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WAI-3176481v6
CROWNING TOUCH SENIOR MOVING SERVICES INC.
FRANCHISE AGREEMENT
FRANCHISEE:__________________________
EFFECTIVE DATE:______________________
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TABLE OF CONTENTS
1. GRANTING OF FRANCHISES ............................................................................................................ 2
2. FRANCHISE LOCATIONS AND DEVELOPMENT ......................................................................... 2
3. TERM AND RENEWAL ........................................................................................................................ 4
4. DUTIES OF THE COMPANY ............................................................................................................... 5
5. FEES ......................................................................................................................................................... 7
6. DUTIES OF FRANCHISEE ................................................................................................................... 9
7. PROPRIETARY MARKS....................................................................................................................... 14
8. CONFIDENTIAL MANUALS ............................................................................................................... 18
9. CONFIDENTIAL INFORMATION ...................................................................................................... 20
10. ACCOUNTING, INSPECTIONS AND RECORDS ........................................................................... 22
11. NATIONAL AND LOCAL ADVERTISING ...................................................................................... 24
12. INSURANCE .......................................................................................................................................... 25
13. TRANSFER OF INTEREST; OPERATION BY THE COMPANY ................................................ 27
14. DEFAULT AND TERMINATION....................................................................................................... 32
15. OBLIGATIONS UPON TERMINATION ........................................................................................... 35
16. COVENANTS ........................................................................................................................................ 38
17. CHANGES AND MODIFICATIONS .................................................................................................. 41
18. TAXES AND INDEBTEDNESS ........................................................................................................... 41
19. INDEPENDENT CONTRACTOR AND INDEMNIFICATION ...................................................... 42
20. APPROVALS AND WAIVERS ............................................................................................................ 44
21. NOTICES ................................................................................................................................................ 44
22. RELEASE OF PRIOR CLAIMS .......................................................................................................... 45
23. DISCLOSURE STATEMENT AND DISCLAIMER ......................................................................... 45
24. ENTIRE AGREEMENT ....................................................................................................................... 46
25. SEVERABILITY AND CONSTRUCTION ........................................................................................ 46
26. APPLICABLE LAW ............................................................................................................................. 47
27. ARBITRATION ..................................................................................................................................... 48
28. SURVIVAL ............................................................................................................................................. 48
29. ACKNOWLEDGMENTS ..................................................................................................................... 48
ATTACHMENTS
ATTACHMENT A Site Selection and Fee Addendum
ATTACHMENT B Mandatory Addendum to Lease Agreement
ATTACHMENT C Telephone Assignment Agreement
ATTACHMENT D Guaranty
ATTACHMENT E Electronic Funds Transfer Authorization
ATTACHMENT F Confidentiality and Non-Competition Agreement
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CROWNING TOUCH FRANCHISE SERVICES
FRANCHISE AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of __________________, 20___, by
and between Crowning Touch Senior Moving Services, Inc., a corporation organized under the laws of the
Commonwealth of Virginia, whose principal place of business is 6704 Williamson Road, Roanoke, Virginia
24019 (hereinafter referred to as the “Company,” “Crowning Touch,” “we,” or “our”) and
, a whose principal place of business is
(hereinafter referred to as the “Franchisee” or
“you”).
BACKGROUND
A. Crowning Touch Group, Inc., a Virginia corporation (hereinafter referred to as “CTGI”), as the result
of the expenditure of time, skill, effort, and money, has developed and owns a proprietary system
(hereinafter the “System”) relating to the establishment, development and operation of a business
specializing in providing moving assistance and related needs such as consultations, asset
redistribution, packing, consignment, auctions, storage, cleaning services and real estate services
offered primarily to senior citizens (hereinafter the “Franchised Business”) identified by the trade
mark Crowning Touch Senior Moving Services.(R)
B. The distinguishing characteristics of the System include, without limitation, unique operational
methods and techniques, proprietary software, technical assistance and training in the operation,
management and promotion of the Franchised Business, specialized reporting, bookkeeping and
accounting methods and documents, and advertising and promotional programs, all of which may be
changed, improved and further developed by the Company.
C. CTGI (including its subsidiaries and affiliates) has granted to the Company the exclusive worldwide
right and license to use and to license others to use the System, the trade name, the trademarks and the
service marks as are now designated in this Agreement, and which may hereafter be designated by the
Company in writing, as part of the System (hereinafter referred to as the “Proprietary Marks”).
D. The Company and CTGI continue to develop, expand, use, control and add to the Proprietary Marks
and the System for the benefit and exclusive use of itself and its Franchisees in order to identify for the
public the source of the products and services marketed thereunder and to represent the System’s high
standards of quality and service.
E. The Franchisee desires to operate a Franchised Business under the System and the Proprietary Marks
and to obtain a license from the Company for that purpose, as well as to receive the assistance
provided by the Company in connection therewith.
F. The Franchisee hereby acknowledges that it has read this Agreement and the Company’s Franchise
Disclosure Document, and that it has no knowledge of any representations about the Franchised
Business or about the Company or its franchising program or policies made by the Company or by its
officers, directors, shareholders, employees or agents which are contrary to the statements in the
Company’s Franchise Disclosure Document or to the terms of this Agreement, and that it understands
and accepts the terms, conditions and covenants contained in this Agreement as being reasonably
necessary to maintain the Company’s high standards of quality and service and the uniformity of those
standards at all facilities which operate pursuant to the System and thereby protect and preserve the
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goodwill of the Proprietary Marks; and
G. The Franchisee understands and acknowledges the importance of the Company’s uniformly high
standards of quality and service and the necessity of operating the Franchised Business granted
hereunder in strict conformity with the Company’s quality control standards and specifications.
NOW THEREFORE, in consideration of our granting you the right to operate Franchised Business at
the Franchised Locations within the Designated Territory during the term of this Agreement, as well as the
statements set forth in paragraphs A through G above, which are hereby incorporated into this Agreement, and
the mutual covenants, agreements and obligations set forth below, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. GRANTING OF FRANCHISES
1.1 Grant
The Company hereby grants to the Franchisee, upon the terms and conditions herein contained, the
right and license to develop, establish, and operate a Franchised Business in strict conformity with the
Company’s quality control standards and specifications which are a material part of the System, which may be
changed, improved and further developed from time to time, only at the specific location which shall be
selected by the Franchisee and approved by the Company. You will at all times comply with your obligations
hereunder and will continuously devote your best efforts to develop, promote, manage and operate the Franchised
Business.
1.2 Scope of Franchise Operations
You will utilize the Proprietary Marks and System to operate all aspects of the Franchised Business
hereunder in accordance with the methods and procedures we develop and prescribe periodically, all of which
are a part of the System.
1.3 Effective Date
This Agreement shall not be effective until the date it is signed by both parties through authorized
representatives (the “Effective Date”). Once the authorized representative of the second party signs the
Agreement, the Effective Date shall be inserted on the cover page and in the preamble of this Agreement.
2. FRANCHISE LOCATIONS AND DEVELOPMENT
2.1 Limitation on Franchise Rights
The rights granted to you are specific to the approved location (“Franchised Location”) and cannot be
transferred to an alternate location without our prior written approval. You may not sublicense these rights to
anyone else. The Franchisee can operate the Franchised Business only in the Designated Territory.
2.2 Designated Territory
(A) Subject to the terms of this Agreement, the Company hereby grants to the Franchisee the
exclusive right and license to operate one (1) Franchised Business in the territory described in
the Site Selection and Fee Addendum attached hereto as Attachment A (the “Designated
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Territory”). This exclusivity in no way limits the Company’s rights to engage in national
marketing. The Franchisee shall only solicit new customers in its Designated Territory,
subject to the conditions set forth in Section 2.4. and approved by the Company. The
Franchisee hereby accepts such license and agrees to perform all of its obligations in
connection therewith as set forth herein.
(B) The Designated Territory will be organized as follows: complete county/city boundaries, then
zip codes within a “broken” county/city, and by other means if zip codes are not clearly
conducive to the creation of a territory that makes business sense. We reserve the right to
determine the Designated Territory, which, in our sole determination, will be fair to all parties
involved. Our aim is that all franchised territories will include a minimum population of
1,000,000 people. In the event that demographics and other market characteristics justify the
business, the Company reserves the right, in its sole discretion, to grant one (1) Franchised
Business in a Designated Territory that encompasses less than one million (1,000,000) people.
If a market can support more than one (1) Franchised Business i.e. total population of the
market exceeds one million five hundred thousand (1,500,000) people, that market’s first
Franchisee shall have the right of first refusal to invest in additional franchises in that market.
(C) The Company agrees that it shall grant one (1) Franchised Business for said Designated
Territory, provided the Franchisee (i) remains in good standing under the terms of the
Franchise Agreement and all other agreements signed with the Company, its affiliates and/or
suppliers and (ii) meets its minimal annual gross volume goals. The minimum Gross Revenue
volume goal is $1,500,000 in order to keep your exclusive Designated Territory and your
Franchise Agreement. This goal must be met in your third 12 months of operation, i.e. 24 to
36 months from the date you opened. If you do not meet or maintain the minimum, we
reserve the right, in our sole discretion, to impose a penalty for each violation, and/or establish
company-owned units or license other franchisees to establish Franchised Businesses within
your Designated Territory, and/or, at our option, to terminate the Franchise Agreement.
2.3 Site Approval
For each proposed site at which you seek to establish and operate a Franchised Business, you agree to
abide by our site selection procedures as set forth in the Company’s confidential Operations Manual (the
“Manual”). Once a site has been selected within the Designated Territory and approved by us, Attachment A
shall be amended to reflect the approved Franchised Location.
2.4 Performing Services Outside of Designated Territory
Any job originating or ending within a Designated Territory is considered to be serviceable by the
Franchised Business operating in that Designated Territory; however, the point of origin will have preeminence
in determining which franchisee is awarded the contract. Any job that neither originates nor ends in a
Designated Territory shall be deemed unserviceable by the Franchisee of that Designated Territory, unless the
Company has referred that job as described in Section 2.5 or there is no other Franchised Business to service it.
The Franchisee shall not solicit, advertise or perform services outside of its Designated Territory without the
Company’s prior written consent. In the event the Franchisee performs services originating in another
franchisee’s territory, the Company may require, as a condition of approval, the Franchisee to pay that
franchisee a commission based on a percentage of the gross billed price of the job, provided the work is
performed in another franchisee’s territory. The Company may charge a fee ranging from $500 to $5,000 for
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each violation of the territory policy. Lastly, the Company reserves the right to settle any territorial disputes, in
its sole discretion, as reasonably and fairly as possible.
2.5 Referral of Jobs
In the event the Company refers a job to a Franchisee that is located outside of the Franchisee’s
Designated Territory, the Company reserves the right to charge a referral fee equal to fifteen percent (15%) of
the gross invoice charged to the customer (“Referral Fee”). In addition, if the Company provides the job
estimate or manages the job, the Company may charge an additional twenty percent (20%) of the gross invoice
charged to the customer.
2.6 Reservation of Certain Rights.
The Company reserves the right to (1) offer, grant and support franchises in similar and other lines of
business that do not compete with Crowning Touch and (2) offer or sell any products or services (under the
Proprietary Marks or any other marks) through any other channel of distribution. The Company makes no
representation or warranty to the Franchisee that there will be any right to participate in these other lines of
business as a franchisee or otherwise.
2.7 Company-Owned Locations, Additional Franchises.
The Company reserves the right to establish as many Company-owned units, or to license as many
franchises to establish Franchised Businesses as it desires, at any site outside of the Designated Territory
regardless of the proximity to the boundaries of the Designated Territory.
3. TERM AND RENEWAL
3.1 Initial Term
Except as otherwise provided herein, the term of this Agreement shall be for five (5) years
commencing on the date of execution of this Agreement.
3.2 Renewal Term
The Franchisee may, at its option, continue the operation and management of the Franchised Business
for an additional five (5) year term (“Renewal Term”), subject to the conditions set forth in Section 3.3.
3.3 Conditions of Renewal
If you desire to continue as a franchisee for the Renewal Term, you must comply with all of
the following conditions at the time of your renewal notice and at the end of the Initial Term:
(A) The Franchisee shall give the Company written notice of its election to renew this Agreement
not less than six (6) months prior to the end of the current term of this Agreement;
(B) At least seven (7) months prior to the expiration of the current term of this Agreement, the
Company shall have the right to give notice of all required modifications to the nature and
quality of the products and services offered in connection with the Franchised Business, as
well as the Franchisee’s advertising, marketing and promotional programs.
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(C) The Franchisee shall not be in default of any provision of this Agreement, any amendment
hereof or successor hereto, or any other agreement between the Franchisee and the Company
or its subsidiaries, affiliates and suppliers. The Franchisee shall have substantially complied
with all of the terms and conditions of such agreements during the terms thereof;
(D) The Franchisee shall have satisfied all monetary obligations of the Franchisee to the Company
and its subsidiaries, affiliates and suppliers and shall have timely met those obligations
throughout the term of this Agreement;
(E) The Franchisee shall execute upon renewal the Company’s then-current form of Franchise
Agreement, which agreement shall supersede in all respects this Agreement, and the terms of
which may differ from the terms of this Agreement, including, without limitation, a higher
percentage royalty fee and the implementation of additional fees; provided, however, that in
lieu of the then-current initial franchise fee or its equivalent, for such renewal period, the
Franchisee shall be required to pay a nonrefundable renewal fee equal to one thousand dollars
($1,000) due with the Franchisee’s written notice to renew;
(F) Unless waived by the Company, the Franchisee shall attend the Company’s then-current
qualification and training programs at the Franchisee’s expense;
(G) The Franchisee, its shareholders, directors and officers shall execute a general release, in a
form prescribed by the Company, of any and all claims against the Company and its
subsidiaries and affiliates, and their respective officers, directors, agents and employees. The
Franchisee shall not be required, however, to release the Company from violations of or
failure to comply with federal or state franchise registration and disclosure laws;
(H) The Franchisee’s operation and management of the Franchised Business shall be in full
compliance with the System; and
(I) The Franchisee shall maintain and be in good standing with all of its necessary and
appropriate licenses and permits.
In the event that any of the foregoing conditions to renewal have not been met at least two (2) months
prior to the expiration of the current term of this Agreement, then the Company shall have no obligation to
renew this Agreement and shall give the Franchisee at least thirty (30) days prior written notice of its intent not
to renew this Agreement, which notice shall set forth the reasons for such refusal to renew.
4. DUTIES OF THE COMPANY
4.1 Pre-Opening Obligations
The duties of the Company prior to the opening of the Franchised Business may include some, but not
necessarily all, of the following services:
(A) The Company shall provide guidelines and specifications for the operation and management
of the Franchised Business that the Franchisee shall adopt, including moving and storage
service procedures, consignment shop and auction house procedures, best real estate practices,
advertising and promotional techniques, and staffing;
(B) The Company shall consult with the Franchisee regarding the location of the Franchised
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Business, basing its guidance on such factors as visibility, ease of access, location within the
Designated Territory, and future growth potential. ANY ASSISTANCE THE COMPANY
PROVIDES IN FINDING AND SETTING UP THE SITE IS NOT A GUARANTY OR WARRANTY
THAT THE SITE WILL BE SUCCESSFUL;
(C) The Company shall provide an initial training program (“Start-Up Training”) which you are
required to attend and successfully complete. Start-Up Training consists of three phases.
Phase One will consist of your own review of training materials prior to attending training in
Roanoke, Virginia. Phase Two will be a combination of hands-on training and classroom
training at the Company’s corporate headquarters in Roanoke, Virginia. Phase Three will
take place on-site at your Franchised Business location within the first 90 days of the
Franchised Business’ operations. Start-Up Training, including the materials, is free to you
and one additional employee. You may bring additional employees to the Start-Up Training
if you pay the Company’s fee in advance, which is currently estimated to be $1000 per
employee. You will be responsible, however, for all travel and living expenses incurred by
you and your employees while attending Start-Up Training.
(D) The Company shall lend to the Franchisee the Manual, as amended from time to time, which
shall include standards and specifications for policies, procedures, management, and
operation of the Franchised Business;
(E) The Company shall provide a final evaluation of business systems, marketing plans, and
business plans to ensure the Franchisee’s Franchised Business is properly set-up in
accordance with the Company’s specifications; and
(F) The Company shall provide the Franchisee with assistance in obtaining the initial equipment,
inventory and supplies.
4.2 Post-Opening Obligations
The obligations of the Company following the opening of the Franchised Business are as follows:
(A) The Company shall provide as much general advisory assistance deemed by it to be helpful to
the Franchisee in the ongoing operation, advertising and promotion of the Franchised
Business via telephone, facsimile, Internet, Intranet, or on-site;
(B) The Company shall provide to the Franchisee updates, revisions and amendments to the
Manual;
(C) The Company shall administer the national advertising program, and provide periodic
reconciliation reports to the franchise network;
(D) The Company shall provide the Franchisee with periodic promotional materials, newsletters
and similar items to update the Franchisee on current trends in the industry and developments
in the System;
(E) The Company shall continue its efforts to establish and maintain high standards of quality,
customer satisfaction and service. To that end, the Company will on a periodic basis, conduct,
as it deems advisable, inspections of the Franchised Business and its operations, and evaluate
the methods and the staff employed at the Franchised Business. You will be required to sign
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an operations report in connection with each visit by the Company’s field support staff; and
(F) The Company shall provide an annual conference for Crowning Touch franchisees (which the
Franchisee is urged to attend) and, in its sole discretion, shall coordinate, conduct and
otherwise make available to the Franchisee such other optional and mandatory ongoing
training programs or seminars on an annual basis or as the Company deems appropriate.
There is no admission charge for your attendance at each annual conference; however, you
will be solely responsible for your expenses, including the cost of travel, lodging and meals.
Other expenses may include items purchased from the company store such as logo apparel,
novelties and new supply items. You may bring key employees with you to the annual
conference, provided you pay, in advance, the then-current fee for additional attendees. You
will be solely responsible for the expenses of additional attendees.
All of the obligations of the Company hereunder are to the Franchisee, and no other party is entitled to
rely on, enforce or obtain relief for breach of such obligations either directly or by subrogation.
5. FEES
5.1 Payments to Company.
In consideration of the right and license to operate the Franchised Business granted herein, the
Franchisee shall pay to the Company the following fees, all in U.S. Dollars:
Franchise Fee
The non-refundable base franchise fee is $26,000 plus additional dollars calculated from the
demographic assessment based on the desired territory, as follows:
General Population to 64 years of age x $.01
Population over 65 years of age x $.30
The total franchise fee, averaging between $50,000 and $65,000, is payable in full upon the
execution of this Agreement, and is deemed fully earned upon receipt by the Company.
A MINIMUM OF $50,000 IS REQUIRED FOR THE RIGHTS TO ANY FRANCHISED
TERRITORY. The calculation and formula used is shown in greater detail in Item 5 of the
Franchise Disclosure Document.
(A) Additional Franchised Businesses
Existing Crowning Touch Franchisees may purchase additional Franchised Businesses at a
reduction of the initial franchise fee by one thousand dollars ($1,000) for each Franchised
Business operated by the Franchisee. The reduced initial franchise fee shall only be available
to the Franchisee if the Franchisee (a) is in full compliance with all existing agreements with
the Company, its affiliates and/or suppliers; (b) meets the then-current annual gross volume
goals set by the Company; and (c) meets certain other qualifications for franchisees as set
periodically by the Company.
(B) Additional Territories
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Existing Crowing Touch Franchisees may add additional protected territories adjacent to their
existing Designated Territory by paying a one thousand dollar ($1,000) license modification
fee, plus a fee correlating to the formula in Section 5.1.A above related to the added
population demographics. The Company reserves the right to deny such additional territory if,
in its sole discretion, either party may be put at an economic disadvantage.
(C) Royalty Fees
The Franchisee shall pay to the Company a continuing non-refundable bi-weekly royalty fee
as set forth in Attachment A. All payments will be made by electronic fund transfer (“EFT”).
Royalty may be reduced at certain sales performance thresholds, as determined by the
Company, in its sole discretion.
(D) Advertising and Promotion Fund
Pursuant to Section 11 herein, the Company reserves the right to establish and maintain an
Advertising and Promotion Fund (the “Fund”). Once established, each Franchisee shall be
required to pay to the Fund a non-refundable bi-weekly fee as set forth in Attachment A. The
Company reserves the right to charge reasonable administrative fees to the Fund.
(E) Technology Fee
The Franchisee shall pay to the Company a non-refundable monthly fee in an amount
estimated to be between $1,000 to $1,500 per month for the use of Franchisor-provided
software, such as the POS System and access to the Crowning Touch Intranet system, Crown
Net. The Franchisee shall purchase, equip, install, and utilize in the Franchise Business the
POS system and hardware and software obtained from the Company or its designated
suppliers.
(F) Restocking Fee
At the discretion of the Company, the Franchisee shall pay 15% of the invoice price, plus
shipping and handling for returned equipment or other items purchased from the Company.
5.2 Definition of Gross Revenues
“Gross Revenues” is defined as all sales generated through the Franchised Business, including fees for
any products or services sold by the Franchisee, whether for cash or credit (regardless of ability to collect), and
income of every kind or nature related to the Franchised Business, including origination and destination fees
and finders’ fees; provided, however, that “Gross Revenues” shall not include any sales tax or other taxes
collected from the Franchisee’s customers for transmittal to the appropriate taxing authority.
5.3 Payment of Fees
(A) Within two calendar days after the end of each bi-weekly payment period, you shall pay us the
royalty fee applicable to the Gross Revenues and other amounts under this Agreement,
including advertising fees and interest charges, by electronic funds transfer (“EFT”), details of
which are set forth in Attachment E. In connection with payment of these fees by EFT, we
will designate a day for payment (“Due Date”). On each Due Date, we will transfer from the
Franchised Business’s bank operating account (in either case, “Account”) the amount
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reported to us in your remittance report or that we determine by the records contained in the
cash registers/computer terminals of each Franchised Business. If you have not reported Gross
Revenues to us for any payment period, we will transfer from the Account an amount
calculated in accordance with our estimate of the Gross Revenues during the payment period.
If, at any time, we determine that you have underreported the Gross Revenues of a Franchised
Business, or underpaid the royalty fee or other amounts due to us under this Agreement, or
any other agreement, we shall initiate an immediate transfer from the Account in the
appropriate amount in accordance with the foregoing procedure, including interest as
provided in this Agreement. Any overpayment will be credited to the Account effective as of
the first reporting date after we and you determine that such credit is due.
(B) In connection with payment of fees by EFT, you shall: (i) comply with procedures we specify
in the Manual or otherwise in writing; (ii) perform those acts and sign and deliver those
documents as may be necessary to accomplish payment by EFT as described in this Section
5.3; (iii) give us an authorization in the form we designate to initiate debit entries and/or credit
correction entries to the Account for payments of the royalty fee and other amounts payable
under this Agreement, including any interest charges; and (iv) make sufficient funds available
in the Account for withdrawal by EFT no later than the Due Date for payment thereof. Your
failure to maintain sufficient funds in the Account constitutes a default of this Agreement
pursuant to Section 14. Following written notice to you, we may require you to temporarily or
permanently pay your obligations to us by some other form or method in lieu of payment by
EFT.
(C) You shall not be entitled to set off, deduct or otherwise withhold any royalty fees, interest
charges or any other monies payable by us under this Agreement on grounds of any alleged
non-performance by us of any of our obligations or for any other reason.
5.4 Interest and Fees on Late Payments
On any amount that the Franchisee owes to the Company that is not received when due, regardless of
reason or if the payment is in dispute, is (1) the highest rate permitted by applicable law, not to exceed 18%
Annual Percentage Rate (compounded monthly); and (2) an administrative fee not to exceed 5% of the amount
owed.
6. DUTIES OF FRANCHISEE
6.1 Compliance with System
The Franchisee understands and acknowledges that every detail of the operation and appearance of the
Franchised Business in compliance with the System is critical to the Company, the Franchisee and other
franchisees operating under the System, in order to: (1) develop and maintain high and uniform operating
standards; (2) increase the demand for the products and services sold by franchisees; and (3) protect the
Proprietary Marks and the System, and the Company’s trade secrets, reputation and goodwill.
6.2 Site Requirements and Selection
Specifications for the location and features of an appropriate site for Franchised Business operations
are contained in the Manual. The Company shall approve or disapprove the Franchisee’s site within ten (10)
business days after the Franchisee submits a properly completed request for approval in a form, and containing
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information required by the Company. The Company shall not approve the lease without receiving a
Mandatory Addendum to Lease Agreement (attached as Attachment B to this Agreement), executed by the
Franchisee and the landlord. THE COMPANY’S APPROVAL OF A SITE IS NOT A GUARANTY OR WARRANTY
OF THE SUCCESS OF THE SITE.
6.3 Pre-Opening Requirements
Before commencing any assembly or leasehold improvements of the Franchised Business, the
Franchisee, at its expense, shall comply with all of the following requirements:
(A) The Franchisee shall obtain the Company’s prior written approval of the site selected by the
Franchisee for the operation of the Franchised Business and the lease for such site, in
accordance with the terms of this Agreement. Such approval shall be evidenced by the
Company’s and the Franchisee’s completion and execution of the Site Selection and Fee
Addendum, attached hereto as Attachment A.
(B) The proposed site must be in compliance with all applicable local and state laws, regulations
and ordinances including all zoning, signage and parking requirements; and
(C) The Franchisee shall obtain all business licenses, permits and insurance certifications required
for lawful construction and ongoing operation of the Franchised Business (including, without
limitation, zoning, access, variances, health and safety, sign and fire requirements) and shall
certify in writing to the Company that all such licenses, permits and certifications have been
obtained.
6.4 Opening Requirements
The Franchisee shall open the Franchised Business for operation within eight (8) months after
execution of the Franchise Agreement, provided that the Franchised Business has been fully staffed, that all
other terms and conditions for opening, described in the Manual, have been met, and the Franchisee is in
receipt of the Company’s written authorization to open. The Company and the Franchisee agree that time is of
the essence in the opening of the Franchised Business. If the Franchised Business fails to open within eight (8)
months of the execution of this Agreement without written authorization from the Company granting an
extension, the Franchisee shall be deemed in default without opportunity to cure, and the Company shall regain
control of the Designated Territory.
6.5 Start-Up Training
In accordance with the terms and conditions set forth in Section 4.1 hereinabove, the Operating
Manager and one other employee shall complete, to the Company’s satisfaction, the company’s initial training
program prior to the opening of the Franchised Business.
6.6 Ongoing Training
The Operating Manager and one other employee shall attend and complete, to the Company’s
reasonable satisfaction, such special programs or periodic additional training as the Company may require in
writing from time to time. The Franchisee shall pay the additional training fee of five hundred dollars ($500)
per day per person for any mandatory additional training and shall be responsible for any and all other
expenses incurred in training, including, without limitation, the costs of meals, entertainment, lodging, travel,
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laundry and wages. The Company may mandate up to two (2) additional training programs per year.
6.7 Supervision Requirements
The Franchised Business shall at all times be under the direct, on-premises supervision of an
Operating Manager. If you are an individual, you must serve as the Operating Manager; however, if you are a
business entity, you must appoint as the Operating Manager an individual acceptable to us and who must be
identified in an exhibit to the Franchise Agreement and must at all times during the term of the Franchise
Agreement own at least a 10% equity interest in you. The Operating Manager shall be available to be
contacted by us at all reasonable times. The Operating Manager must have satisfactorily completed Start-Up
Training and must devote his or her full time and energy during business hours to the supervision and
management of the Franchised Business, unless otherwise exempted by permission of the Company.
6.8 Best Efforts
Franchisee shall devote his or her full time and best efforts to the management and operation of the
Franchised Business.
6.9 Materials
Franchisee shall purchase from the Company and/or its approved suppliers for use in the operation of
its Franchised business certain copyrighted materials that shall include operational materials that are an integral
part of the Company’s business.
6.10 Compliance with Uniform Standards
The Franchisee shall operate the Franchised Business in conformity with such uniform methods,
standards and specifications as the Company may from time to time prescribe to ensure that the highest degree
of quality and service is uniformly maintained. The Franchisee shall conduct its business in a manner that
reflects favorably at all times on the System and the Proprietary Marks. The Franchisee shall at no time engage
in deceptive, misleading or unethical practices or conduct any other act which may have a negative impact on
the reputation and goodwill of the Company or any other franchisee operating under the System. Pursuant to
this ongoing responsibility, the Franchisee agrees:
(A) To maintain in sufficient quantity, as the Company may prescribe in the Manual or otherwise
in writing and use at all times, supplies that conform to the Company’s standards and
specifications;
(B) To sell or offer for sale only such products and services as meet the Company’s uniform
standards of quality and quantity which have been expressly approved for sale in writing by
the Company in accordance with the Company’s methods and techniques; to sell or offer for
sale all approved items;
(C) To refrain from any deviation from the Company’s standards and specifications for serving or
selling such products or services;
(D) To operate the Franchised Business at a standard of excellence consistent with the
requirements set forth in the Manual;
WAI-3176481v6 12
(E) To lease or purchase and install at the Franchisee’s expense all fixtures, furnishings, signs and
equipment as the Company may reasonably specify from time to time in the Manual or
otherwise in writing, and to refrain from installing or permitting to be installed on or about the
Franchised Business without the Company’s prior written consent any fixtures, furnishings,
signs, cards, promotional literature, equipment or other items not previously specifically
approved as meeting the Company’s standards and conforming to the Company’s
specifications;
(F) To purchase and maintain any and all signs for use at the Franchised Business, whether for
interior or exterior use, in conformity with the Company’s quality control standards and
specifications;
(G) To employ such minimum number of employees as may be prescribed by the Company and to
comply with all applicable federal, state and local laws, rules and regulations with respect to
such employees;
(H) To maintain a competent, conscientious staff; and
(I) To maintain all licenses and permits in good standing.
6.11 Purchase and Lease of Materials
Franchisee shall purchase exclusively from the Company certain proprietary and copyrighted materials,
including, but not limited to, uniforms and advertising and promotional materials as described in the Manual
relating to the establishment and operation of the Franchised Business. All other purchased or leased
equipment and supplies must meet the Company’s specifications and standards as to content, quality,
appearance, warranty, performance and serviceability and must adequately demonstrate their capacity and
facilities to supply the Franchisee’s needs for an effective and efficient operation of the Franchised Business as
well as all Franchised Businesses operating under the Company’s System.
6.12 Purchase of Computer Equipment and Software
You must purchase, equip, install and utilize in your Franchised Business a point-of-sale system (“POS
System”) and hardware and software obtained from us or our designated suppliers. Your software purchase
requirements include access to Crown Net, the Intranet system over which business will be conducted between
us, and other software in accordance with our System, including the software associated with the POS System,
and any other technology such as inventory, accounting, production and workflow management, franchise
management, and customer relationship management systems we may, now or in the future, prescribe.
You are responsible for all maintenance costs associated with the POS System and other computer
hardware and software. You will arrange for broadband Internet service with a minimum of 10 Mbps of
download and upload speeds to facilitate electronic communication between us and you, at your sole cost. You
will provide all assistance we require to bring your computer system on-line and integrate your computer
system with our computer system at the earliest possible time. You agree to give us, and acknowledge that we
shall have, the free and unfettered right to retrieve any data and information from your computers as we deem
appropriate, including electronically polling the daily sales and other data of the Franchised Business.
Crowning Touch will provide and administer all email addresses in order to allow us to communicate with you
electronically and maintain an extra level of security for all data.
You must keep your computer system in good maintenance and repair at your expense and make such
WAI-3176481v6 13
additions, changes, modifications, substitutions and replacements to your computer hardware, software,
telephone and power lines or other computer-related facilities as we may direct, and on the dates and within the
times we specify. Upon termination or expiration of this Agreement, any computer software, disks, drives and
other storage media we provide must be returned to us in good condition, excepting normal wear and tear.
6.13 Proprietary Methods
The Franchisee acknowledges and agrees that the Company has developed certain products, services,
operational systems and management techniques and may continue to develop additional products and
proprietary methods and techniques for use in the operation of the Franchised Business which are all highly
confidential and which are trade secrets of the Company. Because of the importance of quality control,
uniformity of product and the significance of such proprietary products in the System, it is to the mutual benefit
of the parties that the Company closely controls the dissemination of this proprietary information.
Accordingly, the Franchisee agrees that in the event such information and techniques become a part of the
System, the Franchisee shall comply and strictly follow these techniques in the operation of its business and
shall purchase from the Company or from an approved source designated by the Company any supplies or
materials necessary to protect and implement such techniques.
6.14 Development of the Market
The Franchisee shall at all times use its best efforts to promote and increase the sales and consumer
recognition of the services offered by the Franchised Business pursuant to the System and the Manual, to effect
the widest and best possible distribution of the Company’s services from the Franchised Business and to
devote its best efforts in controlling the Franchised Business, its managers, assistants, and employees.
6.15 Display of Proprietary Marks and Logos
The Franchisee shall display the Company’s Proprietary Marks and logos in the manner prescribed by
the Company. The color, design and location of said displays shall be specified by the Company and may be
changed from time to time in the Company’s sole discretion.
6.16 Confidentiality and Non-Competition Agreements
Franchisee and its employees, owners, officers, directors, shareholders and independent contractors
shall sign the Confidentiality and Non-Competition Agreement substantially in the form set forth in Attachment
F.
6.17 Health and Safety Standards
The Franchisee shall meet and maintain the highest safety standards and ratings applicable to the
operation and management of the Franchised Business and its personnel as the Company may reasonably
require.
6.18 Inspection of the Premises
The Franchisee shall permit the Company or its agents or representatives to enter upon the premises of
the Franchised Business at any time for purposes of conducting inspections, taking photographs and
interviewing employees and customers. The Franchisee shall cooperate fully with the Company’s agents or
representatives in such inspections by rendering such assistance as they may reasonably request. Upon notice
WAI-3176481v6 14
from the Company or its agents or representatives, and without limiting the Company’s other rights under this
Agreement, the Franchisee shall take such steps as may be necessary to immediately and diligently correct any
deficiencies detected during such inspections, including, without limitation, immediately ceasing and
preventing the further use of any products, equipment, inventory, advertising materials, supplies or other items
that do not conform to the Company’s then-current specifications, standards or requirements. In the event the
Franchisee fails or refuses to correct such deficiencies, the Company shall have the right to enter upon the
premises of the Franchised Business, without being guilty of trespass or any other tort, for the purpose of
making or causing to be made such corrections as may be required, at the sole expense of the Franchisee,
which the Franchisee agrees to pay upon demand.
6.19 Guaranty
Every owner of a legal or beneficial interest in you, and, unless you are a publicly-held entity, all of
your officers and directors, shall jointly and severally guarantee your payment and performance under this
Agreement and shall bind themselves to the terms of this Agreement pursuant to the attached Guaranty, the
form of which is attached hereto as Attachment D (“Guaranty”). Franchisor also reserves the right to require
any guarantor to provide personal financial statements to us periodically. You acknowledge that, unless
otherwise agreed to in writing by us, it is our intent to have individuals (and not business entities) execute the
Guaranty. Accordingly, if any owner is not an individual, we have the right to have the Guaranty executed by
individuals who have only an indirect ownership interest in you. If you, any guarantor or any parent,
subsidiary or affiliate of you holds any interest in other Franchised Businesses that are franchised by us or our
affiliates, the party who owns that interest shall execute, concurrently with this Agreement, a form of cross-
guarantee to us and our affiliates for the payment of all obligations for such Franchised Businesses, unless
waived in writing by us in our sole discretion.
6.20 Other Requirements
The Franchisee shall comply with all other requirements, including customer service requirements, set
forth in this Agreement, in the Manual, or as the Company may designate from time to time.
7. PROPRIETARY MARKS
7.1 Grant of License
CTGI has granted the Company, through a license agreement, the exclusive worldwide license to use
and license others to use the System and Proprietary Marks, including the service mark Crowning Touch
Senior Moving Services.(R) The Company hereby grants the Franchisee the right and license to use the
Crowning Touch Senior Moving Services trademark and any logo derived there from in connection with the
operation of its Franchised Business and the provision of services and products to its customers. The Company
represents with respect to the Proprietary Marks that: (1) CTGI has, to the best of the Company’s knowledge,
all right, title and interest in and to the Proprietary Marks; (2) the Company and CTGI take all steps, which
they deem reasonably necessary, to preserve and protect the ownership and validity of such Proprietary Marks;
and (3) the Company and CTGI will use and license the Franchisee and other franchisees to use the Proprietary
Marks only in accordance with the System and the operating standards and quality control specifications
attendant thereto which underlie the goodwill associated with and symbolized by the Proprietary Marks.
7.2 Conditions for Use
With respect to the Franchisee’s use of the Proprietary Marks pursuant to the license granted under this
WAI-3176481v6 15
Agreement, the Franchisee agrees that:
(A) The Franchisee shall use only the Proprietary Marks designated by the Company and shall use
them only in the manner required or authorized and permitted by the Company.
(B) The Franchisee shall use the Proprietary Marks only in connection with the right and license
to operate the Franchised Business granted hereunder.
(C) The Franchisee may not contest (directly or indirectly) CTGI’s or our ownership, title, right or
interest in the name or marks, trade secrets, methods, procedures and advertising techniques
which are part of the System or contest our right to register, use or license others to use these
names, marks, trade secrets, methods, procedures or techniques.
(D) During the term of this Agreement and any renewal hereof, the Franchisee shall identify itself
as a licensee and not the owner of the Proprietary Marks and shall make any necessary filings
under state law to reflect such status. In addition, the Franchisee shall identify itself as a
licensee of the Proprietary Marks on all invoices, order forms, receipts, business stationery
and contracts, as well as the display of a notice in such form and content and at such
conspicuous locations at the premises of the Franchised Business as the Company may
designate in writing.
(E) The Franchisee’s right to use the Proprietary Marks is limited to such uses as are authorized
under this Agreement or in the Manual, and any unauthorized use thereof shall constitute an
infringement of the Company’s rights and grounds for termination of this Agreement.
(F) The Franchisee shall not use the Proprietary Marks to incur or secure any obligation or
indebtedness.
(G) The Franchisee shall not use the Proprietary Marks as part of its corporate or other legal
name.
(H) The Franchisee must use the Proprietary Marks as the sole trade identification of the
Franchised Business and you must identify yourself in the form we prescribe as the
independent owner of the Franchised Business. The Franchisee may not use any Proprietary
Mark or variation thereof as part of any corporate or trade name or with any prefix, suffix, or
other modifying words, terms, designs, or symbols, or in any modified form.
(I) The Franchisee may not use any Proprietary Mark or any variation of it in connection with the
performance or sale of any unauthorized services or products, as part of the domain name or
address of any website other than Your Website, or in any other manner we have not
expressly authorized in writing.
(J) The Franchisee shall comply with the Company’s instructions in filing and maintaining the
requisite trade name or fictitious name registrations, and shall execute any documents deemed
necessary by the Company or its counsel to obtain protection for the Proprietary Marks or to
maintain their continued validity and enforceability.
(K) In the event that the Franchisee becomes aware of any infringement of the Proprietary Marks
or if the Franchisee’s use of the Proprietary Marks is challenged by a third party, then the
Franchisee is obligated to immediately notify the Company, and the Company shall have sole
WAI-3176481v6 16
discretion to take such action as it deems appropriate. The Franchisee may not communicate
with anyone except us and our counsel with respect to any infringement, challenge or claim.
However, the Company shall protect Franchisee’s right to use the trademarks, service marks,
trade names, logotypes or other commercial symbols or indemnify Franchisee from any loss,
costs or expenses arising out of any claim, suit or demand regarding the use of the name. If it
becomes advisable at any time in the sole discretion of the Company to modify or discontinue
the use of any name or mark and/or use one or more additional or substitute names or marks,
the Franchisee shall be responsible for the tangible costs (such as replacing signs and
materials) of complying with this obligation. In the event that litigation alleging that the
Proprietary Marks infringe a third party’s rights is instituted or threatened against the
Franchisee, the Franchisee shall promptly notify the Company and shall cooperate fully in
defending or settling such litigation.
(L) The Company has sole discretion to take action as we deem appropriate in connection with
any infringement, challenge or claim, and the sole right to exclusively control any litigation or
other proceeding arising out of any infringement, challenge or claim relating to any
Proprietary Mark. The Franchisee must sign any and all instruments and documents, give
assistance, and do any acts and things as may in the opinion of our counsel be necessary or
advisable in order to protect and maintain our interests in any litigation or proceeding or
otherwise to protect and maintain our interests in the Proprietary Marks. The Company will
reimburse you for the reasonable out-of-pocket expenses you incur and pay in complying with
these requirements; except if any action we take with respect to any claim or proceeding
results in any monetary recovery for the Franchisee which exceeds its costs, then the
Franchisee must pay its own costs and share pro-rata in our costs up to the amount of the
monetary recovery.
(M) The Company is not required to take affirmative action when notified of any infringements of
or challenges to the Proprietary Marks, and has the right to control any litigation or
administrative proceedings involving the Proprietary Marks. The Company will indemnify
against and reimburse the Franchisee for all damages for which it is held liable in any
proceeding arising out of the Franchisee’s use of any Proprietary Mark according to and in
compliance with the applicable agreement, and for all costs the Franchisee reasonably incurs
in the defense of any claim in which it is named as a party, if the Franchisee has timely
notified the Company of the claim, has given the Company sole control of the defense and
settlement of any claim and has otherwise complied with the applicable agreement. If any
action taken by the Company with respect to any claim or proceeding results in any monetary
recovery for the Franchisee which exceeds its costs, then the Franchisee must pay its own
costs and share pro-rata in our costs up to the amount of the monetary recovery.
(N) If it becomes advisable at any time in the Company’s sole judgment for the Franchisee to
modify or discontinue the use of any Proprietary Mark and/or for the Franchised Business to
use one or more additional or substitute trade or service marks, the Franchisee must
immediately comply with our directions to modify or otherwise discontinue the use of the
Proprietary Marks and/or to use one or more additional or substitute trademarks, service
marks, logos or commercial symbols or substitute trade dress after our notice to you. Neither
the Company nor our affiliates have any obligation to reimburse the Franchisee for any
expenditures made in connection with any discontinuance or modification.
7.3 Acknowledgment
WAI-3176481v6 17
The Franchisee expressly understands and acknowledges that:
(A) CTGI is the owner, and the Company is the exclusive worldwide licensor, of all right, title
and interest in and to the Proprietary Marks and the goodwill associated with and symbolized
by them;
(B) The Proprietary Marks are valid and serve to identify the System and those who are licensed
to operate a Franchised Business in accordance with the System;
(C) The Franchisee’s use of the Proprietary Marks pursuant to this Agreement does not give the
Franchisee any ownership interest or other interest in or to the Proprietary Marks, except the
nonexclusive license granted herein;
(D) Any and all goodwill arising from the Franchisee’s use of the Proprietary Marks at the
Franchised Business in accordance with the System shall inure solely and exclusively to the
Company’s benefit, and upon expiration or termination of this Agreement no monetary
amount shall be assigned as attributable to any goodwill associated with the Franchisee’s use
of the System or the Proprietary Marks;
(E) The license and rights to use the Proprietary Marks granted hereunder to the Franchisee are
nonexclusive, and the Company thus may: (a) itself use, and grant franchises and licenses to
others to use, the Proprietary Marks and the System; (b) establish, develop and franchise other
systems, different from the System licensed to the Franchisee herein, without offering or
providing the Franchisee any rights in, to or under such other systems; and (c) modify or
change, in whole or in part, any aspect of the Proprietary Marks or the System, so long as the
Franchisee’s rights thereto are in no way materially harmed thereby;
(F) The Company reserves the right to substitute different trade names, trademarks and service
marks for use in identifying the System, the Franchised Business and other Franchised
Businesses operating hereunder, all of which shall become Proprietary Marks; and
(G) The Franchisee shall not register or attempt to register the Proprietary Marks in the
Franchisee’s name or that of any other person, firm, entity or corporation.
7.4 Patents and Copyrights
(A) The Company does not claim rights in any patents that are material to our business.
(B) The Company has common law copyrights in the Manual, advertising and promotional
materials, trade dress, any computer works, the Corporate Website, Your Website and similar
items used in operating the Franchised Business. In addition, all works of authorship related
to the System and created in the future will be owned by the Company and copyrighted. The
Company has not registered these copyrights with the United States Registrar of Copyrights;
however, company trademarks have been registered.
(C) The Company is not required to protect or defend the copyrighted works or Confidential
Information (defined below), although the Company intends to do so when the action is in the
best interests of our System. Nor is the Company required to indemnify the Franchisee for
your expenses or damages if it is a party to an administrative or judicial proceeding involving
the copyrighted materials.
WAI-3176481v6 18
(D) The Franchisee expressly understands and acknowledges that:
(1) The Company has sole discretion to authorize the Franchisee to use certain
copyrighted or copyrightable works, that the copyrighted works are of the Company’s
valuable property and of which the Company is the owner, and the rights granted to
the Franchisee are solely on the condition that you comply with the terms of the this
Agreement.
(2) The Company owns or is the licensee of the owner of the copyrighted works and will
further create, acquire or obtain licenses for certain copyrights in various works of
authorship used in connection with the operation of Franchised Businesses.
(3) The Franchisee’s use of the copyrighted works must be in compliance with this
Agreement and all applicable standards, specifications, and operating procedures the
Company prescribes. The Franchisee must ensure that all copyrighted works used
bear an appropriate copyright notice under applicable copyright laws as the Company
may prescribe in the Manual specifying that we are the owner of the copyright.
(4) The Franchisee must immediately notify the Company of any actual or apparent
infringement of or challenge to any of the copyrighted works or claim by any person
of any rights in the copyrighted works, and may not communicate with any person
other than the Company and its counsel in connection with any infringement,
challenge or claim. The Company shall have the sole discretion to take any action
deemed appropriate and the right to control exclusively any settlement, litigation,
arbitration or administrative proceeding arising out of any alleged infringement,
challenge or claim or otherwise relating to the copyrighted works. If it becomes
advisable at any time in the Company’s sole judgment for you to modify or
discontinue use of any of the copyrighted works and/or for you to use one or more
additional or substitute copyrighted or copyrightable items, the Franchisee agrees to
immediately comply with the directions to modify or otherwise discontinue the use of
the copyrighted materials and/or to use one or more substitute materials.
8. CONFIDENTIAL MANUALS
8.1 Compliance
In order to protect the reputation and goodwill of the Company and to maintain uniform standards of
operation in connection with the Proprietary Marks, the Franchisee shall conduct its business in strict
compliance with the operational systems, procedures, policies, methods and requirements prescribed in the
Manual and any supplemental bulletins, notices, revisions, modifications or amendments thereto, all of which
shall be deemed a part thereof. One (1) registered copy of the Manual shall be provided to the Franchisee on
loan from the Company during the training program, and the Franchisee shall sign for it when received.
8.2 Use
The Franchisee agrees to immediately adopt and use the programs, services, methods, standards,
materials, policies and procedures set forth in the Manual, as the Company may modify them from time to
time. The Franchisee acknowledges that the Company is the owner or licensee of all proprietary rights in and
to the System, and the Manual, and any changes or supplements thereto.
WAI-3176481v6 19
8.3 Confidentiality
The Franchisee shall at all times treat the Manual, any other manuals created for or approved for use in
the operation of the Franchised Business and all of the information contained therein as proprietary and
confidential, and shall use all reasonable efforts to maintain such information as confidential.
8.4 Trade Secrets
The Franchisee acknowledges, knows and agrees that designated portions of the Manual are “trade
secrets” owned and treated as such by the Company.
8.5 Access
The trade secrets must be accorded maximum security consistent with the Franchisee’s need to make
frequent reference thereto. The Franchisee shall strictly limit access to the Manual to employees who have a
demonstrable and valid need to know the information contained therein in order to perform their duties. The
Franchisee shall strictly follow any provisions in the Manual regarding the care, storage and use of the Manual
and all related proprietary information.
8.6 Duplication
The Franchisee shall not at any time, without the Company’s prior written consent, copy, duplicate,
record or otherwise reproduce in any manner any part of the Manual, updates, supplements or related materials,
in whole or in part, or otherwise make the same available to any unauthorized person.
8.7 Company’s Property
The Manual shall at all times remain the sole property of the Company. Upon the expiration or
termination of this Agreement for any reason, the Franchisee shall return to the Company the Manual and all
supplements thereto.
8.8 Updates or Revisions
The Company retains the right to prescribe additions to, deletions from or revisions to the Manual,
which shall become binding upon the Franchisee upon being mailed or otherwise delivered to the Franchisee,
as if originally set forth therein. The Manual, and any such additions, deletions or revisions thereto, shall not
alter the Franchisee’s rights and obligations hereunder.
8.9 Master Set
The Franchisee shall at all times insure that its set of the Manual is kept current and up to date, and in
the event of any dispute as to the contents of the Manual, the terms contained in the master set of the Manual
maintained by the Company at the Company’s headquarters shall be controlling.
8.10 Replacement Fee
If the Manual or any of its contents is lost, stolen or destroyed, the Franchisee shall pay the Company a
nonrefundable replacement fee of one thousand dollars ($1,000) for each volume of the replacement Manual.
WAI-3176481v6 20
9. CONFIDENTIAL INFORMATION
9.1 Confidential Relationship
The parties expressly understand and agree that the relationship established between the Company and
the Franchisee by this Agreement is one of confidence and trust, and that as a result, the Company shall be
disclosing and transmitting to the Franchisee certain trade secrets and other confidential and proprietary
information concerning various aspects of the Franchisee’s operation of the Franchised Business, its methods
of operation, techniques and all proprietary systems, procedures and materials relevant thereto pursuant to the
System and this Agreement.
9.2 Obligations of Franchisee
In order to preserve and protect Confidential Information which is disclosed to the Franchisee during
the term of this Agreement, the Franchisee agrees that:
(A) The Franchisee shall treat and maintain the Confidential Information as confidential both
during the term of this Agreement and thereafter.
(B) The Franchisee shall use the Confidential Information only for its operation of the Franchised
Business under this Agreement.
(C) The Franchisee shall agree to disclose to the Company all ideas, concepts, promotional
materials, methods, techniques and products relating to the development and operation of the
Franchised Business conceived or developed by you or your employees during the term of the
applicable agreement. You must grant to us and agree to procure from your affiliates, owners
or employees a perpetual, non-exclusive and worldwide right to use these intangibles in all the
Franchised Businesses or other businesses operated by the Company, our affiliates and
franchisees. The Company has no obligation to make any payment with respect to any idea,
concept, method, technique or product. You agree that you will not use, nor will you allow
any other person or entity to use, any concept, method, technique or product without obtaining
our prior written approval.
(D) The Franchisee shall disclose the Confidential Information only as reasonably necessary to its
employees or agents who have a demonstrable and valid need to know the Confidential
Information and not to anyone else.
(E) The Franchisee shall restrict disclosure of the Confidential Information to only those of its
employees or agents who are directly connected with the performance of work requiring
knowledge thereof and shall disclose only so much of the Confidential Information as is
required to enable those employees or agents to carry out their assigned duties.
(F) The Franchisee shall advise its employees or agents of the confidential nature of such
information and the requirements of nondisclosure thereof.
(G) The Company and the Franchisee shall conduct a review to determine which employees will
have access to the Confidential Information and to the Manual. The Franchisee shall not
disclose any Confidential Information or provide access to the Manual to such employee or
agent until that person executes the form of Confidentiality and Non-Competition Agreement
WAI-3176481v6 21
set forth in Attachment F, acknowledging the confidential and proprietary nature of the
Confidential Information and agreeing not to disclose such information during the course of
employment or thereafter.
(H) The Franchisee must acknowledge and agree that the Confidential Information is confidential
to and a valuable asset of the Company and its affiliates, is proprietary, includes trade secrets
of the Company and its affiliates and is disclosed to you on the condition that you and your
owners and employees who have access to the Confidential Information agree that during and
after the term of the applicable agreement you: (1) will not use the Confidential Information
in any other business or capacity; (2) will maintain the absolute confidentiality of the
Confidential Information; (3) will not make unauthorized copies of any portion of the
Confidential Information disclosed in written or other tangible form; (4) will adopt and
implement all reasonable procedures we prescribe to prevent unauthorized use or disclosure
of the Confidential Information; and (5) will require all employees and owners who have
access to the Confidential Information to sign confidentiality and non-competition agreements
in the form we prescribe and provide us, at our request, with signed copies of each agreement.
Nothing contained in the Franchise Agreement will be construed to prohibit you from using
the Confidential Information in connection with the operation of other Franchised Businesses
according to a Franchise Agreement or other Agreements with us.
9.3 Confidential Information Defined
We possess and will further develop and acquire certain confidential and proprietary information and
trade secrets including, but not limited to, the following categories of information, methods, techniques,
procedures and knowledge we, our affiliates, or our franchisees have developed or will develop (the
“Confidential Information”) including: (1) methods, techniques, specifications, standards, policies,
procedures, information, concepts and systems relating to and knowledge of and experience in the
development, operation, and franchising of the Franchised Business; (2) marketing and promotional programs
for the Franchised Business; (3) methods of providing services related to packing, moving, and storage; (4)
knowledge of specifications for and knowledge of suppliers of certain materials, equipment and supplies for
the Franchised Business; (5) operating results and financial performance of the Franchised Business; (6) the
Manual; and (7) the terms of this Agreement. Additionally, any and all information, knowledge, know-how,
systems, programs and other methods and techniques which the Company designates as confidential shall be
deemed Confidential Information for purposes of this Agreement.
You agree to disclose to us all ideas, concepts, promotional materials, methods, techniques and
products relating to the development and operation of the Franchised Business conceived or developed by you
or your employees during the term of the applicable agreement which shall be considered Confidential
Information. You hereby grant to us and agree to procure from your affiliates, owners or employees a
perpetual, non-exclusive and worldwide right to use these intangibles in all the Franchised Businesses or other
businesses operated by us, our affiliates and franchisees. We have no obligation to make any payment with
respect to any idea, concept, method, technique or product. You agree that you will not use, nor will you allow
any other person or entity to use, any concept, method, technique or product without obtaining our prior written
approval.
9.4 Protection of Information
The Franchisee acknowledges that it has knowledge of confidential matters, trade secrets, management
and training techniques, operational, accounting, quality control procedures, programs and other methods
WAI-3176481v6 22
developed by the Company through and in its System which, for purposes of this Agreement, are owned by the
Company and which are necessary and essential to the operation of the Franchised Business, without which
information the Franchisee could not efficiently, effectively and profitably operate the same. The Franchisee
further acknowledges that such Confidential Information was unknown to it prior to negotiation for and
execution of this Agreement and that the unique and novel combination of “know-how” and methods
developed by the Company and licensed to the Franchisee by the Company for the operation of the Franchised
Business are peculiar to the Company. The Franchisee shall take all steps necessary, at its own expense, to
protect the Confidential Information and shall not divulge the same either during or upon the termination of
this Agreement without the prior written consent of the Company.
9.5 Confidential Information Restrictions Not Applicable
If you have obtained our prior written consent, the restrictions on the disclosure and use of the
Confidential Information shall not apply to the following: (a) information, methods, procedures, techniques
and knowledge which are or become generally known in the business of moving services, other than through
deliberate or inadvertent disclosure by you; and (b) the disclosure of the Confidential Information in judicial or
administrative proceedings to the extent that you are legally compelled to disclose information, provided you
have notified us prior to disclosure and used your best efforts to obtain, and afforded us the opportunity to
obtain, an appropriate protective order or other assurance satisfactory to us of confidential treatment for the
information required to be so disclosed.
9.6 Remedies
The Franchisee acknowledges that in addition to any remedies available to the Company under Section
14 hereunder, the Franchisee agrees to pay all court costs and reasonable attorneys’ fees incurred by the
Company in obtaining specific performance of a temporary restraining order and/or an injunction against
violation of the requirements of this Section 9.
10. ACCOUNTING, INSPECTIONS AND RECORDS
10.1 Maintenance of Books and Records
You shall keep and maintain, using generally accepted accounting principles and in accordance with
any procedures set forth in the Manual or as otherwise reasonably prescribed by us, complete and accurate
books and records pertaining to your Franchised Business and preserve all of your books, records and tax
returns for at least 5 years after the later of preparation or filing (or such longer period as may be required by
any governmental entity) and make them available and provide duplicate copies to us within 5 days after our
written request.
10.2 Franchise Reporting
You must establish and maintain, at your own expense, bookkeeping, accounting and data processing
systems which conform to the System standards as we may prescribe periodically. Each transaction of the
Franchised Business shall be processed in the manner we prescribe, and you must allow us access to all data with
respect to the Franchised Business. We may require that you provide such access to the data by installing an
access point and establishing an electronic network connection service which meets our System standards. You
must supply to us such types of reports in a manner and form as we may reasonably require periodically,
including:
WAI-3176481v6 23
(A) by a designated day of each week a report on the Franchised Business' Gross Sales for the
previous week;
(B) monthly financial statements prepared in accordance with generally accepted accounting
principles and procedures as specified in the Manual, consistently applied, using the forms
and chart of accounts as we prescribe, which shall include a profit and loss statement and
balance sheet for the Franchised Business, mailed or otherwise forwarded to us by no later
than the 15th day following the end of the month, based on operating results of said month,
which shall be submitted in a form approved by us;
(C) within seven (10) days after the end of each calendar month or other period as we may
determine, a report on your local advertising and marketing expenditures in our recommended
format;
(D) within 60 days after the end of your fiscal year, a balance sheet and profit and loss statement
prepared in accordance with generally accepted accounting principles and procedures set forth
in the Manual, consistently applied, for the Franchised Business for such year;
(E) within 10 days after such returns are filed, exact copies of any federal income tax, state sales
tax, value added tax, and any other tax returns and such other forms, records, books and other
information as we may periodically require; and
(F) any other data, information and supporting records we reasonably request from time to time,
including without limitation, daily, weekly or monthly reports of inventory and sales by
category.
10.3 Other Submissions
The Franchisee shall also submit to the Company, for review and auditing, such other forms, and other
reports and any and all other information and data as the Company may reasonably designate, in the form and
at the times and places reasonably required by the Company, upon request and as specified from time to time in
the Manual or otherwise in writing, at any time during the term of this Agreement.
10.4 Inspection
The Company or its designated agents shall have the right at all reasonable times to examine and copy,
at its expense, the books, records, receipts and tax returns of the Franchisee. This shall include access via the
Internet or other appropriate method. The Company shall at all times maintain strict confidentiality of
Franchisee’s records. The Company shall also have the right, at any time, to have an independent audit made
of the books of the Franchisee. If an inspection should reveal that any payments to the Company have been
understated in any report to the Company, then the Franchisee shall immediately pay to the Company, upon
demand, the amount understated plus (1) interest at the highest rate permitted by applicable law, not to exceed
18% Annual Percentage Rate (compounded monthly); and (2) an administrative fee not to exceed 5% of the
amount owed. If any inspection discloses an understatement in any report of more than (5%), or the
Franchisee’s failure to submit required reports or information, the Franchisee shall, in addition to the payment
of interest thereon, reimburse the Company for any and all costs and expenses connected with the inspection
(including, without limitation, reasonable accountants’ and attorneys’ fees). The foregoing remedies shall be
in addition to any other remedies available to the Company.
WAI-3176481v6 24
11. NATIONAL AND LOCAL ADVERTISING
Recognizing the value of national and local advertising, and the importance of the standardization of
advertising programs to the furtherance and protection of the Proprietary Marks, goodwill and public image of
the System, the parties agree as follows:
11.1 Promotional and Marketing Materials
All promotional and marketing material placed in any medium by the Franchisee shall be supplied
exclusively by the Company. Any promotional and marketing materials not created for and distributed to the
Franchisee by the Company are prohibited from use by the Franchisee.
11.2 Advertising and Promotion Fund
The Company reserves the right to establish an Advertising and Promotion Fund (the “Fund”). After
your first twelve months of operations (beginning with your first reported sales), you must pay to the Fund a
continuing non-refundable fee equal to 1% of Gross Revenues. The Fund will be the sole advertising fund that
we administer and will be used primarily for the design, production and placement of advertising materials and
campaigns on a regional or national basis. No percentage of the Fund will be used for the solicitation of
franchisees, however, our advertising and marketing material may contain contact numbers for obtaining
information about Crowning Touch franchises. The Fund will be allocated to the following media: direct
mail, newspaper, magazines, radio, television, and the Internet and will be placed by our advertising
department. These funds will be applied towards the promotion of the System and there is no guarantee when
funds will be applied to your particular area. All media coverage will be designed to strengthen overall
franchise awareness – regionally, nationally and possibly internationally.
The sums you pay to the Fund will be maintained in a separate account. Upon your request, we will
annually account for the advertising funds expended, including a reasonable allocation for our overhead
expenses associated with the administration and management of the Fund. It is understood and agreed that we
will allocate advertising funds, as we deem appropriate. We will, as conditions warrant, seek input from all
participants as to suggested expenditures, but our determination as to the final allocation of Fund expenditures
may not be challenged or contested.
Other than receiving a reasonable allocation of our overhead associated with the Fund, we do not
receive payment for providing goods or services to an advertising fund. We are not required to spend any
amount on advertising in the area where your Franchised Business will be located. If all of the advertising fees
are not spent in the fiscal year in which they accrue, they remain in the Fund for use in the following year.
We reserve the right to terminate the Fund in our sole discretion. The Fund will not be terminated,
however, until all monies have been expended for advertising and/or promotional purposes, or returned pro-
rata to participating franchises. We may establish such other policies and procedures for the administration of
the Fund as we, in our sole discretion, may deem necessary.
11.3 Website
We will make available to you a fully functional customized Crowning Touch website to advertise,
market and promote the Franchised Business (“Your Website”). You may not use any other Internet site or
web pages in connection with the Franchised Business or otherwise containing or displaying the Proprietary
Marks.
WAI-3176481v6 25
We or our affiliates maintain a website to advertise, market and promote Crowning Touch and our
business worldwide, as well as franchise opportunities (the “Corporate Website”). We periodically may update
and modify the Corporate Website, including links to Your Website. We have final approval over all content
and information on the Corporate Website and Your Website.
We have the right to designate the URLs, domain names, website addresses, meta-tags, links, key
words, e-mail addresses and any other means of electronic identification or origin (“e-names”) used in
connection with Your Website and your Franchised Business.
You will be responsible for the initial creation and for maintaining Your Website and for local
information on Your Website. We will provide you with style guidelines for use in development of Your
Website, as well as content updates. We will provide you hosting and support services for Your Website. You
may not use another hosting service for Your Website and you may not develop, maintain, or authorize any
website that mentions or describes you or the Franchised Business or displays any of the Proprietary Marks
other than Your Website.
You must: (1) comply with any rules and requirements we establish pertaining to the Corporate
Website and Your Website; (2) maintain current and accurate information on Your Website at all times; and
(3) pay all fees and charges for the maintenance and support of Your Website. We will own (or have rights
superior to yours in) all intellectual property and other rights in the Corporate Website and Your Website and
all information they contain (including, the domain name or URL for Your Website, the log of “hits” by
visitors, and any personal or business data that visitors supply, but excluding your proprietary information).
We will only maintain hosting and support services for Your Website while you are in compliance
with the Franchise Agreement and our System standards. If you are in default of any obligation under the
Franchise Agreement or our System standards, then, in addition to our other remedies, we may cause Your
Website to be taken down until you fully cure the default. We may cause Your Website to be permanently
removed from the Internet upon the expiration or termination of the Franchise Agreement.
11.4 Internet, E-Commerce and Social Media
We have the right to designate, approve, control or limit all aspects of your Franchised Business that
you conduct over the Internet (“e-commerce”), including, use of e-names, e-mail, home pages, bulletin boards,
social media, chat rooms, linking, framing, on-line purchasing cooperatives, marketplaces, barter exchanges,
and related technologies, methods, techniques, registrations, networking, and any electronic communication,
commerce, computations, or any means of interactive electronic documents contained in a network of
computers or similar devices linked by communications software or hardware. You must follow all of our
policies and procedures for the use and regulation of e-commerce and for its use with your Franchised Business
and our System.
12. INSURANCE
12.1 Procurement
Franchisee shall procure, within the timetable provided by the Company in the Manuals, and thereafter
maintain in full force and effect during the term of this Agreement, at Franchisee’s expense, an insurance
policy or policies protecting Franchisee and the Company, and their respective officers, directors, partners and
employees, against any loss, liability, personal injury, death, property damage or expense whatsoever from fire,
WAI-3176481v6 26
lightning, theft, vandalism, malicious mischief and the perils included in the extended coverage endorsement,
arising or occurring upon or in connection with the Franchised Business, or by reason of the operation or
occupancy of the Franchised Business, as well as such other insurance applicable to such other special risks, if
any, as the Company may reasonably require for its own and Franchisee’s protection. Franchisee shall be
obligated to procure such insurance and to submit copies of such policies to the Company prior to the
commencement of training.
12.2 Minimum Coverage
Such policy or policies shall be written by an insurance company satisfactory to the Company in
accordance with the standards and specifications set forth in the Manual or otherwise in writing.
The type of insurance, and the insurance amounts, are subject to change based on inflation or future
experience with claims asserted against the Franchised Business. The Company, in its sole discretion, may
require additional insurance coverage to be paid for by the Franchisee. The Franchisee must furnish the
Company with certificates of insurance, along with evidence that the premiums have been paid prior to the
opening of the Franchised Business. The Franchisee shall be liable for any cost and expenses, including
attorneys’ fees, incurred by the Company in connection with any proceedings arising out of compliance with
the provisions of the Franchise Agreement relating to insurance. The Company shall be named as an
additional insured in such of the Franchisee’s insurance policies as are designated by the Company.
Currently, we require you to maintain the following coverages: (1) comprehensive general liability
insurance for bodily injury, death and property damage caused by your operation of the Franchised Business,
including employment practices liability coverage, contractual liability coverage, and coverage for vehicles,
cargo and business assets (not less than $1,000,000 for bodily injury or death and not less than $100,000
property damage; deductible or self-insured retention equal to or less than $5,000); (2) all risk property and
casualty insurance, including fire coverage; (3) business interruption insurance in sufficient amounts but not
less than $100,000; (4) worker’s compensation insurance and all other insurance required by law; (5)
commercial umbrella liability insurance with limits which bring the total of all primary underlying coverages
(comprehensive general liability, business interruption, products liability and employers liability) to not less
than $3,000,000 total limit liability. This umbrella liability will provide at a minimum those coverages and
endorsements required in the underlying policies; (6) and other coverages as specified in the Manual, with such
limits as are specified in the Manual or required by law.
12.3 Certificates
Initially and upon each periodic policy renewal, Franchisee shall make a request, through its agent
and/or carrier, for timely delivery to the Company of certificates of insurance of all coverage required by the
Company. Insurance coverage must be obtained from an insurer that is rated A+ or better by A.M. Best &
Company. We may require you to obtain insurance coverage for other risks or increase the required amount of
coverage and require different or additional insurance during the Franchise Agreement term. Premiums will
depend upon the insurance carrier’s charges, terms of payment and your loss history. Each insurance policy
must: (1) name the Company and our affiliates as additional named insureds and contain a waiver of all
subrogation rights against us; (2) provide for 30 days’ prior written notice to us of any material modification,
cancellation, or expiration of the policy; (3) provide that coverage applies separately to each insured against
whom a claim is brought; (4) contain no provision which limits coverage in the event of a claim by a party who
is indemnified under this Agreement; (5) be primary; and (6) extend to and provide indemnity for all
obligations assumed by you under this Agreement. You must obtain our approval of your insurance carriers
and provide evidence of coverage as and when we may require.
WAI-3176481v6 27
12.4 Failure to Procure
Should the Franchisee for any reason fail to procure or maintain the insurance required by this
Agreement, as revised from time to time for all franchisees by the Manuals or otherwise in writing, the
Company shall have the right and authority (without, however, any obligation) to immediately procure such
insurance and to charge the same to the Franchisee, which charges, together with a reasonable fee for the
Company’s expenses in so acting, including but not limited to attorneys’ fees, shall be payable by the
Franchisee immediately upon notice.
12.5 No Relief Of Liability To The Company
The procurement and maintenance of such insurance shall not relieve Franchisee of any liability to the
Company under any indemnity requirements of this Agreement.
13. TRANSFER OF INTEREST; OPERATION BY THE COMPANY
13.1 Transfer by the Company
The Company shall have the right to assign this Agreement, and all of its rights and privileges
hereunder, to any person, firm, corporation or other entity provided that, with respect to any assignment
resulting in the subsequent performance by the assignee of the functions of the Company: (1) the assignee
shall, at the time of such assignment, be capable of performing the obligations of the Company hereunder, and
(2) the assignee shall expressly assume and agree to perform such obligations.
Specifically, and without limitation to the foregoing, the Franchisee expressly affirms and agrees that
the Company or CTGI may sell its assets, its rights to the Proprietary Marks and the System outright to a third
party; may go public; may engage in a private placement of some or all of its securities; may merge, acquire
other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization,
leveraged buyout or other economic or financial restructuring; and, with regard to any or all of the above sales,
assignments and dispositions, the Franchisee expressly and specifically waives any claims, demands or
damages arising from or related to the loss of said Proprietary Marks (or any variation thereof) and/or the loss
of association with or identification of “Crowning Touch” as the Company hereunder.
Nothing contained in this Agreement shall require the Company to remain in the moving services
business or to offer similar services, whether or not bearing the Company’s Proprietary Marks, in the event that
the Company exercises its rights hereunder to assign its rights in this Agreement.
13.2 Transfer by Franchisee
Franchisee understands and acknowledges that the rights and duties set forth in this Agreement are
personal to Franchisee, and that Company has entered into this Agreement and granted the license hereunder in
reliance on Franchisee’s business skill and financial capacity. Accordingly, neither Franchisee, any immediate
or remote successor to any part of Franchisee’s interest in the Franchised Business, any individual, partnership,
corporation or other legal entity which directly or indirectly controls Franchisee, if Franchisee is a corporation,
nor any general partner or any limited partner (including any corporation which controls, directly or indirectly,
any general or limited partner) if Franchisee is a partnership, shall sell, assign, transfer, convey, give away,
pledge, mortgage or otherwise encumber any direct or indirect interest in Franchisee or in the Franchised
Business without the prior written consent of the Company. Any purported assignment or transfer, by
WAI-3176481v6 28
operation of law or otherwise, not having the written consent of the Company shall be null and void and shall
constitute a material breach of this Agreement, for which Company may then terminate without opportunity to
cure pursuant to Section 14 of this Agreement. Transfer includes the transfer of contract, assets or ownership
change.
(A) The Company shall not unreasonably withhold its consent to a transfer of any interest in
Franchisee or in this Agreement; provided, however, that if a transfer, alone or together with
other previous, simultaneous or proposed transfers, would have the effect of transferring a
controlling interest in the Franchised Business, the Company may, in its sole discretion,
require any or all of the following as conditions of its approval:
(1) All of Franchisee’s accrued monetary obligations and all other outstanding
obligations to the Company (its subsidiaries, affiliates and suppliers), and to
Franchisee’s vendors, shall be up to date, fully paid and satisfied;
(2) The Franchisee shall not be in default of any provision of this Agreement, any
amendment hereof or successor hereto, any other franchise agreement or other
agreement between Franchisee and the Company, or its subsidiaries, affiliates or
suppliers;
(3) The Franchisee and each of its shareholders, officer and directors shall have
executed a general release under seal, in a form satisfactory to the Company, of any
and all claims against the Company and its officers, directors, shareholders and
employees in their corporate and individual capacities, including, without limitation,
claims arising under federal, state and local laws, rules and ordinances, provided,
however, that Franchisee shall not be required to release the Company for violations
of federal and state franchise registration and disclosure laws;
(4) The transferee shall enter into a written assignment, under seal and in a form
satisfactory to the Company, assuming and agreeing to discharge all of Franchisee’s
obligations under this Agreement; and, if the transferor guaranteed the obligations of
Franchisee, the transferee shall guarantee the performance of all such obligations in
writing in a form satisfactory to the Company;
(5) The transferee shall demonstrate to the Company’s satisfaction that the transferee
meets the Company’s educational, managerial and business standards; possesses a
good moral character, business reputation and credit rating; has the aptitude and
ability to operate the Franchised Business herein (as may be evidenced by prior
related experience or otherwise); has at least the same managerial and financial
criteria required of new franchisees and shall have sufficient equity capital to operate
the Franchised Business;
(6) At the Company’s option, the transferee shall execute (and/or, upon the Company’s
request, shall cause all interested parties to execute) for a term ending on the
expiration date of this Agreement and with such renewal term as may be provided by
this Agreement, the standard form of Franchise Agreement then being offered to new
franchisees and such other ancillary agreements as the Company may require for the
Franchised Business, which agreements shall supersede this Agreement in all
WAI-3176481v6 29
respects and the terms of which agreements may differ from the terms of this
Agreement, including, without limitation, a higher percentage royalty fee or
Advertising Fund contribution, and the implementation of additional fees;
(7) The Franchisee shall remain liable for all direct and indirect obligations to the
Company in connection with the Franchised Business prior to the effective date of
the transfer and shall continue to remain responsible for its obligations of
nondisclosure, non-competition and indemnification as provided elsewhere in this
Agreement and shall execute any and all instruments reasonably requested by the
Company to further evidence such liability;
(8) At the transferee’s expense, the transferee and its employees shall complete any
training programs then in effect for current franchisees upon such terms and
conditions as the Company may reasonably require;
(9) The transferee shall have signed an Acknowledgment of Receipt of all required legal
documents, such as the Franchise Offering Circular and the then-current Franchise
Agreement and ancillary agreements;
(10) The Franchisee shall pay to the Company a Transfer Fee which is $10,000 plus
reasonable legal fees and out of pocket expenses. If the transfer is to an entity in
which you have a 51% or greater ownership interest or to a family trust and the
transfer will not result in any change in the daily operational control of the
Franchised Business, and if you have obtained our written approval as the Franchise
Agreement requires, then you must reimburse the Company only for our reasonable
legal fees and expenses.
(11) The Franchisee shall pay to the Company a Transfer Commission equal to ten percent
(10%) of the gross purchase price, where allowed by law, if the Company, either
directly or indirectly through one of its representatives or another franchisee, refers a
purchaser of the Franchised Business to the Franchisee. The non-refundable Transfer
Commission shall be fully payable prior to any such transfer. Attorneys’ fees at
closing are the responsibility of the Franchisee.
(B) The Franchisee shall grant no security interest in the Franchised Business or in any of its
assets unless the secured party agrees that in the event of any default by Franchisee under any
documents related to the security interest, the Company shall have the right and option to be
substituted as obligor to the secured party and to cure any default of Franchisee.
Notwithstanding the foregoing, the Company shall not be construed as a guarantor or surety
for the Franchisee.
(C) The Franchisee acknowledges and agrees that each of the foregoing conditions of transfer that
must be met by the Franchisee and the transferee are necessary and reasonable to assure such
transferee’s full performance of the obligations hereunder.
13.3 Additional Requirements: Corporate Franchisees
The following requirements shall apply to the Franchisee if the Franchisee is a corporation, in addition
to those requirements set forth elsewhere in this Agreement, the Manual or otherwise:
WAI-3176481v6 30
(A) The Franchisee shall be a newly organized corporation and its Articles of Incorporation shall
at all times provide that its activities are confined exclusively to operating the Franchised
Business herein.
(B) Copies of the Franchisee’s Articles of Incorporation, Bylaws and other governing documents,
and any amendments thereto, including the resolutions of the Board of Directors authorizing
entry into this Agreement, shall be promptly furnished to the Company.
(C) Each stock certificate or membership certificate of the corporation issued to shareholders or
members in the Franchised Business shall have conspicuously endorsed upon its face a
statement in a form satisfactory to the Company, such as:
“THE TRANSFER, PLEDGE OR ALIENATION OF THIS SECURITY IS SUBJECT TO THE TERMS AND
RESTRICTIONS CONTAINED WITHIN THE FRANCHISE AGREEMENT BETWEEN CROWNING TOUCH
SENIOR MOVING SERVICES, INCORPORATED AND
.”
(D) The Franchisee shall maintain a current list of all owners of record and all beneficial owners
of any class of voting stock or membership interest of the Franchisee and shall furnish the list
to the Company upon request, together with the addresses and phone numbers of each
shareholder or member.
(E) All shareholders and members of the Franchisee shall jointly and severally guarantee the
Franchisee’s performance hereunder and shall bind themselves to the terms of this
Agreement; provided, however, that the requirements of this Section 13.3.E shall not apply to
a publicly held corporation.
13.4 The Company’s Right of First Refusal
(A) Any party who holds an interest (as reasonably determined by the Company) in the Franchisee
or in the Franchised Business and who desires to accept any bona fide offer from a third party
to purchase his interest shall notify the Company in writing of each such offer and, except as
otherwise provided herein, the Company shall have the right and option, exercisable within
sixty (60) days after receipt of such written notification, to send written notice to the seller
that the Company intends to purchase the seller’s interest on the same terms and conditions
offered by the third party. Any material change in the terms of any offer prior to closing shall
constitute a new offer subject to the same right of first refusal by the Company as in the case
of an initial offer. In the event that the Company elects to purchase the seller’s interest,
closing on such purchase must occur by the later of: (a) the closing date specified in the third
party offer; or (b) within sixty (60) days from the date of notice to the seller of the Company’s
election to purchase. The Company’s failure to exercise the option afforded by this Section
13.4. shall not constitute a waiver of any other provision of this Agreement, including all of
the requirements of this Section 13 with respect to a proposed transfer.
(B) In the event the consideration, terms and/or conditions offered by a third party are such that
the Company may not reasonably be required to furnish the same consideration, terms and/or
conditions, then the Company may purchase the Franchised Business proposed to be sold for
the reasonable equivalent in cash. If the parties cannot agree, within a reasonable time, on the
WAI-3176481v6 31
reasonable equivalent in cash of the consideration, terms and/or conditions offered by a third
party, an independent appraiser shall be designated by the Company, and his determination
shall be final and binding.
13.5 Transfer Upon Death, Mental Incapacity or Disability
Upon the death, mental incapacity or disability of the Franchisee or a shareholder of a corporation or a
general partner of a partnership which has been formed to own and operate the Franchised Business pursuant
to the System, the Company shall consent to the transfer of said interest in the Franchisee, the Franchised
Business and this Agreement to the spouse, heirs or relative by blood or by marriage, of said Franchisee,
shareholder or partner, whether such transfer is made by will or by operation of law, if, in the Company’s sole
discretion and judgment, such person or persons meet the Company’s educational, managerial and business
standards; possess a good moral character, business reputation and credit rating; have the aptitude and ability to
conduct the Franchised Business herein; have at least the same managerial and financial criteria required by
new franchisees and shall have sufficient equity capital to operate the Franchised Business. If said transfer is
not approved by the Company, the executor, administrator or personal representative of such person shall
transfer his interest to a third party approved by the Company within six (6) months after such death, mental
incapacity or disability. Such transfer shall be subject to the Company’s right of first refusal and to the same
conditions as any inter vivos transfer.
13.6 Non-Waiver of Claims
The Company’s consent to a transfer of any interest in the Franchised Business shall not constitute a
waiver of any claims it may have against the transferring party, and it will not be deemed a waiver of the
Company’s right to demand exact compliance with any of the terms of this Agreement, or any other agreement
to which the Company and the transferee are parties, by the transferee.
13.7 Operation of the Franchised Business by the Company
In order to prevent any interruption of the business of the Franchisee’s Franchised Business and any
injury to the goodwill and reputation thereof which would cause harm to the Franchised Business and thereby
depreciate the value thereof, the Franchisee hereby authorizes the Company, and at the sole option of the
Company, to operate said Franchised Business for so long as the Company deems necessary in the event that:
(1) any of the Franchisee’s principals, directors, shareholders or partners is absent or incapacitated by reason of
illness or death and, that the Franchisee is not therefore, in the sole judgment of the Company, able to
effectively manage the Franchised Business; (2) any allegation or claim is made against the Franchised
Business, the Franchisee or any principal, director, shareholder, partner, or employee of the Franchisee,
involving or relating to misrepresentations or any fraudulent or deceptive practice; or (3) there occurs any other
special circumstances, including but not limited to accreditation problems, or contract disputes, the Company
shall operate the Franchised Business pursuant to this Section 13.7, without waiving any other rights or
remedies the Company may have under this Agreement. All revenues from the operation of the Franchised
Business during such period of operation by the Company shall be kept in a separate account, and the expenses
of the Franchised Business, including reasonable compensation and expenses for the Company’s operating
representative, will be charged to said account. If, as herein provided, the Company elects to temporarily
operate the Franchised Business on behalf of the Franchisee, the Franchisee hereby agrees to indemnify and
hold harmless from any and all claims arising from the acts or omissions of the Company and its
representatives taken in good faith.
It is the intent of Section 13.7 of this Agreement to prevent any interruptions of the business of the
WAI-3176481v6 32
Franchised Business and/or injury to the goodwill and reputation thereof which could cause harm to the
Franchised Business or the System and potentially depreciate the value thereof.
14. DEFAULT AND TERMINATION
As a matter of policy, the Company shall make every good faith effort to avoid terminating this
Agreement without having first employed all reasonable steps hereunder to cause the Franchisee to correct and
cure any default. Furthermore, the terms and conditions regarding default and termination contained herein
shall be subject to any applicable state statutes or regulations regarding the termination of a franchise.
14.1 Default With No Opportunity To Cure
The Franchisee shall be deemed to be in default and the Company may, at its option, terminate this
Agreement and all rights granted hereunder, without affording the Franchisee any opportunity to cure the
default, effective immediately upon receipt of notice from the Company to the Franchisee, upon the occurrence
of any of the following events:
(A) If the Franchisee becomes insolvent or makes a general assignment for the benefit of
creditors, or if a petition in bankruptcy is filed by the Franchisee or such a petition is filed
against and consented to by the Franchisee, or if the Franchisee is adjudicated bankrupt, or
if a bill in equity or other proceeding for the appointment of a receiver of the Franchisee or
other custodian for the Franchisee’s business or assets is filed and consented to by the
Franchisee, or if a receiver or other custodian (permanent or temporary) of the
Franchisee’s business or assets is appointed by any court of competent jurisdiction, or if
proceedings for a conference with a committee of creditors under any state, federal or
foreign law should be instituted by or against the Franchisee, or if a final judgment
remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is
filed), or if execution is levied against the Franchisee’s operating location or property, or
suit to foreclose any lien or mortgage against the premises or equipment is instituted
against the Franchisee and not dismissed within thirty (30) days, or if any substantial real
or personal property of the Franchised Business must be sold after levy thereupon by any
sheriff, marshal or constable;
(B) If the Franchisee ceases to do business, or otherwise forfeits the right to do or transact
business in the jurisdiction where the Franchised Business is located;
(C) If the Franchisee attempts to duplicate, tamper with or adulterate any of the Company’s
proprietary materials;
(D) If a threat or danger to public health or safety results from the construction, maintenance
or operation of the Franchised Business;
(E) If the Franchisee understates by five percent (5%) or more its Gross Revenues in
connection with any report required to be submitted to the Company;
(F) If the Franchisee has made any material misrepresentation or omission in the Franchise
Agreement or request for consideration submitted to the Company in order to determine
the eligibility and qualifications of the Franchisee;
WAI-3176481v6 33
(G) If the Franchisee (or the principal stockholder or general partner of a corporate or
partnership franchisee) repeatedly engages in the excessive use of alcohol and/or abuse of
drugs;
(H) If the Franchisee misuses or makes any unauthorized use of the Proprietary Marks,
engages in any business or markets any services or products under a name or mark which
is confusingly similar to the Proprietary Marks, or otherwise materially impairs the
goodwill associated therewith or Company’s rights therein;
(I) If the Franchisee is convicted of a crime of moral turpitude or similar felony or is
convicted of any crime or offense that the Company reasonably believes is likely to have
an adverse effect on the System, the Proprietary Marks, the goodwill associated therewith
or the Company’s interest therein;
(J) If a judgment or a consent decree against the Franchisee, or any of its officers, directors,
shareholders or partners is entered in any case or proceeding involving allegations of
fraud, racketeering, unfair or improper trade practices or any similar claim which is likely
to have an adverse effect on the System, the Proprietary Marks, the goodwill associated
therewith or the Company’s interest therein;
(K) If the Franchisee fails to obtain prior approval of the Company of any and all advertising,
marketing or promotional plans and materials in whatever form used by Franchisee in
connection with its promotion of the Franchised Business or otherwise fails to comply
with Company’s policies and procedures with respect to advertising, marketing or
promotion;
(L) If the Franchisee purports to transfer any right or obligations under the Franchise
Agreement to any third party without the Company’s prior written consent, contrary to any
of the terms of Section 13 of this Agreement;
(M) If the Franchisee fails to comply with any of the covenants contained in Section 16 of this
Agreement, or if any of the representations of the Franchisee contained in Section 16
were, or become inaccurate;
(N) If, contrary to Sections 8 and 9 of this Agreement, the Franchisee discloses or divulges the
contents of the Manual or any other trade secrets or confidential information provided to
the Franchisee by the Company;
(O) If the Franchisee knowingly maintains false books or records or submits any false
statements, applications or reports to the Company or any assignee of the Company;
(P) If the Franchisee willfully and repeatedly engages in a course of conduct that constitutes a
misrepresentation or a deceptive or unlawful act or practice in connection with its sale of
the services and products offered in connection with the Franchised Business;
(Q) If the Franchisee fails to strictly comply with the product and quality control standards and
specifications or otherwise fails to meet any other significant or material specification or
guideline set forth in the Manual;
(R) If any other Franchise Agreement issued to the Franchisee by the Company is terminated
WAI-3176481v6 34
for any reason;
(S) If the Franchisee receives three (3) or more notices of default under Section 14.B. of this
Agreement during the term hereof whether or not such defaults are cured after notice;
(T) If the Franchisee fails to begin business operations no later than eight (8) months after
executing the Franchise Agreement without written authorization from the Company
specifying an extension;
(U) If the Franchisee offers any product or service directly or indirectly in connection with the
Franchised Business which has not been approved in advance in writing by the Company;
or
(V) If the Franchisee utilizes the customer list, customer database, mailing list, prospective
customer list and/or former customer list, in any manner not authorized in writing by the
Company.
14.2 Default With Thirty (30) Days Opportunity To Cure
Except as provided in Section 14.1. of this Agreement, the Franchisee shall have thirty (30) days after
receiving from the Company a written notice of default within which to remedy any default described in this
Section 14.2. and provide evidence thereof to the Company. If any such default is not cured within that time,
or such longer period as applicable law may require, this Agreement, at the Company’s option, shall terminate
without further notice to the Franchisee effective immediately upon the expiration of the thirty (30) day period
or such longer period as applicable law may require. The Franchisee shall be in default hereunder for any
failure to comply substantially with any of the requirements imposed by this Agreement, as it may from time to
time reasonably be supplemented by updates to the Manual, or for any failure to carry out the terms of this
Agreement in good faith. Such defaults shall include, without limitation, the occurrence of any of the
following events:
(A) If the Franchisee fails, refuses or neglects to pay promptly any monies owing to the
Company, its subsidiaries or affiliates when due, or to submit the financial information or
other reports required by the Company under this Agreement;
(B) If the Franchisee fails to maintain any of the standards or procedures prescribed by the
Company in this Agreement, the Manual, any other franchise agreement between the
Company and the Franchisee, any other written agreements between the parties, or
otherwise;
(C) If the Franchisee fails to comply with its duties set forth in Section 6 of this Agreement or
fails to perform any obligation owing to the Company or to observe any covenant or
agreement made by the Franchisee, whether such obligation, covenant or agreement is set
forth in this Agreement or in any other agreement with the Company including, but not
limited to, any other franchise agreement by and between the Company and the Franchisee
or any entity related to the Company;
(D) If the Franchisee fails to adequately promote the Franchised Business as provided in the
Manual or otherwise in writing;
(E) If the Franchisee fails to maintain and submit to the Company all reports required pursuant
WAI-3176481v6 35
to Section 10 hereof, including, but not limited to, financial statements, and other reports
of Gross Revenues and copies of tax returns; or
(F) If the Franchisee or employees fail to attend and successfully complete any mandatory
training program unless attendance is excused or waived, in writing, by the Company.
14.3 Injunctive Relief
The Franchisee acknowledges that the Franchisee may be one of the many franchisees using the
Proprietary Marks and the systems and that the failure on the part of the Franchisee to comply with any of the
terms of this Franchise Agreement could cause irreparable damage to some or all of the other franchisees and
to the Company.
The Franchisee agrees that, upon the happening of a material and substantial breach of this Franchise
Agreement, which, in the opinion of the Company, is detrimental or harmful to the good name, goodwill, or
reputation of the Company, or other Franchisees, or is detrimental or harmful to the interests of the Company,
other franchisees, or the public, the Company shall have the immediate right to secure an order enjoining any
such default or threatened breach of this Franchise Agreement, and, if this Franchise Agreement has been
terminated, the Franchisee may be enjoined from any continued operation of the franchise, the Franchised
Business, or any other operation in violation of the Franchise Agreement.
14.4 No Right or Remedy
No right or remedy herein conferred upon or reserved to the Company is exclusive of any other right or
remedy provided or permitted by law or equity.
14.5 Default and Termination
The events of default and grounds for termination described in this Section 14 shall be in addition to
any other grounds for termination contained elsewhere in this Agreement or otherwise.
14.6 Right to Purchase
In the event of termination of this Agreement for any reason, including, but not limited to, a default
under this Section 14 the Company shall have the right and option to purchase the Franchisee’s interest in the
tangible assets of the Franchised Business as set forth in Section 15.1 below.
14.7 Franchisee’s Right to Termination
The Franchisee may, at its option, terminate this Agreement and all granted hereunder upon one
hundred eighty (180) days written notice to the Company. The Franchisee shall adhere to all of the provisions
and obligations in Sections 15 & 16.
15. OBLIGATIONS UPON TERMINATION
Upon termination or expiration of this Agreement, all rights granted hereunder to the Franchisee shall
forthwith terminate, and Franchisee shall observe and perform the following:
15.1 Cessation of Operation
WAI-3176481v6 36
The Franchisee shall immediately cease to operate the Franchised Business and shall not thereafter,
directly or indirectly, represent to the public or hold itself out as a franchisee of the Company.
15.2 Cessation of Use of Proprietary Marks
The Franchisee shall immediately and permanently cease to use, in any manner whatsoever, any
format, confidential methods, customer data base, programs, literature, procedures and techniques associated
with the System, the name Crowning Touch and any Proprietary Marks and distinctive trade dress, forms,
slogans, uniforms, signs, symbols or devices associated with the System. In particular, the Franchisee shall
cease to use, without limitation, all advertising materials or promotional displays, uniforms, vehicle signage,
stationery, forms and any other articles that display the Proprietary Marks associated with the System.
15.3 Cancellation of Name
Franchisee shall take such action as may be necessary to cancel any assumed name or equivalent
registration which contains the Proprietary Marks or any other trademark, trade name or service mark of the
Company, and Franchisee shall furnish the Company with evidence satisfactory to the Company of compliance
with this obligation within fifteen (15) days after termination or expiration of this Agreement. If Franchisee
fails or refuses to do so, the Company may, in Franchisee’s name, on Franchisee’s behalf and at Franchisee’s
expense, execute any and all documents necessary to cause discontinuance of the name Crowning Touch or any
related name used hereunder and the Company is hereby irrevocably appointed by Franchisee as the Company
attorney-in-fact to do so.
15.4 The Company’s Right to Continue Operations
In the event the Franchise Agreement is terminated, the Company may, at its option, continue to
provide services to customers and apply receipts from this activity to debts owed to the Company by the
Franchisee. The Company will have no other obligations to Franchisee in connection with the Company’s
operations of the Franchised Business following said termination.
15.5 Non-Usage of Marks
The Franchisee agrees, in the event it continues to operate or subsequently begins to operate any other
business, not to use any reproduction, counterfeit, copy or colorable imitation of the Proprietary Marks or trade
dress, either in connection with such other business or the promotion thereof, which is likely to cause
confusion, mistake or deception, or which is likely to dilute the Company’s exclusive rights in and to the
Proprietary Marks or trade dress, and agrees not to utilize any designation of origin or description or
representation which falsely suggests or represents an association or connection with the Company.
15.6 Prompt Payment Upon Default
The Franchisee shall promptly pay all sums owing to the Company and its subsidiaries, affiliates and
suppliers. In the event of termination for any default of the Franchisee, such sums shall include all damages,
costs and expenses, including reasonable attorneys’ fees, incurred by the Company as a result of the default.
15.7 Payment of Costs
The Franchisee shall pay to the Company all damages, costs and expenses, including reasonable
attorneys’ fees, incurred by the Company subsequent to the termination or expiration of this Agreement in
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obtaining injunctive or other relief for the enforcement of any provision of this Section 15 or any other
obligation under this Agreement.
15.8 Return of Materials
The Franchisee shall immediately turn over to the Company all copies of all materials in the
Franchisee’s possession including the Manual, all records, files, instructions, correspondence, customer
database, brochures, agreements, disclosure statements and any and all other materials relating to the operation
of the Franchised Business in the Franchisee’s possession, and all copies thereof (all of which are
acknowledged to be the Company’s property), and shall retain no copy or record of any of the foregoing,
excepting only the Franchisee’s copy of this Agreement, any correspondence between the parties and any other
documents which the Franchisee reasonably needs for compliance with any provision of law. In addition to the
foregoing, the Franchisee shall deliver to the Company a complete list of all persons employed by the
Franchisee during the three (3) years immediately preceding termination, together with all employment files of
each employee on such list. All costs of delivering all materials required by this Section 15.8. shall be borne
by the Franchisee. In addition to the foregoing, the Franchisee shall immediately turn over to the Company any
and all signage, software and/or other property under lease or license from the Company.
15.9 Assignment of Telephone Listings
The Franchisee shall, in additional to the obligations set forth in Attachment C, promptly notify the
appropriate telephone company and all telephone directory listing agencies of the termination or expiration of
its right to use any telephone number and any regular, classified or other telephone directory listings associated
with any Proprietary Marks and authorize the transfer of same to or at the direction of the Company. The
Franchisee agrees to execute updated letters of direction to any telephone companies and telephone directory
listing agencies directing termination and/or transfer of the Franchisee’s right to use any telephone number
associated with the Proprietary Marks, which the Company may hold until termination or expiration hereof.
The Franchisee acknowledges that as between the Company and the Franchisee, the Company has the sole
right to and interest in all telephone numbers and directory listings associated with any Proprietary Marks. The
Franchisee authorizes the Company, and hereby appoints the Company and any officer of the Company as its
attorney in fact, to direct the appropriate telephone company and all listing agencies to transfer all such listings
to the Company upon termination of this Agreement.
15.10 Option to Purchase and Assume Lease
The Company shall have the right (but not the duty) to be exercised by notice of intent to do so within
thirty (30) days after termination or expiration, to purchase any or all of the tangible assets of the Franchised
Business, including, but not limited to the signs, advertising materials, promotional displays, supplies, forms,
inventory, furniture or other items bearing the Company’s Proprietary Marks, at Franchisee’s cost, or fair
market value, whichever is less. If the parties cannot agree on fair market value within a reasonable time, the
Company shall designate an independent appraiser and his determination shall be binding. If the Company
elects to exercise any option to purchase provided herein it shall have the right to set off all amounts due from
Franchisee under this Agreement and the cost of the appraisal, if any, against any payment therefore. The
Company shall also have the right to assume the lease of the Franchisee’s site.
15.11 Covenant of Further Assurances
The Franchisee shall execute any legal document that may be necessary to effectuate the termination
hereunder and shall furnish to the Company, within thirty (30) days after the effective date of termination,
WAI-3176481v6 38
written evidence satisfactory to the Company of the Franchisee’s compliance with the foregoing obligations.
15.12 Compliance with Covenants
The Franchisee shall comply with all applicable covenants contained in Section 16 of this Agreement.
15.13 No Further Interest
Other than as specifically set forth above, the Franchisee shall have no interest in the Franchised
Business upon termination or expiration of this Agreement.
16. COVENANTS
16.1 Best Efforts
The Franchisee covenants that during the term of this Agreement, and subject to the post-termination
provisions contained herein, and except as otherwise approved in writing by the Company, the Franchisee shall
devote his or her full time, energy and best efforts to the efficient and effective management and operation of
the Franchised Business.
16.2 Non-Solicitation and Non-Competition
The Franchisee has heretofore specifically acknowledged that pursuant to this Agreement, the
Franchisee shall receive valuable specialized training and confidential and other information regarding the
business, promotional, sales, marketing and operational methods and techniques of the Company and the
System. The Franchisee covenants that during the term of this Agreement and subject to the post-termination
provisions contained herein, and except as otherwise approved in writing by the Company, the Franchisee shall
not, either directly or indirectly, for itself, or through or on behalf of or in conjunction with any person,
persons, partners or corporation:
(A) Divert or attempt to divert any business or customer of the Franchised Business to any
Competing Business, by direct or indirect inducement or otherwise, or do or perform,
directly or indirectly, any other act injurious or prejudicial to the goodwill associated with
the Proprietary Marks and the System;
(B) Employ or seek to employ any person who is at that time employed by the Company or by
any other Crowning Touch Franchisee, or otherwise directly or indirectly induce such
person to leave his or her employment; or
(C) Own, maintain, engage in, be employed by, advise, assist, invest in, franchise, make loans
to or have any interest in any Competing Business.
“Competing Business” is a business other than a Franchised Business that: (a) provides moving or
relocation services in a business format similar to the Crowning Touch System that includes retail and real-
estate services; or (b) grants or has granted franchises or licenses or establishes or has established joint ventures
for the development and/or operation of such a business; or (c) whose method of operation or trade dress is
similar to that employed in the System. For avoidance of doubt, if you already operate a moving or relocation
business, your business is not a “Competing Business” so long as you do not add to your business format our
proprietary services contained within the Crowning Touch System, such as our retail and real-estate services.
WAI-3176481v6 39
16.3 Restrictive Covenants
The Franchisee covenants that, except as otherwise approved in writing by the Company, for a
continuous uninterrupted period commencing upon the expiration or termination of this Agreement, regardless
of the cause for termination, and continuing for three (3) years thereafter, the Franchisee will not either directly
or indirectly, for itself or through, on behalf of or in conjunction with any person, persons, partnership or
corporation, own, maintain, engage in, be employed by, advise, assist, invest in, franchise, make loans to, or
have any interest in any Competing Business which is located or to be located within one hundred (100) miles
of the territory of any Company-owned or operated or franchisee-operated Franchised Business under the
System.
If the period of time or the area specified above, should be finally adjudged as unreasonable or
unenforceable in any proceeding, then the period of time shall be reduced by such number of months or the
area shall be reduced by the elimination of such portion thereof or both, so that such restrictions may be
enforced in such area and in such time as is adjudged to be reasonable.
16.4 No Undue Hardship
The Franchisee acknowledges and agrees that the covenants not to compete set forth in this Agreement
are fair and reasonable and will not impose any undue hardship on the Franchisee, or the Franchisee’s
shareholders or partners, if the Franchisee is a corporation or partnership, since the Franchisee, its shareholders
or partners have other considerable skills, experience and education which afford the Franchisee, its
shareholders or partners the opportunity to derive income from other endeavors.
16.5 Inapplicability of Restrictions
Section 16.2.C and 16.3 shall not apply to the ownership by the Franchisee of less than a five percent
(5%) beneficial interest in the outstanding equity securities of any publicly held corporation.
16.6 Independence of Covenants
The parties agree that each of the covenants in this Agreement shall be construed as independent of
any other covenant or provision of this Agreement. If any or all portions of the covenants in this Section 16 is
held unreasonable or unenforceable by a court or agency having valid jurisdiction in an un-appealed final
decision to which the Company is a party, the Franchisee expressly agrees to be bound by any lesser covenant
subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the
resulting covenant were separately stated in and made a part of this Agreement.
16.7 Mission
The Franchisee agrees to support the Company’s mission and to conduct the Franchised Business in
accordance with the Company’s operating policies and procedures.
16.8 Modification of Covenants
The Franchisee understands and acknowledges that the Company shall have the right, in its sole
discretion, to reduce the scope of any covenant set forth in this Section 16 or any portion thereof, without the
Franchisee’s consent, effective immediately upon receipt by the Franchisee of written notice thereof, and the
WAI-3176481v6 40
Franchisee agrees that it shall forthwith comply with any covenant as so modified, which shall be fully
enforceable notwithstanding the provisions of Section 24 hereof.
16.9 Enforcement of Covenants
The Franchisee expressly agrees that the existence of any claims it may have against the Company,
whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Company
of the covenants in this Agreement. The Franchisee agrees to pay all costs and expenses (including reasonable
attorneys’ fees) incurred by the Company in connection with the enforcement of the covenants set forth in this
Agreement.
16.10 Injunctive Relief
The Franchisee acknowledges that its violation of the covenants not to compete contained in this
Agreement would result in immediate and irreparable injury to the Company for which no adequate remedy at
law will be available. Accordingly, the Franchisee hereby consents to the entry of an injunction prohibiting
any conduct by the Franchisee in violation of the terms of the covenants not to compete set forth in this
Franchise Agreement. The Franchisee expressly agrees that it may be presumed conclusively that any violation
of the terms of said covenants not to compete was accomplished by and through the Franchisee’s unlawful
utilization of the Company’s confidential information, know-how, methods and procedures.
16.11 Written Agreements
At the Company’s request, the Franchisee shall require and obtain execution of covenants similar to
those set forth in this Section 16 (including covenants applicable upon the termination of a person’s
relationship with the Franchisee) from any or all of the following persons: (1) all directors and managers of the
Franchised Business and any other personnel employed by the Franchisee who have received training from the
Company; (2) all officers, directors and holders of a beneficial interest of five percent (5%) or more of the
securities of the Franchisee and of any corporation directly or indirectly controlling the Franchisee if the
Franchisee is a corporation; and (3) the general partners and any limited partners (including any corporation,
and the officers, directors and holders of a beneficial interest of five percent (5%) or more of the securities of
any corporation which controls, directly or indirectly, any general or limited partner) if the Franchisee is a
partnership. All covenants required by this Section 16.11 shall be in forms satisfactory to the Company,
including, without limitation, specific identification of the Company as a third party beneficiary of such
covenants with the independent right to enforce them. The Franchisee’s failure to obtain an executed
agreement required by this Section 16.11 shall constitute a default under Section 13.2.C hereof.
16.12 Financial Ability
Franchisee represents and warrants that it has the financial ability to perform the transactions
contemplated by this Agreement.
16.13 No Conflicts
Neither the execution of this Agreement nor the consummation of the transactions contemplated by
this Agreement conflict with, result in a breach of, or constitute a default under any agreement to which the
Franchisee is a party, or any ruling or obligation to which the Franchisee is bound.
16.14 Power and Authority
WAI-3176481v6 41
The Franchisee has the power and authority to enter into this Agreement and to execute such other
documents and to take such actions, as are necessary and proper to consummate the terms of this Agreement.
17. CHANGES AND MODIFICATIONS
The Company and the Franchisee may modify this Agreement only upon the execution of a written
agreement. In the event the Franchisee requests changes to this Agreement, and the Company approves such
changes, the Company reserves the right to impose a license modification fee in the amount of one thousand
dollars ($1,000). The Company reserves and shall have the sole right to make changes in the Manual, the
System and the Proprietary Marks at any time and without prior notice to the Franchisee. The Franchisee shall
promptly alter any business materials or related items at its sole cost and expense upon receipt of written notice
of such change or modification in order to conform to the Company’s revised specifications. In the event that
any improvement or addition to the Manual, the System or the Proprietary Marks is developed by the
Franchisee and approved by the Company, then the Franchisee agrees to grant to the Company an irrevocable,
worldwide, exclusive, royalty-free license with the right to sublicense such improvement or addition.
The Franchisee understands and agrees that due to changes in competitive circumstances, presently
unforeseen changes in the needs of customers and/or presently unforeseen technological innovations, the
System must not remain static, in order that it best serve the interests of the Company, its franchisees and the
System. Accordingly, the Franchisee expressly understands and agrees that the Company may from time to
time change the components of the System, including but not limited to, altering the programs, services,
methods, standards, forms, policies and procedures of the System; adding to, deleting from or modifying those
programs, products and services which the Franchised Business is authorized to offer; and changing,
improving or modifying the Proprietary Marks. Subject to the other provisions of this Agreement, the
Franchisee expressly agrees to abide by any such modifications, changes, additions, deletions and alterations.
18. TAXES AND INDEBTEDNESS
18.1 Payment
The Franchisee shall promptly pay, when due, all taxes levied or assessed by any federal, state or local
taxing authority and any and all other indebtedness incurred by the Franchisee in the operation of the
Franchised Business. The Franchisee shall pay to the Company an amount equal to any sales tax, gross
receipts tax or similar tax imposed on the Company with respect to any payments to the Company required
under this Agreement, unless the tax is credited against income tax otherwise payable by the Company.
18.2 Dispute
In the event of any bona fide dispute as to liability for taxes assessed or other indebtedness, the
Franchisee may contest the validity or the amount of the tax or indebtedness in accordance with procedures of
the taxing authority or applicable law; provided, however, in no event shall the Franchisee permit a tax sale or
seizure by levy of execution or similar writ or warrant, or attachment by a creditor, to occur against the
Franchised Business.
18.3 Compliance with Federal, State and Local Laws
The Franchisee shall comply with all federal, state and local laws, rules and regulations, and shall
timely obtain any and all permits, certificates, licenses and bonds necessary for the full and proper operation
and management of the Franchised Business, including, without limitation, a license to do business and
WAI-3176481v6 42
provide services, fictitious name registration and sales tax permits. Copies of all subsequent inspection reports,
warnings, certificates and ratings, issued by any governmental entity during the term of this Agreement in
connection with the conduct of the Franchised Business which indicate the Franchisee’s failure to meet or
maintain the highest governmental standards or less than full compliance by the Franchisee with any applicable
law, rule or regulation, shall be forwarded to the Company by the Franchisee within three (3) days of the
Franchisee’s receipt thereof.
18.4 Duty to Notify
The Franchisee shall notify the Company in writing within three (3) days of the commencement of any
action, suit or proceeding and of the issuance of any order, writ, injunction, award or decree of any court,
agency or other governmental instrumentality which may adversely affect the operation or financial condition
of the Franchised Business. Additionally, any and all consumer related complaints shall be answered by the
Franchisee within fifteen (15) days after receipt thereof or such shorter period of time as may be provided in
said complaint. A copy of said answer shall be forwarded to the Company within three (3) days of the date that
said answer is forwarded to the complainant.
19. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
19.1 Independent Contractor
(A) It is understood and agreed by the parties hereto that this Agreement does not create a
fiduciary relationship between them, that the Franchisee shall be an independent
contractor, and that nothing in this Agreement is intended to make either party an agent,
legal representative, subsidiary, joint venturer, partner, employee or servant of the other
for any purpose whatsoever.
(B) During the term of this Agreement and any extensions hereof, the Franchisee shall hold
itself out to the public as an independent contractor operating the Franchised Business
pursuant to a license from the Company and as an authorized user of the System and the
Proprietary Marks that are owned by the Company. The Franchisee agrees to take such
affirmative action as may be necessary to do so, including, without limitation, exhibiting a
notice of that fact in a conspicuous place in the premises where the Franchised Business
operates. The Company reserves the right to specify the contents of such notice.
(C) The Company shall not have the power to hire or fire the Franchisee’s employees, and
except as herein expressly provided, the Company may not control or have access to the
Franchisee’s funds or the expenditures thereof or in any other way exercise dominion or
control over the Franchised Business.
19.2 No Liability
It is understood and agreed that nothing in this Agreement authorizes the Franchisee to make any
contract, agreement, warranty or representation on the Company’s behalf or to incur any debt or other
obligation in the Company’s name. The Company shall in no event assume liability for or be deemed liable
hereunder as a result of any such action or by reason of any act or omission of the Franchisee in the
Franchisee’s conduct of the Franchised Business or of any claim or judgment arising from this activity. The
Franchisee agrees at all times to defend at its own cost and to indemnify and hold harmless to the fullest extent
WAI-3176481v6 43
permitted by law the Company, its corporate parent, the corporate subsidiaries, affiliates, successors, assigns
and designees of any such entity, and the respective directors, officers, employees, agents, shareholders,
designees, and representatives of each from all losses and expenses incurred in connection with any action,
suit, proceeding, claim, demand, investigation or formal or informal inquiry, regardless of whether any are
reduced to judgment, or any settlement thereof which arises out of or is based upon any of the following: the
Franchisee’s alleged infringement or any other alleged violation of any patent, trademark, copyright or other
proprietary right owned or controlled by third parties; the Franchisee’s alleged violation or breach of any
contract, federal, state or local law, regulation, ruling, standard or directive of any industry standard; libel,
slander or any other form of defamation by the Franchisee; the Franchisee’s alleged violation or breach of any
warranty, representation, agreement, covenant or obligation in this Agreement; any acts, errors or omissions of
the Franchisee or any of its agents, servants, employees, contractors, partners, proprietors, affiliates, or
representatives; latent or other defects in the Franchised Business, whether or not discoverable by the Company
or the Franchisee; the inaccuracy, lack of authenticity or nondisclosure of any information by any customer of
the Franchised Business; any services or products provided by the Franchisee at, from or related to the
operation of the Franchised Business; any services or products provided by any affiliated or nonaffiliated
participating entity; any action by any customer of the Franchised Business; and any damage to the property of
the Franchisee or the Company, their agents or employees or any third person, firm or corporation, whether or
not such losses, claims, costs, expenses, damages, or liabilities were actually or allegedly caused wholly or in
part through the active or passive negligence of the Company or any of its agents or employees, or resulted
from any strict liability imposed on the Company or any of its agents or employees.
19.3 Exceptions to No Liability
Notwithstanding the foregoing Section 19.2, the Company agrees that unless such liability is
determined to be related to a material and integral part of the Company’s prescribed operating system, the
Company agrees to cooperate and participate in defending any claim arising from this activity.
19.4 Identification
The Franchisee shall conspicuously identify itself and the Franchised Business in all dealings with its
clients, contractors, suppliers, public officials and others, as an independent franchisee of the Company. The
Franchisee shall place a notice of independent ownership on all forms, business cards, stationery, advertising,
signs and other materials and in such fashion as the Company may, in its sole and exclusive discretion, specify
and require from time to time in its Manual or otherwise.
19.5 No False Representations
Except as otherwise expressly authorized by this Agreement, neither party hereto will make any
express or implied agreements, warranties, guarantees or representations, incur any debt in the name of or on
behalf of the other party, or represent that the relationship between the Company and the Franchisee is other
than that of franchisor and franchisee. The Company does not assume any liability, and will not be deemed
liable, for any agreements, representations or warranties made by the Franchisee that are not expressly
authorized under this Agreement. The Company will not be obligated for any damages to any person or
property that directly or indirectly arise from or relate to the operation of the Franchised Business.
WAI-3176481v6 44
20. APPROVALS AND WAIVERS
20.1 Written Consent
Whenever this Agreement requires the prior approval or consent of the Company, the Franchisee shall
make a timely written request for such approval to the Company, and the only valid approval or consent shall
be in writing signed by or on behalf of the Company.
20.2 No Waiver
No failure of the Company to exercise any power reserved to it by this Agreement, or to insist upon
strict compliance by the Franchisee with any obligation or condition hereunder, and no custom or practice of
the parties at variance with the terms hereof, shall constitute a waiver of the Company’s right to demand exact
compliance with any of the terms herein. Waiver by the Company of any particular default by the Franchisee
shall not affect or impair the Company’s rights with respect to any subsequent default of the same, similar or
different nature. No delay, forbearance or omission of the Company to exercise any power or right arising out
of any breach or default by the Franchisee of any of the terms, provisions or covenants hereof shall affect or
impair the Company’s right to exercise the same, and no such delay, forbearance or omission shall constitute a
waiver by the Company of any right hereunder or of the right to declare any subsequent breach or default and
to terminate this Franchise Agreement prior to the expiration of its term. Subsequent acceptance by the
Company of any payments due to it hereunder shall not be deemed to be a waiver by the Company of any
preceding breach by the Franchisee of any terms, covenants or conditions of this Agreement.
20.3 Waiver to Jury Trial
The Franchisee hereby waives any right to a jury trial with respect to this Agreement and/or any
matters arising hereunder.
21. NOTICES
Any and all notices required or permitted under this Agreement shall be in writing and shall be
personally delivered or mailed by certified mail, return receipt requested, or dispatched by courier or overnight
delivery, to the respective parties at the following addresses unless and until a different address has been
designated by written notice to the other party:
Notices to the
Company:
Crowning Touch Senior Moving Services, Inc.
Attn: Linda Balentine, President
6704 Williamson Rd., NW
Roanoke, Virginia 24019
Notices to Franchisee:
Any notice sent by certified mail shall be deemed given at the date and time of mailing.
WAI-3176481v6 45
22. RELEASE OF PRIOR CLAIMS
By executing this Agreement, the Franchisee, individually and on behalf of the Franchisee’s heirs,
legal representatives, successors and assigns, and each assignee of this Agreement by accepting assignment of
the same, hereby forever releases and discharges the Company and its officers, directors, employees, agents
and servants, including any subsidiary and affiliated corporations of the Company, their respective officers,
directors, employees, agents and servants, from any and all claims relating to or arising under any franchise
agreement or any other agreement between the parties executed prior to the date of this Agreement including,
but not limited to, any and all claims, whether presently known or unknown, suspected or unsuspected, arising
under the franchise, securities or antitrust laws of the United States, Canada or of any state, province or
territory thereof.
23. DISCLOSURE STATEMENT AND DISCLAIMER
23.1 Compliance with Applicable Laws
The Franchisee acknowledges, by its signature hereto, that it has received from the Company a Federal
Trade Commission or Franchise Disclosure Document for the State in which the Franchised Business shall be
located, or the Franchisee’s place of residence, as appropriate, at least ten (10) business days prior to the
execution of this Agreement. [PLEASE INITIAL TO ACKNOWLEDGE THAT YOU HAVE READ
AND UNDERSTAND THIS SECTION 23.1]
23.2 Receipt of Agreement
The Franchisee acknowledges that it has received from the Company this Agreement with all of the
blanks filled in at least five (5) days prior to the execution of this Agreement. The Franchisee represents that it
has read this Agreement in its entirety and that it has been given the opportunity to clarify any provisions that it
did not understand and to consult with an attorney or other professional advisor. The Franchisee further
represents that it understands the terms, conditions and obligations of this Agreement and agrees to be bound
thereby. [PLEASE INITIAL TO ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND THIS
SECTION 23.2]
23.3 Acknowledgment
The Franchisee acknowledges and accepts the following:
THE SUCCESS OF FRANCHISEE IN OWNING AND OPERATING A FRANCHISE IS SPECULATIVE AND
WILL DEPEND ON MANY FACTS INCLUDING, TO A LARGE EXTENT, FRANCHISEE’S INDEPENDENT BUSINESS
ABILITY. THIS OFFERING IS NOT A SECURITY AS THAT TERM IS DEFINED UNDER APPLICABLE FEDERAL
AND STATE SECURITIES LAWS. THE OBLIGATION TO TRAIN, MANAGE, PAY, RECRUIT AND SUPERVISE
EMPLOYEES OF THE FRANCHISED BUSINESS RESTS SOLELY WITH FRANCHISEE. FRANCHISEE HAS NOT
RELIED ON ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE POTENTIAL
SUCCESS OR PROJECTED INCOME OF THE BUSINESS VENTURE CONTEMPLATED HEREBY. NO
REPRESENTATIONS OR PROMISES HAVE BEEN MADE BY THE COMPANY TO INDUCE FRANCHISEE TO
ENTER INTO THIS AGREEMENT EXCEPT AS SPECIFICALLY INCLUDED HEREIN. THE COMPANY HAS NOT
MADE ANY REPRESENTATION, WARRANTY OR GUARANTY, EXPRESS OR IMPLIED, AS TO THE POTENTIAL
REVENUES, PROFITS OR SERVICES OF THE BUSINESS VENTURE TO FRANCHISEE AND CANNOT, EXCEPT
WAI-3176481v6 46
UNDER THE TERMS OF THIS AGREEMENT, EXERCISE CONTROL OVER FRANCHISEE’S BUSINESS.
FRANCHISEE ACKNOWLEDGES AND AGREES THAT IT HAS NO KNOWLEDGE OF ANY REPRESENTATION
MADE BY THE COMPANY OR ITS REPRESENTATIVES OF ANY INFORMATION THAT IS CONTRARY TO THE
TERMS CONTAINED HEREIN. [PLEASE INITIAL TO ACKNOWLEDGE THAT YOU HAVE READ AND
UNDERSTAND THIS SECTION 23.3]
24. ENTIRE AGREEMENT
This Agreement, the documents referred to herein and the Attachments hereto, which are incorporated
herein by reference, constitute the entire, full and complete Agreement between the parties hereto concerning
the subject matter hereof, and they supersede all prior agreements. No other representations of the Company or
any third party have induced the Franchisee to execute this Agreement. No amendment, change or variance
from this Agreement shall be binding on the parties hereto unless mutually agreed to by the parties and
executed by themselves or their authorized officers or agents in writing, unless otherwise permitted by this
Agreement.
25. SEVERABILITY AND CONSTRUCTION
25.1 Severability
Except as expressly provided to the contrary herein, each section, part, term and/or provision of this
Agreement shall be considered severable, and if, for any reason, any section, part, term and/or provision herein
is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a
court or agency having valid jurisdiction, such shall not impair the operation of, or have any other effect upon,
such other portions, sections, parts, terms and/or provisions of this Agreement as may remain otherwise
intelligible, and the latter shall continue to be given full force and effect and bind the parties hereto, and said
invalid sections, parts, terms and/or provisions shall be deemed not to be a part of this Agreement; provided,
however, that if the Company determines that such finding of invalidity or illegality adversely affects the basic
consideration of this Agreement, the Company, at its option, may terminate this Agreement.
25.2 Covenants
The Franchisee expressly agrees to be bound by any promise or covenant imposing the maximum duty
permitted by law which is subsumed within the terms of any provision hereof, as though it were separately
articulated in and made a part of this Agreement, that may result from striking from any of the provisions
hereof any portion or portions which a court may hold to be unreasonable and unenforceable in a final decision
to which the Company is a party, or from reducing the scope of any promise or covenant to the extent required
to comply with such a court order.
25.3 Captions
All captions in this Agreement are intended solely for the convenience of the parties, and none of the
captions shall be deemed to affect the meaning or construction of any provision hereof.
25.4 References
All references herein to the masculine, neuter or singular shall be construed to include the masculine,
feminine, neuter or plural, where applicable, and all acknowledgments, promises, covenants, agreements and
obligations herein made or undertaken by the Franchisee shall be deemed jointly and severally undertaken by
WAI-3176481v6 47
all of the parties executing this Agreement in his individual capacity on behalf of the Franchisee. This
Agreement may be executed in one or more originals, each of which shall be deemed an original.
25.5 Definition of Franchisee
As used in this Agreement, the term “Franchisee” shall include all persons who succeed to the interest
of the original Franchisee by transfer or operation of law and shall be deemed to include not only the individual
or entity defined as the “Franchisee” in the introductory paragraph of this Agreement, but shall also include all
partners of the entity that executes this Agreement, in the event said entity is a partnership; all shareholders,
officers and directors of the entity that executes this Agreement, in the event said entity is a corporation; and all
members of the entity that executes this Agreement, in the event said entity is a limited liability company. By
their signatures hereto, all partners, shareholders, officers and directors of the entity that signs this Agreement
as Franchisee acknowledge and accept the duties and obligations imposed upon each of them, individually, by
the terms of this Agreement.
25.6 Force Majeure
If, as a result of hurricane, tornado, typhoon, flooding, lightning, blizzard and other unusually severe
weather, earthquake, avalanche, volcanic eruption, fire, riot, insurrection, war, explosion, unavoidable calamity
or other act of God (a “Force Majeure”), compliance by any party with the terms of this Agreement is rendered
impossible or would otherwise create an undue hardship upon any party, all parties shall be excused from their
respective obligations hereunder for the duration of the Force Majeure and for a reasonable recovery period
thereafter, but otherwise this Agreement shall continue in full force and effect.
26. APPLICABLE LAW
26.1 Governing Law
This Agreement takes effect upon its acceptance and execution by the Company. This Agreement
shall be interpreted and construed under the laws of the Commonwealth of Virginia except to the extent
governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Section 1051 et seq.).
26.2 Jurisdiction and Venue
The parties agree that any action brought by either party against the other shall be brought in Roanoke,
Virginia or the appropriate Court in such City and the parties do hereby waive all questions of personal
jurisdiction or venue for the purpose of carrying out this provision.
26.3 Remedy
No right or remedy conferred upon or reserved by the Company or the Franchisee by this Agreement is
intended and it shall not be deemed to be exclusive of any other right or remedy provided or permitted herein,
by law or at equity, but each right or remedy shall be cumulative of every other right or remedy.
26.4 Injunctive Relief
Nothing herein contained shall bar the Company’s right to obtain injunctive relief against threatened
conduct that will cause it loss or damage under the usual equity rules, including the applicable rules for
obtaining restraining orders and preliminary injunctions.
WAI-3176481v6 48
27. ARBITRATION
Any dispute arising out of or relating to this Agreement shall be resolved in accordance with the
procedures specified in this Section 27, which shall be the sole and exclusive procedures for the resolution of
such disputes. Each party shall continue to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to this Agreement, unless to do so would be impossible or
impracticable under the circumstances.
Any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof
shall be settled by final and binding arbitration in accordance with the American Arbitration Association’s
Commercial Arbitration Rules by a sole arbitrator (“Arbitrator”). The Arbitrator shall hear the dispute in
Roanoke, Virginia and may properly consider any and all matters related thereto that would be admissible in a
non-jury trial. The Arbitrator shall apply the law identified in Section 26.1, above, as the governing law of this
Agreement. The Arbitrator’s award shall be announced within seven (7) days of the hearing of the dispute and
shall include all fees, costs, pre-award interest, and legal fees to the prevailing party. The Arbitrator shall not
be empowered to award punitive or exemplary damages and shall limit any award of damages to an amount not
to exceed actual compensatory damages. Judgment upon the award of the Arbitrator shall be binding and may
be entered in a court of competent jurisdiction. Franchisee agrees that any arbitration between the Company
and Franchisee shall be of Franchisee’s individual claims and that the claims subject to arbitration shall not be
arbitrated in conjunction with the claims of any other person or entity, nor on a class-wide basis.
Notwithstanding any provision contained in this Section 27, the Company may at its option institute in
a court of competent jurisdiction an action or actions for temporary, preliminary, or permanent injunctive relief
or seeking any other equitable relief against the Franchisee in addition to any other rights and remedies
provided herein.
In no event shall Franchisee make any claim for money damages based upon any assertion by
Franchisee that the Company has unreasonably withheld or unreasonably delayed any consent or approval to a
proposed act by Franchisee under any terms of this Franchise Agreement, and Franchisee hereby waives any
claim for money damages, including but not limited to any claim for money damages by way of set-off,
counterclaim or defense based on any such assertion. Franchisee’s sole remedy for any such assertion shall be
an action or proceeding in arbitration as set forth in this Section 27 to enforce any such provisions, or for
specific performance, or declaratory judgment.
A party to arbitration in accordance with this Section 27 may not submit any claim unless the other
party is notified within one (1) year of the date on which the submitting party first knew or should have known
of the existence of the facts indicating the existence of such dispute.
28. SURVIVAL
It is agreed by the parties that whenever performance by a party is contemplated to extend beyond the
termination of this Agreement, such performance obligation shall survive the termination of this Agreement.
29. ACKNOWLEDGMENTS
The Franchisee acknowledges that it has conducted an independent investigation of all aspects relating
to the Franchised Business and recognizes that the business venture contemplated by this Agreement involves
business risks and that its success will be largely dependent upon the skills and ability of the Franchisee as an
WAI-3176481v6 49
independent business person or organization. The Franchisee acknowledges that it has received, read and
understands this Agreement, the Attachments hereto and agreements relating thereto, and that the Company has
accorded the Franchisee ample time and opportunity to consult with advisors of the Franchisee’s own choosing
about the potential benefits and risks of entering into this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this
Agreement in triplicate on the day and year first above written.
COMPANY:
CROWNING TOUCH SENIOR MOVING SERVICES,
INC.
By: Linda J. Balentine
Title: President
FRANCHISEE:
By:
WAI-3176481v6 1
ATTACHMENT A
SITE SELECTION AND FEE ADDENDUM
THIS ADDENDUM is made this day of , by and between CROWNING
TOUCH SENIOR MOVING SERVICES, INC., (the “Company”) and
(the “Franchisee”).
WHEREAS, the Company and the Franchisee, are parties to a Franchise Agreement dated ,
_______,by the terms of which the Company has granted to the Franchisee the right and license to operate a moving
services business franchise pursuant to the Company’s System and Proprietary Marks; and
WHEREAS, the Franchisee has selected and presented a site to the Company that has been approved by the
Company;
NOW, THEREFORE, the parties hereto, intending to be bound, agree as follows:
1. Designated Territory and Franchised Location. The Designated Territory and Franchised Location
shall be as follows:
Designated Territory: ________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Franchised Location: ____________________________________________________
_____________________________________________________________________
_____________________________________________________________________
3. Fees
a. Initial Franchise Fee. The nonrefundable initial franchise fee payable by the Franchisee to the
Company is Dollars ($____________).
b. Royalty. Royalties fee payable by the Franchisee to the Company are 6% of Gross Revenues
c. Advertising and Promotion Fund. One percent (1%) of Gross Revenues are payable by
the Franchisee.
4. Miscellaneous.
a. All capitalized terms not defined herein shall have the meaning given to them in the Franchise
Agreement.
b. This Site Selection Addendum constitutes an integral part of the Franchise Agreement, and the
terms of this Site Selection Addendum shall be controlling with respect to the subject matter hereof. Except as modified
WAI-3176481v6 2
or supplemented by this Site Selection Addendum, the terms of the Franchise Agreement are hereby ratified and
confirmed.
IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum on the
day and year first above written.
ATTEST: COMPANY:
CROWNING TOUCH SENIOR MOVING SERVICES, INC.
_____________________________ By: ___________________________________________________
Its: ___________________________________________________
WITNESS: FRANCHISEE:
______________________________ By: ___________________________________________________
Each of the undersigned is an owner of the Franchisee who owns a beneficial interest in the Franchisee; each has read this
Site Selection and Fee Addendum and each agrees to be individually bound by its terms.
WITNESS:
OWNER:
WAI-3176481v6 1
ATTACHMENT B
MANDATORY ADDENDUM TO LEASE AGREEMENT
THIS AGREEMENT is made and entered into this day of ,
, by and among CROWNING TOUCH SENIOR MOVING SERVICES, INC., (hereinafter referred to as the
“Company”), a Virginia corporation; (hereinafter referred to as the
“Landlord”), with its principal offices at ;
and (hereinafter referred to as the “Tenant”), with its principal offices
at .
W I T N E S S E T H:
WHEREAS, the Landlord and the Tenant have executed a lease agreement dated ,
(the “Lease”) for the premises located at (the “Leased Premises”) for
use by the Tenant as a business to be operated pursuant to the Company’s proprietary marks and system in connection
with a written Franchise Agreement dated , by and between the Company and the Tenant
(the “Franchise Agreement”);
WHEREAS, a condition to the approval of the Tenant’s specific location by the Company is that the Lease for
the Leased Premises designated for the operation of a Crowning Touch moving assistance service (hereinafter the
“Franchised Business”) contain the agreements set forth herein;
WHEREAS, the Landlord acknowledges that the Company requires the modifications to the Lease set forth
herein as a condition to its approving the Leased Premises as a site for the Franchised Business, and that the Landlord
agrees to modify and amend the Lease in accordance with the terms and conditions contained herein;
WHEREAS, according to Section 15.10. of the Franchise Agreement, all right, title and interest in and to the
Lease may be assigned to the Company upon the termination of the Franchise Agreement; and
WHEREAS, it is the intent of the parties hereto to provide the Company with the opportunity to preserve the
leased premises as a Franchised Business in the event of any default or termination of said Lease or Franchise Agreement
and to assure the Landlord that in the event the Company exercises its rights herein contained, any defaults of the Tenant
under the Lease will be cured by the Company before it takes possession of the Leased Premises.
1. Use Clause. The Leased Premises shall be used for the operation of a Crowning Touch
moving assistance service (the “Franchised Business”) offering consultations, computerized furniture placement, packing,
moving, unpacking, auctions, consignment, cleaning services, and real estate services, primarily to senior citizens and
related products and services and identified by the mark Crowning Touch Senior Moving Services®.
The Landlord acknowledges that such use shall not violate any then existing exclusives
granted to any existing tenant of the Landlord. The Landlord further acknowledges that during the term of this Lease or
any extension thereof, the Landlord will not lease space within the location of the Franchised Business to a business
similar to the Tenant’s.
Landlord represents and warrants that the Leased Premises has no existing building code
violations and is properly zoned for its intended use.
2. Default of Lessee under Lease. The Landlord shall mail to the Company copies of any notice
of default or termination it gives to the Tenant concurrently with giving such notices to the Tenant. If the Tenant fails to
cure any default within the period provided in the Lease, if any, the Landlord shall give the Company immediate written
notice of such failure to cure. The Landlord shall thereupon offer to the Company and the Company shall have the right
WAI-3176481v6 2
to accept an assignment of the Lease or a new lease containing the same terms and conditions of the Lease, whichever the
Company elects. If the Company elects to continue the use of the Leased Premises under an assignment of the Lease or a
new lease, it shall so notify the Landlord in writing within thirty (30) days after it has received written notice from the
Landlord specifying the defaults the Tenant has failed to cure within the grace period specified in the Lease. Upon
receipt of such notice from the Company, the Landlord shall promptly execute and deliver to the Company an assignment
of the Lease or a new lease, whichever the Company requests, and shall deliver to the Company possession of the Leased
Premises, free and clear of any rights of the Tenant or any third party. The Company, before taking possession of the
Leased Premises, shall promptly cure the defaults specified by the Landlord in its notice to the Company and shall
execute and deliver to the Landlord its acceptance of the assignment of the Lease or of the new lease, as the case may be.
In the event that the Company elects to enter into a new lease with the Landlord, Landlord
shall do so upon terms and conditions no less favorable than those contained in the Lease.
3. Termination of the Franchise Agreement. If the Franchise Agreement between the Company
and the Tenant is terminated for any reason during the term of the Lease or any extension thereof, the Tenant, upon the
written request of the Company, shall assign to the Company all of its right, title and interest in and to the Lease. If the
Company elects to accept the assignment of the Lease from the Tenant, it shall give the Tenant and the Landlord written
notice of its election to acquire the leasehold interest. The Landlord hereby consents to the assignment of the Lease from
the Tenant to the Company, subject to the Tenant’s and/or the Company’s curing any defaults of the Tenant under the
Lease before the Company takes possession of the Leased Premises. Alternatively, in the event of a termination of the
Franchise Agreement, the Company may elect to enter into a new lease with the Landlord containing terms and
conditions no less favorable than the Lease. Upon the Landlord’s receipt of written notice from the Company advising
the Landlord that the Company elects to enter into a new lease, the Landlord shall execute and deliver such new lease to
the Company for its acceptance. The Landlord and the Tenant shall deliver possession of the Leased Premises to the
Company, free and clear of all rights of the Tenant or third parties, subject to the Company’s curing any defaults of the
Tenant, under the Lease, and executing an acceptance of the assignment of Lease or the new lease, as the case may be.
The Company shall indemnify, defend and hold the Landlord harmless from any attempt to
terminate the Lease or dispossess the Tenant from the Leased Premises based upon a termination of the Franchise
Agreement.
4. Tenant’s Agreement to Vacate Leased Premises. The Tenant agrees to peaceably and
promptly vacate the Leased Premises and (subject to the Company’s right to acquire any such property pursuant to its
Franchise Agreement with the Tenant) to remove its personal property there from upon the termination of the Franchise
Agreement or upon the Tenant’s failure to timely cure all of its defaults under the Lease. Any property not removed or
otherwise disposed of by the Tenant shall be deemed abandoned.
5. Delivery of Possession. If it becomes necessary for the Landlord to pursue legal action to
evict the Tenant in order to deliver possession of the Leased Premises to the Company, the Company shall, at the written
request of the Landlord, pay into an interest-bearing escrow account all amounts necessary to cure any default of the
Tenant’s, pending delivery of the Leased Premises to the Company. If the Landlord may not legally obtain possession of
the Leased Premises or if the Landlord is unable to deliver the Leased Premises to the Company within six (6) months
from the date the Company notifies the Landlord of its election to continue the use of the Leased Premises, then the
Company shall have the right at any time thereafter to rescind its election to acquire a leasehold interest in the Leased
Premises and to terminate the Lease or any new lease between it and the Landlord for the Leased Premises, whereupon all
amounts deposited by the Company in escrow, together with interest earned thereon, shall be returned forthwith to the
Company, and the Landlord shall release the Company from all of its obligations under the Lease or under any new lease.
6. Amendment of Lease. The Landlord and the Tenant agree not to amend the Lease in any
respect, except with the prior written consent of the Company.
7. Company Not a Guarantor. The Landlord acknowledges and agrees that notwithstanding any
terms or conditions contained in this Addendum or any other agreement, the Company shall in no way be construed as a
WAI-3176481v6 3
guarantor or surety of the Tenant’s obligations under the Lease. Notwithstanding the foregoing, in the event the
Company becomes the Tenant by assignment of the Lease in accordance with the terms hereof or enters into a new lease
with Landlord, then the Company shall be liable for all of the obligations of the Tenant on its part to be performed or
observed under the Lease or a new lease.
8. Document to Govern. The terms and conditions contained herein modify and supplement the
Lease. Whenever any inconsistency or conflict exists between this Addendum and the Lease, the terms of this Addendum
shall prevail.
9. No Hazardous Materials. The Landlord warrants and represents that no part of the Franchised
Business location, including the walls, ceilings, structural steel, flooring, pipes or boilers is wrapped, insulated, fire-
proofed or surfaced with any asbestos-containing materials (hereinafter “ACM”) or other hazardous materials as the same
may be identified from time to time by applicable federal, state or local laws or regulations (“Hazardous Materials”), and
that no ACM materials or Hazardous Materials will be present in the Leased Premises as of the date Tenant takes
possession thereof.
10. Assignment and Subletting. Notwithstanding anything set forth in the Lease to the contrary,
the Tenant shall have the right to assign this Lease or any interest therein, or sublet the Leased Premises or any portion
thereof without the consent of Landlord:
(a) to any bona fide franchisee of the Company; or
(b) to the Company or any successor or affiliate thereof.
11. Subordination. The Landlord will subordinate its interest in the Tenant’s equipment to any
lender financing the same, and the Landlord will further cooperate in executing all required documents to recognize such
subordination.
12. Waiver. Failure of the Company to enforce or exercise any of its rights hereunder shall not
constitute a waiver of the rights hereunder or a waiver of any subsequent enforcement or exercise of its rights hereunder.
13. Amendment of Agreement. This Agreement may be amended only in writing signed by all
parties hereto.
14. Notices. All notices hereunder shall be by certified mail to the addresses set forth above or to
such other addresses as the parties hereto may, by written notice, designate.
15. Binding Effect. This Agreement shall be binding upon the parties hereto, their heirs,
executors, successors, assigns and legal representatives.
16. Severability. If any provision of this Agreement or any part thereof is declared invalid by any
court of competent jurisdiction, such act shall not affect the validity of this Agreement and the remainder of this
Agreement shall remain in full force and effect according to the terms of the remaining provisions or part of provisions
hereof.
17. Remedies. The rights and remedies created herein shall be deemed cumulative and no one of
such rights or remedies shall be exclusive at law or in equity of the rights and remedies which the Company may have
under this or any other agreement to which the Company and the Tenant are parties.
18. Attorneys’ Fees. If any action is instituted by any party to enforce any provision of this
Agreement, the prevailing party shall be entitled to recover all attorneys’ fees and costs incurred in connection therewith.
19. Construction. This Agreement shall be governed by and construed in accordance with the
laws of the State in which the Leased Premises are located.
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20. Certain Acknowledgments. The Landlord and the Tenant acknowledge and agree that all
interior and exterior signage and related items (collectively the “Leased/Licensed Assets”) are the sole property of the
Company. The Tenant shall have no right to pledge in any manner the Leased/Licensed Assets and the Landlord shall
have no rights to place any liens on or make any other claims to the Leased/Licensed Assets.
IN WITNESS WHEREOF, the parties hereto have caused this Mandatory Addendum to Lease Agreement to
be executed the day and year first above written.
Landlord:
By: ________________________________________________
Title________________________________________________
Tenant:
By: ________________________________________________
Title:_______________________________________________
CROWNING TOUCH SENIOR MOVING SERVICES, INC.
By:_________________________________________________
Title:_______________________________________________
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ATTACHMENT C
TELEPHONE ASSIGNMENT AGREEMENT
This Telephone Assignment Agreement is made as of this day of , ____ by and between
(hereinafter the “Assignor”) and CROWNING TOUCH
SENIOR MOVING SERVICES, INC., a Virginia corporation (hereinafter the “Assignee”).
WITNESSETH:
WHEREAS, the Assignee has been licensed to use the proprietary system (“System”) for the sales and support
of franchises of a moving services business under the trademark and logo Crowning Touch Senior Moving Services ®
(the “Franchised Business”) by Crowning Touch Group, Inc., owner of the “System”;
WHEREAS, the Assignor has been granted a license to operate a Franchised Business pursuant to a Franchise
Agreement dated , in accordance with the System;
WHEREAS, in order to operate its Franchised Business, the Assignor shall be acquiring one or more telephone
numbers and telephone listings; and
WHEREAS, as a condition to the execution of the Franchise Agreement, the Assignee has required that the
Assignor assign all of its rights, title and interest in its telephone numbers and telephone listings to the Assignee in the
event of a termination of the Franchise Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Assignment. In the event of termination of the Franchise Agreement, and in order to secure continuity
and stability of the operation of the System, the Assignor hereby sells, assigns, transfers and conveys to the Assignee all
of its right, title and interest in and to certain telephone numbers and telephone listings pursuant to which Assignor shall
operate its Franchised Business in accordance with the terms of the Franchise Agreement; provided, however, such
Assignment shall not be effective unless and until the Franchise Agreement terminates in accordance with the provisions
thereof.
2. Representation and Warranties of the Assignor. The Assignor hereby represents, warrants and
covenants to the Assignee that:
(a) As of the effective date of the Assignment, all of the Assignor’s obligations and indebtedness
for telephone and telephone listing services shall be paid and current;
(b) As of the date hereof, the Assignor has full power and legal right to enter into, execute, deliver
and perform this Agreement;
(c) This Agreement is a legal and binding obligation of the Assignor, enforceable in accordance
with the terms hereof;
(d) The execution, delivery and performance of this Assignment does not conflict with, violate,
breach or constitute a default under any contract, agreement or instrument to which the Assignor is a party or by which
the Assignor is bound, and no consent of nor approval by any third party is required in connection herewith;
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(e) The Assignor has the specific power to assign and transfer its right, title and interest in its
telephone numbers and listings, and the Assignor has obtained all necessary consents to this Assignment.
3. Miscellaneous. The laws of the Commonwealth of Virginia shall govern the validity, construction and
performance of this Assignment. All agreements, covenants, representations and warranties made herein shall survive the
execution hereof. All rights of the Assignee shall inure to its benefit and to the benefit of its successors and assigns.
IN WITNESS WHEREOF, each of the parties has executed this Assignment as of the day and year first written
above.
CROWNING TOUCH SENIOR MOVING SERVICES, INC.
By: ________________________________________________
Title: ________________________________________________
ASSIGNOR
By: _______________________________________________
Title: _______________________________________________
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ATTACHMENT D
GUARANTY
In consideration of, and as an inducement to, the execution of that certain Franchise Agreement, and any
revisions, modifications and amendments thereto, (hereinafter collectively the “Agreement”) dated , by and
between CROWNING TOUCH SENIOR MOVING SERVICES, INC., a Virginia corporation, whose principal office
is located at 6704 Williamson Rd., NW, Roanoke, Virginia 24019 (hereinafter the “Company”) and
(hereinafter “Franchisee”), each of the undersigned (“Guarantors”) agree as follows:
1. The Guarantors do hereby jointly and severally unconditionally guaranty the full, prompt and complete
performance of the Franchisee under the terms, covenants and conditions of the Agreement, including without limitation
the complete and prompt payment of all indebtedness to the Company under the Agreement. The word “indebtedness” is
used herein in its most comprehensive sense and includes without limitation any and all advances, debts, obligations, and
liabilities of the Franchisee, now or hereafter incurred, either voluntarily or involuntarily, and whether due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined, or whether recovery thereof may be now
or hereafter barred by any statute of limitation or is otherwise unenforceable.
2. The obligations of the Guarantors are independent of the obligations of Franchisee and a separate
action or actions may be brought and prosecuted against any or all of the Guarantors, whether or not actions are brought
against the Franchisee or whether the Franchisee is joined in any such action.
3. If the Franchisee is a corporation or partnership, the Company shall not be obligated to inquire into the
power or authority of the Franchisee or its partners or the officers, directors, or agents acting or purporting to act on the
Franchisee’s behalf and any obligation or indebtedness made or created in reliance upon the exercise of such power and
authority shall be guaranteed hereunder. Where the Guarantors are corporations or partnerships it shall be conclusively
presumed the Guarantors and the partners, agents, officers and directors acting on their behalf have the express authority
to bind such corporations or partnerships and that such corporations or partnerships have the express power to act as the
Guarantors pursuant to this Guaranty and that such action directly promotes the business and is in the interest of such
corporations or partnerships.
4. The Company, its successors and assigns, may from time to time, without notice to the undersigned: (a)
resort to the undersigned for payment of any of the liabilities, whether or not it or its successors have resorted to any
property securing any of the liabilities or proceeded against any other of the undersigned or any party primarily or
secondarily liable on any of the liabilities; (b) release or compromise any liability of any of the undersigned hereunder or
any liability of any party or parties primarily or secondarily liable on any of the liabilities; and (c) extend, renew or credit
any of the liabilities for any period (whether or not longer than the original period); alter, amend or exchange any of the
liabilities; or give any other form of indulgence, whether under the Agreement or otherwise.
5. The undersigned further waive presentment, demand, notice of dishonor, protest, nonpayment and all
other notices whatsoever, including without limitation: notice of acceptance hereof; notice of all contracts and
commitments; notice of the existence or creation of any liabilities under the foregoing Agreement and of the amount and
terms thereof; and notice of all defaults, disputes or controversies between the Franchisee and the Company resulting
from such Agreement or otherwise, and the settlement, compromise or adjustment thereof.
6. Any dispute arising out of or relating to the Franchise Agreement shall be resolved in accordance with
the procedures specified in Section 27 of the Franchise Agreement, which shall be the sole and exclusive procedures for
the resolution of such disputes. Each party shall continue to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to the Franchise Agreement, unless to do so would be impossible or
impracticable under the circumstances.
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Any dispute arising out of or relating to the Franchise Agreement or the breach, termination or validity
thereof which has not be resolved through mediation as provided shall be settled by final and binding arbitration in
accordance with the American Arbitration Association’s Commercial Arbitration Rules by a sole arbitrator (“Arbitrator”).
The Arbitrator shall hear the dispute in Roanoke, Virginia and may properly consider any and all matters related thereto
that would be admissible in a non-jury trial. The Arbitrator shall apply the law identified in Section 26.1 of the Franchise
Agreement, as the governing law of the Franchise Agreement. The Arbitrator’s award shall be announced within seven
(7) days of the hearing of the dispute and shall include all fees, costs, pre-award interest, and legal fees to the prevailing
party. The Arbitrator shall not be empowered to award punitive or exemplary damages and shall limit any award of
damages to an amount not to exceed actual compensatory damages. Judgment upon the award of the Arbitrator shall be
binding and may be entered in a court of competent jurisdiction. The Franchisee agrees that any arbitration between the
Company and the Franchisee shall be of Franchisee’s individual claims and that the claims subject to arbitration shall not
be arbitrated in conjunction with the claims of any other person or entity, nor on a class-wide basis.
Notwithstanding any provision contained in Section 27 of the Franchise Agreement, the Company may
at its option, institute in a court of competent jurisdiction an action or actions for temporary, preliminary, or permanent
injunctive relief or seeking any other equitable relief against the Franchisee in addition to any other rights and remedies
provided herein.
In no event shall Franchisee make any claim for money damages based upon any assertion by
Franchisee that the Company has unreasonably withheld or unreasonably delayed any consent or approval to a proposed
act by Franchisee under any terms of the Franchise Agreement, and Franchisee hereby waives any claim for money
damages, including but not limited to any claim for money damages by way of set-off, counterclaim or defense based on
any such assertion. Franchisee’s sole remedy for any such assertion shall be an action or proceeding in arbitration as set
forth in Section 27 of the Franchise Agreement to enforce any such provisions, or for specific performance, or
declaratory judgment.
A party to arbitration in accordance with this Section 27 may not submit any claim unless the other
party is notified within one (1) year of the date on which the submitting party first knew or should have known of the
existence of the facts indicating the existence of such dispute.
7. This Guaranty shall be enforceable by and against the respective administrators, executors, successors
and assigns of the Guarantors and the death of any Guarantor shall not terminate the liability of such Guarantor or limit
the liability of the other Guarantors hereunder.
8. If more than one person has executed this Guaranty, the term “the undersigned,” as used herein shall
refer to each such person, and the liability of each of the undersigned hereunder shall be joint and several and primary as
sureties.
IN WITNESS WHEREOF, each of the undersigned has executed this Guaranty under seal effective as of the
______ date of __________, 20___.
GUARANTOR(S)
Name:
Name:
Name:
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ATTACHMENT E
ELECTRONIC FUNDS TRANSFER AUTHORIZATION
The undersigned, as the authorized representative of the depositor identified below hereby authorizes and requests
CROWNING TOUCH SENIOR MOVING SERVICES, INC., or its affiliated companies (the “Company”) to
initiate debit entries against the bank/depository account of the depositor indicated below and authorize and request
the bank/depository indicated below (“Bank”) to debit such bank account in response.
This authorization is binding and will remain valid and in full force and effect until 90 days prior written notice of
revocation or termination has been given to the Bank and the Company. The undersigned is responsible for, and
must pay on demand, all costs or charges relating to the handling of debit entries pursuant to this authorization.
Franchise #:____________
________________________________________________
Depositor’s Name as Shown on Bank Account
________________________________________________
Transit/ ABA Number
________________________________________________
Bank Account Name and Number
Bank/Depository:____________________________________________
Branch (if any): ___________________________________________
Street: ___________________________________________________
City, State and Zip Code: __________________________________
Bank Telephone Number:__________________________________
________________________________________________
Date Signed
________________________________________________
Signature of Depositor, as Printed Above
**Please submit a voided blank check, for purpose of setting up electronic funds transfer
WAI-3176481v6
ATTACHMENT F
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
THIS AGREEMENT (the “Agreement”) is made and entered into as of this ____day of _____________,
20___, by and among You (defined below), Covenantor (defined below) and CROWNING TOUCH SENIOR
MOVING SERVICES, INC., a Virginia corporation (“we”, “us” or “our”).
“You”: ________________________
“Covenantor”:________________________________________, being:
□ an owner or shareholder of you, if you are a business entity
□ an employee or agent of you who will have access to Confidential Information
□ an officer of you
□ a director of you
Address:
1. PREAMBLES.
We have executed or intend to execute a Franchise Agreement with you (the “Franchise Agreement”), under
which we grant to you certain rights with regard to a Crowning Touch Franchised Business. We and you require that
Covenantor enter into this Agreement before allowing Covenantor to have access to the Confidential Information and
as a material term of the Franchise Agreement necessary to protect our “System”, which consists of confidential
know-how and distinctive systems, designs, decor, trade dress, specifications, standards and procedures authorized
or reasonably required by us from time to time for use in the operation of the Crowning Touch Franchised Business
and to protect our proprietary rights in and your right to use the Confidential Information.
To induce us to enter into the Franchise Agreement and/or to avoid a material breach thereof, as the case
may be, we, you and Covenantor desire and consider it to be in Covenantor’s best interests that Covenantor enter
into this Agreement. Furthermore, due to the nature of our and your business, any use or disclosure of the
Confidential Information other than in accordance with this Agreement will cause us and you substantial harm.
2. DEFINITIONS.
The following terms shall have the meanings set forth below:
(a) “Competing Business”: A business (other than the Franchised Business licensed by the
Franchise Agreement or authorized by separate agreement with us) that (i) provides moving or relocation services in a
business format similar to the Crowning Touch System that includes retail and real estate services; (ii) provides
assistance and related needs such as consultations, asset redistribution, packing, appraisals, storage, cleaning services,
and real estate services offered primarily to senior citizens; (iii) grants or has granted franchises or licenses or establishes
or has established joint ventures for the development and/or operation of such a business; or (iv) whose method of
operation or trade dress is similar to that employed in the System.
(b) “Confidential Information”: Certain confidential and proprietary information and trade
secrets, including, but not limited to, the following categories of information, methods, techniques, procedures and
knowledge developed or to be developed by us, our affiliates and/or our franchisees: (i) methods, techniques,
WAI-3176481v6
specifications, standards, policies, trade secrets, management and training techniques, operational, accounting,
quality control procedures, information, concepts, systems for, and knowledge of and experience in the development,
operation and franchising of the Franchised Business; (ii) marketing and promotional programs for the Franchised
Business; (iii) methods of providing certain moving services (iv) knowledge of specifications for and suppliers of
certain materials, equipment and fixtures for the Franchised Business; (v) knowledge concerning operating results
and financial performance of the Franchised Business; (vi) our Manual and any other operating manuals or materials
for use in the Franchised Business as modified from time to time; and (vii) the terms of the Franchise Agreement and
each agreement entered into pursuant to the Franchised Business.
(3) Capitalized terms not otherwise defined in this Agreement shall have the meanings set
forth on the Franchise Agreement.
3. PROTECTION OF CONFIDENTIAL INFORMATION.
3.1 Covenantor agrees to use the Confidential Information only to the extent reasonably necessary to
perform his or her duties on your behalf, taking into consideration the confidential nature of the Confidential
Information. Covenantor may disclose the Confidential Information only as agent for you. Covenantor
acknowledges and agrees that neither Covenantor nor any other person or entity will acquire any interest in or right
to use the Confidential Information under this Agreement or otherwise, other than the right to utilize it as authorized
in this Agreement, and that the unauthorized use or duplication of the Confidential Information, including, without
limitation, in connection with any other business, would be detrimental to us and you and would constitute a breach
of Covenantor’s obligations of confidentiality and an unfair method of competition with us and/or passing off you
and other Crowning Touch Senior Moving Franchise owned by us or franchisees.
3.2 Covenantor acknowledges and agrees that the Confidential Information is confidential to and a
valuable asset of us. The Confidential Information will be disclosed to Covenantor solely on the condition that
Covenantor agrees to the terms and conditions of this Agreement. Covenantor therefore agrees that, during the term
of the Franchise Agreement and thereafter, he or she: (a) will not use the Confidential Information in any other
business or capacity; (b) will maintain the absolute confidentiality of the Confidential Information; (c) will not make
unauthorized copies of any portion of the Confidential Information disclosed or recorded in written or other tangible
form; and (d) will adopt and implement all reasonable procedures prescribed from time to time by us and you to
prevent unauthorized use or disclosure of or access to the Confidential Information.
3.3 Notwithstanding anything to the contrary contained in this Agreement, the restrictions on
Covenantor’s disclosure and use of the Confidential Information shall not apply to the following: (a) information,
methods, procedures, techniques and knowledge which are or become generally known or easily accessible, other
than by Covenantor’s breach of an obligation of confidentiality; and (b) the disclosure of the Confidential
Information pursuant to applicable law or in judicial or administrative proceedings to the extent that Covenantor is
legally compelled or required by a regulatory body to disclose such information, provided Covenantor has notified us
and you prior to disclosure and shall have used his or her best efforts to obtain and shall have afforded us and you
the opportunity to obtain an appropriate assurance reasonably satisfactory to us of confidential treatment for the
information required to be so disclosed.
4. IN-TERM RESTRICTIVE COVENANT.
4.1 Covenantor acknowledges and agrees that we and you would be unable to protect the Confidential
Information against unauthorized use or disclosure and would be unable to achieve a free exchange of ideas and
information among Crowning Touch businesses if persons authorized to use the Confidential Information were
permitted to engage in, have ownership interests in or perform services for Competing Businesses. Covenantor
therefore agrees that for as long as Covenantor is an owner or shareholder, an employee or agent of you who will
have access to Confidential Information, an officer or a director of you (whichever is applicable), Covenantor shall
not directly or indirectly through members of Covenantor’s immediate family or otherwise:
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(a) have any direct or indirect participation as a beneficial owner in a Competing Business, or sell,
assign, lease or transfer any Franchised Location to any person, firm, partnership, corporation, or other entity which you
know, or have reason to know, intends to operate a store business at the Franchised Location as a Competing Business;
(b) perform services as a director, officer, manager, employee, consultant, representative, agent or
otherwise for a Competing Business;
(c) divert or attempt to divert any business related to, or any customer or account of, the
Franchised Businesses, our business or any other Crowning Touch franchisee’s business, by direct inducement or
otherwise;
(d) employ or seek to employ any person then employed by us or any Crowning Touch franchisee,
or otherwise directly or indirectly induce such person to leave his or her employment without our prior written consent;
(e) make use or avail yourself of any of the materials or information furnished or disclosed by us
or our affiliates under this Agreement or disclose or reveal any such materials or information or any portion thereof to
anyone else; or
(f) own, maintain, engage in, by employed by, advice, invest in, make loans to, assist or have any
interest in any business or anyone not licensed by us or our affiliates to construct or equip a Competing Business.
4.2 The restrictions of Section 4.1(a) are not applicable to the ownership by the Franchisee of less than
a five percent (5%) beneficial interest in the outstanding equity securities of any publicly held corporation.
5. RESTRICTIVE COVENANT UPON TERMINATION OR EXPIRATION OF THE AREA
DEVELOPMENT AGREEMENT OR COVENANTOR’S ASSOCIATION WITH YOU.
5.1 Upon the first to occur of: (a) termination or expiration without renewal of the Franchise
Agreement; or (b) the date as of which Covenantor is neither an owner or shareholder, an employee or agent of you
who will have access to Confidential Information, or an officer or a director of you (each of these events is referred
to as a “Termination Event”), Covenantor agrees that for a period of 3 years commencing on the effective date of a
Termination Event, Covenantor shall abide by the restrictions set forth in Article 4.
5.2 Prior to a Termination Event, there is no geographical limitation on the foregoing restrictions with
respect to a Competing Business. Following a Termination Event, however, these restrictions shall apply to Competing
Businesses within 100 miles of the Designated Territory or the territory of any other Crowning Touch Franchised
Business, inside or outside the Designated Territory, except as otherwise consented to in writing by us.
6. SURRENDER OF DOCUMENTS.
Covenantor agrees that as of the effective date of a Termination Event, Covenantor shall immediately cease
to use the Confidential Information disclosed to or otherwise learned or acquired by Covenantor and return to you or
to us, if so directed by us, all copies of the Confidential Information loaned or made available to Covenantor.
7. COSTS AND ATTORNEYS’ FEES.
In the event that we or you bring an action against Covenantor arising out of the terms or provisions of this
Agreement, the prevailing party in whose favor judgment is entered or in whose favor a decision is rendered shall be
entitled to receive from the other party full reimbursement of its reasonable attorneys’ fees, whether such fees are
incurred before, during or after any trial or administrative proceeding or on appeal.
8. WAIVER.
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Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition nor shall any waiver or relinquishment of any right or remedy
hereunder at any one or more times be deemed a waiver or relinquishment of such right or remedy at any other time
or times.
9. SEVERABILITY.
Each section, paragraph, term and provision of this Agreement and any portion thereof shall be considered
severable and if for any reason any such provision is held to be invalid or contrary to or in conflict with any
applicable present or future law or regulation in a final unappealable ruling issued by any court, agency or tribunal
with competent jurisdiction in a proceeding to which we are a party, that ruling shall not impair the operation of or
have any other effect upon such other portions of this Agreement as may remain otherwise intelligible, which shall
continue to be given full force and effect and bind the parties hereto. Any portion held to be invalid shall be deemed
not to be a part of this Agreement from the date the time for appeal expires if Covenantor is a party thereto,
otherwise upon Covenantor’s receipt of a notice from us that we will not enforce the section, paragraph, term or
provision in question.
10. RIGHTS OF PARTIES ARE CUMULATIVE.
The rights of the parties hereunder are cumulative and no exercise or enforcement by a party hereto of any
right or remedy granted hereunder shall preclude the exercise or enforcement by them of any other right or remedy
hereunder or which they are entitled by law to enforce.
11. BENEFIT.
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns. In the event that for any reason we do not execute this Agreement, we shall be deemed a
third-party beneficiary of this Agreement and shall have the right to enforce this Agreement directly.
12. EFFECTIVENESS.
This Agreement shall be enforceable and effective when signed by Covenantor, regardless of whether and
when we or you sign this Agreement.
13. GOVERNING LAW.
This Agreement and the relationship between the parties hereto shall be construed and governed in
accordance with the laws of the Commonwealth of Virginia, without regard to its conflict of law principles.
Covenantor and you agree that you shall institute and that we may institute any action against any of the parties
hereto in any state or federal court of general jurisdiction in the Commonwealth of Virginia or the state or federal
court nearest to our executive office at the time such action is filed. Covenantor and you irrevocably submit to the
jurisdiction of such courts and waive any objections to either the jurisdiction or venue of such court.
WAI-3176481v6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple counterparts as of
the day and year first above written.
FRANCHISEE:
Print name of COVENANTOR
By:
Signature of COVENANTOR Print Name:
Title:
FRANCHISOR:
CROWNING TOUCH SENIOR MOVING SERVICES, INC.
By:
Print Name:
Title:
