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EXHIBIT 10.8
DYNAMIC FRANCHISE AGREEMENT
1. Definitions
2. Grant of Franchise
3. Ownership of DYNAMIC Names and Marks
4. Use of Name
5. Franchise Fee
6. DYNAMIC Manual and Software
7. Obligations of Franchisee
8. Obligations of DYNAMIC
9. Covenants of Franchisee
10. Term of Franchise
11. Independent Contractors
12. Insurance
13. Indemnification
14. Books and Records
15. Assignment by DYNAMIC
16. Assignment by Franchisee
17. Termination
18. Notices
19. Waiver of Default by DYNAMIC
20. Interpretation and Execution of Agreement
21. Acknowledgements
Schedule "A" Area
Schedule "B" Job Classifications for the Franchised Business
Schedule "C" Minimum Performance Criteria
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DYNAMIC FRANCHISE AGREEMENT
This Agreement is made this_____day of _______, 19____ between DYNAMIC
TEMPORARY SERVICES, INC., a Georgia corporation ("DYNAMIC"), and
____________________________________________________________[as husband and wife
jointly and severally] ("Franchisee"),___________ an individual[s]____________
a partnership____________ a corporation, of the State of_______________.
WHEREAS, as the result of the expenditure of time, effort and money,
DYNAMIC has developed a unique system for providing to business and industry, on
a temporary basis, personnel to perform certain jobs and services, and such
system and the business of DYNAMIC and its licensees and franchisees transacted
in accordance with that system has acquired a distinctive, high quality
reputation and public identity; and
WHEREAS, DYNAMIC, through its advertising programs and its quality service,
has established a reputation and a demand for qualified temporary personnel it
makes available to business and industry under its licensed trademarks and trade
names; and
WHEREAS, Franchisee desires to obtain the benefits of that system and the
right to operate a franchised DYNAMIC Temporary Help Service Business under
DYNAMIC=s Names and Marks, upon the terms and conditions herein set out;
THEREFORE, the parties agree as follows:
1. DEFINITIONS.
As used in this Agreement,
(a) Accounting Period means one of the four or five week periods generally
coinciding with calendar months and producing twelve such periods per calendar
year, as determined by DYNAMIC.
(b) Area means the geographic territory described on Schedule AA@ hereto,
which Schedule is a part of this Agreement.
(c) Customer means business and industrial users of Temporary Employees
furnished through the Franchised Business.
(d) Franchised Business means the Temporary Help Service Business
franchised to and operated by the Franchisee under this Agreement.
(e) Gross Margin means the Net Billings during the applicable Accounting
Period less all payroll and other direct labor costs with respect to Temporary
Employees (including, without limitation, payroll taxes, workers= compensation
insurance, vacation pay, and charges for liability insurance carried by DYNAMIC)
paid or incurred by DYNAMIC in that Accounting Period with respect to the
Franchised Business.
(f) Liquidation Fees means those amounts payable or paid by Customers who
hire for positions of permanent employment Temporary Employees furnished to such
Customers through the Franchised Business.
(g) Net Billings means the gross billings to Customers with respect to
Temporary Employees furnished through the Franchised Business, less any
discounts and other adjustments to such gross billings, and excluding
Liquidation Fees, if any. Adjustments may include, without limitation,
corrections of errors in billings and billings with respect to services rendered
but either not billed or billed in a reduced amount, or billed and then reduced
or cancelled, due to complaints or dissatisfaction of Customers, in order to
develop and maintain customer relations and goodwill.
(h) DYNAMIC Manual means the confidential operations and procedures
manuals of DYNAMIC for a Temporary Help Service Business and the DYNAMIC System
as developed and maintained by DYNAMIC and as the same may be modified or
supplemented from time to time by DYNAMIC.
(i) DYNAMIC Names and Marks means the names and words "DYNAMIC", "DYNAMIC
Services", "DYNAMIC People Skilled People. With People Skills.", "DYNAMIC
Temporary Services, Inc.", and all other trade names, trademarks, service marks,
logos, designs, slogans and other such marks now or hereafter used by DYNAMIC,
either alone or in conjunction with other words or phrases, to identify the
DYNAMIC System and Temporary Help Service Businesses operated, licensed and
franchised by DYNAMIC.
(j) DYNAMIC System means the unique system and plan for the promotion,
development and operation of a Temporary Help Service Business as developed by
DYNAMIC including, without limitation, the following distinctive elements
thereof:
(i) the DYNAMIC Names and Marks, which Franchisee recognizes are
unique and publicly-recognized, either alone or in combination
with or in association with words or ideas connotating a
nationwide service of providing Temporary Employees of high
quality;
(ii) the color scheme, pattern, design, furnishings, equipment and
decoration of offices of DYNAMIC and its franchisees and
licensees in a uniform manner;
(iii) unique methods of operating a Temporary Help Service Business
such that a high quality of service is provided to customers;
(iv) a program of advertising and publicity of DYNAMIC and the
Temporary Help Service Business operated by DYNAMIC and its
licensees and franchisees;
(v) methods and procedures, whether or not embodied in tangible
form which standardize (insofar as practical) the operation
and development of a Temporary Help Service Business of the
type and character identified with the DYNAMIC Names and
Marks; and
(vi) DYNAMIC Software.
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(k) DYNAMIC Software means computer programs and software developed by or
licensed to DYNAMIC for use in the DYNAMIC System, including, without
limitation, the BOSS System, other operational programs and software, screening
and testing programs and software, and training programs and software.
(l) Temporary Employees means persons furnished to business and industrial
customers and who perform, on a temporary or part-time basis, jobs or services
for such customers.
(m) Temporary Help Service Business means the business of marketing and
providing, on a temporary or part-time basis, personnel to perform services for
business and industrial customers.
(n) Working Days means the week days of Monday through Friday, excluding
any legal holidays.
2. GRANT OF FRANCHISE.
(a) DYNAMIC grants to the Franchisee, and the Franchisee accepts, subject
to and in accordance with the terms and conditions of this Agreement, a license
to use the DYNAMIC Names and Marks, the DYNAMIC System and the DYNAMIC Manual in
the operation, solely within the Area, of one (1) Temporary Help Service
Business for providing Temporary Employees to perform the specific jobs and
services listed on Schedule B to this Agreement.
(b) The license granted hereby is restricted to the operation, solely
within the Area, of a Temporary Help Service Business for providing Temporary
Employees to perform the specific jobs and services listed on Schedule B; and no
license is granted for the use of the DYNAMIC Names and Marks, the DYNAMIC
System or the DYNAMIC Manual (i) outside the Area, or (ii) in connection with
any Temporary Help Service Business other than one that provides Temporary
Employees to perform the specific jobs and services listed on Schedule B, or
(iii) in connection with any other business or enterprise whatsoever. DYNAMIC
reserves the right to operate directly, and to license and franchise others to
use the DYNAMIC Names and Marks, the DYNAMIC System and the DYNAMIC Manual in
the operation of other Temporary Help Service Businesses outside the Area,
Temporary Help Service Businesses within the Area where the Temporary Employees
thereof perform jobs and services other than those specifically listed on
Schedule B, and, in the circumstances set forth in, and subject to, Sections 2
(d) and (e) below, Temporary Help Service Businesses within the Area where the
Temporary Employees thereof perform the jobs and services listed on Schedule B.
(c) So long as Franchisee fully performs its duties, obligations and
covenants under this Agreement, DYNAMIC agrees that, except as provided in
Sections 2 (d) and (e) below, it will neither operate directly nor license or
franchise others to operate within the Area a Temporary Help Service Business
for providing Temporary Employees to perform the jobs and services listed on
Schedule B under the name DYNAMIC. However, Franchisee expressly acknowledges
and understands that it may directly compete within the Area with other
temporary help service businesses operating under different names or marks (such
as "Norrell") owned or licensed by DYNAMIC's parent or affiliates and which are
authorized to provide temporary employees to perform any jobs and services
listed on Schedule B.
(d) Anything to the contrary in this paragraph 2 notwithstanding, in the
event that DYNAMIC or an affiliate of DYNAMIC acquires from an unrelated third
party, through a purchase of assets or stock, including the acquisition of a
majority voting interest, or through a merger, consolidation or any other form
of business combination, a Temporary Help Service Business with an owned or
franchised office in the Area, DYNAMIC, the affiliate of DYNAMIC and the
surviving entity in a merger, consolidation or other form of business
combination, as the case may be, will have the right to continue the operation
of such office in the Area as a company owned or franchised office under the
trade name utilized by the acquired business for such office before the
acquisition.
(e) Franchisee acknowledges that certain temporary help business customers
have offices in more than one state of the United States of America (such
customers are hereinafter referred to as ANational Account Customers@), and in
order to obtain the business of National Account Customers, a temporary help
service business normally must agree to provide temporary help services to all
offices of the National Account Customer on the same terms and conditions, and
while the Franchisee has certain exclusive rights in the Area pursuant to this
Agreement, the Franchisee would not normally be able to obtain the temporary
help service business of a National Account Customer in the Area except through
DYNAMIC, under a contract between DYNAMIC and the National Account Customer,
since DYNAMIC has the capability to provide nationwide temporary help services
but the Franchisee does not. Accordingly, during the term of this Agreement:
(i) DYNAMIC will have the right to negotiate and enter into
agreements with National Account Customers to provide
temporary help services to the offices of such National
Account Customers wherever located, including, without
limitation, those offices located in the Area.
(ii) Within ten (10) business days of the execution of a contract
between DYNAMIC and a National Account Customer (or within ten
(10) business days of the opening of an office of the National
Account Customer in the Area, if, at the time of the execution
of the contract with the National Account Customer, the
National Account Customer has no office in the Area), DYNAMIC
will offer to the Franchisee the right to provide to the
National Account Customer office or offices in the Area, on
the terms and conditions set forth in the contract between
DYNAMIC and the National Account Customer, those temporary
help services which the Franchisee is licensed to provide by
this Agreement.
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(iii) The Franchisee will have ten (10) business days from the date
of the offer made under subparagraph 2 (e) (ii) above within
which to accept, in writing, the offered rights to the
National Account Customers' business in the Area.
(iv) The Franchisee's exclusivity rights in this Agreement
notwithstanding, if the Franchisee does not accept the offer
made under subparagraph 2 (e) (ii) within the time required by
subparagraph 2 (e) (iii), then DYNAMIC will have the right (A)
to provide temporary help services to the National Account
Customer office or offices in the Area on the terms and
conditions in the contract between DYNAMIC and the National
Account Customer, or (B) to contract with another temporary
help service business in the Area to provide those temporary
help services on the terms and conditions in the contract
between Norrell and the National Account Customer, in either
case ((A) or (B)), utilizing the names and marks of DYNAMIC.
(f) Nothing in this paragraph 2 will be construed to prohibit DYNAMIC,
directly or through an affiliate, from providing billing, collecting and
accounting services and financing of receivables to unrelated third party
Temporary Help Businesses for a fee, whether within the Area or otherwise. As
part of those services, DYNAMIC may license to the unrelated third party the use
of the DYNAMIC operations software system or the Norrell BOSS System or a
variation of that system, but the unrelated third party to which those services
might be provided will be prohibited from using the DYNAMIC and Norrell Name and
Marks in any fashion.
3. OWNERSHIP OF DYNAMIC NAMES AND MARKS.
Franchisee acknowledges DYNAMIC's ownership of and exclusive right to:
(a) the DYNAMIC Names and Marks;
(b) the DYNAMIC System, and the DYNAMIC Manual and all other materials and
confidential and proprietary information which are a part thereof; and
(c) all trademarks, trademark registrations, service marks, service mark
registrations, and trade names hereafter applied for or used by DYNAMIC in
connection with the operation, licensing or franchising of a Temporary Help
Service Business.
Franchisee will not, at any time, take any action or do anything, either
directly or indirectly, which would contest the validity or ownership by DYNAMIC
of the foregoing and shall cooperate with and assist DYNAMIC with respect to the
protection of the DYNAMIC System and the DYNAMIC Names and Marks, all as
hereinafter set out.
4. USE OF NAME.
Franchisee, in the conduct of the Franchised Business, will use only the
name "DYNAMIC" and other DYNAMIC Names and Marks authorized by DYNAMIC.
Franchisee will not use or permit the use, either directly or indirectly, of the
name "DYNAMIC" or any DYNAMIC Names or Marks in any territory other than the
Area or in connection with any business or enterprise other than the Franchised
Business. Franchisee shall not interfere with or prohibit in any manner the
proper use of the DYNAMIC Names and Marks by DYNAMIC or other franchisees and
licensees of DYNAMIC in any territory.
5. FRANCHISE FEE.
(a) For the franchise and license granted in this Agreement, for payroll
and billing services and for financing of receivables, Franchisee agrees to pay
to DYNAMIC during the term of this Agreement a continuing fee and royalty of
forty percent (40%) of the Gross Margin of the Franchised Business for each
Accounting Period.
The foregoing notwithstanding, for each Accounting Period during the term
of this Agreement Franchisee's fee and royalty paid to DYNAMIC shall not be less
than ten percent (10%) of the Net Billings of the Franchised Business during
that Accounting Period. Upon request of Franchisee, DYNAMIC will review any
proposed business and may, at its discretion, exclude that business from this
minimum fee and royalty calculation.
(b) DYNAMIC shall be responsible for billing Customers for work and
services performed by Temporary Employees furnished through the Franchised
Business, and shall also pay all wages of such Temporary Employees and all
payroll taxes, workers' compensation insurance charges, vacation pay, state
unemployment charges and taxes, and (to the extent maintained by DYNAMIC)
liability insurance charges attributable to such Temporary Employees, all of
which payments shall be deducted from the amount billed to Customers in
determining Gross Margin. Payment of the fee and royalty specified in Section
(a) above shall be made in each Accounting Period by DYNAMIC deducting from and
retaining the amount calculated per subparagraph (a) for that Accounting Period;
and DYNAMIC will pay to Franchisee, after deduction of any reserve or charge
back for uncollectable accounts of the Franchisee as hereinafter provided, the
balance of the Gross Margin for the Accounting Period, within ten (10) Working
Days following such Accounting Period.
(c) The amount of any billing to a Customer that, in the good faith
judgment of DYNAMIC, becomes uncollectable in that period, will be deducted in
that Accounting Period from the Gross Margin for that Accounting Period. If any
billing or account becomes, in the good faith judgment of DYNAMIC, uncollectable
after the Accounting Period in which it was originally billed, the Franchisee
will be charged back the same percentage of the uncollectable billing or account
as the percentage of Gross Margin remitted to Franchisee for the Accounting
Period during which the uncollectable billing or account was orginally billed.
In any event, any uncollectable billing or account with respect to the
Franchised Business will be borne by and accounted for between the parties with
DYNAMIC assuming responsibility for the same proportion its fee and royalty
bears to the Gross Margin for the Accounting Period in which the billing or
account was originally invoiced. At DYNAMIC's sole discretion, any account
remaining unpaid
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more than 120 days after the original invoice date may be written off as
uncollectable.
(d) Franchisee will pay interest to DYNAMIC on Franchisee's share of all
accounts serviced by the Franchised Business which remain unpaid ninety (90)
days after the original invoice date at an annual rate of Prime plus one (1%)
percent, where Prime is the prime rate published in the Wall Street Journal on
the first Working Day of DYNAMIC's fiscal year. That interest will be paid each
Accounting Period by deduction of the interest amount from the amount remitted
to Franchisee.
(e) In order to establish a reserve for the Franchisee's share of
uncollectable accounts with respect to the Franchised Business and to secure the
performance by Franchisee of its duties, obligations and covenants hereunder,
Franchisee will establish a deposit with DYNAMIC by permitting DYNAMIC to
withhold from all amounts to be remitted to Franchisee by DYNAMIC as provided in
Section (b) above an amount equal to two percent (2%) of the Net Billings for
the Accounting Period with respect to which such remittance is made; provided,
however, except as provided in the next sentence, the maximum amount of such
deposit will not exceed three percent (3%) of the highest Net Billings for any
Accounting Period occurring during the twelve-month period ending on the last
day of the Accounting Period just ended. In addition to such deposit, if
DYNAMIC, in its good faith judgment, believes that the Franchisee's share of
actual or potential uncollectable amounts of Customers will exceed the then
aggregate amount of such deposit, DYNAMIC may deduct from remittances to be made
to Franchisee under Section (b) above (and shall credit to such deposit balance)
such additional sums as DYNAMIC, in its good faith judgment, deems adequate to
cover Franchisee's share of such actual or potential uncollectable accounts. If
in any Accounting Period the accounts for the Franchised Business that become
uncollectable in that Accounting Period exceed the Gross Margin for that
Accounting Period, DYNAMIC shall have the right to debit such deposit account by
an amount equal to the percent of such excess equal to the percent of Gross
Margin paid to Franchisee for the Accounting Period in which the account was
billed. DYNAMIC will also have the right to debit such deposit account by all
amounts Franchisee shall be obligated to pay or reimburse DYNAMIC hereunder.
DYNAMIC will not be obligated to establish or maintain the deposit account as a
separate or segregated account, but may commingle such funds and deposit
accounts with other funds and accounts of or maintained by DYNAMIC and use such
funds in its business. DYNAMIC will pay to Franchisee interest on any such
deposit at an annual rate of Prime plus one (1%) percent, where Prime is the
prime rate published in the Wall Street Journal on the first Working Day of
DYNAMIC's fiscal year, with that interest to be paid each Accounting Period
there is a deposit.
(f) In addition, all Liquidation Fees collected by either DYNAMIC or
Franchisee shall be divided between the parties so that Franchisee will receive
SIXTY (60%) PERCENT, and DYNAMIC will receive FORTY (40%) PERCENT of such
Liquidation Fees. Billing for all Liquidation Fees will be through DYNAMIC's
normal billing and collecting process, but remittance by DYNAMIC to Franchisee
for Liquidation Fees will not be made until after collection. All billing
information for Liquidation Fees will be submitted to DYNAMIC weekly with the
remainder of the payroll and billing information. In no event may Franchisee
invoice a Customer directly for Liquidation Fees.
(g) Each Accounting Period, Franchisee and DYNAMIC will each pay into a
local marketing and advertising fund (the "Local Advertising Fund") one eighth
(1/8) of one (1%) percent of the Net Billings for the Accounting Period. The
purpose of the Local Advertising Fund is to provide funding for marketing
efforts in Franchisee's market area and will be used as may be jointly agreed by
DYNAMIC and Franchisee. The Local Advertising Fund will be held by DYNAMIC and
will not bear or accrue interest. DYNAMIC is not required to establish or
maintain a separate or segregated account for the Local Advertising Fund, but
may commingle this money with other funds or accounts maintained by DYNAMIC and
use the money in its business. Franchisee acknowledges that the Local
Advertising Fund must be used to be effective, so all amounts in the Local
Advertising Fund, whether credited from DYNAMIC or Franchisee, which are not
expended within two (2) years of their credit to the Local Advertising Fund,
will, at DYNAMIC's discretion, revert solely to DYNAMIC. DYNAMIC will show the
balance of the Local Advertising Fund on the Franchise Statement sent to
Franchisee each Accounting Period. Upon termination of this Agreement for any
reason, DYNAMIC will pay to Franchisee one-half (1/2) of the balance in the
Local Advertising Fund.
6. DYNAMIC MANUAL AND SOFTWARE.
The Dynamic Manual (including all forms and reports used in the DYNAMIC
System) and the DYNAMIC Software are for the exclusive use of DYNAMIC and its
licensees and franchisees. The DYNAMIC Manual and the DYNAMIC Software are to be
treated at all times as confidential and are not to be copied or duplicated,
either in whole or in part, at any time (other than for normal backup in the
case of DYNAMIC Software), nor are the contents thereof to be provided or
disclosed to any unauthorized person. The DYNAMIC Manual and the DYNAMIC
Software and all copies thereof shall be and remain the sole and exclusive
property of DYNAMIC.
7. OBLIGATIONS OF FRANCHISEE.
Franchisee will:
(a) Develop and conduct the Franchised Business in full and strict
compliance with the terms and conditions of this Agreement through its fullest
and best efforts in a manner becoming to a good, ethical business establishment
and the standards of the DYNAMIC System. Franchisee will comply with all
applicable county and municipal, state and Federal laws, and proper orders,
rules and regulations issued pursuant thereto by lawful authorities.
(b) Adhere to the procedures, methods and standards set forth in the
DYNAMIC Manual and such directives, including all changes, as may, from time to
time, be issued by
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DYNAMIC pertaining to the DYNAMIC System and the Franchised Business.
(c) Establish and maintain in the Area and at its expense an office
properly identified as a DYNAMIC Temporary Service office for the Franchised
Business. The office must be located in a safe and suitable location, be
maintained in a safe and orderly manner, present a neat and businesslike
appearance, and be adequately staffed, consistent with the standards of DYNAMIC.
Franchisee will submit to DYNAMIC, for its review and approval in advance in
writing, the planned location, layout, furnishings and decoration for the
office. Franchisee will redecorate and relocate its office from time to time as
necessary to comply with these standards for the office or as may be reasonably
required by DYNAMIC for the conduct of the Franchised Business in the Area, with
any relocation or redecoration subject to the review and approval in advance by
DYNAMIC.
(d) Fulfill all pre-opening requirements as are set forth in the DYNAMIC
Manual and commence full operation of the Franchised Business within sixty (60)
days of the date of this Agreement, unless DYNAMIC consents in advance in
writing to an extension of the commencement date.
(e) Devote full time to the development and operation of the Franchised
Business, or such lesser reasonable amount of time as DYNAMIC consents to in
advance in writing. Franchisee will not directly or indirectly own or operate or
be employed by or in any other business, without the prior written consent of
DYNAMIC; provided Franchisee will not be prevented from investing in or owning
less than one (1%) percent of the shares or obligations of any business, the
shares or obligations of which are listed and traded on any national securities
exchange, and which investments do not adversely affect the time, supervision,
management and operation by Franchisee of the Franchised Business.
(f) Obtain, maintain and pay for any and all necessary or appropriate
licenses to conduct the Franchised Business in compliance with all applicable
laws. Insofar as permitted by applicable law, those licenses will be obtained by
Franchisee in the name of "DYNAMIC Temporary Services" or "DYNAMIC People.
Skilled People. With People Skills." and, at the option of DYNAMIC, exercisable
at any time, all legal and equitable rights and benefits in such licenses will
become and be the property of DYNAMIC and will be transferred to any person at
the request or instruction of DYNAMIC.
(g) Operate under the name "Dynamic Temporary Services" or "DYNAMIC People.
Skilled People. With People Skills." and register under applicable fictitious
name statutes to do business as "Dynamic Temporary Services" or "DYNAMIC People.
Skilled People. With People Skills.", as DYNAMIC instructs. The Franchisee
acknowledges that DYNAMIC has sole rights to any of those registrations and,
agrees, upon request of DYNAMIC, to execute any documents required by DYNAMIC
from time to time to cancel or transfer (at the sole discretion of DYNAMIC) any
of those registrations, provided that DYNAMIC will hold the executed documents
in escrow until termination or expiration of this Agreement.
(h) Fully and aggressively promote the Franchised Business in and through
such media, in such manner and with such materials as may be selected and
provided by DYNAMIC or which may be selected and provided by Franchisee
consistent with the standards of the DYNAMIC System and approved in advance in
writing by DYNAMIC.
(i) If, with the prior written consent of DYNAMIC, Franchisee is not
engaged full time in the development and operation of the Franchised Business,
employ at least one full-time employee to operate the Franchised Business,
unless DYNAMIC otherwise agrees in advance in writing. Such employee must be
acceptable to and approved in advance in writing by DYNAMIC and must be trained
by DYNAMIC as promptly as possible after the commencement of their employment as
provided herein. Franchisee will also employ one other full-time employee to
assist in the operation of the Franchised Business and other managerial and
staff employees as necessary or appropriate for the proper conduct of the
Franchised Business with those employees to be acceptable to and approved in
advance in writing by DYNAMIC. All those employees are the employees of the
Franchisee and not of DYNAMIC.
(j) Obtain from each of the employees of Franchisee and furnish to DYNAMIC,
within five (5) days of the date of this Agreement or the date of employment of
each employee, whichever is later, covenants and agreements in form and
substance satisfactory to DYNAMIC, which covenants and agreements will be for
the benefit of and enforceable by DYNAMIC against the employee. In the event
Franchisee becomes aware of any actual or threatened violation of any of those
covenants and agreements by any of its employees, Franchisee will promptly and
fully advise DYNAMIC in writing of all related facts known to Franchisee.
Franchisee may take action to prevent or stop any such violation as it deems
appropriate, at its own expense, except that it may not waive its rights or give
any release without the express written consent of DYNAMIC, as the covenants and
agreements are also for the benefit of and enforceable by DYNAMIC. DYNAMIC may
also request that Franchisee take action or take action itself to prevent or
stop any such violation. Franchisee will cooperate with DYNAMIC in all ways
reasonably requested by DYNAMIC to prevent or stop any such violation,
including, without limitation, instituting or permitting to be instituted in the
name of Franchisee any demand, suit or action which DYNAMIC determines to be
necessary or appropriate. If DYNAMIC makes such a request, then any such demand,
suit or action will be maintained and prosecuted at the expense of DYNAMIC
unless otherwise agreed.
(k) Exercise diligent efforts to recruit, screen, interview, test, train,
indoctrinate, contract with and for, and assign, place and dispatch Temporary
Employees on behalf of DYNAMIC and in conformity with the standards and
procedures of DYNAMIC and the DYNAMIC System, and without regard to race, color,
religion, sex, national origin or age. Franchisee will obtain and maintain from
each Temporary Employee, prior to any placement through the Franchised Business,
a current application for employment as a Temporary Employee, in form
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satisfactory to DYNAMIC, with a copy of each application for employment to be
promptly provided to DYNAMIC if requested by DYNAMIC. Notwithstanding anything
herein to the contrary, such Temporary Employees are the employees of DYNAMIC
and not of Franchisee, and the services of Franchisee with respect to such
Temporary Employees will not affect the relationship of DYNAMIC and Franchisee
as independent contractors as set out herein.
(l) Upon reasonable request of DYNAMIC, Franchisee will provide to DYNAMIC
such monthly, quarterly or annual profit and loss statements showing the results
of operation and financial position of the Franchised Business and other
operating information relating to the Franchised Business as DYNAMIC may
specify. All information to be furnished by Franchisee to DYNAMIC shall be
accurate, correct and complete, so as to provide DYNAMIC a true and accurate
picture of the operation and financial condition of the Franchised Business and
the financial condition of the Franchisee. The annual statements will be
provided to DYNAMIC within thirty (30) Working Days from the end of the fiscal
year of the Franchisee. All reports and statements of the Franchisee to DYNAMIC
will be prepared in accordance with generally accepted accounting principles and
will either be prepared and certified by an independent certified public
accountant, or will be certified by Franchisee, under oath, as being accurate,
correct and complete in all material respects and fairly presenting the
financial condition and results of operation of the Franchised Business for the
period covered.
(m) Submit to DYNAMIC not later than Tuesday of each week (Wednesday if
Monday of such week is not a Working Day) the complete and accurate payroll and
billing information for Temporary Employees furnished through the Franchised
Business for the previous week, which DYNAMIC may use and rely on as the basis
for weekly payments to such Temporary Employees and the preparation of bills to
Customers in accordance with methods and procedures of the DYNAMIC System. Such
billing information will include information with respect to both temporary
services performed by the Temporary Employee and Liquidation Fees. Franchisee
will further submit to DYNAMIC, upon request by DYNAMIC, reports giving complete
information on sales and promotional activities and other relevant information
concerning activity of the Franchised Business, including but not limited to
personal and telephone sales calls, advertising materials sent out, and new
Customers and identified potential new Customers, all in such form and at such
times as DYNAMIC may request.
(n) Keep the office of the Franchised Business open and conduct the
Franchised Business in and from that office in accordance with the practices and
procedures of the DYNAMIC System. The Franchisee or a designated employee of the
Franchisee will meet DYNAMIC standards as to outside sales call activity. The
minimum hours of operation will be determined by DYNAMIC, and will be at least
on all Working Days from the hours of 8:00 a.m. to 5:15 p.m.. local time, with
the exception only of legal holidays observed by business and industry in the
Area, and may include additional hours, split shifts or double shifts, and
additional days. The provision of this subparagraph, however, will not in any
manner prevent Franchisee from keeping the office of the Franchised Business
open or conducting the Franchised Business, either on a regular or only
occasional basis, on Saturday or Sunday or legal holidays, or for longer hours,
if that activity is not illegal under any applicable law.
(o) Obtain, maintain and pay for adequate telephone service for the sole
and exclusive use of the Franchised Business, with that telephone service to be
in the name of "Dynamic Temporary Services" or "DYNAMIC People. Skilled People.
With People Skills." The bill for such telephone service must be sent directly
to the office of the Franchised Business, and must be paid on a timely basis by
Franchisee. Franchisee will also obtain and maintain a listing in bold face type
in the classified section (yellow pages) of the city telephone directory for the
largest city in the Area and the telephone directory for any other city or
county in the Area where the office of the Franchised Business is located, with
the listing to be under the name "Dynamic Temporary Services" or "DYNAMIC
People. Skilled People. With People Skills." The content and appearance of any
telephone listing of the Franchised Business will be subject to the prior
written approval of DYNAMIC. At the option of DYNAMIC, exercisable at any time,
all rights and benefits in the telephone numbers, listings and service shall
become and be the property of DYNAMIC and may be transferred to any person or
location at the request or instruction of DYNAMIC. The Franchisee acknowledges
that DYNAMIC has sole rights to all the telephone numbers and listings and
acknowledges that a direction by DYNAMIC is conclusive evidence of the rights of
DYNAMIC in the telephone numbers and listings and its authority to direct their
transfers and further agrees, upon request of DYNAMIC, to execute any documents
required by DYNAMIC from time to time to effect a transfer to DYNAMIC of all
numbers and listings. DYNAMIC will hold those executed documents in escrow until
termination or expiration of this Agreement.
(p) Make timely payment of all bills and expenses of the Franchised
Business, including instant payments to Temporary Employees without assistance
from DYNAMIC where it is necessary or appropriate to do so, with any payment to
Temporary Employees to be promptly reported and accounted for to DYNAMIC. With
respect to instant payments to Temporary Employees by Franchisee, DYNAMIC will
reimburse Franchisee for these payments within ten (10) Working Days of its
receipt of the related payroll information from Franchisee.
(q) Utilize and adhere to promotional programs of DYNAMIC and the DYNAMIC
System, including without limitation personal sales calls, telephone calls and
mailings.
(r) Personally attend or take and successfully complete, and cause its
manager, if any, and all its employees to attend or take and successfully
complete, such training programs as DYNAMIC determines and makes available.
(s) In the event of any actual, threatened or suspected infringement or
piracy of any of the DYNAMIC Names or Marks or the confidential and proprietary
information which is part of and comprises the DYNAMIC System which comes to
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the attention of Franchisee, Franchisee will promptly report all known facts in
writing to DYNAMIC. Franchisee agrees to be a named party in any demand, suit or
action which DYNAMIC decides to institute in connection with the matter, but
DYNAMIC may in its sole discretion determine whether to institute any demand,
suit or action with respect to any infringement or piracy of any part of the
DYNAMIC System. If any demand, suit or action is instituted by DYNAMIC it will
be maintained and prosecuted solely by and at the expense of DYNAMIC. In
addition, in the event Franchisee is named as a party in any suit or action
where any part of the DYNAMIC System is alleged to violate the rights of any
other person, Franchisee will promptly report all known facts in writing to
DYNAMIC. DYNAMIC will, at its expense, take over the defense of the action and
maintain and control the defense, and will further, at its expense, solely
determine how to respond to any such challenge, and whether to institute and how
to maintain or prosecute any demand, suit or action. In any such matters
Franchisee will cooperate in all ways and take all action and do all things
reasonably requested by DYNAMIC.
(t) Immediately notify DYNAMIC in writing concerning, and forward to
DYNAMIC copies of and otherwise fully advise DYNAMIC with respect to, any and
all actual or threatened demands, notices, suits or actions or other legal
process served on or otherwise coming to the attention of Franchisee or the
Franchised Business, and any facts, circumstances or events that might result in
a suit or action against Franchisee or the Franchised Business.
(u) Lease or purchase computer hardware which meets DYNAMIC's
specifications and standards, which is compatible with other systems utilized by
DYNAMIC, and which is capable of operating the DYNAMIC Software including,
without limitation, operational, training, testing or screening systems and the
BOSS System and any modifications to or replacements of those systems. DYNAMIC
may loan the DYNAMIC Software to Franchisee during the term of this Agreement
and may require Franchisee to utilize the DYNAMIC Software in connection with
the operation of the Franchised Business. Upon DYNAMIC's request from time to
time, Franchisee shall execute any additional software license, document or
agreement DYNAMIC or Norrell deems necessary to protect its proprietary
interests in the BOSS System or in the DYNAMIC Software.
(v) Since the grant of territorial rights herein is specifically
conditional on the successful market penetration of the Area, Franchisee must
achieve the Minimum Performance Criteria set forth on Schedule "C" to this
Agreement.
8. OBLIGATIONS OF DYNAMIC.
DYNAMIC will:
(a) Promptly provide to Franchisee a copy of the DYNAMIC Manual, and during
the term of this Agreement keep such copy complete and up-to-date, including
modifications and supplements and directives and instructions of DYNAMIC as
DYNAMIC may determine are reasonable and appropriate for the Franchisee and the
Franchised Business.
(b) Within thirty (30) days following the execution of this Agreement, or
at such other time as DYNAMIC and Franchisee may agree, make available to
Franchisee and to the employee designated by Franchisee and approved by DYNAMIC
to be the manager of the Franchised Business, initial instruction, advice and
guidance as DYNAMIC, in its judgment, deems necessary or appropriate to the
establishment and operation of the Franchised Business. This training program
will consist of not less than one day nor more than ten days of intensive
training provided in a continuous training period of one to fourteen days,
conducted in Atlanta, Georgia, or another reasonably convenient place and manner
as DYNAMIC determines. DYNAMIC will also make available similar training to one
additional employee of Franchisee designated by Franchisee and approved by
DYNAMIC as a manager of the Franchised Business. This training will be provided
by DYNAMIC to Franchisee at no cost or charge by DYNAMIC, but Franchisee will be
solely responsible for any and all expense of the Franchisee and its employees
of attending the training, including but not limited to, salary, lodging, meals,
travel and personal expenses.
(c) Develop regional, national and other promotional programs and sales
campaigns as DYNAMIC deems appropriate, which DYNAMIC may implement
independently or with the participation of its licensees and franchisees,
including Franchisee, as DYNAMIC may, in its discretion, determine.
(d) Cooperate with Franchisee in the development of sales, recruiting and
promotional programs for the Franchised Business. DYNAMIC will assist and
cooperate with Franchisee in the development of a list of prospective Customers;
however, the primary responsibility for actually compiling the list and the
names on the list will be that of the Franchisee. DYNAMIC will then set up and
maintain through updated lists provided to it by Franchisee a direct mail list,
up to, but not exceeding, what DYNAMIC deems to be a reasonable number of
Customers and prospective Customers for the Franchised Business. DYNAMIC will
further provide direct mail advertising and sales materials for prospective
Customers, and will conduct on behalf of the Franchised Business direct mailings
to the Customers on the mailing list of Franchisee maintained by DYNAMIC, in the
amounts and with the frequency as Dynamic determines to be reasonable and
appropriate for the Franchised Business.
(e) Hire and contract with Temporary Employees to be furnished to
Customers. Notwithstanding anything else herein to the contrary, the Temporary
Employees will be the employees of DYNAMIC and not of Franchisee, and the
services of Franchisee with respect to the Temporary Employees will not affect
the relationship of DYNAMIC and Franchisee as independent contractors as set out
in this Agreement.
(f) Process the payroll and billing information provided to it by
Franchisee, and based on that information bill the Customers for work and
services performed by Temporary Employees furnished through the Franchised
Business and for Liquidation Fees. Based on that information, DYNAMIC will pay
the Temporary Employees on a regular weekly basis for services rendered to
Customers. DYNAMIC will make a diligent effort to collect all Net Billings and
Liquidation Fees.
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DYNAMIC will perform bookkeeping and other services as it deems necessary or
appropriate incident to the payroll, billing and collecting, except the services
to be performed by Franchisee, and will pay appropriate, related payroll and
withholding taxes, workers' compensation and liability insurance of or with
respect to the Temporary Employees. DYNAMIC will also mail the payroll checks to
Franchisee=s office and prepare W-2 forms and other necessary payroll reports
for the Temporary Employees.
(g) Supply to Franchisee, at the expense of DYNAMIC, an initial reasonable
amount of the necessary forms, letterhead, envelopes, advertising materials, art
work for the classified advertisement in the telephone directory and other
printed materials with the DYNAMIC Names and Marks. DYNAMIC will further supply
Franchisee with reasonable amounts of all internal report forms (including, but
not limited to time sheets for Temporary Employees), and may continue to supply
Franchisee with reasonable amounts of printed materials with the DYNAMIC Names
and Marks, with those materials to be provided to Franchisee by DYNAMIC at a
cost to Franchisee which does not exceed the reasonable cost of the materials to
DYNAMIC.
(h) Resolve in good faith disputes arising between Franchisee and Customers
or Temporary Employees, or between Franchisee and other licensees or franchisees
of DYNAMIC, and the determinations made in such resolution by DYNAMIC will be
binding upon Franchisee.
9. COVENANTS OF FRANCHISEE.
During the term of this Agreement and for the period of one year
thereafter, except as otherwise expressly set out below, Franchisee covenants
and agrees as follows:
(a) Franchisee will not, without the prior written consent of DYNAMIC,
within the Area, either directly or indirectly, on its own behalf or in the
service or on behalf of others, engage in or be employed by any Temporary Help
Service Business providing Temporary Employees to do any or all of the services
listed on Schedule "B", other than the Franchised Business (any such other
business being herein referred to as a ACompeting Business@) as a partner,
officer, executive or managerial employee, guarantor, director, shareholder
(other than as owner of less than five (5%) percent of the issued and
outstanding stock of a publicly owned corporation whose securities are traded on
a nationally recognized stock exchange), consultant, or salesperson.
(b) Franchisee will not, without the prior written consent of DYNAMIC,
within the Area, either directly or indirectly, on its own behalf or in the
service or on behalf of others, solicit or service for, or divert or appropriate
to any Competing Business, or attempt to solicit, divert or appropriate to or
from any Competing Business, any person or entity which is, or was at any time
during the preceding two (2) year period a Customer.
(c) Franchisee will not, either directly or indirectly, on its own behalf
or on the behalf of others, solicit, divert or hire away, or attempt to solicit,
divert or hire away, to any Competing Business any person employed by DYNAMIC,
whether or not such employee is a full-time or Temporary Employee of DYNAMIC,
and whether or not such employment was pursuant to written agreement and whether
or not such employment was for a determined period or was at will; nor will
Franchisee solicit, divert or hire away or attempt to solicit, divert or hire
away to the Franchised Business or any Competing Business any such employee of
any licensee or franchisee of DYNAMIC, without the prior written consent of such
licensee or franchisee of DYNAMIC.
(d) Franchisee agrees that all customer lists, sales and promotional
information, employee lists, financial information furnished or disclosed to
Franchisee by DYNAMIC, the DYNAMIC Software, the DYNAMIC Manual and other
information with respect to DYNAMIC, the DYNAMIC System, the Customers or other
customers of DYNAMIC (i) of which the Franchisee becomes aware as a result of
its franchise relationship with DYNAMIC (ii)which has actual or potential
economic value to DYNAMIC from it not being generally known to other persons who
could obtain economic value from its disclosure or use, and (iii)which is the
subject of reasonable efforts by DYNAMIC to maintain its secrecy or
confidentiality, whether assembled and compiled by Franchisee or produced and
provided by DYNAMIC, and the physical embodiments of such information, are and
will be and remain the confidential and trade secret property of DYNAMIC. Upon
termination of this Agreement for any reason, and as a prior condition to
receiving any final payments due from DYNAMIC, Franchisee will promptly deliver
to DYNAMIC all such lists and information and all copies thereof in the
possession or control of Franchisee. Franchisee will not, at any time disclose
or make available to any person, business concern or other entity any
proprietary or confidential information relating to DYNAMIC, the DYNAMIC System,
the Franchised Business, the Customers, or the employees or other customers of
DYNAMIC, which was disclosed to Franchisee by DYNAMIC during the course of this
Agreement, nor will Franchisee make or cause to be made any use of such
proprietary or confidential information other than as proper in the conduct of
the Franchised Business.
(e) Franchisee acknowledges that the entire DYNAMIC System and the DYNAMIC
Names and Marks, the DYNAMIC Manual, the DYNAMIC Software and other confidential
and proprietary information constituting parts of the DYNAMIC System are the
sole and exclusive property of DYNAMIC, and no right is given or acquired to use
or duplicate the DYNAMIC System or portion thereof other than the right to use
the same in the operation of the Franchised Business hereunder. Franchisee will
not challenge or contest the right, title or interest of DYNAMIC in and to the
DYNAMIC System and all parts thereof; nor will Franchisee claim any right, title
or interest (other than as licensee hereunder) in or to the DYNAMIC System or
the DYNAMIC Names and Marks, the DYNAMIC Manual or any other confidential or
proprietary information constituting part of the DYNAMIC System.
(f) Franchisee will not in any manner or fashion, disparage the name or
goodwill of DYNAMIC, or the DYNAMIC Names and Marks or the DYNAMIC System.
(g) Upon termination of this Agreement for any reason, Franchisee will
immediately cease using the DYNAMIC
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Names and Marks, the DYNAMIC Manual and the DYNAMIC System; cease to identify
itself as a member or part of the DYNAMIC System; and remove from its business
premises all signs bearing the DYNAMIC Names and Marks or other identification
of DYNAMIC or the DYNAMIC System. In addition, at the request of DYNAMIC,
Franchisee shall cooperate with and assist DYNAMIC in the transition of the
Franchised Business to an office of DYNAMIC, or with the transfer thereof to a
licensee or franchisee of DYNAMIC, in order to continue such business as
smoothly, or with as little interruption, as possible. In this regard, upon the
request of DYNAMIC, Franchisee shall, to the best of its ability, bring about a
complete and effective transfer of the Customers, facilities, and services to
DYNAMIC or such licensee or franchisee of DYNAMIC as DYNAMIC may designate. If
DYNAMIC does not request such a transfer of the trade name registration or
telephone listings of the Franchised Business, then Franchisee shall promptly
cause the same to be cancelled or withdrawn. Franchisee shall also immediately
deliver and turn over to DYNAMIC all property of DYNAMIC, as provided herein,
including but not limited to the DYNAMIC Manual, customer lists, employee lists,
sales and promotional information, the DYNAMIC Software, financial records and
other confidential or proprietary information, with respect to DYNAMIC, the
DYNAMIC System, the Franchised Business, and all materials and supplies bearing
the DYNAMIC Names and Marks or other identification of DYNAMIC or the DYNAMIC
System, including all copies and embodiments thereof and without making or
retaining any copies or other embodiments thereof, and DYNAMIC is hereby
authorized and empowered peaceably to take possession thereof.
(h) The covenants and agreements contained in the Sections of this
Paragraph of the Agreement are of the essence of this Agreement; each such
covenant and agreement is reasonable and necessary to protect and preserve the
interests and properties of DYNAMIC, the DYNAMIC Names and Marks and the DYNAMIC
System for the benefit of DYNAMIC; irreparable loss and damage will be suffered
by DYNAMIC should Franchisee breach any of such covenants and agreements; each
of such covenants and agreements is separate, distinct and severable, not only
from the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; the unenforceability of any such
covenant or agreement will not affect the validity or enforceability of any
other such covenant or agreement or any other provision of this Agreement; and
in addition to all other remedies available to it, DYNAMIC will be entitled to
both temporary and permanent injunctions to prevent a breach or contemplated
breach by Franchisee of any of such covenants or agreements. Any breach of any
of the foregoing covenants will be deemed a material breach of this Agreement.
(i) The existence of any claim, demand, action or cause of action by
Franchisee against DYNAMIC, or any parent, subsidiary or affiliate of DYNAMIC,
whether predicated upon this Agreement or otherwise, will not constitute a
defense to the enforcement by DYNAMIC of any of its rights hereunder.
10. TERM OF FRANCHISE.
(a) The term of the franchise and license granted in this Agreement is for
a period of fifteen (15) years beginning on the date of the Agreement.
(b) If Franchisee has not been in default under this Agreement during the
fifteenth (15th) year of the term of this Agreement, upon the expiration of the
term hereof, DYNAMIC will, upon one hundred eighty (180) days notice, either:
(i) renew the franchise and license for the operation of a Temporary
Help Service Business in the Area on DYNAMIC's then current terms
and conditions; including without limitation, different or
additional license and royalty fee rates; or
(ii) pay to the Franchisee an amount equal to the total amount of
Gross Margin paid or payable to Franchisee pursuant to paragraph
5 in respect of the last nine (9) Accounting Periods of the term
of this Agreement.
The choice of which of the above alternatives applies will be in the sole
discretion of DYNAMIC. If DYNAMIC elects alternative (ii), payment of the amount
specified will be made in twelve (12) equal consecutive monthly installments
without interest, the first monthly installment to be paid ninety (90) days
after the expiration of the term of this Agreement. It is expressly agreed that
the payment of the amount specified in alternative (ii) is in part consideration
for Franchisee's covenants and agreements contained in paragraph 9 of this
Agreement and payment of that amount is expressly conditioned on Franchisee's
compliance with those covenants and agreements.
(c) Anything to the contrary herein notwithstanding, this Agreement and the
license and franchise granted hereunder may be terminated prior to the
expiration of the term hereof as provided in Paragraph 17 of this Agreement.
11. INDEPENDENT CONTRACTORS.
(a) DYNAMIC and Franchisee are completely separate entities and are not
partners, joint venturers, or agents of the other in any sense, and neither will
have the power to bind the other.
(b) Except as herein specifically provided, Franchisee will be solely
responsible for and will promptly pay when due all expenses of the Franchised
Business, including, without limitation, all taxes and levies imposed on or
assessed against the Franchised Business, and DYNAMIC will not in any way be
liable for any such expenses, taxes, levies or disbursements in connection with
the establishment and maintenance of the Franchised Business.
(c) Franchisee will conspicuously identify itself and the Franchised
Business, and in all dealings with associates, temporary employees, clients,
contractors, suppliers, public officials and others, as an independent
franchisee of DYNAMIC, and will place such notice of independent ownership on
all forms, business cards, stationery, advertising, signs and other materials in
such fashion as DYNAMIC may, in its sole discretion, specify and require from
time to time, in
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the DYNAMIC Manual (as same may be amended from time to time) or otherwise.
12. INSURANCE.
(a) Franchisee will, at its own cost and expense, purchase and maintain,
continuously throughout the term of this Agreement, the following insurance
coverages:
(i) Public Liability (including property damage, bodily injury, owned
and non-owned automobile) in no less than the amount of
$1,000,000 combined single limits.
(ii) Worker's Compensation Insurance, as required by applicable state
laws, with respect to Franchisee's employees.
(iii) Fidelity Bond: $50,000 per loss on the employees of Franchisee,
covering employee dishonesty.
(b) Franchisee will, upon request by DYNAMIC, increase the coverage
afforded under policies described in Section 12(a)(i) above to such amounts as
DYNAMIC may reasonably establish.
(c) All policies of insurance required to be provided and maintained by
Franchisee by this Agreement must name DYNAMIC as an additional insured (without
obligation to pay the premium or any deductible amounts, all of which will be
paid by Franchisee), and must be carried with such responsible insurance
companies and be in such form as is reasonably satisfactory to DYNAMIC.
Franchisee will deliver to DYNAMIC, within ten (10) days after the date of this
Agreement and thereafter within ten (10) days following the issuance or renewal
of any such policy of insurance, the original policies or certificates of
insurance, in form reasonably satisfactory to DYNAMIC, evidencing the policies
required to be provided and maintained by Franchisee. All the policies must be
endorsed to provide that they may not be terminated or cancelled, or the
coverages afforded reduced in any respect, except upon thirty (30) days prior
written notice by the insurer to DYNAMIC.
(d) In the event Franchisee fails to provide and maintain the insurance
coverages required, DYNAMIC may, in addition to any other rights and remedies it
may have with respect to such failure, and without in any way waiving any other
rights and remedies, obtain policies of insurance and make any payments required
for that insurance. All such payments made by DYNAMIC must be reimbursed by
Franchisee promptly upon demand by DYNAMIC.
(e) Public Liability Insurance of the Temporary Employees of the Franchised
Business will be provided and maintained by DYNAMIC. That insurance, which may
be provided through blanket policies maintained by DYNAMIC, will be in such
amounts as DYNAMIC deems adequate.
13. INDEMNIFICATION.
Franchisee agrees to indemnify and to save and hold harmless DYNAMIC, its
officers, agents and employees, and their successors and assigns, of, from,
against and in respect of all actions, causes of action, claims, demands,
liabilities, loss, damages, litigation or other expenses, including, but not
limited to, interest and attorneys' fees, which DYNAMIC or any of its officers,
agents or employees, shall or may sustain or incur by reason of any claims of
whatsoever nature which may arise against it or them or part of them as a result
of the establishment and/ or maintenance of the Franchised Business or the
nonperformance by Franchisee of any of its obligations hereunder; provided,
however, the Franchisee will not be obligated to indemnify or to save and hold
harmless DYNAMIC, or its officers, agents or employees, for any claim against it
or them based on the negligence of DYNAMIC, or its officers, agents and
employees or claims arising out of nonperformance by DYNAMIC of its obligations
hereunder. Franchisee will pay all attorneys' fees and costs which DYNAMIC, or
any of its officers, agents or employees, become liable to pay in the
negotiation or prosecution of any claim to enforce the obligation of this
indemnity provision; and Franchisee will pay DYNAMIC, and/or any of its
officers, agents or employees, as the case may be, all sums of money, plus
interest thereon at the legal rate, which DYNAMIC and/or any of its officers,
agents or employees, as the case may be, advances, pays or causes to be paid as
a result of the establishment and/or maintenance of the Franchised Business
other than amounts specifically provided to be paid by DYNAMIC in this
Agreement. All vouchers, cancelled checks, receipts, receipted bills or other
evidence of payments for any loss, liabilities, costs, damages, charges or
expenses of whatsoever nature incurred by DYNAMIC and/or its officers, agents or
employees, as the case may be, or its or their attorney or attorneys, will be
taken as prima facie evidence of Franchisee's obligation set out in this
Agreement.
14. BOOKS AND RECORDS.
(a) DYNAMIC will have the right, upon reasonable notice and during regular
business hours of Franchisee, to inspect and copy all books and records of
account of the Franchised Business.
(b) Franchisee will keep and maintain at the office of the Franchised
Business true and correct records and books of account and operations of the
Franchised Business, and in connection therewith will employ such bookkeeping,
accounting and reporting systems as are necessary and appropriate and as may be
established by DYNAMIC for its licensees and franchisees or reasonably requested
by DYNAMIC.
(c) Franchisee will, in addition to all other records and accounts required
to be maintained by it in this Agreement, maintain true, correct and current
listings of the name, address and telephone number of each Customer and of each
Temporary Employee furnished through the Franchised Business. These listings,
together with all other books, records and accounts of or relating to the
Franchised Business, excepting only the financial, tax and accounting records of
the Franchisee and the Franchised Business, are the sole property of DYNAMIC.
15. ASSIGNMENT BY DYNAMIC.
DYNAMIC's rights under this Agreement will inure to the benefit of its
successors and assigns. DYNAMIC may assign
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this Agreement without the consent of Franchisee, if DYNAMIC's commitments to
establish the franchise have been met, the assignee agrees in writing to assume
all of DYNAMIC's obligations to Franchisee, and notice of the assumption is
given to Franchisee. Such assignment will discharge DYNAMIC from any further
obligation to Franchisee.
16. ASSIGNMENT BY FRANCHISEE.
(a) Franchisee will not sell, assign, transfer, sublicense or encumber this
Agreement or any right or interest of Franchisee herein, or suffer or permit any
such sale, assignment, transfer, sub-license or encumbrance to occur by
operation of law or otherwise, without the prior written consent of DYNAMIC. Any
violation by Franchisee of this subsection will constitute a material breach of
this Agreement.
(b) In the event of the death or disability (provided such disability shall
have existed or be expected to exist for more than six (6) months and shall be
confirmed in writing by a medical doctor competent in the field of medicine to
which such disability relates) of the Franchisee, DYNAMIC will not unreasonably
withhold its consent to the transfer of this Agreement to Franchisee's spouse or
heirs, whether such transfer is by will or by operation of law, if in the sole
judgment of DYNAMIC the transferee(s) is capable of conducting the Franchised
Business in a manner satisfactory to DYNAMIC and if such transferee(s) executes
such documentation of assumption of the Franchisee's obligations hereunder as
DYNAMIC reasonably requires.
If DYNAMIC determines that Franchisee's spouse or heirs are not capable of
conducting the Franchised Business in a manner satisfactory to DYNAMIC, DYNAMIC
will allow the estate of Franchisee or the disabled Franchisee a reasonable
period of time, not to exceed six (6) months from the date of death or
determination of disability, to sell the Franchised Business to a third party
who satisfies any reasonable conditions DYNAMIC imposes which may include,
without limitation, the following:
(i) The purchaser must fully satisfy all obligations to DYNAMIC
arising out of the operation of the Franchised Business, and
will if requested by DYNAMIC, deposit with DYNAMIC funds
sufficient in the judgment of DYNAMIC to pay all known
creditors of the Franchised Business;
(ii) The purchaser must demonstrate to the satisfaction of DYNAMIC
that it meets all financial and managerial requirements then
applicable to new licensees or franchisees of DYNAMIC;
(iii) The purchaser must meet the same standards with respect to
personal characteristics required of new applicants for
DYNAMIC franchises;
(iv) The purchaser must not be a competitor of DYNAMIC or an
affiliate of a competitor of DYNAMIC;
(v) The purchaser must agree to take all training programs then
required by DYNAMIC for its new licensees or franchisees; and
(vi) The purchaser will, at the sole discretion of DYNAMIC, execute
a new Franchise Agreement containing DYNAMIC's then standard
terms and conditions, or such documents of assumption of the
Franchisee's obligations hereunder as DYNAMIC may require.
During the time between the death or determination of disability of Franchisee
and the transfer of the franchise, DYNAMIC shall permit the estate of the
deceased franchisee or the disabled franchisee to appoint a designee to operate
the Franchised Business, which designee must be approved by DYNAMIC, but DYNAMIC
shall not unreasonably withhold its approval of such designee. If the Franchised
Business is not sold within the six (6) month period, DYNAMIC may, upon request,
extend the period for one other six (6) month period. Approval of such extension
request will not be unreasonably withheld.
(c) If Franchisee receives a bona fide offer, which it desires to accept,
for the purchase of the Franchised Business and its rights in this Agreement,
Franchisee will before accepting any such offer first disclose and furnish a
copy of the offer in writing to DYNAMIC and offer in writing to sell its rights
in this Agreement and all assets of the Franchised Business to DYNAMIC on the
same terms and conditions as contained in the bona fide offer, but without any
provision for or consideration related to any retained management contract or
arrangement. DYNAMIC will have the right, exercisable by it by written notice to
Franchisee given within thirty (30) days after DYNAMIC's receipt of Franchisee's
written offer, to purchase the rights of Franchisee in this Agreement and the
assets of the Franchised Business upon those terms and conditions. If DYNAMIC
accepts the offer, the purchase and sale will be consummated not later than
thirty (30) days following DYNAMIC's acceptance. If DYNAMIC fails to accept the
offer within the thirty (30) day period, that failure shall be deemed the
consent by DYNAMIC to the sale by Franchisee and Franchisee will be free to
accept the bona fide offer and sell its interest in the Franchised Business and
this Agreement to the bona fide offeror upon those terms and conditions.
However, the purchaser must, before the consummation of its purchase of
Franchisee's interest in this Agreement, satisfy all reasonable conditions
DYNAMIC imposes, which may include, without limitation, the following:
(i) The purchaser must fully satisfy all obligations to DYNAMIC
arising out of the operation of the Franchised Business, and
will if requested by DYNAMIC, deposit with DYNAMIC funds
sufficient in the judgment of DYNAMIC to pay all known
creditors of the Franchised Business;
(ii) The purchaser must demonstrate to the satisfaction of DYNAMIC
that it meets all financial and managerial requirements then
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applicable to new licensees or franchisees of DYNAMIC;
(iii) The purchaser must meet the same standards with respect to
personal characteristics which are required of new applicants
for DYNAMIC franchises;
(iv) The purchaser must not be a competitor of DYNAMIC or an
affiliate of a competitor of DYNAMIC;
(v) The purchaser must agree to take all training programs then
required by DYNAMIC for its new licensees or franchisees; and
(vi) The purchaser will, at the sole discretion of DYNAMIC, execute
a new franchise agreement containing DYNAMIC's then standard
terms and conditions, or such documents of assumption of the
Franchisee's obligations hereunder as DYNAMIC requires.
Franchisee will pay to DYNAMIC a transfer fee of $3,000 to cover the
legal and administrative costs to DYNAMIC involved in such a purchase.
If the sale to the purchaser is not consummated within ninety (90) days
following the failure of DYNAMIC to exercise its option as above provided, then
the restrictions of this Section are renewed, and any sale or transfer by
Franchisee of the Franchised Business and its interest in this Agreement,
whether to purchaser or any other person or entity, will again be subject to the
restrictions herein stated.
(d) If Franchisee desires to conduct the Franchised Business in an
incorporated form, DYNAMIC will not unreasonably withhold its consent to the
transfer of this Agreement and Franchisee's interest herein to any corporation
formed for that purpose; provided Franchisee and such corporation must, prior to
such transfer, satisfy such reasonable requirements as DYNAMIC imposes, which
may include, without limitation, the following:
(i) Franchisee must at all times be the record and/or beneficial
owner of and must have, by law or by written agreement
satisfactory to DYNAMIC, voting control of not less than
fifty-one (51%) percent of each class of the capital stock of
such corporation;
(ii) No other person or entity, except members of Franchisee's
immediate family or trusts for the benefit of such members,
may own or have any right to acquire any capital stock or
securities of such corporation;
(iii) The form and content of the Articles of Incorporation and
bylaws of such corporation must have been approved by DYNAMIC,
and will contain provisions enforceable under applicable law
restricting the issuance and transfer of capital stock or
securities of the corporation to such extent as DYNAMIC
reasonably requires; and
(iv) DYNAMIC must have been furnished in writing the names and
addresses of all shareholders or prospective shareholders of
the corporation, and Franchisee and (if requested by DYNAMIC)
each such shareholder or prospective shareholder must have
guaranteed in writing (in form and substance satisfactory to
DYNAMIC) the performance by the corporation of the obligations
of the Franchisee under this Agreement.
After assignment of this Agreement to a corporation as provided above, or
if Franchisee is a corporation at the date of this Agreement, the issue, sale,
transfer, assignment or encumbrance of any capital stock or securities of such
corporation, whether by operation of law or otherwise, will be deemed a sale by
Franchisee of the Franchised Business and its interest in this Agreement and
will in all respects be subject to the limitations set forth in this Section on
the sale of the Franchised Business and Franchisee's interest in this Agreement.
Any merger, consolidation or reorganization by any corporation having an
interest in this Agreement will be deemed a sale of such interest and, unless
done with the prior written consent of DYNAMIC, constitutes a material breach
hereof.
(e) No sale, transfer, conveyance or assignment by Franchisee of all or any
part of its interest in this Agreement relieves Franchisee from its duties,
obligations and covenants to DYNAMIC arising prior to such sale, transfer,
conveyance or assignment, and Franchisee remains liable therefor notwithstanding
such sale, transfer, conveyance or assignment.
17. TERMINATION.
(a) This Agreement and the franchise and license granted hereunder may be
terminated:
(i) By Franchisee upon not less than ninety (90) days prior
written notice to DYNAMIC;
(ii) by DYNAMIC
(A) Immediately upon any material breach of this Agreement;
(B) Upon thirty (30) days written notice to Franchisee in the
event of any other breach or failure of performance by
Franchisee which is not cured to the satisfaction of
DYNAMIC within that thirty (30) day period;
(C) Upon ninety (90) days written notice if Franchisee has not
achieved the minimum Performance Criteria set forth on
Schedule AC@ hereto, which Schedule is a part hereof;
(D) Subject to the provisions of paragraph 16(b), upon thirty
(30) days written notice to the Franchisee or his estate
or personal representative, where the Franchisee is an
individual, if upon the disability or death of Franchisee
DYNAMIC shall in its sole judgment determine that the
Franchisee or assignee of the Franchisee is not capable
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of conducting the Franchised Business in a manner satisfactory
to DYNAMIC;
(E) Immediately, if the Franchisee becomes insolvent or commits an
act of bankruptcy; or makes a general assignment for the
benefit of creditors, or to an agent authorized to liquidate
its property or assets; or becomes or is adjudicated a
bankrupt, or voluntarily files a petition in bankruptcy or
reorganization, or to effect a plan or other arrangement with
creditors; or files an answer to the creditor=s petition or
other petitions filed against it (admitting the material
allegations in the respective petition) for an adjudication of
bankruptcy, or for reorganization, or to effect a plan or
other arrangement with creditors; or applies for or suffers
the appointment of a receiver or trustee of any of its assets
and property, or such receiver or trustee is appointed for any
of its property or assets, and such trustee or receiver so
appointed is not discharged within fifteen (15) days after the
date of his appointment; or all or substantially all of the
property of the Franchisee is attached by the United States or
any officer or instrumentality thereof, and so remains and
continues for a period of fifteen (15) days; or a writ or
warrant of attachment, or similar process, is issued by any
court against all or any substantial portion of the property
or assets of the Franchisee, and such writ, warrant of
attachment, or any similar process is not released or bonded
within fifteen (15) days after entry or levy;
(F) Immediately, if Franchisee is convicted of a felony or a crime
involving moral turpitude or the operation of the Franchised
Business, or if Franchisee takes or appropriates for its own
use any property of DYNAMIC;
(G) Immediately, if Franchisee shall cease operation of the
Franchised Business during regular business hours for more
than five (5) successive Working Days;
(H) Immediately, where the Franchisee is two individuals who are
husband and wife, upon the consent to or adjudication of
divorce or other dissolution of the marriage of or by such
persons, or the initiation and filing of formal, legal
proceedings by one of such individuals for divorce or other
dissolution of the marriage of such persons;
(I) Immediately, where the Franchisee is a corporation, upon the
dissolution or liquidation of the corporation; and
(J) Immediately, where the Franchisee is a partnership composed of
two or more persons, upon written notice to the Franchisee, in
the event of the death or disability of any one or more of the
partners, or the attempted assignment or transfer of the
interest of one or more of the partners, or the occurrence of
any act or event resulting in the dissolution of the
partnership in accordance with applicable law. (b) The right
of DYNAMIC to terminate this Agreement and the franchise and
license herein granted is in addition to all other rights and
remedies, whether at law or in equity, that DYNAMIC might have
against Franchisee as a result of any breach or default by
Franchisee of any provision of this Agreement.
(c) Upon any termination of this Agreement, whether by DYNAMIC or
Franchisee, or upon expiration of the term hereof, the parties will properly
report to each other all payroll and billing information and account for and pay
to each other proper percentages and amounts of all Gross Margin, Liquidation
Fees, deposits, advances, uncollectable billings and accounts and other sums, if
any, pursuant to this Agreement.
18. NOTICES.
All notices permitted or required hereunder must be in writing, must be
delivered personally or, if mailed, sent by certified or registered mail, return
receipt requested, in an envelope with proper postage, addressed to the party to
whom the notice is directed at its address shown below or at such other address
as that party designates in writing, or, in the case of the Franchisee, at the
premises of the Franchised Business. Notices sent by mail shall be deemed given
and received three (3) business days after deposit in the mails.
19. WAIVER OF DEFAULT BY DYNAMIC.
The waiver by DYNAMIC of any particular breach or default by the Franchisee
shall not affect or impair DYNAMIC's right with respect to any subsequent breach
or default of the same or a different kind; nor will any delay or omission of
DYNAMIC to exercise any right arising from any breach or default affect or
impair DYNAMIC's right as to the same or any future breach or default. No
failure of DYNAMIC to exercise any power given it hereunder, or to insist upon
strict compliance by the Franchisee with any obligation hereunder, and no custom
or practice at variance with the terms hereof, shall constitute a waiver of
DYNAMIC's right to demand exact compliance with the terms hereof.
20. INTERPRETATION AND EXECUTION OF AGREEMENT.
(a) This Agreement shall be governed by and construed in accordance with
the laws of or applicable to the State of Georgia.
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(b) The parties hereto agree that it is in their best interest to resolve
disputes between them in an orderly fashion and in a consistent manner.
Therefore, the parties hereby agree as follows:
(i) Franchisee consents and agrees that the following courts shall
have personal jurisdiction over it in all lawsuits relating to
or arising out of this Agreement and hereby waives any defense
Franchisee may have of lack of personal jurisdiction in any
such lawsuits filed in these courts:
(A) All courts included within the state court system of
the State of Georgia; and
(B) All courts of the United States of America sitting
within the State of Georgia including, but not
limited to, all the United States District Courts
sitting within the State of Georgia.
(ii) Franchisee consents and agrees that venue shall be proper in
any of the following courts in all lawsuits relating to or
arising out of this Agreement and hereby waives any defense it
may have of improper venue in any such lawsuits filed in these
courts:
(A) The state court of the county where DYNAMIC has its
principal place of business (presently, Fulton
County); and
(B) The United States District Court for the Northern
District of Georgia, Atlanta Division.
In the event any of these courts are abolished, Franchisee agrees that
venue shall be proper in the state or federal court in Georgia which most
closely approximates the subject-matter jurisdiction of the abolished court as
well as any of these courts which are not so abolished. All lawsuits filed by
Franchisee against DYNAMIC relating to or arising out of this Agreement shall be
required to be filed in one of these courts; provided, however, that if none of
these courts has subject-matter jurisdiction over such a lawsuit, such lawsuit
may be filed in any court having such subject-matter jurisdiction if in-personam
jurisdiction and venue in such court are otherwise proper. Lawsuits filed by
DYNAMIC against Franchisee may be filed in any of the courts named in this
subparagraph or in any court in which jurisdiction and venue are proper.
(iii) In all lawsuits relating to or arising out of the Agreement,
Franchisee consents and agrees that it may be served with
process outside the State of Georgia in the same manner as
service may be made within the State of Georgia by any person
authorized to make service by the laws of the state,
territory, possession or country in which service is made or
by any duly qualified attorney in such jurisdiction, and
Franchisee hereby waives any defense it may have of
insufficiency of service of process relating to such service.
This method of service shall not be the exclusive method of
service available in such lawsuits and shall be available in
addition to any other method of service allowed by law.
(c) It is the intention of the parties that this Agreement comply with the
provisions and requirements of all applicable laws. This Agreement shall be
deemed to contain and shall be construed so as to contain and be consistent with
all mandatory provisions and requirements of applicable laws, which provisions
and requirements are hereby incorporated herein by reference.
(d) All terms and words used in this Agreement, regardless of the number
and gender in which they are used, are deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context or sense of this Agreement or any paragraph or clause herein may
require, the same as if the words had been fully and properly written in the
number and gender.
(e) This Agreement, the documents incorporated by reference, and the
Schedules annexed, constitute the entire Agreement between the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions with respect to the subject matter
hereof, whether oral or written. Except as provided herein, there are no
conditions, representations, warranties, undertakings, promises, inducements or
agreements, whether direct, indirect, collateral, express or implied, oral or
otherwise, made by DYNAMIC to the Franchisee concerning this Agreement, the
subject matter hereof, the Franchised Business, or any other matter embodied
herein.
(f) This Agreement may not be amended or modified except in writing signed
by the parties hereto.
(g) Should any part of this Agreement for any reason be declared invalid,
that decision shall not affect the validity of any remaining portion, which
remaining portion will remain in force and effect as if this Agreement had been
executed with the invalid portion eliminated.
(h) The provisions of this Agreement where the context or sense of this
Agreement so indicates will survive any termination or cancellation of the
Agreement.
(i) DYNAMIC will not be liable to Franchisee or any other person for its
failure to perform or comply with any of its obligations under this Agreement
where its nonperformance or noncompliance is caused by or due to events or
circumstances beyond its control.
(j) This Agreement will not be binding upon DYNAMIC until it has been fully
executed by the Franchisee and approved by DYNAMIC and fully executed by a duly
authorized officer of DYNAMIC at DYNAMIC's offices in Atlanta, Georgia.
21. ACKNOWLEDGMENTS.
(a) Franchisee understands and acknowledges that the business licensed
under this Agreement involves business risks and that Franchisee's volume,
profit, income and success is primarily dependent upon Franchisee's ability and
efforts as an independent business operator.
(b) Franchisor expressly disclaims the making of, and Franchisee
acknowledges that it has not received from any
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party, any warranty or guaranty, expressed or implied, as to the potential
volume, profit, income or success of the business licensed under this Agreement.
(c) Franchisee acknowledges that because complete and detailed uniformity
under many varying conditions may not be possible or practical, DYNAMIC
specifically reserves the right and privilege, in its sole discretion and as it
may deem in the best interest of all concerned in any specific instance, to vary
standards for any other franchisee based upon the peculiarities of a particular
site or circumstance, density of population, business potential, population of
trade area, existing business practices or any other conditions which DYNAMIC
deems to be of importance to the successful operation of such franchisee=s
business. Franchisee will have no recourse against DYNAMIC on account of any
variation from standard specifications and practices granted to any other
franchisee and will not be entitled to require DYNAMIC to grant Franchisee a
like or similar variation hereunder.
(d) Franchisee acknowledges that no warranty or representation has been
made by DYNAMIC that all DYNAMIC System franchise agreements issued by DYNAMIC
before or after this Agreement do or will contain terms substantially similar to
those contained in this Agreement. Further, Franchisee recognizes and agrees
that DYNAMIC may, in its reasonable business judgment, due to local business
conditions or otherwise, waive or modify comparable provisions of other
franchise agreements granted before or after this Agreement to other DYNAMIC
System franchisees in a nonuniform manner, subject, however, to those provisions
of this Agreement which require DYNAMIC to act toward its franchisees on a
reasonably non-discriminatory basis.
(e) FRANCHISEE ACKNOWLEDGES THAT FRANCHISOR OR ITS AGENT HAS PROVIDED
FRANCHISEE WITH A FRANCHISE OFFERING CIRCULAR NOT LATER THAN THE EARLIER OF THE
FIRST PERSONAL MEETING HELD TO DISCUSS THE SALE OF A FRANCHISE, TEN (10)
BUSINESS DAYS BEFORE THE EXECUTION OF THIS AGREEMENT OR TEN (10) BUSINESS DAYS
BEFORE ANY PAYMENT OR ANY CONSIDERATION. FRANCHISEE FURTHER ACKNOWLEDGES THAT
FRANCHISEE HAS READ SUCH FRANCHISE OFFERING CIRCULAR AND UNDERSTANDS ITS
CONTENT.
(f) FRANCHISEE ACKNOWLEDGES THAT FRANCHISOR HAS PROVIDED FRANCHISEE WITH A
COPY OF THIS AGREEMENT AND ALL RELATED DOCUMENTS, FULLY COMPLETED, FOR AT LEAST
FIVE (5) BUSINESS DAYS PRIOR TO FRANCHISEE'S EXECUTION HEREOF.
IN WITNESS WHEREOF, the parties have entered into this Agreement the day
and year first written above.
FRANCHISEE: DYNAMIC TEMPORARY SERVICES, INC.:
By:
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Title:
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ADDRESS OF FRANCHISEE: ADDRESS OF DYNAMIC:
3535 Piedmont Road, NE
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Atlanta, Georgia 30305
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Attention: President, Franchise Division
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