Does the Cinch I.T. Disclosure Document include the Multi-Unit Development Agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
elopment 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. If you fail to open and continue to operate the required number of franchises in accordance with the mutually agreed upon Development Schedule, we will have the right to terminate the Multi-Unit Development Agreement. If the Multi-Unit Development Agreement is terminated, you will lose all of your 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 which has been opened will not be terminated solely by reason of the termination of the Multi-Unit Development Agreement. Unless you sign a Multi-Unit Development Agreement, you have no obligation, nor any right, to open any additional franchises.
The Franchise Agreement for the first CINCH I.T. Franchised Business to be developed under Development Schedule must be executed and delivered at the same time you sign Multi-Unit Development Agreement.
Market Competition
The target market for services and products provided by CINCH I.T. is businesses with a minimum of 10 users in need of I.T. support.
Source: Item 22 — CONTRACTS (FDD page 60)
What This Means (2024 FDD)
Yes, according to the 2024 Cinch I.T. Franchise Disclosure Document, the current form of the Multi-Unit Development Agreement is included as Exhibit E. Cinch I.T. offers qualified franchisees the chance to develop multiple franchises within a specific territory through this agreement.
For franchisees interested in expanding, the Multi-Unit Development Agreement outlines a mutually agreed-upon development schedule. To establish each additional Cinch I.T. outlet, the franchisee must pay the then-current Initial Training Fee and sign the current standard franchise agreement. It's important to note that this agreement may differ from the initial Franchise Agreement and have materially different terms, although the franchise and royalty fees will remain the same.
A key condition of the Multi-Unit Development Agreement is adherence to the development schedule. Failure to open and operate the required number of franchises as agreed can result in the termination of the agreement, and the franchisee would lose rights to develop the area and the initial franchise fees paid for franchises without signed agreements. However, existing Franchise Agreements for opened locations will not be terminated solely due to the termination of the Multi-Unit Development Agreement.
The Franchise Agreement for the first Cinch I.T. location under the development schedule must be executed when the Multi-Unit Development Agreement is signed. Unless a franchisee signs a Multi-Unit Development Agreement, they have no obligation or right to open additional Cinch I.T. franchises.