Effective Date05, March 2019
We are Color World Franchise Systems, LLC (called “We,” “Us,” or “Our”). We were formed in Ohio on January 8, 2016. We do business under the “COLOR WORLD” and “COLOR WORLD HOUSEPAINTING” names, marks, and logos. We do not intend to business under any other names. To simplify the language in this Franchise Disclosure Document, “Company,” "we," “us” or “our” means Color World Franchise Systems, LLC, the franchisor. "You," “your” or “Franchisee” means the person who buys a Color World franchise, and includes , and includes owners or partners of a corporation, partnership, or other legal entity that purchases a Color World franchise. If you are a business entity, such as a corporation or limited liability company, all of your owners will sign the Owner's Guaranty, making them personally responsible for all provisions of the Franchise Agreement.
Thomas Hodgson - Director, President, Secretary, and Chief Executive Officer Mr. Hodgson has served as our President and Chief Executive Officer in Powell, Ohio since our inception in January 2016. He has been President and Chief Executive Office for our affiliate Color World Housepainting, Inc. in Powell, Ohio since its inception in 1997. Jon Boston – Operations Manager Mr. Boston has served as our Operations Manager in Powell, Ohio since our inception in January 2016. He has been Operations Manager for our affiliate Color World Housepainting, Inc. in Powell, Ohio since February 2005. Michelle Dubay – Office and Production Manager Ms. Dubay has served as our Office Manager and Production Manager in Powell, Ohio since April 2016. From July 2014 to April 2016, she was employed as a server with The Best Breakfast and Sandwiches in Westerville, Ohio. From August 2013 to July 2014, she worked as a serve for Brio Tuscan Grill in Columbus, Ohio. From February 2012 to March 2013, she was employed as a server for Sunny Street Café in Albany, Ohio. From July 2011 to November 2013, she worked as a valet at The Parking Spot in Columbus, Ohio.
We are the franchisor of the Color World franchise system. We license our franchisees in specified territories to own and to operate franchises under the Color World names and marks. We authorize our franchisees to promote, advertise, and sell quality residential and commercial painting and other related products and services (including power washing, minor carpentry, cleaning and repair services, gutter installation, and holiday lighting), to the public and to use our Method of Operation and our service marks in the operations of the franchisee's business. You will have the right to provide such services within a geographic area specified in the franchise agreement. Our principal office address is 94 Village Pointe Dr., Powell, Ohio 43065. Our telephone number is (614) 588-1180. We have offered franchises since March 2016. We have never offered franchises in any other line of business. We do not operate any businesses of the type being franchised. We produce and sell innovative advertising and sales promotion materials. We may attempt to negotiate group discount rates for the benefit of our franchisees for wholesale paint and related products, supplies, and equipment. We do not have any other business activities. We have no parent or predecessors.
The Initial Franchise Fee is $49,500 for the right to operate your franchise. You will be granted certain rights to operate in a “Franchise Territory” made up of contiguous areas (typically zip codes) consisting of up to approximately 100,000 households. If you purchase more than one Franchise Territory concurrently, the Initial Franchisee is $49,500 for the first Franchise Territory; and a reduced Initial Franchise Fee of $30,000 for your second Franchise Territory; and a reduced Initial Franchise Fee of $20,000 for the third and each other additional Franchise Territory. Additional Franchise Territories are subject to availability and our approval. To be eligible to pay the reduced initial franchise fees for multiple Franchise Territories, you must qualify financially to open multiple franchises and you must pay to us the entire Initial Franchise Fee upfront for each Franchise Territory when you sign the relevant franchise agreement. If you desire a larger Franchise Territory than 100,000 households, or to later add additional territory to your Franchise Territory, you must pay an additional Initial Franchise Fee of $0.50 per household for every household above 100,000, subject to territorial availability and approval. All territory and areas comprising the Franchise Territory must be contiguous and must be approved by us. The number of households in your designated Franchise Territory is determined based upon recent United States census data and estimates and chamber of commerce information, but we will make the final determination. To be eligible to purchase an additional Franchise Territory, whether contiguous to your original Franchise Territory or in a separate market area, you and your affiliates must be fully compliant and in good standing under all agreements with us, you must qualify financially to open an additional franchise, and you must pay to us the entire Initial Franchise Fee for the additional Franchise Territory. If more than 10% of your Gross Sales is derived from approved operations from within a specific location or area that is outside of your Franchise Territory, to continue to operate in that area, you must either purchase an additional franchise and execute a separate franchise agreement for that operation or purchase additional territory to add to your existing Franchise Territory. Simultaneous with the execution of the Franchise Agreement(s), you will pay to us the entire Initial Franchise Fee(s). The Initial Franchise Fee is paid in consideration for our sales expenses, administrative overhead, return on investment, and start-up costs related to the execution of the Franchise Agreement, the opening of the Franchise, and for our lost or deferred opportunity to sell franchises in the Franchise Territory to others. Upon request, you may receive training in your Franchise Territory. You are exclusively responsible to pay for or otherwise reimburse us for all travel, lodging, and living expenses that we or our representatives reasonably incur to conduct such on-site training in your Franchise Territory. These payments or reimbursements for travel expenses are not refundable. We estimate these travel expenses or reimbursements payable to us to range from $500 to $3,000, depending on the distance of your Franchise Territory from our headquarters and the prevailing travel and lodging rates at the time of training. If you do not pass the entire mandatory training course to our satisfaction we may terminate the Franchise Agreement without refunding any of the Initial Franchise Fee or any other amounts paid to us, our affiliate, or others for training or travel reimbursement. You must open the franchise within the earlier of 180 days after the date of the Franchise Agreement or 60 days after successful completion of the initial training program. If this obligation is not fulfilled, we may elect to terminate the Franchise Agreement without refunding any of the Initial Franchise Fee and or other amounts paid to us, our affiliate, or others for training or travel reimbursement. The initial fees are uniform except as described in this Item 5. We intend to raise the initial franchise fee after certain growth levels have been attained. The increased franchise fee and timing have not been determined as of this date. We have not contemplated and do not currently intend to raise the transfer or renewal fees, but reserve the right to do so in the future. 11 COLOR WORLD Franchise Disclosure Document We may offer franchises at a reduced rate to prospective franchisees who in our opinion possess the knowledge and experience to conduct business with minimal assistance from us or who are purchasing multiple franchises. Occasionally, we may grant new franchises to our owners and employees with reduced or no initial fees. To be eligible for reduced or no initial fees, such individuals must have worked for us or our affiliate for at least one year and evidenced a level of competence that demonstrates the ability to operate a franchise with minimal or no initial training or assistance from us. They must also operate in a territory approved or designated by us. The Initial Franchise Fee and the amount paid for the training and travel reimbursement are not refundable in whole or in part under any circumstances other than those listed above.
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 this Item 19 may only be given 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 possible performance at a particular location or under particular circumstances. Financial Performance Representation The following representation relates to the ColorWorld™ outlets that had operations during the 2018 calendar year. The outlets include: our affiliate Color World Housepainting, Inc. which operated for the entire 2018 calendar year in Columbus, Ohio in an area about the size of 2 standard franchise territories; and 3 ColorWorld™ franchise outlets. Our franchisee in Cincinnati, Ohio operated for the entire 2018 calendar year in 2 franchise territories. Our franchisee in Dayton, Ohio operated for the entire 2018 calendar year in 1 franchise territory. Our franchisee in Louisville, Kentucky suspended his operations after obtaining employment and has since been terminated. Thus, information concerning the Louisville, Kentucky franchise is not included in the representation because there were not operations and insufficient data from which to make an accurate representation of performance. Accordingly, the following financial performance representation relates to: (1) our 2 franchisees' operations during the 2018 calendar year; and (2) our affiliate's operations in Columbus, Ohio during the 2018 calendar year. The representation shows tables exhibiting information concerning: close ratios, average job size, average and median number of jobs per month, average and median income per month, percentage EBITDA, annual gross sales, and annual profit & loss statements. The data in the following tables comes from the actual reported historical performance for our 2 operational franchisees in Cincinnati and Dayton, Ohio and our affiliate in Columbus, Ohio during the period from January 1, 2018 to December 31, 2018. Accordingly, each of these outlets or 100% of the outlets attained the stated results. See the notes following each of the tables and the financial performance representation for additional information.