM 5
INITIAL FRANCHISE FEE
You and all other JUMPBUNCH® franchisees will pay a lump sum, nonrefundable, franchise fee upon completion of initial training. The franchise fee varies depending upon the population in your exclusive territory. The table below shows how the franchise fee is calculated.
|
Territory Population: |
Franchise Fee |
|
Less than 250,000 |
$30,000 |
|
250,000-500,000 |
$40,000 |
|
500,000-1,000,000 |
$50,000 |
Presently, if our Franchise Sales Broker refers a franchise prospect to us that signs a franchise agreement with us, we pay the Franchise Sales Broker the greater of 40% of the initial franchise fee paid to us, or $15,000.
ITEM 6
OTHER FEES
FA = Franchise Agreement
|
Name of Fee |
Due Date |
Amount |
Remarks |
|
Successor Franchise Fee |
Concurrently with our granting a successor franchise to you |
Twenty five (25%) percent of our then current franchise fee |
Paid to us if you want to renew your franchise agreement with us and obtain a successor franchise. Nonrefundable. See Article 1.8. of the Franchise Agreement |
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|
Name of Fee |
Due Date |
Amount |
Remarks |
|
Royalty |
Monthly on or before the 3rd day following the close of each calendar month |
The higher of 8% of Gross Revenue' or the minimum royalty as identified in the table below. |
Paid to us to provide ongoing assistance to you and to use our Marks and proprietary intellectual property. Non-refundable. See Article 2.3. of the Franchise Agreement |
|
Start-Up Marketing |
Expended according to our marketing programs |
$500 |
Paid to advertisers to promote the franchise at opening. Nonrefundable. See Article 2.4. of the Franchise Agreement |
|
Regional/National Ad Fee |
When the Royalty is paid |
1% of Gross Revenue1 |
Paid to us into the advertising fund to use for building regional and national recognition of the Marks. See Article 2.5. of the Franchise Agreement |
|
Local Marketing Fee |
According to Methods of Operation as per your advertising budget |
1% of Gross Revenue1 |
Paid to advertisers to promote your franchise locally. Non-refundable. See Article 2.6. of the Franchise Agreement |
|
Interest on Late Payments |
When you pay us the overdue amount |
Highest contract rate beginning from the due date |
Paid to us if you are overdue on a payment due to us. See Article 2.7. of the Franchise Agreement |
|
Refresher Training Fee |
As we and you agree |
$400 per person per day |
Paid to us if you need additional or refresher training. See Article 3.2. of the Franchise Agreement |
|
Per Day Fee |
As we and you agree |
$400 per person per day |
Paid to us if you need us to assist you in operating your franchise. See Article 3.4.7. of the Franchise Agreement |
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|
Name of Fee |
Due Date |
Amount |
Remarks |
|
Ongoing Assistance |
As we and you agree |
$400 per person per day |
Paid to us if you need ongoing assistance in operating your franchise. See Article 3.4.8. of the Franchise Agreement |
|
Operations Manual Replacement Charge |
When replacement pages are delivered to you |
$1 per page |
Paid to us if you lose the Operations Manual or if we update pages to the Operations Manual. See Article 3.5. of the Franchise Agreement |
|
Capital Additions |
You will expend these amounts over the time it takes to make Capital Additions |
Reasonable expenditures from time to time during the term of the Franchise Agreement |
Paid to approved suppliers. Nonrefundable. See Article 6.3. of the Franchise Agreement |
|
Auditing Costs |
Within 7 days of your receipt of notice from us that you must reimburse us for our actual costs of the audit |
Reimbursement of actual costs |
You'll reimburse us for our auditing costs if we have to audit you because you fail to provide us with required reports on a timely basis. See Article 8.3. of the Franchise Agreement |
|
Franchise Transfer Fee |
Concurrently with the transfer |
$5,000 |
Paid to us if you want to transfer the franchise. See Article 9.2. of the Franchise Agreement. |
Except as otherwise noted above, all fees are imposed by us, are payable to us and are nonrefundable.
As the term is used in the Franchise Agreement, "Gross Revenue" means all revenue you derive from operating the JUMPBUNCH® franchise in accordance with the JUMPBUNCH® system standards, and whether from cash, check, barter, trade-in, credit transactions or otherwise, but excluding all federal, state or municipal sales taxes, use taxes or service taxes collected from customers and paid to the appropriate taxing authority and excluding customer refunds, adjustments, credits and allowances actually made by the franchise in compliance with the JUMPBUNCH® system standards.
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JUMPBUNCH*
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MINIMUM ROYALTY
|
Territory Population: |
Year 1 of the Term of the Franchise Agreement |
Year 2 of the Term of the Franchise Agreement |
Year 3 and Thereafter During the Remaining Term of the Franchise Agreement |
|
Less than 250,000 |
$300 per calendar month, beginning fourth month |
$400 per calendar month |
$500 per calendar month |
|
250,000-500,000 |
$400 per calendar month, beginning fourth month |
$500 per calendar month |
$600 per calendar month |
|
500,000-1,000,000 |
$600 per calendar month, beginning fourth month |
$700 per calendar month |
$800 per calendar month |
ITEM 7
INITIAL INVESTMENT
Your Estimated Initial Investment
|
INVESTMENT ITEM |
AMOUNT (LOW) |
ESTIMATED (HIGH) |
METHOD OF PAYMENT |
WHEN DUE |
TO WHOM PAYMENT IS TO BE MADE |
|
Initial Franchise Fee |
$30,000 |
$50,000 |
Lump sum |
When you sign the Franchise Agreement |
Us. Nonrefundable. |
|
Leasehold Improvements1 |
$0 |
$5,000 |
Terms vary |
Terms vary |
Approved suppliers or per specifications. Nonrefundable. |
|
Signs |
$100 |
$1,000 |
Terms vary |
Terms vary |
Approved suppliers or per specifications. Nonrefundable. |
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|
INVESTMENT ITEM |
AMOUNT (LOW) |
ESTIMATED (HIGH) |
METHOD OF PAYMENT |
WHEN DUE |
TO WHOM PAYMENT IS TO BE MADE |
|
Office Equipment and Supplies |
$500 |
$1,500 |
Terms vary |
Terms vary |
Approved suppliers or per specifications. Nonrefundable. |
|
Fitness Equipment |
$1,000 |
$1,500 |
Terms vary |
Terms vary |
Approved suppliers or per specifications. Nonrefundable. |
|
Start-Up Marketing |
$500 |
$1,000 |
Terms vary |
Shortly before and around the time you begin operations |
Advertisers. Nonrefundable. |
|
Insurance |
$1,000 |
$4,500 |
Lump sum payment of first year premium |
Before beginning operations |
Insurance companies. Nonrefundable. |
|
Professional Fees |
$1,000 |
$2,500 |
Terms vary |
Terms vary |
Accountants, lawyers, etc. Nonrefundable. |
|
Initial Training Expenses |
$400 |
$1,700 |
Terms vary |
Terms vary |
Airfare, ground transportation, meals, lodging, etc. Nonrefundable. |
|
Lease Deposits |
$0 |
$2,000 |
Terms vary |
Terms vary |
Landlord. Maybe refundable although terms will vary. |
CA DD-7 JUMPBUNCH*
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|
INVESTMENT ITEM |
AMOUNT (LOW) |
ESTIMATED (HIGH) |
METHOD OF PAYMENT |
WHEN DUE |
TO WHOM PAYMENT IS TO BE MADE |
|
Other Deposits |
$0 |
$500 |
Lump sum |
When you hire the service |
Utilities, banks/credit card companies, leased equipment vendors, alarm company, telephone company. May be refundable although terms will varv. |
|
Licenses and/or Bonds |
$300 |
$1,000 |
Lump sum payment on application |
Prior to beginning operations |
Government agencies and bonding companies. Nonrefundable. |
|
Additional Funds |
$400 |
$5,000 |
Terms vary |
Amount varies over the next 3 months |
Payroll, debt service, and miscellaneous day-to-day expenses |
|
Total |
$35,200 |
$77,200 |
Does not include real estate costs |
||
The expenses in this Item 7 are estimates of your initial investment in one franchise prior to beginning operations and for the first three months after that time. We cannot guarantee that you will not have additional expenses starting the business. Your costs will depend on how closely you follow the JUMPBUNCH® system standards, your management skill, experience and business acumen, local economic conditions, the acceptance by local consumers of our approved services, prevailing wage rates, competition, etc. We've made no estimate regarding real estate acquisition costs. We do not require you to acquire real estate. We make no representation as to whether any of the estimated investment amounts are refundable. The estimates in this Item 7 were developed based upon the experience of our former affiliate in starting a business similar to the franchise business and upon our analysis of the present market cost of obtaining the necessary goods and services to begin operating the franchise business. We do not provide any financing of your initial investment.
1 Typically, the franchise will be operated out of your home. We have included in our high end estimate your costs for any leasehold improvements in a rented space in the event you elect to operate the franchise outside your home. Our primary concern as to the type of property in which
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JUMPBUNCH®
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you operate the franchise is that the franchise business not be located in any area which clearly may reflect negatively upon the image of the franchise business, such as in an area with a historically high crime rate. The property type may be residential, office or commercial. There are no requirements as to building size.
2 Our estimated cost of office equipment and supplies includes the cost of a computer, printer/fax/copy machine, phone/voice mail system, filing cabinets, forms, and stationery.
3 Our estimated cost of fitness equipment includes sports equipment, toys and miscellaneous items you will need to conduct the classes. We made no estimate for a vehicle as we assume you will use a vehicle you already own.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
The leasehold improvements, signs, office equipment and supplies, and fitness equipment listed in Item 7 must be purchased by you from our approved suppliers or according to our specifications. You must use an approved accounting software program in the operation of your JUMPBUNCH® franchise. You will use the accounting software program to generate invoices and receipts for customers, track your sales at the franchise, and maintain information required for accounting records. Also, you must use a standard Windows 2000® compatible computer. You must purchase and use Microsoft Publisher 2002 or a more recent version of this software. You also will need a printer, a facsimile machine, and a copy machine, in order to operate the franchise. You will use the personal computer to communicate with us through the Internet, as well as to create correspondence and records related to the franchise. It will be your responsibility to find an Internet Service Provider and to set up an e-mail account through which you can communicate with us. The software and hardware are not proprietary.
Approved suppliers and specifications are set forth in our Operations Manual. Approved suppliers and specifications are determined based on the current needs for operating the franchised business. We evaluate approved suppliers based on price, service, quality, and other commercially reasonable benchmarks. The identity of approved suppliers and these specifications are updated periodically in writing by modifying the appropriate pages of the Operations Manual. We will send you modified pages through the United States Mail or by any other commercially reasonable means. We have procedures for approving vendors and suppliers you recommend. It takes up to 90 days to evaluate new vendors or suppliers.
Attached Exhibit "D" sets forth the goods and services we require you to purchase or lease from our approved suppliers and any arrangements we've negotiated with the suppliers. These goods and services include leasehold improvements, signs, office equipment and supplies, fitness equipment, and insurance. We are not currently approved suppliers. We do not derive revenue or other material consideration as a result of your required purchases or leases. Our reason for these requirements is to ensure uniformity and consistent quality in all
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JUMPBUNCH® locations. During our last fiscal year ending December 31, 2006, we did not derive gross revenue from franchisees' required purchases.
The following table sets forth our estimates regarding the items we require you to purchase or lease from our approved vendors and suppliers relative to your total initial investment and annual operating expenses (not as a percentage of gross revenue).
|
Goods/Services |
Percentage of Total Initial Investment |
Percentage of Total Annual Operating Expenses |
|
Leasehold improvements |
0%tol3% |
Less than 1% |
|
Signs |
l%to3% |
Less than 1% |
|
Office equipment and Supplies |
4% to 5% |
Less than 3% |
|
Production equipment |
4% to 10% |
Less than 3% |
|
Insurance |
4% to 5% |
Less than 2% |
We do not provide other material benefits to you, i.e., special renewal privilege or additional franchises, based on your use of our designated or approved sources. We have no information to report on revenue at this time. There are no purchasing or distribution cooperatives at this time.
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 OFFERING CIRCULAR.
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|
OBLIGATION |
ARTICLE NUMBER IN FRANCHISE AGREEMENT |
ITEM NUMBER IN DISCLOSURE DOCUMENT |
|
a. Site selection and acquisition/ lease |
Not applicable |
11 |
|
b. Pre-opening purchases/leases |
6. |
8 |
|
c. Initial and ongoing training |
3. |
7 and 11 |
|
d. Opening |
2.4. |
11 |
|
f. Fees |
1.8., 2.1., 2.3.,2.4., 2.5., 2.6., 2.7., 3.2., 3.4., 3.5., 6.3., 8.3., 9.2., |
5 and 6 |
|
g. Compliance with standards and Policies / Operations Manual |
1.1., 3., 6. |
11 |
|
h. Trademarks and proprietary Information |
4., 6. |
13 and 14 |
|
i. Restrictions on products/services Offered |
6. |
16 |
|
j. Warranty and customer service Requirements |
N/A |
11 |
|
k. Territorial development and sales Quotas |
2.9. |
12 |
|
1. Ongoing products/service Purchases |
3.4.2., 3.5., 6. |
8 |
|
m. Maintenance, appearance and Remodeling requirements |
6. |
6 and 8 |
|
n. Insurance |
6.1.13. |
7 and 8 |
|
o. Advertising |
2.4., 2.5., 2.6. |
6 and 11 |
|
p. Indemnification |
12.4. |
9 |
|
q. Owner's participation/ Management/staffing |
1.4., 1.7. |
11 and 15 |
|
r. Records/reports |
7. |
6 |
|
s. Inspections/audits |
8. |
6 and 11 |
|
t. Transfer |
9. |
17 |
|
u. Renewal |
1.8. |
17 |
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|
OBLIGATION |
ARTICLE NUMBER IN FRANCHISE AGREEMENT |
ITEM NUMBER IN DISCLOSURE DOCUMENT |
|
v. Post-termination obligations |
11. |
17 |
|
w. Non-competition covenants |
5., 11. |
17 |
|
x. Dispute resolution |
13.12. |
17 |
|
y. [other] |
ITEM 10
FINANCING
We do not offer direct financing. We do not guarantee any note, lease or other of your obligations.
ITEM 11
FRANCHISOR OBLIGATIONS
Except as listed below, we need not provide any assistance to you (Article refers to the relevant Franchise Agreement Article):
Our obligations prior to your beginning operation of your JUMPBUNCH® franchise (with cites to the Franchise Agreement) include:
1. Granting you a franchise when you sign the Franchise Agreement to operate a JUMPBUNCH® business within a designated territory (Article 1.3.);
2. Allowing you to use our Operations Manual and instructing you in "Methods of Operation" within 60 days of your signing the Franchise Agreement (Article 3.5.). You will be permitted to view our Operations Manual at our main office prior to purchasing the franchise. A copy of the Table of Contents to our Operations Manual is contained in Exhibit "E" to the Franchise Offering Circular;
3. Providing you with an initial training program within 60 days of your signing the Franchise Agreement (Article 3.1.);
4. Providing you with general guidance, within 60 days of your signing the Franchise Agreement, concerning (Article 3.3. and sub-articles);
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Standards, specifications and operating procedures and methods utilized by the business;
Purchasing required ancillary goods, equipment, materials, supplies and services;
Advertising and marketing programs;
Employee training; and
Administrative, bookkeeping and accounting procedures and services.
Since we allow you to operate from your home, we have no requirement that we must approve a location for your JUMPBUNCH® business. However, if you decide to operate your business from outside your home, we have the right to approve your choice of location. The primary factor we consider in approving your choice of location is that the location not adversely impact the image of the franchise, such as being located in an area with a historically high crime rate. We will not unreasonably withhold our consent to your choice of a location but if you and we can't agree on a choice of a location, we may terminate the Franchise Agreement and retain your initial franchise fee.
Our obligations to you during the operation of your JUMPBUNCH® franchise may include:
1. Providing you with telephone and e-mail consultation during the times as are outlined in the Operations Manual (Article 3.4.1.);
2. Providing you with buying advisory services where we provide you with lists of sources and approved suppliers for our ancillary goods, services, equipment, etc. (Article 3.4.2.);
3. Providing you with ongoing marketing programs (Article 3.4.3.);
4. Providing you with newsletter services where we may inform you periodically about current events in the JUMPBUNCH® franchise program (FA 3.4.4.);
5. Providing you with meetings, seminars or conventions where we may get together with you and other JUMPBUNCH® franchisees for business or social purposes (Article 3.4.5.);
6. Providing you with research and development regarding our Methods of Operation (Article 3.4.6.);
7. At your request, we may furnish additional guidance and assistance and, in this situation, may charge the per day fees and charges we periodically
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establish. If you request, or if we require, additional or special training for your employees, all of the expenses that we incur in connection with this training, including per day charges and travel and living expenses for our personnel, will be paid by you (Article 3.4.7.);
8. As we may mutually agree, we may provide ongoing assistance to you at the hourly fee and charge we periodically establish. (FA 3.4.8.);
We control an Advertising Fund to which all JUMPBUNCH® franchisees contribute. We may, but are not obligated to, contribute to the Advertising Fund. We are not limited to any specific media in which ads may be disseminated. We are not limited to local, regional or national programs, but may use a combination of these programs. We will generate ads and may solicit outside ad agencies for ad creation. You can only use advertising that you generate after first receiving our approval. We are not required under the terms of the Franchise Agreement to provide advertising in the area or territory where your JUMPBUNCH® franchise is located in the same proportion as your contributions to the Advertising Fund. The Advertising 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 the reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the Advertising Fund and its programs. We will prepare an annual unaudited statement of monies collected and costs incurred by the Advertising Fund and furnish the statement to you upon written request. Any money in the Advertising Fund which is not depleted within the calendar or fiscal year will remain in the Advertising Fund for use during the following calendar or fiscal year. Our franchisor-owned company units have no obligation to contribute to the Advertising Fund. (Article 9). There are no advertising cooperatives or franchisee councils involved in the advertising process, although we have the right to require these cooperatives to be formed, changed, dissolved or merged. The Advertising Fund will use 0% of Ad Fees collected to solicit the sale of JUMPBUNCH® franchises. During our last fiscal year ending December 31, 2003, we collected no Advertising Fund fees.
We approve suppliers for hardware and software (see Item 8 above). You must use an approved accounting software program in the operation of your JUMPBUNCH® franchise. You will use the accounting software program to generate invoices and receipts for customers, track your sales at the franchise, and maintain information required for accounting records. We also require you to use a standard Windows 2000® compatible computer. Also, you must purchase and use Microsoft Publisher 2002 or a more recent version of this software. You also will need a printer, a facsimile machine, and a copy machine, in order to operate the franchise. You will use the personal computer to communicate with us through the Internet, as well as to create correspondence and records related to the franchise. It will be your responsibility to find an Internet Service Provider and to set up an e-mail account through which you can communicate with us. The software and hardware are not proprietary. You will contact our approved suppliers for service and maintenance of your computer hardware and software and peripheral equipment. Our approved suppliers have their own policies for service and maintenance as well as hardware and software upgrades. You agree to maintain at your own expense a computer system that conforms to the requirements and formats we periodically, including updating all computer
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software and hardware as we require. We may, as often as we deem appropriate, including on a daily basis, access the computer systems that you must maintain in connection with the operation of the JUMPBUNCH® franchise and may retrieve all information relating to the JUMPBUNCH® franchise's operations. (Article 7.2.)
We estimate the length of time between the signing of the Franchise Agreement or the first payment of consideration for the JUMPBUNCH® franchise and your first marketing effort to sell the franchise services is 30 days. Things that may affect the time period include your ability to purchase equipment, obtain clients, and/or purchase materials and supplies. You must begin operation of your JUMPBUNCH® franchise within 90 days after execution of the Franchise Agreement or within 10 days after you have completed initial training to our satisfaction. The pre-opening training program will be conducted at our mutual convenience during this time period.
Our training program is conducted at our main office at 1160 Spa Rd, Suite 3B, Annapolis, Maryland 21403. Our current initial training program consists of 2 working days of training for you (or your Managing Owner), and 1 additional employee you elect to enroll in the training program. Also, you must participate in all other activities required to operate the JUMPBUNCH® franchise. Although we will furnish initial training to you (or your Managing Owner), and 1 additional employee at no additional fee or other charge, you will be responsible for all travel and living expenses which you (or your Managing Owner) and your employee incur in connection with training. If we determine that you (or your Managing Owner) are unable to complete initial training to our satisfaction, we may terminate the Franchise Agreement under the terms of Article 10 of the Franchise Agreement. (Article 10.2.)
We may reasonably require you (or your Managing Owner) and/or previously trained and experienced employees to attend refresher training courses at the times and locations that we designate, and we may charge reasonable fees for these courses. There are no limits on the frequency of these required refresher training courses.
Pre-opening training will be provided substantially as follows:
|
SUBJECT |
TIME BEGUN |
INSTRUCTIONAL MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Personnel |
See Notel |
Operations Manual |
1 |
0 |
See Note 2 |
|
Administration |
See Note 1 |
Operations Manual |
3 |
0 |
See Note 2 |
|
Operations |
See Notel |
Operations Manual |
3 |
0 |
See Note 2 |
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The original documents were scanned as an image. The original file can be downloaded at the link above.