Key Items to Watch out for in the Seniors Helping Seniors, LLC 2019 FDD
Please consider the following RISK FACTORS before you buy this franchise: 1. THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY ARBITRATION OR LITIGATION IN BERKS COUNTY, PENNSYLVANIA. OUTOF- STATE ARBITRATION OR LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE OR LITIGATE WITH US IN PENNSYLVANIA THAN IN YOUR HOME STATE. 2. THE FRANCHISE AGREEMENT STATES THAT PENNSYLVANIA LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS. 3. THERE ARE UNRELATED ENTITIES IN THE ELDERLY PERSONAL CARE BUSINESS IN THE U.S. WITH THE NAME “SENIORS HELPING SENIORS” OR A VARIATION THEREOF. THESE BUSINESSES COULD AFFECT THE RIGHT TO TRADEMARKS GRANTED TO YOU (SEE ITEM 13 OF THIS DOCUMENT). 4. FRANCHISE OWNERS AND SPOUSES MUST SIGN PERSONAL GUARANTEES MAKING SPOUSES JOINTLY AND SEVERALLY LIABLE FOR ALL OBLIGATIONS OF THE FRANCHISE WHETHER OR NOT THE SPOUSE IS INVOLVED IN THE OPERATION OF THE FRANCHISE BUSINESS AND THIS REQUIREMENT PLACES THE PERSONAL ASSETS OF THE FRANCHISE OWNERS AND THEIR SPOUSES AT RISK. 5. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Item 5: Initial Fees
Franchise Fee You must pay an initial “Franchise Fee” of $40,000 when you sign the Franchise Agreement. The Franchise Fee is paid to us in a lump sum and is nonrefundable. The Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you as set forth in the Franchise Agreement and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees.
Technology Fund You must pay a $5,000 fee when you sign the Franchise Agreement for deposit to the Seniors Helping Seniors Technology Fund. This amount is nonrefundable and is intended to reimburse us for costs that we incur in evaluating and accessing evolving technologies that may be utilized in the ongoing operation of the Franchised Business. If you and we agree that you will purchase four or more additional SENIORS HELPING SENIORS territories, we will reduce the Franchise Fee for these additional territories to $35,000 each. Otherwise, the Franchise Fee is uniform for all franchisees.
Item 8: Restrictions on Sources of Products and Services
Except as indicated below, you are not required to purchase or lease products or services from us or our Affiliate or from suppliers approved by us or under our specifications. Specifications/Approved Suppliers You must furnish and equip the Franchised Business according to our standards and specifications, even if we allow you to operate the Franchised Business from your home. All signs, equipment, and other items, including, but not limited to marketing materials and any and all merchandise with the SHS logo, used in the operation of the Franchised Business must comply with our specifications and quality standards and, if we require, must only be purchased from approved suppliers that we designate. We will provide you, in the Manual or other written or electronic form, a list of specifications for equipment, supplies, and other materials and, if required, a list of designated or approved suppliers for some or all of these items, which may include us or our Affiliate. From time to time we may modify the list. We formulate and modify our specifications and standards for products and services based upon our and our Affiliate’s industry knowledge and our Affiliate’s experience in operating a SENIORS HELPING SENIORS Business since October of 1998. Neither we nor our Non-Profit Affiliate is an approved supplier nor the only approved supplier of any product or service. None of our officers owns an interest in any approved supplies.
Alternate Suppliers You may request to purchase items from an alternate supplier that has not been approved by us. Upon your request, we will furnish you with our current alternate supplier approval criteria. You may then submit to SHS for its prior written approval, a sample of the item or items. The sample must be sent to SHS in a format that permits us to complete our review. As part of our approval process, we may review the proposed supplier’s financial records, business reputation, delivery performance, credit rating and other information. We do not charge for the review. SHS shall notify you of its approval or disapproval thereof within ten (10) days from the date of receipt by SHS of such materials. If SHS does not notify you within ten (10) days, approval shall be deemed to have been given. Approval may be revoked at any time, if SHS becomes aware that 1) the items no longer conform to our standards and requirements or, 2) if the alternate supplier no longer meets our criteria for approval.
Computer Hardware and Software You are required to purchase computer hardware and software that meet the specifications described in the Manual. We currently recommend that you purchase a laptop and word processing software, such as, Microsoft Office. You must purchase QuickBooks account software and a customized scheduling and customer management software system. We do not derive revenue from your purchase of hardware or software.
Answering System and Forwarding Calls You must arrange for an answering service or machine to monitor incoming calls, and you must be able to respond to customer calls during normal business hours (8:00 a.m. to 6:00 p.m.). Your office phone must be capable of forwarding calls to your cell phone if no one is in the office.
Insurance You must purchase and maintain in effect during the term of the Franchise Agreement the type and amount of insurance specified in Section XI of the Franchise Agreement in addition to any other insurance that may be required by applicable law, any lender or lessor. Your insurance policies must name us as an additional insured and/or loss payee. We do not derive revenue as a result of your purchase of insurance.
Miscellaneous We may negotiate group rates, including price terms, for the purchase of equipment and supplies necessary for the operation of the Franchised Business. Other than an agreement with a local vendor for embroidery of SHS logo, there are no such purchase or supply agreements in effect. Neither we nor our Non-Profit Affiliate receive any consideration from this arrangement. We estimate that approximately 10% of your expenditures in establishing your Franchised Business will be for goods and services that must be purchased in accordance with our standards and specifications from an approved supplier. We estimate that approximately 5% of your expenditures on an ongoing basis will be for goods and services that must be purchased in accordance with our standards and specifications from an approved supplier. Neither our Affiliate nor we receive revenue as a result of franchisee purchases, but we may derive revenue from future arrangements with suppliers based on franchisee purchases. We do not provide or withhold material benefits to you (such as renewal rights or the right to open additional territories) based on whether or not you purchase through the sources we designate or approve; however, purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle us, among other things, to terminate the Franchise Agreement. There are no purchasing or distribution cooperatives that you are required to join. The one-time payment of $5,000 to the Seniors Helping Seniors Technology Fund reimburses us for the current and future costs of evaluating and assessing evolving technologies that may be used in the ongoing operation of the Franchised Business. The payment to the Technology Fund does constitute revenue to us. However, it is in no way tied to a franchisee’s obligations to purchase or lease goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate or operating the franchised business either from us, our non-profit affiliate or an approved supplier. There are no obligations to purchase imposed by the Franchise Agreement or by our practices.
Item 10: Financing
We do not offer direct or indirect financing. We do not guarantee any note, lease or other obligations.
Item 12: Territory
You must operate the Franchised Business only from the Approved Location listed in Section V.R. of the Franchise Agreement, which may be your home or a leased facility in a suitably located commercial park or similar area. If the Approved Location has not already been determined when you sign the Franchise Agreement, you and we will agree upon a Designated Area within which you will locate the Franchised Business. Although we may assist you in selecting a location, you are solely responsible for selecting the Approved Location and negotiating the terms of the lease. We will also grant you a Territory (Section I.C.). A Territory will have a specified minimum population of 250,000 people. If you are in compliance with the Franchise Agreement during its term, including meet the Monthly Minimum Gross Sales requirement, we will not establish or operate, or license others to establish or operate, SENIORS HELPING SENIORS Businesses or competing businesses within the Territory.
If you decide to relocate the Franchised Business you must notify us. We will approve relocation as long as it is within the boundaries of the Territory assigned to below. You have no contractual right, whether by option, right of first refusal or similar rights, to acquire additional franchises. You may not accept or solicit orders inside of another Franchisee’s Territory. You are not restricted from accepting orders from consumers outside your territory, and you have the right to use other channels of distribution such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales outside your territory, until such time as we assign territory to a new franchisee. Notwithstanding the forgoing, at no point are you permitted to solicit clients beyond your Territory.
You have an exclusive right to your territory. We have not reserved the right to use other channels of distributions, such as the internet, catalog sales, telemarketing or other direct marketing to make sales within your territory under our principal trademarks or different trademarks.If you fail to meet the requisite performance targets within the Territory as reasonably established by mutual agreement in your business plan (or if you fail to submit a business plan as required under the Franchise Agreement), grounds for default under the Franchise Agreement will exist and we may reduce the size of the Territory or revoke the terms of exclusivity therein.
Item 15: Obligation to Participate in the Actual Operation of the Franchise Business
The Franchised Business must always be under the direct full-time supervision of a Designated Manager, which is you if you are an individual, or is an individual you select. You (or your Designated Manager) must attend and satisfactorily complete our initial training program prior to opening the Franchised Business. You must keep us informed of the identity of your current Designated Manager. If you are a corporation or other business entity and the Franchised Business is under the supervision of a Designated Manager, he or she does not have to be one of your owners. As described in ITEM 14, all shareholders (and members of their immediate families and households), officers, directors, partners, members, managers, executives, employees and staff, and other individuals having access to Confidential Information may be required to sign nondisclosure and noncompetition agreements. We will be a third-party beneficiary with the right to enforce the agreements.
If you are a business entity, anyone who owns an interest in the entity must personally guarantee the performance of all of your obligations under the Franchise Agreement and agree to be personally liable for your breach of the Franchise Agreement by signing the Guaranty and Assumption of Obligations attached to the Franchise Agreement as Exhibit B.
Item 16: RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
You may only use the Approved Location for the operation of the Franchised Business and you must not use, or permit the use of, the premises for any other purpose or activity without our written consent. You must operate the Franchised Business in strict conformity with those methods, standards and specifications in the Manual and as we may require otherwise in writing. You may not deviate from these standards, specifications and procedures without our written consent. You must offer the services and products we specify from time to time, in strict accordance with our standards and specifications, including services such companion care, home assistance, transportation, shopping, homemaking, home assistance and maintenance, personal care, alzheimer’s/dementia care (memory care), transportation, shopping and errands, repair services; medical and home health services including skilled nursing, medication management, health monitoring, wound care, catheter management, injections and blood draws, occupational therapy, and rehabilitation therapy. These services are to be provided by individuals whose life experiences indicate that they will provide them in a loving, giving, caring and compassionate way. You may not sell any services or products that we have not authorized, and you must discontinue offering any services or products that we may, in our sole discretion, disapprove in writing at any time.
We may periodically change required and/or authorized products or services. There are no limits on our right to do so. If we modify the System, you may be required to add or replace equipment, signs and fixtures, and you may have to make improvements or modifications as necessary to maintain uniformity with our current standards and specifications. From time to time, we may allow certain services or products that are not otherwise authorized for general use as a part of the System to be offered locally or regionally based upon such factors as we determine, including test marketing, your qualifications, and regional or local differences.
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