List of Franchisees as of 12/31/2019 | Financial Statements
Fresh Coat is an Ohio corporation that was incorporated on January 1, 2005. Our principal business address is 10700 Montgomery Road, Suite 210, Cincinnati, Ohio, 45242. We do business under our name, F.C. FRANCHISING SYSTEMS, INC., and under the trade name FRESH COAT. Our agents for service of process are listed in Exhibit A. We do not have any parents or predecessors.
President, Director: Tara Riley Ms. Riley has been President of Fresh Coat since December 2014 and has been a member of its Board of Directors since January 1, 2016. Prior to joining Fresh Coat, she was employed with CK Franchising, Inc. in Dayton, Ohio serving as its Vice President of Franchise Operations from August 2011 through December 2014 and as a Large Office Business Coach from February 2010 through August 2011. Senior Vice President of Franchising: Steve Kwon Mr. Kwon has been Vice President of Franchising for Fresh Coat since December 2016, of its affiliate Caring Transitions since April 2017, and of its affiliates Pet Wants, Growth Coach, and TruBlue since November 2017. Mr. Kwon was the owner of SK Franchising Inc., a franchise consulting firm in Irvine, California, from September 3 2014 to December 2016. From February 2011 to September 2014, he was the Executive Vice President of Franchising (U.S./CAN & International) for Mathnasium, LLC in Los Angeles, California. Vice President of Operations: Tom Tucker Mr. Tucker has been Vice President of Operations for Fresh Coat since May 2017. He was Director of Operations for America's Pizza Company in Lafayette, Louisiana from February 2013 through May 2017. From January 2012 through February 2013, Mr. Tucker was Regional Director of Franchising for Reahy Executives International in Phoenix, Arizona. Chief Financial Officer: Joe Grimes Joe has been our Chief Financial Officer for us and our affiliates Growth Coach, Caring Transitions, TruBlue, and Pet Wants since March 10, 2017 and was our Director of Accounting from November 2015 through March 10, 2017. From April 2014 through November 2015, he was Controller for Jack Guttman Inc., dba Bakery Crafts, in West Chester, Ohio. From January 2010 through December 2013, Joe was the Global Product Supply Forecast manager for the Iams Corporation, a division of the Procter & Gamble Company, in Mason, Ohio. Director: Chris Seman Mr. Seman has been a member of the Board of Directors of Fresh Coat and of our affiliates Growth Coach and TruBlue since February 2019. He served as President of our affiliate Caring Transitions from February 2012 through February 2019 and has been a member of its Board of Directors since January 2016. Mr. Seman has been president of Strategic Franchising in Cincinnati, Ohio since March 2019. Director: Dan Murphy Mr. Murphy has been a member of the Board of Directors of Fresh Coat since January 2012. He has also been a member of the Board of Directors of our affiliate, the Growth Coach, since December 2002, was its CEO from January 2011 through November 2017, and its President from January 2013 through January 2014. He has been a member of the Board of Directors of our affiliate TruBlue since May 2011 and of our affiliate Caring Transitions since January 2012. General Counsel, Vice President, Secretary: Jeff Siehl Mr. Siehl has been General Counsel and Secretary of Fresh Coat since September 2007 and Vice President since February 2018. He has been General Counsel and Secretary Fresh Coat's affiliates Growth Coach and Caring Transitions since September 2007, of TruBlue since May 2011, of Pet Wants since August 2015, and has been Vice President of these affiliates since February 2018. Mr. Siehl was General Counsel of H.H. Franchising Systems, Inc. in Cincinnati, Ohio from September 2007 through February 1, 2018. From July 2002 to September 2007, Mr. Siehl practiced law with Squire, Sanders & Dempsey, L.L.P. in Cincinnati, Ohio
Fresh Coat offers franchises to operate painting businesses under the trade name FRESH COAT. We will train you to operate the franchised business. You will offer both interior and exterior painting and wallpapering services to the general public, including both residential and commercial clients, through, among other things, direct mail advertising and through referral sources such as real estate agents. The market for painting services is well developed throughout the United States. Your competition will be other local painting services in the same geographic area, including those that may be franchised by other national competitors.
You must pay an initial franchise fee1 when you sign the franchise agreement. The franchise fee for a territory with a population of between 175,000 and 200,000 is $44,900. If the population of your territory exceeds 200,000, you must pay an additional $500 for each 1,000-population unit (or any portion of a 1,000-population unit) in excess of 200,000. For example, for a territory with a population of 201,135, the total franchise fee would be $45,900 [$44,900 + (2 x $500)]. The initial franchise fee is fully earned and non-refundable upon receipt. You can reserve a specific territory for up to 30 days by paying a $5,000 deposit and sending us a signed Deposit Remittance Form. The deposit is fully earned and non-refundable upon our receipt, in consideration of our reservation and removal from the market of your territory for 30 days, and will be applied toward your initial franchise fee. You must pay an initial Website Fee of $95 to cover the cost and maintenance of website(s) you will use in the operation of the business. During the first 24 months after you purchase your first franchise, you may be eligible for a 10% discount on the then-current initial franchise fee for each additional franchise that you purchase. To be eligible for this discount, you must pay the entire franchise fee at the time you sign the franchise agreement for the initial franchise and for each additional franchise. We may cancel or modify this discount policy at any time. We are a member of the International Franchise Association and participate in the IFA's Veterans Transition Franchise Initiative (“VetFran Program”), which encourages franchise ownership by offering financial incentives to honorably discharged veterans of the U.S. Armed Forces. We offer a $2,000.00 discount on the initial franchise fee to veterans who meet our requirements and those of the VetFran program. You may receive only one discount or referral fee on the purchase of any given franchise. We currently intend to impose each initial franchise fee uniformly except as stated otherwise in this Item 5. We presently offer a rebate program called “The Winners' Circle” for new Fresh Coat owners that meet our qualifications and that achieve certain revenue goals. For qualifying owners, we will rebate $20,000 of the franchise fee they paid if they attain cumulative gross revenues of at least $900,000 during the two-year period after the Commencement Date; we will rebate an additional $10,000 of the franchise fee if they received the first rebate and attain cumulative gross revenues of at least $1,700,000 during the three-year period after the Commencement Date; and we will rebate the remainder of the franchise fee they paid if they received the first two rebates and attain cumulative gross revenues of at least $2,700,000 during the four-year period after the Commencement Date. The “Commencement Date” is the first day of the month following the month in which the training program for new owners is completed. If the owner fails to achieve any one of these revenue goals, then he or she will not be eligible to receive any additional rebate. To be eligible for any rebate, the owner must not be in default under any agreement between us, must be current on all obligations to us, must have timely reported all gross revenues as required by the franchise agreement, must have paid when due all royalties, national branding fees, and other amounts due under the franchise agreement, and must have substantially complied with all other material terms and conditions of each agreement and instrument between us. NOTE: The revenue goals above are not to be construed as projections or estimates of actual or potential earnings, sales, or revenues. We make no representation that you or any other Fresh Coat owner has or will be able to achieve any of the revenue goals required to receive a rebate under this program. We reserve the right to cancel or modify this rebate program at any time, but owners who have already been accepted into The Winners' Circle will be permitted to complete the program. 1 All dollar figures are in U.S. currency. 5 Your franchise agreement does not give you any option, right of first refusal, or similar right to acquire additional franchises, but you may purchase a right of first refusal to purchase an additional franchise territory. The price for a right of first refusal is $3,000, which would be credited toward the initial franchise fee if you exercise the right of first refusal. A right of first refusal would give you the right to purchase a specific territory first if another prospective purchaser shows an interest in purchasing the territory within 1 year after you purchase the right of first refusal. You would have 7 calendar days after notice by Fresh Coat to exercise the right. Fresh Coat must receive the entire balance of the then current initial franchise fee for the territory by the seventh day after you receive the notice. A right of first refusal lasts for 1 year.
We do not offer direct or indirect financing. We do not guarantee your note, lease, or obligation.
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances. Presented below are historic Gross Revenue and Gross Profit figures for franchised Fresh Coat business owners for the one-year period from January 1, 2018 through December 31, 2018. Only data from franchisees who were already open for at least one year before December 31, 2018, who operated their business on a full-time basis in the United States during the entire period, who reported Gross Revenue for all 12 months of the period, and who submitted income statements by March 29, 2019 were included in the table. The information has been extracted from royalty reports and income statements submitted to us by our franchisees. The income statements submitted to us were prepared by the franchisee in most cases, not reviewed or audited by an independent accountant. We have not audited or independently verified any of this information. There were 132 Fresh Coat franchises (each franchise consists of a single franchise territory) in operation as of December 31, 2018, which were owned by 113 franchisees. Of those, 52 franchisees were open for at least one year before that date, operated their business on a full-time basis in the U.S., reported Gross Revenue for all 12 months between January 1, 2018 and December 31, 2018, and submitted income statements by March 29, 2019. 27 For purposes of this Item 19, “Gross Revenue” means the total of all income arising from the operation of the franchised business, whether cash or credit. It is recognized on an accrual basis and regardless of collection, which means that a franchisee's Gross Revenue for any period represents how much a franchisee billed its clients during the period, not how much the franchisee received. Gross Revenue does not include the amount of refunds and discounts made to clients, or the amount of sales or excise taxes that are separately stated and that the franchisee is required to and does collect from clients and pays to the appropriate taxing authority. “Gross Profit” means Gross Revenue minus the cost of direct labor and paint. Neither the Gross Revenue figures nor the Gross Profit figures reflect the costs of sales, other operating expenses, or other costs or expenses that must be deducted from Gross Revenue to obtain your net income or profit. Those expenses include fees you are required to pay us under the terms of your franchise agreement, such as royalties and national branding fees. Your sales and operating expenses will vary depending on many factors, such as the geographic location of your territory, competition from other providers in your market, the effectiveness of your advertising, whether you manage your franchise yourself or hire a general manager, your pricing, the prices you pay for paint and other supplies, employee salaries and benefits (health insurance, retirement plan, etc.), other employment conditions in your market, insurance costs, weather conditions, ability to generate clients, and the necessity, cost and difficulty of obtaining a license to perform all of the services a Fresh Coat franchise offers. You should conduct an independent investigation of the costs and expenses you will incur in operating a Fresh Coat franchise. Franchisees and former franchisees listed in this disclosure document may be one source of this information. We strongly suggest that you consult a financial advisor or accountant for assistance in reviewing the table and in preparing your own financial projections, and for advice about the income and other taxes you will incur in operating a Fresh Coat franchise and the effect of non-cash expenses such as depreciation and amortization on your business. The success of your Fresh Coat franchise will depend largely upon your personal abilities and how you use them, your willingness to engage in personal sales activities (or your ability to hire someone else to), the number of potential customers in your market and their household income levels, and the number of competitors in your market. Some of our franchisees have sold this amount. There is no assurance that you'll do as well. Written substantiation for the financial performance representation will be made available to you upon request. Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Jeffrey D. Siehl, General Counsel/Vice President, 10700 Montgomery Road, Suite 210, Cincinnati, Ohio 45242, (513) 587-4980, the Federal Trade Commission, and the appropriate state regulatory agencies.