Franchise Agreement
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Sample Franchise Agreement
MAILCOUPS, INC. SUPERCOUPS FRANCHISE AGREEMENT
This Agreement is made on______day of_________________,______, by and between
MailCoups, Inc., a Delaware corporation with principal offices at Avon Industrial Park, 180
Bodwell Street, Avon, Massachusetts 02322 ("MailCoups") and________________________, a
corporation/ partnership/ limited liability company/ individual proprietorship, with its principal place of business at the location designated on the Summary Pages ("Franchisee"). Franchisee has designated the person named on the Summary Pages as its "Operating Franchisee," to be the individual responsible for supervision of the daily operation of the Franchise.
MailCoups and Franchisee, intending to be legally bound, agree as follows:
ARTICLE 1: FRANCHISE GRANT
1.1 License Grant. Subject to the terms and conditions of this Agreement, MailCoups grants Franchisee the right to use MailCoups' registered service marks {"SUPERCOUPS MONEY SAVING COUPONS FOR THE WHOLE FAMILY" and design, and "SUPERCQUPS"(the) ["SUPERCOUPS" and "Local Coupons. Super Savings" (the]
"Service Marks") and the right, franchise and privilege to use the SuperCoups Confidential Manual and the SuperCoups system of operating an advertising and marketing business which specializes in cooperative direct mail coupon advertising and Internet and television advertising services ("SuperCoups System").
ARTICLE 2: TERRITORY
2.1 Franchisee's Territory. Subject to the conditions enumerated below throughout the term of this Agreement, Franchisee shall have the exclusive right to {send, through the United States Postal Sendee,) [deliver] Cooperative Mailings identified by the Service Marks in the Territory (to "Mail"). [A "Mailing" may be distributed via the United States Postal Service, or through distribution services such as the "ADVO ShopWise Wrap," the ADVO National Network Extension ("ANNE") and through other methods of delivering envelopes to Homes (collectively, "Distribution Services").] "Cooperative Mailings" are envelopes containing advertising of two (2) or more advertisers. Franchisee's right to {advertise} [deliver advertising] through [devices] other {media,] [than Mail,] including{, without limitation,) the Internet, television, radio 4©f| [and] other (electronic) media is non-exclusive. MailCoups, its franchisees, affiliates and their franchisees or licensees may transmit advertising to Franchisee's Territory by any means other than Mail. If Franchisee is in compliance with this Agreement:
2.1.1 Except as set forth below, MailCoups shall not authorize anyone to Mail to individual or family dwellings or businesses ("Homes") using the Service Marks in Franchisee's Territory; nor shall MailCoups itself Mail to Homes using the Service Marks in Franchisee's Territory.
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2.1.2 [Except as provided in Section 2.1.3,] MailCoups and its affiliates and any of their successors, licensees, or assigns may Mail to Homes in the Territory, but they may not Mail using the Service Marks.
2.1.3 Neither MailCoups nor its affiliates shall provide Complete Manufacturing Services for any person or company who mails Cooperative Mailings into Franchisee's Territory if such person is neither an affiliate nor a franchisee of MailCoups or its affiliates. "Complete Manufacturing Services" means providing printing, inserting, sort/tray, envelopes, lists and labeling to a person or company. Neither MailCoups nor its affiliates are prohibited from providing one or more components of Complete Manufacturing Services to such persons or companies, provided they are less than all of such services; nor are they prohibited from providing distribution services to such persons or companies.
2.2 National Accounts. MailCoups reserves the right to place coupons of National Accounts in envelopes Mailed in Franchisee's Territory}, provided the National Accounts couponc do not violate an Exclusive Advertising Right Franchisee has granted to an advertiser pursuant to Section 2.6). MailCoups reserves the exclusive right to solicit and service National Accounts in Franchisee's Territory. A National Account is an advertiser which, in MailCoups' judgment, is capable of Mailing to a minimum of 1,000,000 Homes in a two (2)-month period. MailCoups shall pay Franchisee One Dollar ($1) per thousand for each MailCoups National Account inserted in (a coupon Mailing) [an envelope Mailed] to Franchisee's Territory {(except Franchisee's initial two (2) coupon Mailings if the Summary Pages (Section 7(b)) indicate Franchisee is entitled to receive "Free" Mailings)) [directly by MailCoups through the United States Postal Service (except for National Accounts coupons placed in discounted Mailings described in Section 3.2). No payment is required for envelopes distributed via the ADVO ShopWise Wrap, the ANNE network or similar distribution devices]. MailCoups may modify the fee at any time.
4 2.2.1 If Franchisee believes that a National Account advertisement conflicts with an Exclusive Advertising Right which Franchisee has granted to an advertiser. Franchisee shall notify MailCoups of Franchisee's opinion, and an appropriate member of MailCoups' management team shall evaluate Franchisee's concern. MailCoups' decision about whether a National Account advertisement would violate the advertiser's Exclusive Advertising P.ight and whether the Exclusive Advertising Right was granted pursuant to Section 2.6 shall be binding on Franchisee.
2.3 Multiple Territory Clients) [2.3 Cross-Sales]. MailCoups and any franchisee
("Originating Franchisee") may contract with a client which resides in its Territory to Mail coupons into another franchisee's Territory, provided:
a) The franchisee which owns the Territory ("Local Franchisee") is notified a reasonable amount of time before its copy deadline;
b) The Originating Franchisee pays the Local Franchisee the compensation the parties have negotiated. However, if the parties fail to reach agreement on compensation, the Originating Franchisee shall pay the Local Franchisee the cross-sale compensation ("CSP") (published) [set] by MailCoups. The CSP is compensation the Originating Franchisee must pay the Local Franchisee if (they) [the franchisees] cannot agree (between themselves) on a fair
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price for the services and costs incurred by the Local Franchisee which are related to Mailing a {Multiple Territory coupon. It shall be established by a vote of a majority of the voting SuperCoups franchisees in Franchisee's region ("CSZs") whose franchise agreements or amendments to them contain provisions consistent with relevant provisions of this Article 3. The CSP shall apply to all such CSZs in the region. The CSP may be modified annually and shall be published by October 1 for all Mailings which shall occur during the following calendar year,) [cruss-saie cuupou; and]
(c) Within sixty (60) days of October 1 of each year MailCoupc or its designee shall solicit all CSZs about their opinions of what the CSP should be for the next calendar year. Based upon a majority vote of those CSZs in the region who voted, MailCoups shall publish a CSP for Franchisee's region by October 1, or as soon thereafter as is practical.
d) The advertisement is not for a business, product or service for which the Franchisee has granted Exclusive Advertising FJghts pursuant to Section 3.6;
e)f [c)] A Local Franchisee has no duty to Mail a coupon for an Originating Franchisee if:
(i) the Originating Franchisee has not paid the Local Franchisee the full agreed compensation, or if no agreement on compensation has been reached, the entire CSP, as well as all other costs associated with Mailing the Originating Franchisee's coupon at least fifteen (15) days before the [Scheduled) [scheduled] Mailing; or (ii) the Originating Franchisee is in default of any payment obligations to the Local Franchisee^!.]
2.3.1 Because franchise agreements executed before 1999 do not address [Multiple Territory Clients) [cross-sale clients], and because franchise agreements executed between 1999 and [3001} [2002] contain somewhat different standards from those in Section 2.3, some Local Franchisees may not be required to accept Franchisee's {Multiple Territory Client Mailings) [cross-sales], or the terms of this Section 2.3 may not apply to them.
{2A Territory Mapping. MailCoups will order CPJS (Carrier Route Information Systems) Schemes from the U.S. Postal Service, and count information by zip code and carrier route from the label company that supplies) [2.3.2 If a Local Franchisee has granted an advertiser exclusive advertising rights in the Local Franchisee's Territory pursuant to a franchise agreement executed before 2003, the Originating Franchisee must honor the exclusive advertising rights and may not cross sell a competing coupon for Mailing in the Local] Franchisee's Territory. (This information shall be used to assist Franchisee in designating the siae of the Community Marketing Profiles in Franchisee's Territory, A Community Marketing Profile consists of those Homes sharing certain demographic characteristics that constitute the smallest group which is normally the subject of a Mailing, MailCoups may charge a fee for these services.) [Exclusive advertising rights are based on a franchisee's agreement with an advertiser to exclude coupons of competitors in a Mailing which includes the favored advertiser's coupon.]
(2.5) [2.4] Envelope Advertising. MailCoups may place advertisements on the back of envelopes [that Franchisee Mails.] {the Franchisee Mails, provided MailCoups pays Franchisee at least One Dollar ($1) for each one thousand (1,000) such envelopes Franchisee Mails. If Franchisee notifies MailCoups that it has sold advertising for the envelope before the notice deadline MailCoups specifies. Franchisee may place advertisements on the backs of envelopes it Mails.
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2.6 Exclusive Advertising Rights. To facilitate sales of advertising to businesses which have a narrow customer base and which might refuse to advertise in a SuperCoups envelope if it carried an advertisement of a competitor; Franchisee may grant Exclusive Advertising Rights to certain advertisers. Within sixty (60) days of October 1 of eaeh year, Mail Coups or its designee shall solicit all CSZs in Franchisee's region or urban gone about their opinions of which, if any, categories of business) products or services should be eligible for Exclusive Advertising Rights during the following calendar year. The ten (10) categories receiving the most votes shall be published by Mail Coups as the only categories entitled to Exclusive Advertising Rights in their region or urban zone during the following calendar year. MailCoupc may designate "urban aones" within regions which ma;' be treated as "regions" for purposes of this Section 2.6. Urban aones are large cities within regions which have market characteristics which differ from those in suburban or rural areas of the same region.
3.6.1 Franchisee is not required to grant Exclusive Advertising Rights for a business, product or sendee which is on the approved list for the region.
3.6.2 Franchisee only may grant Exclusive Advertising Flights for a business, product or service which is approved for use in Franchisee's region, and only for franchise territories Mailed by
2.6.3 Once Franchisee has committed to an advertiser that the advertiser is entitled to Exclusive Advertising Rights for a particular Mailing, both Originating Franchisees (as defined in Section 2.3) and MailCoups shall honor that commitment, and no Multiple Territory Client or National Account may place advertisements in the subject envelope which would violate an Exclusive Advertising PJght which Franchisee has granted to an advertiser in compliance with this Section
ARTICLE 3: INITIAL FRANCHISE FEE
3.1 Initial Franchise Fee. Upon the signing of this Agreement (the "Effective Date"), Franchisee shall pay MailCoups the Initial Franchise Fee set forth on the Summary Pages. The Initial Franchise Fee is fully earned by MailCoups when paid by Franchisee. It is not refundable.
3.2 Discounted (Initial) Mailing Cost for New Franchisees. If the Summary Pages indicate that Franchisee qualifies, {certain coctc of Franchisee's first two (2) coupon Mailings to j [Franchisee shall not be charged a Royalty Fee or Base Fee on Mailings to the first ten (10) Community Marketing Profiles ("CMPs") to which Franchisee Mails. A CMP consists of approximately] ten thousand (10,000) Homes {are included in the Initial Franchise Fee. A "coupon Mailing" or "Mailing" is comprised of coupons sold by Franchisee to local businesses and which are Mailed to Homes in Franchisee's Territory and Multiple Territory Clients. The following costs of the initial two (2) coupon Mailings are included in the Initial Fee if Franchisee qualifies; all pre-press, printing, inserting, envelopes, labels and trucking charges (not to exceed reasonable charges);) [which share certain demographic characteristics.] Franchisee must pay all {postage charges, incremental charges for Mailing more than twenty-five (25) coupons (other than incremental charges generated by National Accounts), up charges for oversized coupons, overruns, four, color discs which are not included in MailCoups existing
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library, excessive type charges, pulls/kills, florescent inkc, 7 point stock and two sided coupons.j [other charges associated with a discounted Mailing.
3.3 Mailing Costs for Metro Franchisees. If the Summary Pages indicate that Franchisee qualifies as a Metro Franchisee, in lieu of the discount described in Section 3.2, Franchisee's Territory shall be divided into areas of approximately 100,000 Homes ("Areas"). Franchisee shall not be charged a Royalty Fee or a base Fee on Mailings to the first ten (10) CMPs Mailed in each Area.]
ARTICLE 4: ADDITIONAL TERRITORY
4.1 (Purchase) [License] of Additional Territory. If at any time during the term of this Agreement, Franchisee and MailCoups agree to Franchisee's purchasing an Additional Franchise Territory, in consideration of Franchisee paying to MailCoups its then standard Initial Franchise Fee for Additional Territories, MailCoups shall grant Franchisee a Franchise for the Additional Territory on (it's) [its] then current form of Franchise Agreement. [At its option, MailCoups may amend this Agreement by adding the Additional Franchise Territory and by defining new Minimum Mailing Requirements.] Franchisee shall not be entitled to receive the in-field portion of initial franchise training, nor shall the Initial Franchise Fee entitle Franchisee to discounted Mailings described in Article 3.2 [and 3.3], to the computer hardware and software described in Article 8.2, or to the initial franchise training described in Article 16.2 and 16.3. Neither Franchisee nor MailCoups is obliged to execute a franchise for Additional Territory.
4.1.1 (However,] Franchisee shall be eligible to execute a Franchise for Additional Territory if:
a) MailCoups still is offering franchises in the jurisdiction selected by Franchisee and MailCoups has obtained any franchise registrations or exemptions necessary to lawfully offer the franchise to Franchisee;
b) Franchisee has been in full compliance with all of its obligations arising under the Franchise Agreement for at least twelve (12) months before Franchisee offers to acquire a franchise for the Territory;
c){ Franchisee's coupon count per envelope during the twelve (12) months preceding the offer has met or exceeded the average (median) coupon count of all SuperCoups franchisees which have been in business for at least two (2) full years;
d)f Franchisee possesses the capital and management skills which MailCoups reasonably determines is necessary to develop the Territory. However, MailCoups' granting of an additional franchise in no way constitutes a warranty or representation that Franchisee will successfully operate a SuperCoups business in the Additional Territory;
4*)} (d)] MailCoups has not already commenced negotiations with a third
party to grant a franchise for the Additional Territory;
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-)}■ [e)] Franchisee executes a general release in a form prescribed by
MailCoups which waives any and all claims Franchisee and its Shareholders and Guarantors may have against MailCoups, its affiliates and their officers, directors, employees, representatives, lawyers, franchisees and suppliers;
f) MailCoups and its affiliates have no plans to operate a
SuperCoups business in the proposed Additional Territory;
{h)} [g)J The Additional Territory identified by Franchisee will not likely
interfere with MailCoups' development plans for the region by rendering adjacent territory too costly or too difficult to service by another franchisee;
4*^- [h)J Franchisee has cooperated with other franchisees in the region in
servicing Multiple Territory Clients;
4j)^ [i)] Franchisee has neither sued nor threatened to sue MailCoups, its
affiliates or their franchisees, officers, directors, employees, agents, lawyers or vendors; [and]
■Wr U)l Franchisee increases its Mailing (Frequency] [frequency] in all its
existing franchise Territories to at least the level prescribed in the new Franchise Agreement!.]^ aad
1) Franchisee participates in all programs required by the Franchise Agreement for the Additional Territory in all of Franchisee's existing Territory.
A,2 Additional Fee Due If Transferred Within Two Years. If Franchisee shall transfer all of any part of any Additional Territory acquired pursuant to this Article 4 within two (2) years of the Effective Date of such Agreement; as a condition of MailCoups' approval of the Transfer; in addition to the Transfer Fee required by Article 22.1, Franchisee shall pay MailCoups the difference between the Initial Franchise Fee paid for such Territory and MailCoups' then standard Initial Franchise Fee charged to new franchisees of the same type, i.e., Traditional, Conversion or Industry Experienced Professional.}
ARTICLES: TERM
5.1 Term. Unless sooner terminated pursuant to Article 23, subject to the terms of Article 6, the term of this Agreement is for a period often (10) years from the Effective Date.
ARTICLE 6: FRANCHISE RENEWAL
6.1 Renewal. If Franchisee wishes to [renew or] extend (or renew] this Agreement, Franchisee shall apply for renewal or extension of this Agreement for an additional ten (lO)-year term by providing notice to MailCoups not less than one hundred twenty (120) days prior to the expiration of this Agreement. MailCoups may invite Franchisee to extend or renew this Agreement by tendering to Franchisee for Franchisee's execution, the documents identified in this Article.
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6.2 Agreement to Renew. Franchisee's right to renew or extend this Agreement shall be conditioned upon Franchisee's having complied with each of the following conditions:
6.2.1 Franchisee is and has been in substantial compliance with all the provisions of this Agreement and requirements prescribed by MailCoups pursuant to this Agreement.
6..2.2 .Franchisee is current in all its financial obligations to MailCoups.
6.2.3 Franchisee signs the then current form of Franchise Agreement that MailCoups is issuing, which may include materially different terms and conditions from this Agreement.
6.2.4 Franchisee pays a renewal fee of Two Thousand Five Hundred Dollars ($2,500).
6.2.5 Franchisee obtains such {furniture, fixtures;) equipment and services that are then required of new SuperCoups franchisees and pays MailCoups or the vendors of such products or services the cost of obtaining such {furniture, fixtures,) equipment and services.
6.2.6 Franchisee and its guarantors sign a general release of any and all claims against MailCoups and its directors, officers, employees and agents. [The release shall not relate to the offer or sale of the Renewal Franchise Agreement]
6.3 Franchisee Election Not to Renew. {Failure} [The failure] by Franchisee to pay the renewal fee, sign the then current Franchise Agreement (and) [or] sign a general release within ninety (90) days after the agreements are delivered to Franchisee shall constitute an election by Franchisee not to renew the Franchise.
6.4 Refusal to Renew by MailCoups. MailCoups shall not be obligated to renew or extend this Agreement if:
6.4.1 Franchisee has failed to satisfy the Minimum Mailing Requirements during either of the two (2) years preceding the Expiration Date of this Agreement;^-©?
6.4.2 Franchisee has not paid Franchisee's Royalty Fees, Minimum Bimonthly Royalty Fees, Manufacturing Charges, Postage Charges or other monies owed MailCoups on a timely basis; or
6.4.3 MailCoups has decided to no longer offer or service franchises of a type, which is the subject of this Agreement in a state where Franchisee's Territory is situated.
6.5 Notice of Nonrenewal. If MailCoups elects not to renew or extend this Agreement pursuant to Section 6.4, MailCoups shall notify Franchisee of its decision at least 90 days prior to the Expiration Date. The notice shall state MailCoups' reasons for refusing to renew or extend this Agreement. If MailCoups and Franchisee have not agreed to renewal terms, MailCoups unilaterally may extend the Expiration Date of this Agreement to provide Franchisee a full ninety (90) (days) [days'] notice of nonrenewal.
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ARTICLE 7: FRANCHISE SITE
7.1 Franchise Site. Franchisee must conduct its Franchised Business from an office which satisfies the minimum criteria established by MailCoups from time to time, and which complies with MailCoups* site location criteria and with applicable zoning laws. MailCoups' annroya! of a.location does not constitute a representation or-guarantee iimi Franchisee's" operation of its business there will be successful, or that the operation of the business there complies with applicable laws and regulations. Franchisee is liable for assuring that the location, and the way in which it conducts its business satisfies local zoning, regulatory and licensing requirements.
ARTICLE 8: FRANCHISE EQUIPMENT
8.1 Required Facsimile Machine. Franchisee must {purchase or lease) [acquire] a facsimile machine {capable of transmitting to and from a group three (3) facsimile machines] and install a dedicated telephone line for {the use of the facsimile machine.) [its use in the operation of the Franchised Business.]
8.2 Required Computer. Franchisee must at all times use in the operation of its Franchise Business the computer hardware and software which MailCoups designates for Franchisee's use. Franchise is solely responsible for the costs of the hardware and software, as well as maintenance and all upgrades prescribed by the Franchisor.
8.3 { Television Production/Advertising Program Kit. Franchisee must at all times have and use the television production/advertising program equipment MailCoups prescribes.
&4| Equipment Standards. Franchisee shall acquire, maintain and use any other equipment, software, supplies or materials MailCoups designates for use in carrying on the Franchised Business. MailCoups may modify such standards and requirements described in this Article 8 at any time on thirty (30) days notice.
ARTICLE 9: MAILING REQUIREMENTS
9.1 Minimum Mailing Requirements. Franchisee must satisfy the Minimum Mailing Requirements specified on the Summary Pages.
9.1.1 MailCoups may increase Minimum Mailing Requirements at any time provided at least fifty percent (50%) of SuperCoups franchisees are Mailing more frequently than the requirements specified on the Summary Pages.
9.1.2 If Franchisee's Territory is within a {Metropolitan Statistical Area ("MSA")) [region or urban zone] in which seventy-five percent (75%) or more of the Homes Mailed by SuperCoups franchisees are Mailed at a frequency which exceeds Franchisee's Mailing frequency, MailCoups may require Franchisee to increase the frequency of its Mailings to the rate Mailed by the majority of SuperCoups franchisees in the {MSA.} [region or urban
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zone. MailCoups may require Franchisee to Mail at a frequency which equals the Mailing frequency of the majority of its Franchisees in the United States.]
9.1.3 MailCoups shall notify Franchisee of any increase in its Minimum Mailing Requirements by July 1 of the year before the increase is effective.
9.1.4 SuperCoups franchisees who have cxccui&i Fiouuiiise Agreements at different times may be subject to different Minimum Mailing Requirements.
9.2 Failure to Mail: Standard Territory. If Franchisee fails to satisfy (any) [its] Minimum Mailing Requirements {in any of Franchisee's Community Marketing Profiles) [during any year, or if Franchisee fails to schedule enough Mailings to satisfy the Minimum Mailing Requirements] without MailCoups' prior written approval, in lieu of its right to terminate the Franchise, MailCoups may {elect to) terminate Franchisee's rights {to the Community Marketing Profiles in which the default occurredi) [in any zip codes in the Territory which have not been Mailed.]
9.3 Failure to Mail: {Large Territory. If Franchisee has a territory which has more than eighty thousand (80,000) Homes, and has satisfied the Minimum Mailing Requirements in Community Marketing Profiles comprising at least eighty thousand (80,000) Homes, but not in all of Territory's Community Marketing Profiles unless MailCoups has provided Franchisee with a written waiver of such obligation, the Franchisor] [Metro Franchise. If Franchisee has been granted a Metro Franchise and has Mailed to at least eight (8) CMPs for each of Franchisee's last three (3) scheduled Mailings, but has not scheduled to Mail or has not Mailed the number of Homes Franchisee is required to Mail, in lieu of its right to terminate the Franchise, MailCoups [may terminate Franchisee's rights {to some or all of the Community Marketing Profilee where the Minimum Mailing Requirements have not been satisfied) but may not terminate the Franchisee solely for such deficiency. Without incurring liability for lost future profits, at any time prior to receiving a notice of termination from MailCoups, Franchisee may terminate its rights to one or more Community Marketing Profiles, provided Franchisee is in full compliance with applicable Minimum Mailing Requirements and is Mailing to at least eighty thousand (80.000) Homec in the Territory.} [in any zip codes in the Territory which have not been Mailed during the last three (3) scheduled Mailings.]
ARTICLE 10: QUALITY STANDARDS
10.1 Approved Products. Franchisee recognizes it is essential to the proper marketing of the SuperCoups System and to the preservation and promotion of the SuperCoups System's reputation and acceptance by the public at large, that MailCoups' approved standards of quality, composition, texture, finish and appearance are used in products distributed to the public.
10.1.1 Franchisee will use, offer for sale and sell using MailCoups' Service Marks only products, services, and advertising media that are approved by MailCoups in writing. Franchisee may not solicit business on the Internet or otherwise use MailCoups' Service Marks on the Internet unless such solicitation or use is approved or prescribed by MailCoups.
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10.1.2 Franchisee agrees not to in any way, manner, shape or form, distribute or sell any products or services purchased from MailCoups to any re-seller of such products or services without MailCoups' prior written approval.
10.2 Approved Suppliers. Franchisee must purchase the products and services sold in connection with the Franchise including pre-press, plating, and printing, inserting, sort/tray and labeling, labels, envelopes, and direct mailing -services exclusively from MailCoups or suppliers it approves. MailCoups is not obliged to approve or accept any other suppliers for such products and/or services.
10.2.1 Franchisee must purchase software products designated by MailCoups from sources designated [or approved] by MailCoups. Franchisee must use these software products in the Franchised Business as directed by MailCoups.
10.3 Approved Operating Franchisee. The Franchised Business only may be operated by an Operating Franchisee who has been approved in writing by MailCoups.
ARTICLE 11: ROYALTY FEES
11.1 Royalty Fees. During the term of this Agreement, Franchisee shall pay MailCoups a Royalty Fee of Fifteen Dollars and Twenty-Five Cents ($15.25) for each one
- thousand (1,000) (Homes) [envelopes] Mailed (an envelope) by Franchisee. Franchisee also shall pay MailCoups a Minimum Bimonthly Royalty Fee of (One Hundred Fifty Two) [Fifteen] Dollars and (Fifty) [Twenty-Five] Cents {($152.50)) [($15.25)] for every (Community Marketing Profile) [1,000 envelopes] in Franchisee's Territory [to] which -fi^} [Franchisee was] required to -fb®} [have] Mailed, but which -*sf [were] not Mailed during (the preceding cixty (60) days) [that period]. Minimum Bimonthly Royalty Fees must be received by the fifteenth (15 ) day of January, March, May, July, September and November for Mailings required to have been Mailed during the two (2) (calendar months. If any tax. other than an income tax ie imposed upon Royalty Fees, Minimum Bimonthly Royally Fees; License Fees or Advertising Fund Contributions required by Article 1Q» which are paid by Franchisee to MailCoupC; which MailCoups cannot offset against taxes it is required to pay under the laws of the United States or the State of its domicile, Franchisee shall compensate MailCoupc in the manner MailCoups prescribes so that the net amount or net rate MailCoups or the Fund receives jg no less than that which was established by this Agreement and due to MailCoups or the Fund on the Effective Date or on the date any increase in fees was imposed under this Agreement.) [previous calendar months. Minimum Mailing Requirements are defined in the Summary Pages.]
11.2 Royalty Fee Increase. The Royalty Fee and the Minimum Bimonthly Royalty Fee may be increased annually, effective (February) [January] 1 of each year by MailCoups at its sole discretion. The Royalty Fee shall not increase more than six percent (6%) annually during the term of this Agreement.
11.3 Royalty Fee [Waiver. If the Sum man Pages bo indicate, MailCoups waives Royalty Fees and) [Tax. If any tax other than an income tax is imposed upon Royalty Fees,] Minimum Bimonthly Royalty Fees (for the first two (2) twenty five (25) coupons Mailed ac a part of two (2) ten thousand (10,000) Home Mailings.) [, License Fees or Advertising Fund
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Contributions required by Article 19, which are paid by Franchisee to MailCoups, which MailCoups cannot offset against taxes it is required to pay under the laws of the United States or the State of its domicile, Franchisee shall compensate MailCoups in the manner MailCoups prescribes so that the net amount or net rate MailCoups or the Fund receives is no less than that which was established by this Agreement and due to MailCoups or the Fund on the Effective Date or on the date any increase in fees was imposed under this Agreement.] ------------
ARTICLE 12: LICENSE FEES
12.1 License Fees. As compensation to MailCoups for new programs, products or services which are not subject to Royalty Fees, Franchisee shall pay MailCoups such License Fee as MailCoups sets. Each License Fee shall be a flat fee, which shall be no higher than eight percent (8%) of Franchisee's Gross Receipts based upon MailCoups' suggested prices for the product or service Franchisee offers or sells. Flat fees may be increased annually effective (February) [January] 1 of each year by MailCoups at its sole discretion. License fees shall increase no more than six percent (6%) annually during the Term of this Agreement.
12.2 Gross Receipts. Gross Receipts is defined as the aggregate gross amount of all revenues from whatever source derived (whether in form of cash, credit, the redemption of gift certificates, agreements to pay or other consideration, including the actual retail value of any goods or services traded, bartered, or otherwise received by the Franchisee in exchange for any form of non-monetary consideration, whether or not payment is received at the time of sale or any such amount is proved uncollectible) from or in conjunction with the Franchised Business, whether such business is conducted in compliance with or in violation of the terms of the Franchise Agreement. Gross Receipts includes all sales of products, services or promotional items made from the Franchised Business. Gross Receipts includes proceeds received from "loss of business" insurance. However. Gross Receipts does not include:
a) Proceeds due from the sale of Cooperative Mailings;
b) Sales or use taxes collected by the Franchisee;
c) The amount of any refunds or allowances made on products or services returned by customers;
d) Returns to shippers, vendors and manufacturers;
e) Proceeds derived from the sale of equipment or supplies used by the Franchisee in the conduct of its business and not provided for resale;
f) Sums received in settlement of claims of loss or damage to fixtures, equipment or leasehold improvement; and
g) Sale of gift certificates.
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ARTICLE 13: MANUFACTURING, INTERNET AND TELEVISION MARKETING CHARGES
13.1 Manufacturing Charges. {MailCoupc charges Franchisee fees for pre press, plating and printing; inserting, sort/tray; envelopes; labels and labeling; and direct mailing services ("Manufacturing Charges") for each coupon Mailing.) [Franchisee shall pay MaiiCoups its then current Manufacturing Charges. Manufacturing Charges consist of the Base Fee (envelopes, list, labels and set up services), and Production Charges (art, prepress, plating, printing, inserting), and distribution services, at the time specified by Section 15.1. The Base Fee on the Effective Date is set forth on the Summary Pages. Production Charges vary based on several factors. They are published in MailCoups' Production Pricing Table which is a part of the Confidential Manual.]
13.2 Increases and Modifications in Manufacturing Charges. MailCoups may unilaterally increase the Manufacturing Charges by notifying Franchisee before October 1 of each year of any change in [the] Manufacturing Charges for the next calendar year. MailCoups may charge lower Manufacturing Charges if the volume or frequency of Franchisee's Mailings [warrant) [warrants] a discount. The decision about whether or how much discount to offer rests exclusively with MailCoups. MailCoups may pass on increases in the cost of (postage) [distribution services] and paper at any time.
13.3 Internet{ Marketing Charges, MailCoups charges Franchisee feesfo* participation in its Internet program. The fees may be modified at any time. If pursuant to Section 3.2 Franchisee qualifies for discounted initial Mailing costs for its first two (2) Mailings) no Internet marketing fee will be charged for those Mailings.
13.1 Television) Marketing Charges. MailCoups charges Franchisee fees for participation in its (television marketing) [Internet] program. The fees may be modified at any time.
[ARTICLE M: POSTAGE) [13.4 Television Marketing Charges. MailCoups or its designated supplier may charge Franchisee fees for participation in the television marketing program. The fees may be modified at any time.]
[11.1 Postage ha*ge} [ARTICLE 14: DISTRIBUTION CHARGES
14.1 Distribution Charges]. Franchisee is required to pay MailCoups its then current (postage rate) [distribution charges] for each envelope Mailed for Franchisee. [Distribution charges may change at any time.]
ARTICLE 15: FAILURE TO PAY FEES/FAILURE TO MAIL
15.1 Failure to Pay Fees When Due. If MailCoups has not received payment of Franchisee's Royalty Fees, Minimum Bimonthly Royalty Fees, Manufacturing Charges and Postage Charges for a Mailing and any other fees or charges which Franchisee owes MailCoups by the Due Date, MailCoups shall not be obliged to Mail Franchisee's Envelopes, and Franchisee bears total liability for breach of contract to Franchisee's customers and to MailCoups. The Due Date for {Royalty Fees, Manufacturing Charges, Postage) [the first thirty percent (30%) of
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the estimated Royalty Fee, Manufacturing Charge, Distribution] Charges and other periodic amounts owed by Franchisee which are not due by another specified date is {seven (7) days before a Scheduled Mailing. However, if Franchisee ever fails to pay all amounts due by the seventh (7th) day before a Scheduled Mailing, the Due Date shall thereafter be fourteen (14) days before each Scheduled Mailing) [twenty-one (21) days before a scheduled Mailing. The full balance is due no later than the Friday before the week for which the Mailing has been scheduled]. The Due Date for Minimum Bimonthly Royalty Fees is Ihe iifieemh (i5~; aay ot January, March, May, July, September and November of each year for Mailings required to have been Mailed during the two (2) preceding calendar months.
15.2 Financing Charges. All Royalty Fees, Minimum Bimonthly Royalty Fees, Manufacturing Charges and other amounts Franchisee owes MailCoups bear interest after the due date at the highest applicable rate allowed by law for open account business credit, not to exceed two percent (2%) per month.
15.3 Payment of Financing Charges. Financing Charges are due and payable to MailCoups when invoiced.
15.4 Failure to Mail. If Franchisee has paid Royalty Fees, Minimum Bimonthly Royalty Fees, Manufacturing, Internet and Television Marketing Charges, {Postage} [Distribution] Charges and all other fees and charges owed MailCoups when due, and MailCoups fails to place Franchisee's coupon Mailing into distribution by direct mailing within fourteen (14) days of MailCoups' projected coupon Mailing date, MailCoups will refund production costs and postage charges, if any, paid by Franchisee.
15.4.1 MailCoups shall not be deemed to be in breach of this Agreement as a result of errors in producing a coupon Mailing or in the distribution of a Mailing. If MailCoups is unable to produce the coupon Mailing at its own facility, MailCoups shall use its best efforts to have Franchisee's Mailing produced and distributed using such alternate resources as MailCoups determines would facilitate production and distribution under the circumstances, at a reasonable cost and on a reasonable schedule. Franchisee shall be liable for paying such charges for the alternative sources. However, Franchisee shall incur no liability to such source if Franchisee has not agreed to the terms offered by that source.
15.5 Mailing Cancellation Fee. If Franchisee cancels a (Scheduled Mailing or ai4e4| [Mailing to a CMP less than six (6) weeks before a scheduled Mailing date, or if Franchisee fails] to provide MailCoups with information, materials or payments required by MailCoups to Mail on the scheduled date {less than cix (6) weeks before a scheduled Mailing date, the)[, ]Franchisee shall pay MailCoups a Mailing Cancellation Fee of Seven Hundred Fifty Dollars ($750) for each (such canceled Mailing.) [CMP which was scheduled to have been Mailed.] The entire (Fee) [fee] must be (received by) [paid to] MailCoups within ten (10) days of die date of the (Scheduled) [scheduled] Mailing [which was cancelled].
15.6 Mailing Rescheduling Fees. If Franchisee causes a change in the date of a (Scheduled) [scheduled] Mailing [to a CMP], Franchisee shall pay MailCoups a fee of Two Hundred Fifty Dollars ($250) [for each such CMP] if MailCoups received notice of the change less than ninety (90) days before a (Scheduled) [scheduled] Mailing, and One Hundred Dollars ($100) [for each such CMP] if MailCoups received notice of the change ninety (90) or more
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days before the scheduled Mailing date. [The entire fee must be paid to MailCoups by the Friday before the week of the scheduled Mailing.]
ARTICLE 16: TRAINING
16.1 Initial Franchise Training. The Operating Francliiacc and the Franchise manager, if any, are required to participate in and complete, to MailCoups' satisfaction, the SuperCoups initial franchise training.
16.2 Initial Franchise Training: In-House. The in-house portion of initial franchise training is five (5) days at MailCoups' corporate headquarters in Avon, Massachusetts. Unless Franchisee requests a later date in writing, the in-house portion of the initial franchise training usually occurs within ninety (90) days, but not later than one hundred twenty (120) days, of the date this Agreement is signed by both parties.
16.3 Initial Franchise Training: In-Field. The in-field portion of initial franchise training is conducted by a representative of MailCoups for ten (10) days at Franchisee's business location within Franchisee's Territory. This ten (10) day training is divided into two (2) nonconsecutive five (5) day segments.
16.3.1 During the in-field portion of the initial franchise training MailCoups' representative assists Franchisee in establishing and standardizing procedures and sales techniques at the Franchise location.
16.4 Cost of Initial Franchise Training. The cost of providing in-house and in-field training for the Operating Franchisee and Franchisee's manager (or one other representative of Franchisee) is included in the Initial Franchise Fee. However, [if a Transfer results in the appointment of an Operating Franchisee who has not previously received initial training, MailCoups may charge Franchisee its then Standard Training Fee.] Franchisee is responsible for all travel and living expenses, salaries and workers' compensation, if any, for the Operating Franchisee and Franchisee's manager or representative(s) during initial franchise training.
16.5 [Initial) [In-Field] Franchise Training for Additional Franchise Representatives. At any time during the term of this Agreement, Franchisee may request infield training for additional individuals who are responsible for the daily operation of the Franchised Business. In-field training will be provided at {a goet of not more than Five Thousand Dollars ($5,000)} [MailCoups' standard in-field training fee,] plus MailCoups' out-of-pocket expenses for each of its representatives participating in the training. All training fees shall be paid by Franchisee prior to receiving training.
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16.6 Waiver of Initial Franchise Training. Unless Franchisee has agreed to pay MailCoups' standard training fees and the Summary Pages so indicate, if Franchisee has purchased Additional Territory or an additional franchise, no initial franchise training will be provided by MailCoups and no attendance at training will be required of Franchisee. If Franchisee is a Conversion Franchisee or an Industry Experienced Professional Franchisee, infield training is not offered and will only be made available upon Franchisee's request for MailCoups' 'standard training fees; -------'
16.7 Additional Mandatory Training Programs. Franchisee acknowledges MailCoups' right to implement additional mandatory training programs for the Operating Franchisee and managers of SuperCoups franchises.
16.7.1 MailCoups will not require attendance by the Operating Franchisee and/or Franchisee's manager at additional mandatory training programs more than twice a year.
16.7.2 MailCoups will not charge Franchisee more than Two Hundred Fifty Dollars ($250) per person annually for additional mandatory training programs.
16.7.3 Franchisee will be responsible for all travel and living expenses, salaries and workers' compensation, if any, for the Operating Franchisee and Franchisee's representative(s) for all additional mandatory training programs.
16.8 Additional Training Fee Payments. Fees for additional optional training programs and additional mandatory training programs, if any, must be paid in advance of the date of the program.
16.9 Continuing Support. During the term of this Agreement, MailCoups, either directly or through its representatives, shall provide Franchisee with such of the following as it deems reasonably appropriate and to the extent that it provides similar support to similarly situated MailCoups' franchisees:
16.9.1 Advice and guidance on establishing and maintaining proper administrative and general business procedures.
16.9.2 Continuing advisory services, which include, but are not limited to, consultation by telephone, correspondence, e-mail, facsimile or conference on promotional, business, operational or sales problems including, as required, analysis of Franchisee's sales, marketing and/or financial data and other problems relating to the operation of the Franchised Business.
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ARTICLE 17: CONFIDENTIAL MANUAL/NONDISCLOSURE/CONFLICTS
17.1 Confidential Manual. During initial franchise training, MailCoups will furnish Franchisee with one copy of the SuperCoups Confidential Manual which may include written materials, video tapes, computer software!, compact disks, computer files,] and cassette tapes ("Confidential Manual") containing the procedures, standards, specifications and operating methods fur a SuperCoups franchise. {If Franchisee is not required to attend initial franchise training, the Confidential Manual shall be provided to Franchisee before Franchisee is authorised to commence business using the Service Marks*}
17.2 Modification of Confidential Manual. MailCoups may modify the Confidential Manual unilaterally under any conditions, and may make some or all of them available electronically.
17.3 Reproduction of Confidential Manual. Franchisee shall at all times treat as confidential and shall not at any time disclose, copy, duplicate, record or reproduce, in whole or in part, or make available to any unauthorized person or entity the contents of the Confidential
Manual.
17.4 Compliance with Confidential Manual. Franchisee agrees to operate the Franchised Business in strict compliance with this Agreement and the procedures, standards, specifications and operating methods contained in the Confidential Manual, as modified from time to time. Franchisee acknowledges that modifications may require Franchisee to incur expenses to comply, and Franchisee agrees to pay the cost of compliance so long as the requirements apply to substantially all similarly situated franchisees. No changes to the Confidential Manual shall modify Franchisee's or Franchisor's rights under the Franchise Agreement.
17.5 Ownership of Confidential Manual. The Confidential Manual shall at all times remain the sole property of MailCoups.
17.6 Nondisclosure Agreements. Franchisee must implement reasonable procedures prescribed by MailCoups to prevent unauthorized use and disclosure of MailCoups' trade secrets. These procedures include, without limitation, restriction on disclosure of MailCoups' trade secrets to employees of Franchisee and the use of Nondisclosure Agreements as prescribed in the Confidential Manual with employees, shareholders, directors and officers who have access to the trade secrets. Franchisee shall promptly deliver to MailCoups executed copies of all Nondisclosure Agreements Franchisee has executed pursuant to this Article.
17.7 Conflict of Interest. During the term of this Agreement, neither Franchisee, nor any shareholder or partner, nor any member of Franchisee's immediate family, nor any director or officer of Franchisee, nor any employee of the Franchise, shall have any interest as an owner, investor, partner, lender, director, officer, manager, employee, consultant, representative or agent or any other capacity in any entity which is involved in the cooperative direct mail advertising business. "Cooperative direct mail advertising" means mailing in a single envelope advertisements, solicitations or promotional materials of more than one advertiser to a group of Homes. Moreover, without MailCoups prior written approval, neither Franchisee nor anyone else identified in this Article 17.7 shall provide advertisers with any other type of advertising,
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marketing or promotional assistance unless prescribed by this Agreement or approved by MailCoups.
17.8 Exception to Conflict of Interest. Conflict of interest restrictions do not apply to ownership of securities listed on a stock exchange or traded on the over-the-counter market representing three percent (3%) or less of the cumulative number of shares of all classes of the Securities issued and outstanding nor the ownership of other SuperCoups franchises pursuant" to Franchise Agreements with MailCoups.
17.9 Waiver of Conflict of Interest. Franchisee acknowledges MailCoups' right, in its sole discretion, to waive all or part of these conflict of interest restrictions, if at the time of signing this Agreement, Franchisee holds an interest that would otherwise conflict with these restrictions. Such waiver shall be described on the Summary Pages.
ARTICLE 18: INSURANCE
18.1 Insurance. Franchisee shall procure at Franchisee's expense before the commencement of business and maintain in full force and effect during the term of this Agreement the types of insurance and the amounts of coverage specified in the Confidential Manual. All such policies shall name MailCoups and ADVO as an additional insured.
18.1.1 The insurance policy or policies shall be written by a responsible insurance company or companies satisfactory to MailCoups, and must provide for thirty (30) days prior notice to MailCoups of any material modification, cancellation or expiration.
18.2 Evidence of Insurance. Franchisee must provide MailCoups with satisfactory evidence that required insurance is in force before commencing business as a SuperCoups franchisee.
18.3 Changes in Insurance Requirements. MailCoups may unilaterally require Franchisee to increase the amounts required and/or purchase different or additional kinds of insurance, including without limitation, excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
ARTICLE 19: ADVERTISING; NEW PROGRAMS
19.1 Advertising Fund. At any time during this Agreement, MailCoups may, at its option, establish, maintain and administer or discontinue one or more advertising funds for national, regional or local advertising, market research, public relations, promotional campaigns and other programs which, in MailCoups' opinion, will promote and enhance the image, identity or patronage of franchises generally. MailCoups shall have complete discretion over how each fund may be spent. Franchisee owns no interest in any advertising fund created pursuant to this Section and MailCoups owes no duties to Franchisee concerning such funds beyond what is expressly set forth in this Agreement. A portion of each such fund may be paid to MailCoups for administrative expenses it incurs in connection with such advertising. [At Franchisee's request,] MailCoups shall provide Franchisee with quarterly reports about any national
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advertising fund's income and expenses. MailCoups shall deposit amounts collected for the national advertising fund in a separate, segregated bank account.
19.1.1 For so long as MailCoups maintains or administers an advertising fund, Franchisee shall be required to contribute to the fund each year amounts based upon the number of Homes in Franchisee's Territory as follows: up to 250,000 Homes, Five Hundred Dollars ($500); 250,000 to 1,000,000 Homes, One Thousand Doiiars ($i,00u); and more than 1,000,000 Homes, Two Thousand Dollars ($2,000) (Franchisee's "Advertising Fund Contribution").
19.1.2 Franchisee's Advertising Fund Contributions shall be due at such times as MailCoups determines. The annual mandatory Advertising Fund Contribution may be increased if the increase is approved by a majority vote of such franchisee advisory board or association as MailCoups shall vest with such authority, provided the increase is proposed by MailCoups and the board or association acts pursuant to standards approved by MailCoups in adopting it.
19.2 Franchisee Advertising and Promotions. Prior to use by Franchisee, samples of all marketing materials, advertisements and promotional programs which are intended to promote Franchisee's Franchised Business which have not been prepared or approved by MailCoups for Franchisee's use must be submitted to MailCoups for approval.
19.2.1 If written disapproval is not received by Franchisee within fifteen (15) days from the date of receipt by MailCoups of the materials, MailCoups shall be deemed to have given the required approval.
19.2.2 Franchisee shall only use MailCoups' Service Marks with the appropriate registration or service mark notations, e.g., ® orSM .
19.3 MailCoups Advertising. MailCoups shall conduct such advertising and
promotion for the benefit of SuperCoups [franchises) [franchisees] as MailCoups, in its sole discretion, deems appropriate.
(MailCoups may offer Franchisee the opportunity to participate in various advertising and marketing programs in the future. Franchisee shall not be required to participate in them, and MailCoups shall not be obliged to offer Franchisee the right to participate in the programs. MailCoups ma)' require Franchisee to participate in advertising and promotional programs which are associated with its Internet and television marketing programs. Franchisee's participation shall be conditional upon its compliance with all conditions MailCoups may establish for participation.
lM Mandatory Programs.MailCoupsmay designate programswhichatemandatory. Mandatory Programs are) [19.4 Optional Programs. Franchisee may be given the
option to participate in 1 pro grams sponsored by MailCoups (in which franchisees may participate, but only if they comply) [. Franchisee's participation may be conditioned on Franchisee's complying] with all of MailCoups' requirements relating to such programs, -j-lf). [Franchise also may seek and MailCoups, in its sole discretion, may grant Franchisee approval to engage in activities which are not included in the System.
19.5 Additional Products and Services. Without MailCoups' prior written approval, Franchisee may not offer products, services, programs or business lines
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(collectively "Products") which have not been prescribed by MailCoups. Once] at least forty percent (40%) of (SuperCoups franchisees already participate in a program which MailCoups designates a Mandatory Program, absent express consent of MailCoups, Franchisee may not offer programs or services which, in MailCoups' judgment, compete with MailCoupc' Mandatory Programs. MailCoups may charge Franchisee fees to participate in Mandatory Programs and other programs.} [MailCoups franchisees offer a Product which was not prescribed by MailCoupa-«s part of the System on the Effective Date, MailCoups may require Franchisee to offer that Product in the manner prescribed by MailCoups or to discontinue offering Products which MailCoups deems competitive with such Products.]
(19.5 Implementation Requirements. If MailCoups adopts a Mandator}' Program for use by SuperCoups franchisees which is similar to or competitive with a program or line of business in which Franchisee was engaged with MailCoups' approval)) [If Franchisee is offering a Product which MailCoups has approved before MailCoups notifies Franchisee, either that Franchisee must offer competitive Products MailCoups prescribes or that Franchisee must discontinue offering Products which compete with such Products] within ninety (90) days of {its receipt of a) [receiving] notice from MailCoups^rM*] Franchisee [shall] either (shall) discontinue [Franchisee's) [its] involvement [in] and ownership of such {program or business line, or convert it to the MailCoups program or business line following all MailCoups* policies and procedures. However, if before receiving notice from MailCoups, Franchisee has executed written contracts to provide such similar or competitive products or services for a term which exceeds ninety (90) days from the date of the notice, Franchisee may fulfill such contracts for up to twelve (12) months from the date of the notice.) [a Product, or if required by MailCoups, begin offering the Product prescribed by MailCoups.]
ARTICLE 20: RECORDS/REPORTING REQUIREMENTS
20.1 Statements and Records. Franchisee shall keep and preserve for a period of not less than forty-eight (48) months after the end of each of its fiscal years, separate, complete, and accurate books and records for all the business activities, prepared in the form and manner set forth in the Confidential Manual and in accordance with generally accepted accounting principles. During each of the first twelve (12) months following the Effective Date, Franchisee shall provide such business reports to MailCoups as MailCoups shall prescribe.
20.2 Inspection. MailCoups or any of its authorized agents or representatives, may, at any time upon at least seven (7) days prior notice during normal business hours, enter upon and examine and inspect Franchisee's offices, its furnishings, equipment, products and supplies, confer with employees and inspect the operation in all respects to determine compliance with this Agreement and with the Confidential Manual.
20.3 Franchise Inspection and/or Audit. MailCoups has the right during normal business hours to interview employees and customers of Franchisee and to inspect and examine Franchisee's books of account, bank statements, documents, records, tax returns, papers and files of the Franchise relating to gross revenues, expenses and business transacted. Upon request by MailCoups, Franchisee shall make these materials available for examination at the Franchise location.
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20.4 Cost of Franchise Inspection and/or Audit If MailCoups incurs any expenses in conducting or in attempting to conduct an inspection or audit, and the audit or inspection reveals to MailCoups a violation of this Agreement, Franchisee shall reimburse MailCoups within ten (10) days of the invoice date for all the costs thereof, including without limitation, charges of any independent accountants and travel expenses, room, board and compensation of MailCoups' employees.
20.5 Additional Reports. Franchisee shall submit to MailCoups such reports, forms and records as MailCoups may [request] from time to time (specify in the Confidential Manual). Franchisee consents to MailCoups' use of such information in the preparation of franchise offering circulars.
20.6 Online Data Access. Franchisee shall record business and financial data on such computer systems as MailCoups shall prescribe and shall permit MailCoups to have such regular access to Franchisee's business and financial information as MailCoups requests. Franchisee acknowledges MailCoups' right without liability to Franchisee, to disable or disconnect any communications software or related software, or any intranet, extranet or other communications facility prescribed by MailCoups and used by Franchisee if Franchisee fails to correct any defaults under this Agreement following receipt from MailCoups of a notice to cure defaults.
ARTICLE 21: SERVICE MARKS AND COPYRIGHTS
21.1 Franchisee's Use of the Service Marks. Franchisee acknowledges that the Service Marks ("SUPERCOUPS MONEY SAVING COUPONS FOR THE WHOLE FAMILY", "SUPERCOUPS" } ["SUPERCOUPS", "Local Coupons. Super Savings.] and
related designs are owned by MailCoups or ADVO, which have licensed MailCoups to use them and to license others to use them. Franchisee's license to use and display these marks and designs in connection with the SuperCoups franchise is limited as follows:
21.1.1 Franchisee's right to use the Service Marks is derived solely from this Agreement and is limited to the conduct of business by Franchisee pursuant to and in compliance with this Agreement and applicable procedures, standards, specifications and operating methods MailCoups prescribes from time to time during the term of this Agreement.
21.1.2 All usage of the Service Marks by Franchisee and any resulting goodwill (inures) [inure] to MailCoups' and ADVO's exclusive benefit. This Agreement does not confer any goodwill or other interest in the Service Marks upon Franchisee other than the right to use the Service Marks in connection with the operation of a SuperCoups franchise in the manner prescribed by MailCoups.
21.1.3 All provisions of this Agreement applicable to the Service Marks apply also to additional proprietary trade and Service Marks and commercial symbols subsequently authorized by MailCoups in writing for use by Franchisee and licensed to Franchisee by MailCoups.
21.1.4 Franchisee must use the Service Marks in identifying the Franchised Business and must identify Franchisee as the independent owner of an authorized SuperCoups franchise. Franchisee may not use the Service Marks as part of any corporate name or trade
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The original documents were scanned as an image. The original file can be downloaded at the link above.