Does the Cinch I.T. Disclosure Document include a form of Franchise Agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
rks as Marks.
In order to become a CINCH I.T. franchisee, you must sign a franchise agreement ("Franchise Agreement") and operate your business in accordance with our system standards and specifications.
The CINCH I.T. System
A CINCH I.T. franchised business operates in accordance with a prescribed system of specifications and operating procedures that we have developed and will continue to develop ("System"). The distinguishing characteristics of the System include specifications for equipment; inventory; software; marketing materials; the Marks; uniform operating methods, procedures and techniques; vendor relationships; methods and techniques for record keeping and reporting; procedures and techniques for marketing, sales promotion and advertising; client service standards and methods; client maintenance and help desk support; hardware and software procurement; and the mandatory and suggested policies, procedures, standards, specifications, rules, and requirements ("System Standards") set out in our confidential operations manuals ("Operations Manual"). We may change, improve, add to, and further develop the elements of the System from time to time.
Development Program
In addition, for qualified franchisees who desire the right to develop multiple CINCH I.T. franchises within a designated territory (the "Development Area") and that meet certain conditions, we also offer the opportunity to enter into a Multi-Unit Development Agreement with us (the "Multi-Unit Development Agreement" or "Development Agreement"), as defined under the NASAA Multi-Unit Commentary, to develop a mutually agreed upon number of franchises
in accordance with a development schedule specified in the Multi-Unit Development Agreement (the "Development Schedule"). Our current form of Multi-Unit Development Agreement is included as Exhibit E to this Disclosure Document.
Upon establishing each additional outlet under the Development Schedule, you must deliver to us the then-current Initial Training Fee (as defined in Item 5) and you will be required to sign a copy of our then-current standard form of franchise agreement, which may differ from the current Franchise Agreement and contain terms and condition that are materially different than the form of Franchise Agreement that is attached as Exhibit D to this Disclosure Document, however, the franchise fee and royalty fee will remain the same as the first Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 60)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, becoming a franchisee requires signing a Franchise Agreement. The document also states that for franchisees who qualify and desire to develop multiple Cinch I.T. franchises within a designated territory, Cinch I.T. offers the opportunity to enter into a Multi-Unit Development Agreement. The current form of the Multi-Unit Development Agreement is included as Exhibit E to the Disclosure Document. The Franchise Agreement for the first Cinch I.T. Franchised Business to be developed under the Development Schedule must be executed and delivered at the same time the Multi-Unit Development Agreement is signed. The current form of the franchise agreement is included as Exhibit D to the disclosure document.
For those establishing additional outlets under the Development Schedule, the franchisee must deliver the then-current Initial Training Fee and sign a copy of Cinch I.T.'s then-current standard form of franchise agreement. This agreement may differ from the current Franchise Agreement and contain terms and conditions that are materially different than the form of Franchise Agreement attached as Exhibit D. However, the franchise fee and royalty fee will remain the same as the first Franchise Agreement.
It is important to note that failure to open and operate the required number of franchises in accordance with the mutually agreed upon Development Schedule can result in the termination of the Multi-Unit Development Agreement. If this occurs, the franchisee will lose all rights to develop the Development Area and the initial franchise fees paid for any franchises for which franchise agreements have not been signed. However, the Franchise Agreement for each Franchised Business that has been opened will not be terminated solely due to the termination of the Multi-Unit Development Agreement. Unless a Multi-Unit Development Agreement is signed, there is no obligation or right to open additional franchises.