BRANDCHISE DEVELOPMENT, LLC FRANCHISE SALES REFERRAL AGREEMENT

Transcription

1 BRANDCHISE DEVELOPMENT, LLC FRANCHISE SALES REFERRAL AGREEMENT THIS AGREEMENT ( Agreement ) is made this day of, 20, by and between BrandChise Development, LLC ( BrandChise Development, LLC ) and ( Referrer ). RECITALS BrandChise Development, LLC is engaged in working with franchisors ( Franchisor ) to locate qualified candidates looking to purchase Single Unit, Area Development or Regional Development franchises ( Franchises ); BrandChise Development, LLC has contracts with Franchisors and desires to form a relationship with Referrer to refer qualified candidates to BrandChise Development, LLC s menu of franchise clients ( Franchisors ); BrandChise Development, LLC utilizes independent brokers to assist BrandChise Development, LLC, its clients, and affiliates in locating qualified candidates looking to purchase Franchises; BrandChise Development, LLC desires to engage Referrer on a non-exclusive basis to refer qualified candidates looking to purchase Franchises; Referrer represents that it is a franchise broker/consultant ( Referrer ) and desires to refer qualified candidates looking to purchase Franchises on a non-exclusive basis to BrandChise Development, LLC under the terms and conditions set forth in this Agreement. 1. OBLIGATIONS OF REFERRER 1.1 Conduct of Referrers Service. Referrer shall use its best efforts to refer to BrandChise Development, LLC individuals or entities who meet or exceed the qualifications established by the Franchisor and BrandChise Development, LLC to own and operate a Franchise ( Qualified Prospects ). Referrer is authorized to solicit individuals or entities and refer interested and Qualified Prospects to BrandChise Development, LLC for original sales of Franchises to be located in the following areas: North America including the United States and Canada ( Market Area ). 1

2 1.2 Compliance with Laws. Referrer shall perform all services in compliance with all applicable franchising, federal, state and other laws and regulations. Referrer represents and warrants to BrandChise Development, LLC that Referrer and all of its employees, affiliates, and/or agents, if any, providing services to or on behalf of BrandChise Development, LLC or the Franchisor under this Agreement have been fully trained in franchise sales compliance rules and maintains reasonably updated and related training. Referrer shall not conduct any sales activity related to Franchisor s Franchisees, other than in an introductory manner as specifically authorized above, but Referrer shall not be responsible for delivering a copy of Franchisor s current Franchise Disclosure Document ( Disclosure Document ) unless instructed to do so in writing by BrandChise Development, LLC to Qualified Prospects if instructed to do so by BrandChise Development, LLC. Referrer shall not accept any franchise fees or other manner of payment to be made to Franchisor from a Qualified Prospect under any circumstances. Referrer shall register, at its own expense, in all states which require Referrer registration prior to any effort by Referrer to conduct franchise sales activity in such state. BrandChise Development, LLC will advise Referrer prior to seeking registration of Franchisor s franchise offering in any state or country that requires registration prior to any franchise sales taking place in that state or country. 1.3 Referral Services in Accordance with BrandChise Development, LLC s and Franchisor s Prescribed Methods. Referrer agrees to portray the Franchises in the manner approved by BrandChise Development, LLC and Franchisor and not misrepresent such Franchises in any manner whatsoever. Referrer acknowledges that Referrer shall follow only BrandChise Development, LLC s and Franchisor s approved procedures in its activities. Referrer shall not have, nor shall Referrer represent itself as having, any authority to make contracts in the name of or binding on Franchisor. Franchisor or BrandChise Development, LLC shall, if necessary, provide Referrer with promotional material, advertising material including sufficient copies of Franchisor s current Disclosure Document as described above, and other materials which depict the Franchisor s business system, operation and facilities. Referrer shall present only the then-current version of these materials to prospective referrals. All materials to be used in the solicitation of Qualified Prospects for such sales shall be on the then-current Franchisor form or forms approved by Franchisor and consistent with the Franchisor s system and standards. If Referrer utilizes these materials, to produce any marketing or advertising materials, referrer must provide a draft proof detailing the precise and final look and content of the proposed material. Referrer may not use any advertising or marketing materials until such time as BrandChise Development, LLC and/or the Franchisor provides written permission to proceed. BrandChise Development, LLC and the Franchisor have no obligation to any of the costs to market or advertise proposed by Referrer. Further, if at any time BrandChise Development, LLC or the Franchisor, in its sole discretion, wants any Advertising or Marketing to be taken out of public view or any other use, then the Referrer agrees to comply with these demands without delay. In the event the Referrer is either unavailable, untimely, or otherwise un-cooperative with the demand to remove any 2

3 Advertising or Marketing, then this agreement shall serve as full unhindered authority of BrandChise Development, LLC or its Franchisors, to take action and to manage, in any way necessary, the use of its marks to serve those demands without any obligation or liability to the Referrer resulting from those actions. In no event will Referrer make any earnings, revenue, tax or similar claims in the course of its duties hereunder, unless authorized to do so by Franchisor or BrandChise Development, LLC in writing and if appropriate disclosures are contained in Franchisor s current Disclosure Document. Qualified Prospects shall be credited to the Referrer as a bona fide referral, attributable to the referrer, upon Franchisor s receipt of the Franchisor s form New Candidate Franchise Application in electronic format (fax/scan, or hard copy acceptable as well. However, for fastest processing PDF form format is preferred) 1.4 Indemnity. Referrer shall indemnify, defend and hold BrandChise Development, LLC and Franchisor, their stockholders, directors, officers, employees, partners, proprietors, agents and all other persons, firms or entities affiliated with BrandChise Development, LLC or Franchisor, harmless from any cost, liability or expense (including attorney s fees), incurred by Referrer, BrandChise Development, LLC or Franchisor as a result of or in regard to any actions or failures to act of Referrer in connection with this Agreement or its activities thereunder, including any claims by third parties, and any fines or penalties assessed against BrandChise Development, LLC or Franchisor as the result of Referrer s sales or brokerage activities. BrandChise Development, LLC shall hold Referrer, including its officers, directors, employees, agents and representatives harmless from and against any and all costs, liability and expenses, including attorneys fees relating to or arising out of any misrepresentations or omissions of material facts contained in Disclosure Documents or other sales literature provided to Referrer by Franchisor for Referrer s use in recruiting Franchisees, provided such information is authorized for use at the time it is used by Referrer. Each party entitled to indemnification shall give the indemnifying party prompt written notice of any claim for which the indemnified party demands indemnity (provided that such obligation shall not constitute a condition to the indemnifying party s indemnification obligation unless the indemnifying party has been materially harmed by such delay). Any payments made by an indemnified party shall be net of benefits received by any indemnified party on account of insurance coverage of such claims. 3

4 1.5 Confidentiality. Referrer agrees that all information concerning any aspect of the Franchisor s system and its business, including but not limited to technology, procedures and concepts used by Franchisor, and any list of Franchisees shall be held as confidential for all time, except to the extent necessary for Referrer to arrange appointments for the sale of Franchises. 1.6 Disclosure Requirements. Referrer agrees to supply BrandChise Development, LLC and Franchisor, in a form provided by BrandChise Development, LLC, all disclosure information on Referrer and all of Referrer s employees, representatives, agents or independent consultants, as may be reasonably required to meet Franchisor s obligations relating to compliance with any applicable federal, state, or other laws and regulations. 2. OBLIGATIONS OF BRANDCHISE DEVELOPMENT, LLC 2.1 Compensation. BrandChise Development, LLC shall pay, and Referrer shall accept, as sole compensation for Referrer s services in arranging appointments for the original sale to a Qualified Prospect of a Franchise to be located in the Market Area a Referrer fee as outlined on the attached Exhibit A ( Referrer Fee ). All Referrer s Fees will be based on either a flat fee or a percentage of the initial franchise fee received by the Franchisor for the sale of Franchises. All Qualified Prospects will be required to sign a franchise agreement for the Franchise (the Franchise Agreement ). BrandChise Development, LLC shall pay the Referrer Fee within ten (10) business days after BrandChise Development, LLC has received funds from the Franchisor and such funds have cleared with BrandChise Development, LLC s bank. In the event that Franchisor extends the payment time for any Franchisee referred by Referrer, Referrer shall be entitled to receive a pro rata portion of the Referrer Fee. Referrer is entitled to receive upon receipt by Franchisor of each payment made by Franchisee towards the Franchise Fee within ten (10) days of the date BrandChise Development, LLC receives such payment. Should the Qualified Prospect referred by Referrer be refunded the Franchise Fee within sixty days (60) after signing the Franchise Agreement, Referrer shall return its Referrer Fee within ten (10) days of the date Referrer receives notice from Franchisor of such refund if the refund is caused by or necessitated by the actions or omissions of the Referrer. Should the Qualified Prospect referred by Referrer be refunded the Franchise Fee more than sixty days (60) but less than ninety (90) Days after signing the Franchise Agreement, Referrer shall return its Referrer Fee, less forty percent (40%), within ten (10) days of the date Referrer receives notice from BrandChise Development, LLC of such refund if and only if the refund is caused by or necessitated by the actions or omissions of the Referrer. Notwithstanding the foregoing, (i) if this Agreement is terminated for cause by BrandChise Development, LLC, then Referrer shall not be entitled to any Referrer Fee or the unpaid portion of any Referrer Fee that has not been paid prior to the effective date of the termination; and, (ii) if this Agreement is terminated for cause by Referrer or by either party without cause, then Referrer shall be entitled to a Referrer Fee or the unpaid portion of any Referrer Fee for any Franchise Agreement arising out of a referral to BrandChise Development, LLC by Referrer during the term of this Agreement. Referrer understands and acknowledges 4

5 that it is not entitled to receive a portion of any other initial fee, royalty fee, or any other fee paid by any franchisee to Franchisor, whether referred to Franchisor by Referrer or not. 2.2 Referral Activity Registration. Referrer shall notify BrandChise Development, LLC, in writing, of each person or entity it is referring to BrandChise Development, LLC regarding the possible purchase of the Franchise. The submission to BrandChise Development, LLC of written documentation identifying all relevant information required by BrandChise Development, LLC, on approved BrandChise Development, LLC electronic application, by Referrer, shall be construed as adequate written notice under this Section. BrandChise Development, LLC shall notify Referrer within seven (7) business days of receipt of such notice if a conflict exists with respect to said referral (that is, the person or entity referred by Referrer was already participating in an investigation of the Franchise with BrandChise Development, LLC prior to the date of the referral by Referrer). If a conflict exists, then no Referrer Fee shall be due from BrandChise Development, LLC to Referrer on the particular person or entity unless otherwise agreed to in writing by BrandChise Development, LLC and Referrer. 2.3 Current Franchisees Excluded. For purposes of compensation under Section 2.1 of this Agreement, a Qualified Prospect shall not include any individual or firm who is currently a franchisee of the Franchisor. 2.4 Time Limitation. A person or entity shall not be deemed found and referred by Referrer under this Agreement if Referrer provides to BrandChise Development, LLC, in writing, the name, address and phone number of the Qualified Prospect before the termination of this Agreement but such person or entity does not execute a Franchise Agreement with Franchisor until more than four (4) months from the date of the termination of this Agreement for cause or until more than one (1) year from the date of the termination of this Agreement without cause. 2.5 Franchisor Discretion. It is understood and acknowledged that notwithstanding any other term or condition of this Agreement, Franchisor has the sole discretion to determine whether a person or entity found and referred to it by Referrer is a qualified person or entity for purposes of awarding a Franchise to said person or entity. Franchisor is under no obligation to award Franchise rights to any person or entity found and referred by Referrer, and Referrer hereby releases any claims or causes of action which may accrue as the result of Franchisor s failure or refusal to award a Franchise or area development or regional development rights to any person or entity found and referred by Referrer. 5

6 3. MISCELLANEOUS 3.1 Independent Contractor. An independent contractor relationship is created by this contract. Referrer is not and shall not be considered an agent or employee of BrandChise Development, LLC or Franchisor for any purpose. Referrer is in no way authorized to make any agreement, warranty or representation on behalf of BrandChise Development, LLC or Franchisor, or to incur any obligation expressed or implied on behalf of BrandChise Development, LLC or Franchisor. Referrer is responsible for obtaining all business licenses, filing all tax returns and otherwise complying with all applicable legislation pertaining to, operating as, and maintaining the status of an independent contractor. Referrer understands that it is not an employee of the BrandChise Development, LLC for any purpose including, but not limited to, workers compensation, unemployment compensation, and any other local, state and federal ordinances, legislation, statutes and regulations pertaining to employer employee relationships. Referrer is not eligible to receive benefits which the BrandChise Development, LLC may offer to its employees from time to time and is not eligible to participate in any employee incentive programs that the BrandChise Development, LLC may implement. Referrer agrees that it will not hold itself out to be an employee of the BrandChise Development, LLC nor use any of its marks. 3.2 Right of Supervision. BrandChise Development, LLC shall exercise no control over Referrer with respect to the number of hours in a day or days in a week during which Referrer is to carry out its activities, nor as to the location of the business operations of Referrer. Referrer acknowledges that the Company will not provide Referrer with any office, business supplies or other equipment necessary to perform the services contemplated by this Agreement, except that BrandChise Development, LLC may grant the Referrer access to the materials described in Section 1.3 from time to time as is necessary to perform Referrer s responsibilities. 3.3 Trade Secret. Referrer understands and agrees that during the term of this Agreement Referrer, its employees or agents, will be made aware of, receive and have access to the Franchisor s proprietary and confidential information and the Referrer undertakes to hold such information in trust and confidence for and on behalf of the Franchisor. The Referrer further recognizes and acknowledges that Franchisor s and BrandChise Development, LLC s services are unique and extraordinary and that information including, but not limited to, the Franchisor s accounts, potential franchise locations, commission structure, and financial data as they may exist from time to time are valuable, special and unique assets of the Franchisor s and BrandChise Development, LLC s business. 6

7 Except as may be required by the lawful order of a court or agency of competent jurisdiction, Referrer agrees to keep secret and confidential, both during the term of this Agreement and indefinitely thereafter, all non-public information concerning the Franchisor and its affiliates that was acquired by, or disclosed to, Referrer during the course of its engagement by the BrandChise Development, LLC or any of its affiliates, including information relating to Qualified Prospects (including, without limitation, credit history, repayment history, financial information and financial statements), costs, and operations, financial data and plans, whether past, current or planned, and not to disclose the same, either directly or indirectly, to any other person, firm or business entity, or to use it in any way; provided, however, that the provisions of this Section 3.3 shall not apply to information that is in the public domain or that was disclosed to the Referrer by independent third parties who were not bound by an obligation of confidentiality. The Referrer further agrees that it shall not make any statement or disclosure that (i) would be prohibited by applicable federal or state laws, or (ii) is intended or reasonably likely to be detrimental to BrandChise Development, LLC or Franchisor or any of their subsidiaries or affiliates. 3.4 Assignment. This Agreement is an agreement for personal services to be performed by Referrer and may not be assigned or transferred by Referrer without the written consent of BrandChise Development, LLC. BrandChise Development, LLC may transfer or assign this Agreement at any time to any other party upon notice to Referrer. 3.5 Term and Termination of Agreement. The term of this Agreement shall continue until terminated in the manner set forth below. Either party may terminate this Agreement, without cause and without liability for such termination, except as set forth in this Agreement, upon written notice to the other. If the termination of this Agreement is without cause, the terminating party shall provide written notice to the non-terminating party at least thirty (30) days prior to the effective date of the termination. If the termination is for cause, which is defined to be the breach of this Agreement by either party or if BrandChise Development, LLC, in its sole discretion, determines that Referrer, its employees or agents have conducted themselves in a unprofessional manner or a manner that has adverse consequences to the BrandChise Development, LLC or the Franchisors they represent and their principles of operation, then the termination of this Agreement shall be effective on the date of the notice of termination or the date of the breach, whichever is sooner. 3.6 Venue. The parties further agree that any action at law or equity instituted against either party to this Agreement shall be commenced only in a federal, state or municipal court located in Lakeland, Florida. Referrer acknowledges that this Agreement has been entered into in the State of Florida. 7

8 IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date or dates indicated below: BRANDCHISE DEVELOPMENT, LLC REFERRER By: Title: Member Date: / / Title: Date: / / 8

9 EXHIBIT A COMPENSATION Compensation will vary depending on the Franchise being sold. All Referrer s Fees are based on a percentage of the initial franchise fee received for the sale of the Franchise. The percentages and franchise fees can be found either online at a location provided by BrandChise Development, LLC or as part of a current roster document detailing the Franchisors being offered. BrandChise Development, LLC reserves the right to modify any and all pricing online and/or on its roster document(s) at any given time. Referrer is encouraged to periodically check for the most current prices.