Countersign Franchise Agreement Template Made Easy

Countersign franchise agreement template

good afternoon everybody and welcome to ivmf spat net webinars my name is Ellis abdic and I am host programs for stress advisor here at ivmf and I help our ivmf veterans service members and their families with resources and connections to help them start and grow their business ventures or careers I just hope everybody is well and your families and during these tough critical times that we are in and just before we start some ground rules if you're not speaking make sure your microphone is muted and will definitely record a session for you real later viewings and people send out the recorded link to everybody to register for this session later today but the survey link as well so make sure you rate us let us know how he did and what other future webinars you would like to see so before we start I would also like to share in the chat box ivmf has created a resource guide to take care of your business throughout this you know evolving situation of coronavirus covered 19 so definitely take a look if you're struggling your business and definitely reach out if you need any help with it as well so before I pass it to Stefan Meeker to talk about franchise disclosure documents 1 to 23 I will also like to ask us that one to see what his perspective is on current situations and have this day at the old franchising industry in business Stefan out past you make sure your mute your mic and you're good to go can you hear me okay very good well first of all welcome everyone it's always a pleasure and privilege to speak to our exiting military vet so let me start with just my perspective Ellis for a few for a few minutes you know I think if we look at the situation we're in today there's some parallel with past precedent relative to say the Great Depression Black Monday in 1987 when the market and one day went down 22 percent we looked to you know the Gulf War in the Baghdad bombings certainly the 9/11 World Trade Center disaster and I think in each one of those scenarios the only given is is that we overcame it and I think my first takeaway on this is you know whether it's going to take 3 to 6 weeks or 3 to 6 months based on past press and if this is something we'll get through together I firmly believe that I think with respect to predictions I think you're going to see what the quarantines are gonna go widespread you're seeing that mandated by the state governors and then being funneled down at the county and even local jurisdiction level I think you're gonna see that non-essential businesses will be closed and we're seeing that you know we're seeing the restaurants only being able to do drive-thru and fitness clubs and massage parlors mandated being closed yeah I think you know we're seeing this you're gonna see that infections are going to go through the roof as testing resumes and it's going to put a severe strain on on the medical community and then lastly and we're seeing this today massive government bailouts to mitigate damage I think we're very close to a two trillion dollar stimulus package being approved on he wasn't unanimously approved by the Senate last night in in in clearly today the market is really liking what they're seeing because the market is up another thousands of points within franchising here's some predictions I see first of all and this isn't a prediction last week unprecedented 3.3 million people file for unemployment unheard of you know folks have a lot of time now working out of their home to search around I'll tell you I'm getting bombarded by people based on my professional reputation wanting to connect whether they've been laid off or they're just flat-out you know nervous I think what franchises we are seeing in a media move from in-person corporate Discovery days to virtual discovery days using technology funding is dirt cheap we're seeing it loud and clear you're seeing SBA loans the initial fees being laid on retail brick-and-mortar the cost of real estate I believe is going to plummet which as a franchisee in that setting is going to be significant benefit and then last but not least taxes the tax deadline has even been extended so on the franchise fly quite frankly I see a lot of opportunity and I'm in the process of building out my second unit the nom en so with that said that's my perspective from a global macroeconomic standpoint Elvis let's look at the at the slides in and today the purpose of today's presentation is to talk about the franchise disclosure document and in my opinion one of the most if not the most important tools in a franchise investigation procedure you're gonna learn that Fred the process to disseminate the FTD is becoming more and more towards electronic dissemination as opposed to hardcopy environmentally friendly and what I want to do today is I am afraid a multi-unit franchisees of one of the 150 concepts that are represent solo salon studios and express permission to talk to the FDD not as the registered agent but to use it for educational purposes but based on permission from the founder of solo so we'll use that to give concrete examples as we go through the FDD today okay all this is go to the agenda the first thing I'm going to do with y'all is I'll introduce myself in a slide in a second so you can understand my background we'll talk about candidate motivation motivations and I'll give you five of the primary motivations one of which is going to be directly attributable to the vets uh we'll talk about 23 items one of the things you're gonna learn is that there's about 3,000 franchises in the United States and if you can read one FTD you can read all 3,000 they all have the same 23 items they are all written consistently uniformly in protected language of the franchisor so we'll give some specific information around each one of these items will talk about the franchise investigation process it'll but not least I'm proud to have a strategic relationship with with vetnet and I will happily give you my contact information so you know how to reach out to me should you have any further questions okay with that said let's dive into this first of all Who am I on a personal note I'm a dad in a proud husband my wife is the administrator counseling and director of Counseling and Psychological Services for katy isd she is currently working with the executive team to transition online learning 284 thousand students my daughter is a cellist at the Cleveland Institute of Music and currently taking a gap year in Austin Texas working for AmeriCorps to help our a homeless population as a case manager my son is a musician and works in the restaurant industry and he knows what it's like to be all laid off as do many many people in that industry hoping to get back to work soon my educational background comes from the University of Texas I did my bachelor's in management in finance my master's degree in MBA comes at the University of Southern California and trompin Oriole ventures last year I was recognized as a distinguished alumni and our quarterly alumni magazine additionally I have been a professor for the University of Texas Texas A&M the University of Houston in the business schools it's a way for me to give back just as this webinar is now professionally I've had a blessed career I work for for industry leaders in heavy progressive franchising level responsibilities mobil oil that's director jack-in-the-box director TGI friday's international chief financial officer overseeing 150 franchise restaurants in 42 countries and last but not least global vice-president of franchise sales for papa murphy's taking baked pizza the biggest of the world when I resigned from Papa Murphy's I elected to use my entrepreneurial desire in education to become a consultant with industry-leading franchisee I'm proud to say I'm one of franchises top consultants and I have helped many many people over the last eight years execute their respective franchise agreements through the education based approach that I take finally my wife and I are proud multi-unit franchisees of Sola salon Studios which I'll give you some perspective on as we talk to the individual ok all of us let's look at let's look at one more slide with respect to motivations literally on a daily basis I'm connected through candidates in I asked why are we talking with some motivation corporate downsizing last week 3.3 million people are diversification State one of my primary motivations for doing what I did it or maybe legacy leaving a legacy for the children the e2 immigration visa process and last but not least more directly applicable to the military vets change you might you're exiting and you're trying to figure out what your next professional transition is going to be in franchising potentially can be one and one of the things that you're going to learn is that statistically military veterans outperform non military vets and you'll learn that the primary reason that is is that you understand how to forward a standard operating procedure and when you buy into a franchise that's exactly what you're doing you're buying into a proven business model to follow the guidelines in the operational support to maximize the probability is yes I have helped many veterans in my career and proud to do so so the purpose of the day is to talk about the FDD so let's spend the next 20 30 minutes I mean to the FDD and again all of them have the exact same 23 items so what's the first item item one the franchise are in any parent's predecessors and affiliates so in this item you're gonna see a certain key topic the corporate entity tied the principal business address where are they based is it an LLC etc the description of the franchise I'll give you an example in the one we bought as a franchisee you will typically purchase release existing buildings faced ranging from three to nine thousand square feet and convert or remodel the person T space into individual size two lawn suites which are then licensed to independence salon professionals that's what they do that's the description that the market in the competition you know who's our market it's providing services to salon professionals primarily stylist nail techs estheticians and massage therapists the market and the competition regulations you know it'll talk to you about different states and local jurisdictions and then general comments and you'll see that the franchisor will often say we retain the right in our business judgment to award or not award the franchisee regardless of the state of franchise award process so the item one gives a very high-level overview of food franchisor is where they're based what the market and competitive nature is right what does item to do I'm to is the business experience and if you can go to the next slide that'd be great the business experience and food is Seanie ie who's won in this thing what the background is what the current and past job titles are maybe they're time from so as an example here one of the executives been from 2020 again this this FTD is from 2030 so I'm using the one I initially use uh uh but from 2012 to then he served as the executive vice president general counsel prior to that from April 2008 to 2012 he was the president and owner of a consulting firm in Boston so the business experience item 2 is going to highlight who the executives are fortunately that run the franchisor okay what's item 3 litigation important under federal franchising law if there is litigation this is where I would be disclosed um how much litigation well ideally none but again considering the maturity of the franchisor understanding that the franchisee is the more mature it is the more apt to can have to have a minimal amount of litigation now if in fact under the current the FDD there is no litigation you might see some type of urgent it says no litigation information is required to be disclosed in this item if you receive an FTD and if you receive a mound of litigation you want to pay careful attention to that because you know part of the the business of franchising is relationship between the franchisee and the franchisor so in an ideal situation there's no existing litigation of understanding the more mature franchisor can be the more after can be the key is is understanding it okay item for bankruptcy if again if there was bankruptcy this is where it would be disclosed if none was required to be disclosed you might see something such as no bankruptcy informant is required to be disclosed in this item now if one of the corporate executives had a past bankruptcy this is in fact where it would be disclosed all right now let's get into the cost side of the business items 5 6 & 7 so first of all the initial the initial fee starting with the franchise fee for both the single and multi unit and what you're gonna see is that if you lined all the franchisee this glue documents doubt that is a general rule franchisors would incent multi-unit behavior by having the single unit fee at one price and then a probable discount on the multi-unit fee on a lower price if there are other fees such as a national leasing program or site selection assist me software rollout this is additionally where you would see that in in franchise fees will differ based on the franchisor okay what about item six tip will typically be in a tabular format the table will cover key things such as what's the type of fee what the amount is what the due day is it may be if there are any remarks associated what might be some examples of what will be in other fees items such as raw national marketing fund initial training transfer renewal technology fees is a general rule again will vary based on who the franchisor is you know in our case it it typically royalty is the first one and in our case it shows a percent based on gross revenue with the minimal amount per month it says when it's due the tenth of each month and then remarks its required of all franchisees so in each case the other fees that the franchisor would charge would be laid out in a table format with explanation basic the one of the line item by item 7 the estimated initial investment again in a table format what can you expect to see the type of expenditure amount from the low to high range with the payment method and when it was due the total itemized summary at the bottom with explanation that sort of certain expenses with additionally footnoted detailed explanations so as a rule of thumb what you'll see in the last table line item is the total in with the retail brick-and-mortar business you were more I have to see a greater range of low to high why driven by the square footage of the business conversely with a service based business that might be home-based you're liable to see entire variants because you don't have those incremental costs but again the item five to seven are a key to understanding the cost structure of the franchise that you're investigating right now let's talk about the item the item a which is restrictions on the sources of products and services uh this is where approved suppliers would be defined if there's any exclusivity with respect to suppliers in additionally if there were insurance in computer software requirements in our item eight it says you must strictly follow specifications as set forth in the operations manual provided to you or within other written materials and in our particular case we had in 2013 two specific exclusive pliers that we were required to utilize so in this case if you're gonna be obligated to use someone this is where it would be found in the IMA what about the item nine the franchisee of obligation so what does this mean when you sign the franchise agreement what are you legally obligated under the contractual terms of the franchise agreement to do so what you're gonna see if it's a table format in key columns are going to talk about the obligation the selects the section and the franchise agreement where it's found the section and the multi-unit development agreement where it's down and then the item number in the disclosure where it's found so some of the topics that you might see if it's retail brick-and-mortar site selection pre-opening opening fees insurance advertisement transfer guarantee so let me give you an example for Mars so the first obligation site selection acquisition where is it specifically discussed in the franchise agreement in sections 8.0 to and 10th we know - in the meat in the muta words it's bound in section 3 specifically in the franchise disclosure document in item 11 so as a frame as a prospective franchisee if you want to focus in on the specific language relative to topic such as site selection pre-open etc this is where you would find and locate where the language would be in the franchise agreement and in the FDD what about the item 10 financing do does the franchisor provide indirect in-house direct funding or if not do they possibly have a strategic relationship with with a third party funding partner if they do not offer any else fun funny you might see something like this we do not offer direct or indirect funding as a consultant with France we have four national funding partners that we use so in the situation where the funding the franchisor might not offer funding assistance that can come in can come into play I always encourage candidates to evaluate the in-house funding that a franchisor might have relative to rollover or third-party or SBA funding to where they can maximize their individual funding strategy all right what about the I am 11 now my take on the item 11 is franchisor assistance okay what does the franchisor do to earn the franchise fee that you paid them alright some of the things that you're going to see in this you're going to be pre opening obligations and training the development schedule for opening marketing programs computer systems and proprietary software so one of the things that we do is at within 60 days of signing the franchise agreement we have to attend two days of training at corporate headquarters in in that training certain things such as orientation and overview site selection and construction marketing and promotion studio licensing and documentation operating and back office systems would all be covered in the course of the to day regimen the development schedule for opening with retail brick-and-mortar as a general rule of thumb might be one unit a year could be sick one every six months can be one every eighteen months completely dependent upon the franchisor but this is where you want to understand when you pay the franchise fee what is the franchisor doing to maximize the potential of success okay what about territory how is it defined first of all is it exclusive or protected is there a trade area radius differential you know and I'll give you an example of retail and what about for the right for the corporate to operate their own individual units adjacent in our particular case you will receive an exclusive protected territory within a 2-mile trade area radius now if it's within a more dense central business district the protected area would be limited to a one-mile trade area radius so this is where you're gonna want to understand if it's rip retail brick-and-mortar as a general rule what's the trade area radius can be and if it's non retail breaking more such as service based home-based or light industrial sweep how is it going to be defined is it going to be defined based on maybe continuous zip codes household income population etc very key item to make sure that you understand about the item per team if in fact the franchise are had a trademark this is where it would be listed they would show the mark and registration number the physical date when it was registered in the principal or supplemental register of the United States Patent and Trademark Office all right what about item 14 pad as copyright and provide Terry information uh first of all would there be any pending patent applications the flying second confidential information cannot be revealed before after the franchise agreement is initial renewed or expired and this is where a confidentially confidentiality or non-compete agreement would specifically be addressed what about the item 15 it important when you sign the franchise agreement what is your obligation to participate in the actual operation of the franchise business is there a non-compete in if you have a 20 more percent our partner interest they might be required additionally on a personal guarantee now is a general rule of thumb there's going to be two different types of business models here what is going to be the hands on full-time you're required to participant in business on a daily basis ie you might not be able to have a corporate job conversing the other side of the fence might need a semi absent part-time manager on business model to where you delegate the operations to a manager who oversees the daily operations who would be required to attend training and you simply manage the manager right what about item 16 restrictions on what you may or may not sell this is where specifically designated suppliers would be to find a more corporate could change products and services upon what is deemed reasonable notice with respect to the item 17 renewal termination termination transfer and dispute resolution elements if we can go to the next slide that'd be awesome this is gonna be again the item 17 again like I'm table format so what are some of the key columns the provision section and the franchise agreement the section where it's gonna be in the summary for it um some of the examples here that might be what is the link to the franchise term what is the renewal specific wait what is the requirements and the termination and transfer pieces so let me give you a few examples from mine ah table a link to franchise term word as it found in the franchise agreement section three what is the summary for the franchise agreement ten years renewal or extension if you are in good standing you for additional terms of ten years each what if I want to transfer the agreement this would be found in section fourteen and would specifically include the transfer of the contractor assets oh so I am seventeen lays out different topics that are important provisions of the franchise agreement and it guides you to the specific language of where they can be found in the franchise agreement what about item 18 public figures pure and simply if there are public figures this is where this would be stated all right what about the item 19 highly important few key points here franchisors are under no legal obligation to make a financial performance representation on sales earnings and expenses first point second point registered franchise sales agent can only discussed what is included in a financial performance representation so the franchisor does not make any financial performance representation then that registered agent cannot talk to anything with respect to revenue or expense if they make a representation revelat of to revenue they can speak to it on a general level finally they must be realistic and they can help to model assumptions so key key points here again the majority of franchises that I represent do make financial performance representations which help make it a bit easier to make assumptions when in fact in the modeling process relative to expected earnings or return on assets or even I cetera a chichi point but again keep in mind Eagle II they're not obligated to another thing typically you'll see something involved with respect to this language some outlets have earned this amount your individual results may differ there is no assurance you'll earn as much a franchisor cannot guarantee financial performance so they can't guarantee you a certain even AA percentage or net income this your assumptions come through a combination of financial performance representations that have been made in an in addition to validating with its existing franchisees key questions that you asked all right what about the item 20 Alex and franchisee information well first of all you're gonna see five tables they're going to talk about the system-wide summary franchise versus affiliate owned equals total locations then they're going to talk about transfers then the talk about franchise locations and that's typically broken out by state in where they'll talk about outlets at the beginning of the year versus the ending of the year how many opened how many terminations non-renewals reacquired by the franchisor and how many might have ceased operations within that given F the year ah the company owned offices where they are how many there are and then in projected openings which is typically done by state ah additionally who are the franchisees and in our particular case it lists their owner's name it lists the physical address the state and the phone number sometimes it might list the email address and then another section is the branch agreements that have been signed but where the outlets are not yet been open so there's a wealth of information in the item 20 relative to specific franchisee information all right what about the item 21 of financial statements this is where the balance sheet the statement of operations owner's equity cash flow would be found 3 years of audited financial statements our requires most franchisors create a new business entity when they begin franchising and what's happened is the franchise the Federal Trade Commission has developed a phase-in rule that allows a start-up franchisor to provide an unordered a balance sheet in the first year of franchising and then an audited one in the second year going forward and note this is on a stations for on a state specific level as some states have an adopted this rule yet all right what do I look into the contract well when you get to the point that both parties make a mutual decision to move forward is when the franchise agreement is produced the franchise agreement is an actual exhibit item under the item 22 so the F in the franchise agreement is in the actual FTD what are some other things that are in there the addendum may be the electronic payment authorization the guaranty the general release so different contracts are listed under exhibit exhibit letters and attached honors and then last but not least the receipt when the franchisor in the item 23 sends the FTD out so obvious we go to the next slide they're gonna ask you to document receipt and if it's sent the a DocuSign you simply document that you received it on the date it was received this is simply part of federal franchising law legally a candidate cannot execute a franchise agreement until they have had a minimum of 14 days to review the agreement to make an educated based decision as a general rule of thumb my run rate is about 62 from start to finish before an agreement is funded the the protective rule of 14 day minimum is is to protect the candidate and again when they ask you to sign the receipt this is not saying you're buying the franchise the day they send the FDD it's simply acknowledging that you have see the FDD okay as I stated earlier the FT the receipt of the FTD is one of the most important pieces of the franchise investigation procedure document so what is the frame as part of this so when a can are connected to me it starts with the introductory call well we talked about the motivations and the end the transferrable here with the with the vent is the transition then leads to a completely questionnaire and then the most important pieces of consultation where we dive into the specifics of what that candidate believes which produces the model which identifies the key characteristics which is what we use to identify the condoms once those concepts are introduced that's when we set a weekly recurring call all right what does that look like once those concepts are introduced and Elvis if I go to the next slide that would be great I use a football field analogy I'm a Texas long-arm so I use the analogy the day that I introduced the concepts you're in the goal you're in the end zone to make an educated buying decision to execute franchise agreements you got to go the length of the football field so what's at 50 the first 50 yards about what some stage it's going to be the dissemination of the FDD which is the purpose of today's call it will also include a functional breakdown of unit economics marketing operations so by the time you get to the 50-yard line you should have a sound baseline of the franchisor and be in a position to asked intelligent questions to the franchisees who you'll validate with now you're marching toward the other goal line so validations key how many franchisees do you speak with I spoke with four in what I learned was a range of performance flying a range of which for me was critical because I learned what the top performing guy did versus what one of the other performers did did not do and for me that was very helpful as I launched my business during this time you're working on territory definition working on your funding strategy because the last step before franchise agreements are awarded our Discovery Day this would he go to the corporate headquarters now today with was Cove in 19 virtually so what's happening is the stage in the game you should be visualizing yourself enjoying and being successful in the business the output of a discovery day is mutual decision to move forward or not I don't want to candidate to go to discovery ka unless they're absolutely visualizing themselves successful as a general rule the following business day after discovery day is fun there will be a formal decision call at which time if both parties want to move forward franchise agreements would officially be awarded as a general rule that some statistically about 90% of people execute franchise agreements as individuals up front and they might assign the franchise agreement over to a create an entity after the fact be it an LLC or maybe a C Corp as example ok what's the last slide last but not least if anybody has any specific questions for me that's my cell phone number text me that's my email address if you eat tell me and I don't you don't hear from me by the end of a business day text me cuz you probably got spammed but my strategic relationship with Batman is to help guide our vets in whatever capacity I can so Elvis with that said I know earlier when we talked I know you had already some questions that were emailed into you prior to this by people and my guess is you've had some other ones ok let me just start with turn it back to you let's have you ask some questions Thank You Stefan for a great presentation definitely let's sensor jason has a question and also I'm gonna allow participants to actually a mute themself and ask questions as well so let me enable death session right now guys have it so Jason's question is how do you break into markets that are currently locked out but their original franchisees for example it would be successful in an area but can buy or build because there are agreements already in place that's an excellent question ok so first of all Jason one of the ways one of the answers to that question comes in the item 12 where territory is defined okay and that's going to depend upon if that territory is exclusive or protected etc with that said let's just use an example let's say that it's a market whereas a retail brick-and-mortar concept and let's say that that market is able to support ten stores say that those ten stores are bought all ten licenses have been bought by let's say three franchisees maybe two of them did a three-unit deal and the other one did a four-unit deal and in this example let's assume that their development schedule is tied to opening one a year to answer your question if the three franchisees in this example are under good contractual standing relative to the franchise agreement in the development schedule you're locked out ie if they if each one of them is opening a store within one year based on the development schedule you're blocked out now in this example if one or two of opens the first unit or for whatever reasons is okay we're not gonna open our second or third unit or if they fall behind on their development schedule and if they're not working with the franchisor under the contractual terms of the agreement in this example that territory can be taken back and released for sale to a new external candidate or an existing internal candidate that would be how that process would work and that's it that's a great question okay Ellis Thank You Stefan if you have any more questions you can definitely unmute your microphone and ask Stefan but I do have a question for Stefan as well Jimmy oh I don't know 23 when you mentioned about the receipts if somebody if Silas is buying franchise and I sign the receipt does that mean I have to buy a franchise or not okay so this was a question that was emailed prior so I understood as I stipulated in the in the item 23 when they're asking you to sign the receipt it's nothing more than an acknowledgement that the FTD is received and that was part of the compliance function of federal franchising law documenting holding in a minimum of 14 days got what you got next thank you we also had a question about a franchising fees - are they all the same or the different franchisors charge it differently that's a great question if you've lined all three thousand franchise disclosure documents what you'd see is the answer is no they will vary dramatically within our inventory I believe the lowest franchise fee it for a single twenty five thousand and the highest is a hundred thousand so the franchise fee is one of the key components of the cost structure but if your question yes they will vary based upon a franchisee that's a good question and what about the royalty fees are those the same or that is it different from each franchisor same thing they will vary it might be based on a percentage of gross sales it might be based on net sales it might be a fixed rate in our inventory it goes from zero in the first six months zero dollars too low double digits percent of course revenue another good question we had a question above what is negotiable in our franchising agreements that's a great question is this is a general comment but the more mature that a franchisor is the more or less apt they are to negotiate anything in a franchise agreement in my opinion on that is is when they begin to make exceptions for individuals they can open themselves up to legal liability so again as the more mature of franchisor is the less out there and then ago she ate anything now the more pioneer a franchisor is the more flexible you might be able to find with maybe respect to how they defined territory or as one example maybe the development schedule is another example you know in art with respect to our inventory do not expect them to negotiate royalties or franchise fees but you might be able to get somewhat of a deal on a development schedule or on territory allocation it's examples thank you also have another question the best way to make your financial assumptions that's a great question so it's a combination of if the franchisor makes a financial performance raise representation in the item 19 one way in the second way is combining that with validation so in the event that they do not make a financial performance representation in the item 19 then the only way that you can make assumptions is by talking with the franchisees and asking them specific questions so the ideal scenario is to have the financial performance representation in the FDD and overlay that with respect to talking with franchisees again the franchisor can't guarantee financial performance they can't do that so it's incumbent upon a candidate to utilize the tools available at them in speaking with both franchisees and item 19 disclosures that's a good question thank you sir you have a question from Jason a he's asking you know how do you find out who your market in an area that you will not want to open your own franchise I'm sorry you broke up can you ask that one more time um you find out who owns the current market in the area where you want to open up your franchise business excellent question it depends first of all if they've been in there more than one year Jason it would be found in the item 20 where the given city and state and owner and their address and contact information would be listed in the event that it was a new franchisee who had recently acquired that territory and they would not be in the current year FDD the franchisor would choose could choose whether or not to relay that information or quite frankly you could simply run a google search so if the answer is they've been in there more than one year that information would be found in the item 20 under franchisee a specific contact information good question Thank You Stefan I have another question what happens if I cannot get my retail franchise open by my required time according to the development schedule that's another good question so as a general rule of thumb the franchisor is looking for good communication first of all so if it's retail brick-and-mortar after you execute your agreement you have to go through training and then you have to work on site acquisition which goes to a letter of intent which goes to a lease phase which altima Lee goes to the build-out in ultimately opening let's assume that the development schedule is one a year in our particular case it took us two years to get our first unit open we were technically in defaulter of our development agreement but why because the landlord that we used went through a senior level management change that for a year they set idle on our letter of intent so the reality of that was was we stayed in good contact with the franchisee updated weekly basis as to what we're moving forward to the development schedule so as a general rule of thumb if you're communicating well with them they tend to work with you has been my personal experience if the franchisors do not for any funding is there any other options for you to secure money or to get loans yeah yeah I think like we talked about when you know I'm talking about macroeconomic conditions now the SBA is they're waiving fees upfront additionally I would always encourage someone to talk to their local bank where they might have a long term relationship this is we have four national one that's what they specialize in funding tractors the answer is there's multiple avenues for that it's a general rule of thumb the higher a person's credit score is the better you know if somebody's got an 800 credit score to dating about what they want to you know additionally the lender is going to be looking for capacity to repay collateral etc good question justify I forgot which item hold it but I meant you know like I figured that if you're going to sign in to be like a full-time manager new franchisee or you know substantial like overseeing you manager like in terms of in regards to training like if you were just overseeing the franchise manager manager you said it has to go to train but what about you as a owner overseeing that oversee it's gonna depend on the franchisor in the specific language in that item number as a best practice even many of the deals that I have were semi absent part-time scalable businesses as a best practice I always strongly encourage the franchisee to attend training with their designated manager I might be with me I don't have a minute I run it myself now it's a semi absent business but the reality is is I invested a significant amount of money in ultimately that business failed I had to look at myself in the mirror and take ownership so whenever anybody is investing their own money I even if it's in my absence I strongly encourage them to attend training so they have a good foundation for that daily operation of the business thank you and what happens to let's say an foreseeing accident or something happens to you as an owner or you die or you get badly hurt like what happens yeah that's it and why in life happens right it's answer your question the specific language on that would be found in the item 7 tene under under the transfer ii specifically would be listed under dat and it would give an amount of time for that franchise agreement to be assigned to the next party that and that does happen of course thank you and we had another question asking about if branch Iser will provide modeling tool to help with the financial assumptions it depends it completely depends on the franchisor if they do it helps your job a little bit easier helps make your job a little bit easier but under no circumstances if they do provide a tool can they provide input relative to specific numbers such as the revenue line or maybe the cost of goods sold line they simply have to provide a template that enables you to make your assumptions which lead to the outputs which can be no return on assets are alike cetera breakeven etc it's good question thank you a feast when am i required Fay the franchising fee and do I officially become a franchisee that's good question so when when you were awarded the franchise agreement when you sign the franchise agreement they would the franchisor would initiate the wire transfer information typically these days people wire transfer the franchise fee if you FedEx the cashier's check that's another way to get it there um when the agreement is signed and a franchise fee is received in full is when the franchise agreement is countersigned by the franchisor and when you have become an official franchisee I have a last question from our audience here is about agreements is the franchising disclosure item agreement is the same as a final franchising agreement as a general would yes so the language of the panchalas agreement in the FDD would be specific to the agreement you'd ultimately receive could there be a difference relative to an addendum or a modification based on an event to development schedule or maybe territory realignment or whatever it depends possible so in that example if there was that would be in an addendum or an exhibit attached to the actual franchise agreement thank - and that's all the question in box and I give a few seconds to Jason see if he has any last questions but besides that I just want to thank everybody out there and I just want to remind you to stay safe and if you are struggling or you would like to know a little more more about resources into taking care of your business in this epidemic situation crisis please visit our website and taking care of your business and resources and a covered 19 and also I just want to remind you that this webinar is being recorded and everybody registered will receive a recorded link and you can only reach out to me or Stefan for any more information or questions that you might have I would also like to remind you that our next webinar is on April 9th and we can I have guests some of the employers Amazon Web Services instant group Jacobs and West Bank so definitely join us for him there spotlight on 9th and also IBM F is working with a Small Business Administration office to create a couple of webinar series on actually doing business in this crisis situation that we have right now with the cover 19 so stay tuned as we advertise beside that Thank You Stefan so much and it's been pleasure thank you god bless everybody