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What pre-opening obligations does Benjamin Franklin Plumbing have (Item 11) and what assistance will they provide?

Benjamin_Franklin_Plumbing Franchise · 2025 FDD

Answer from 2025 FDD Document

THIS RENEWAL ADDENDUM ("Addendum") to the BENJAMIN FRANKLIN PLUMBING
Franchise Agreement dated as of
("Franchise
Agreement")
by
and
between Benjamin Franklin
Franchising SPE LLC,
a Delaware
limited liability company
("Franchisor"),
, a [state/entity type] ("Franchisee"), and
([collectively] "Guarantor"), is entered into simultaneously with the Franchise Agreement.
RECITALS
A.
Franchisor and Franchisee are parties to
one or more
BENJAMIN FRANKLIN
PLUMBING
franchise agreements
dated
([collectively]
"Prior
Agreement")
under
which Franchisor granted Franchisee the right to operate the Franchised Business at the Approved Location.
The term of the Prior Agreement has expired or will expire soon.
B.
Franchisor and Franchisee are executing the Franchise Agreement to renew the rights
granted to Franchisee under the Prior Agreement.
C.
The individual(s) identified above as "Guarantor" are guarantying
Franchisee's obligations
under the Franchise Agreement (the "Guaranty").
D.
The parties desire to modify certain provisions of the Franchise Agreement as reflected in
this Addendum.
NOW THEREFORE, in consideration of 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, intending to be legally bound, agree as follows:
1.
Pre-Opening Obligations Deleted. Since Franchisee has been operating the Franchised Business
pursuant to the Prior Agreement, the parties agree that no provisions of the Franchise Agreement that relate
to pre-opening obligations of either party shall be applicable.
Franchisee remains required to comply with
the conditions for renewal under the Prior Agreement.
2.
Term. The text of Section 3 of the Franchise Agreement is deleted and replaced with the following:
"This Agreement will expire on the anniversary of the Agreement Date specified
in the Brand Appendix (the "Expiration Date"). You will not have a contractual
right to renew the franchise rights when the term expires. However, we may in our
sole discretion offer you the opportunity to enter into a new
franchise
agreement
with us.
3.
Renewal Fee.
Simultaneously with the execution of this Addendum, Franchisee shall pay
Franchisor a renewal fee in the amount of, as described in the Prior Agreement.
4.
Indemnification.
The indemnification obligations under the Prior Agreement survive the
expiration of the Prior Agreement.

Brand Fund. Franchisees must contribute to a marketing fund for the BENJAMIN FRANKLIN PLUMBING system (the "Brand Fund"). New franchisees are required to contribute to the Brand Fund an amount that we determine, not to exceed 4% of Gross Revenue. As of the date of this disclosure document, the required contribution is a declining percentage of annual Gross Revenue starting at 1.5% of the first $5,000,000 of Gross Revenue in the then-current calendar year (see Item 6). The rate reverts to 1.5% at the start of the next calendar year. Franchisees under previous forms of Franchise Agreement may contribute at other rates. Company-Owned Outlets will contribute to the Brand Fund on the same basis as new franchisees.

The purpose of the Brand Fund is to support general development and recognition of the BENJAMIN FRANKLIN PLUMBING brand. We will have the right to direct all advertising, marketing, public relations, and other activities to promote, develop and enhance the brand, with final discretion over strategic direction, creative concepts, materials, endorsements, geographic market, and media allocation. We or our affiliate administer the Brand Fund. We may use the Brand Fund to pay costs and expenses as we determine in our sole discretion, including but not limited to: production of video, audio, written, online and mobile marketing materials; purchasing promotional items; sponsorship of sporting, charitable, or similar events; design, establishment, and maintenance of websites, social media, mobile applications and other electronic marketing; implementation of advertising programs, in-store promotions, direct mail, and media advertising; marketing and sales training; employing advertising agencies; conducting public relations, consumer research, product development, product testing, and test marketing programs; developing and implementing trade dress and design prototypes; fulfillment charges; salaries and expenses of our and our affiliates' employees working for or on behalf of the Brand Fund; fees of accounting firms, design firms, public relations firms, consultants and ad agencies; legal fees for advertising pre-clearance, defense of false advertising claims, and defense of any claims made regarding our administration of the Brand Fund; other administrative costs and overhead incurred in activities related to the administration and activities of the Brand Fund; and interest on any monies borrowed by the Brand Fund.

Pricing and Promotional Activities. To the extent permitted by applicable law where your Franchised Business is located, we have the right to establish maximum and/or minimum prices that you must follow for goods and services sold by the Franchised Business. You must participate in and comply with the terms of special promotional activities that we prescribe for Franchised Businesses generally or in specific geographic areas or for specific types of venues. These activities may include special offers, limited time offers, and pricing promotions. You must bear your own costs of participating in these activities and must display promotional signs and materials and otherwise participate in the manner we request.

As of the date of this disclosure document, we have a Franchisee Leadership Team ("FLT") that provides us with input on advertising policies, plans, programs, strategies, and other matters that impact the BENJAMIN FRANKLIN PLUMBING, Mister Sparky, and One Hour Heating & Air Conditioning franchise systems. The FLT serves in an advisory capacity only; we retain final authority on all decisions. The FLT is composed of a total of ten members (franchisees) from BENJAMIN FRANKLIN PLUMBING, Mister Sparky, and One Hour Heating & Air Conditioning. Currently, eight franchisees on the FLT are selected based on a vote by then-current franchisees of the three brands, and the other two franchisee members are appointed by our President. Each member serves a four-year term. Under the current FLT bylaws, only franchisees in good standing may serve on the FLT. We reserve the right to alter the bylaws and the FLT program at any time at our discretion. The address for the FLT is our principal office at 7120 Samuel Morse Drive, Suite 300, Columbia, Maryland 21046. The FLT does not maintain a separate telephone number, email address, or website. The FLT usually meets four times each year, twice in-person and twice through teleconference. We pay the FLT's expenses for approved meetings. We have the power to form, change or dissolve the FLT at any time.

The Table of Contents of the Operations Manual is in Exhibit H to this disclosure document. The Operations Manual has 734 pages.

What This Means (2025 FDD)

According to the 2025 Benjamin Franklin Plumbing FDD, specific pre-opening obligations are not detailed for new franchisees within the provided excerpts. However, the FDD does state that for franchisees renewing their agreement, pre-opening obligations are waived, as they are already operating the franchised business. This suggests that the standard Franchise Agreement includes such obligations for new franchisees.

While the FDD excerpts do not list specific pre-opening obligations, they do highlight several areas in which Benjamin Franklin Plumbing provides assistance to franchisees. Benjamin Franklin Plumbing directs advertising, marketing, and public relations activities to develop and enhance the brand. Franchisees must participate in promotional activities and display related materials as requested by Benjamin Franklin Plumbing. Franchisees also benefit from the Operations Manual, which contains mandatory and recommended standards and procedures for the Benjamin Franklin Plumbing System. The Table of Contents of the Operations Manual is in Exhibit H to the FDD, and the manual itself has 734 pages.

Furthermore, Benjamin Franklin Plumbing has a Franchisee Leadership Team (FLT) that provides input on advertising policies and other matters impacting the Benjamin Franklin Plumbing franchise system. The FLT consists of ten members, with eight selected by franchisee vote and two appointed by the President. The FLT meets four times a year and Benjamin Franklin Plumbing pays for their expenses for approved meetings.

To fully understand the pre-opening obligations, a prospective franchisee should carefully review Exhibit A (the Franchise Agreement) and consult with Benjamin Franklin Plumbing directly. Specifically, they should inquire about site selection criteria, build-out requirements, initial training programs, and any other steps necessary to launch the franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.