Franchise Registration Renewal Questionnaire

FRANCHISE REGISTRATION RENEWAL QUESTIONNAIRE

Franchisor:

Name of Person Responsible for Questionnaire: Signature:

Phone No.: Fax No.:

Date Completed:

Since our last Offering Circular, we have amended, or we plan to amend, our Franchise Agreement.

Yes    No

INSTRUCTIONS

As you are aware, federal law and the law of franchise registration states require you to provide an Offering Circular to prospective franchisees no later than the first meeting with them to discuss the franchise and at least 10 business days before either entering into a franchise agreement (or any other agreement) with them or accepting any payment from them. Your Offering Circular must be updated each year. We have prepared this Questionnaire to obtain from you new information that should be incorporated into your new Offering Circular.

This questionnaire tracks the organization of an Offering Circular, which organizes information into 23 categories called Items (the first 22 of which are covered herein). All references to “you” or “your” in the Questionnaire are to the franchisor company.

For all negative answers, please write “No” or “N/A” (not applicable) in the space below the question. For all affirmative answers to questions, please provide an explanation. If you have questions about the information to provide, please do not hesitate to contact us. You will find attached following each Item of this Questionnaire your most recent disclosure for that Item. Please feel free to mark-up your old disclosure rather than to indicate any changes on the Questionnaire itself. You may also attach additional sheets. Where a question requires a narrative response, please simply answer the question as completely as possible, but do not worry about your wording. Wording everything appropriately is part of our job.

IMPORTANT - IT IS VERY IMPORTANT THAT YOU READ THE QUESTIONS FOR EACH ITEM CAREFULLY, EVEN IF YOU THINK YOU WILL HAVE NO CHANGES FOR THAT ITEM, AND IT IS VERY IMPORTANT THAT FOR EACH ITEM YOU MARK THE APPROPRIATE BOX APPEARING AT THE BEGINNING OF EACH AS FOLLOWS:

We have no changes.

We have changes as indicated below or attached.

ITEM 1 - THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES

1. Name, address, etc. of franchisor. Have you changed any of the following: Name, Name(s) under which you do business, Principal place of business, State of incorporation, or Business form of organization (corporation, partnership, etc.)?

2. New Affiliates. Have you added any affiliate(s) or has any previous affiliate(s) ceased to be affiliated with you? If adding an affiliate, please include the address of its principal place of business.

3. Affiliate(s)' addresses. Has the name or address of the principal place of business of any of your affiliates changed?

4. Predecessor(s)' addresses. Has the name or address of the principal place of business of any of your predecessors changed?

5. Agent. Have you changed your agent for service of process in any state(s)?

6. Operations. Has there been any change in whether you operate the types of businesses that you franchise?

7. Other business activities. Has there been any change in whether you engage in business activities other than franchising and, if applicable, other than operating businesses of the type you franchise?

8. Business of franchisees. Has there been any change in the type of business to be conducted by your franchisees?

9. Market conditions. Has there been any significant change in the market for the type of business you franchise?

10. Regulation of industry. Has there been any significant change in the basic regulations that are specific to the industry of the type of business you are franchising?

11. Other franchising. Has there been any change in whether you or your affiliates or predecessors offer franchises in other lines of business?

ITEM 2 - BUSINESS EXPERIENCE

1. Has there been any change in the identities or positions of people occupying any of the following positions: Franchise salespeople or brokers, Chief Executive or Operating Officer(s), Chief Financial Officer, President, Officer(s) responsible for franchise marketing, Officer(s) responsible for training, or Officer(s) responsible for franchise operations?

2. Attached is a copy of your most recent Sales Agent Disclosure Statement. Please indicate any changes in the biographical information.

ITEM 3 - LITIGATION

1. Legal proceedings. Have you or any of the following been involved in or subject to any material civil litigation, criminal proceedings, administrative actions, arbitration proceedings, currently effective injunctive relief or restrictive orders, or any other material complaint or legal proceeding?

2. Criminal convictions of new officers and salespeople. Has anyone to be added to Item 2 in the previous 10 years been convicted of a felony, pleaded no contest to a felony charge, or held liable in a civil action for specified violations?

ITEM 4 - BANKRUPTCY

1. Bankruptcy. Have you or any affiliate, predecessor, officer, or general partner had any bankruptcy-related filing, discharge, or related event in the past year or in the last 10 years for new officers?

ITEM 5 - INITIAL FRANCHISE FEE

1. Initial fee. Has your initial franchise fee changed?

2. Payment terms. Have the terms under which franchisees pay the initial franchise fee changed?

3. Refunds. Have the terms under which a franchise can obtain a refund of the initial fee changed?

ITEM 6 - OTHER FEES

1. Other fees. Has there been any change in any of the fees or other payments that franchisees must pay to you or your affiliates?

ITEM 7 - INITIAL INVESTMENT

1. Categories and amounts of expenditures. Has there been any changes in the categories or amounts of expenditures covering franchisees initial investment?

2. Payment terms. Has there been any change in to whom payments are made or the payment and refund terms for any categories of expenditures?

3. Location of outlets. Has there been any change in the probable location of your franchised outlets?

ITEM 8 - RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

1. Required purchases. Has there been any change in whether franchisees are required to acquire from you or your affiliates certain goods or services?

2. Approved suppliers. Has there been any change in whether your franchisees must obtain certain goods or services only from suppliers you approve?

3. Designating approved suppliers. Has there been any change in whether franchisees can nominate new suppliers, the fees charged, the criteria used, or the decision time?

4. Benefits from approved suppliers. Has there been any change in whether you receive benefits from approved suppliers or grant franchisees benefits for approved purchases?

5. Specifications. Has there been any change in whether you impose specifications on franchisees' purchases?

6. Warranty or Customer Service Requirements. Have there been any changes in your franchisees' warranty or customer service requirements?

7. Volume purchasing. Has there been any change in whether you negotiate purchase arrangements with suppliers for the benefit of your franchises?

9. Local advertising. Has there been any change in whether franchisees are required to spend certain amounts on local advertising, the amount required to be spent or whether you are required to approve their advertising?

ITEM 9 - FRANCHISEE'S OBLIGATIONS

1. Have there been any changes with respect to franchisees' obligations concerning insurance, indemnification, inspections/audits?

ITEM 10 - FINANCING

1. Financing. Has there been any change in whether you or your affiliates or agents directly or indirectly offer financing to franchisees?

ITEM 11 - FRANCHISOR'S OBLIGATIONS

1. Pre-opening assistance. Have the obligations you have to franchisees before they open for business changed?

2. Operating assistance. Have the obligations you have to franchisees during their operations changed?

3. Advertising funds and program. Has there been any change in advertising fund contributions, media, administration, or surpluses?

4. Advertising council. Has there been any change in whether you maintain an advertising council with franchisee members?

5. Advertising cooperatives. Has there been any change in whether you require franchisees to participate in local or regional advertising cooperatives?

6. Advertising fund expenditures. Use of Advertising Fund in Most Recent Fiscal Year:

Production Media Placement Administration Other

Total

9. Local advertising. Has there been any change in whether franchisees are required to spend certain amounts on local advertising?

10. Cash register or computer systems. Has there been any change in whether you require franchisees to buy or use electronic cash registers or computer systems?

11. Confidential Operating Manual. If there has been any change in the table of contents or total number of pages, please indicate below.

Has changed ( attached; to follow)

Has not changed

Total number of pages:

12. Site selection. Has there been any change in whether you must select or approve the franchisees' sites, the factors you consider in approving sites, or the consequences of not being able to agree upon a site?

13. Time to opening. Has there been any change in the typical length of time between signing and opening or the factors affecting the length?

14. Training program. Has there been any change in the training program location, duration, frequency, instructors, charges, requirements, or courses?

ITEM 12 - TERRITORY

1. Granted territory. Has there been any change in whether you grant franchisees an exclusive territory and, if so, in the size or definitions of their territories?

2. Restrictions on competing outlets. Has there been any change in restrictions on you against operating units or granting franchises in a franchisee's granted territory?

3. Inside-territory sales. Has there been any change in the restrictions on you soliciting or accepting orders inside a franchisee's defined territory?

4. Outside-territory sales. Has there been any change in restrictions on whether franchisees may solicit or accept orders outside of their defined territories?

5. Relocation. Has there been any change in the conditions under which you will approve relocation of franchisee's business?

6. First refusal rights. Has there been any change in whether franchisees have rights of first refusal to acquire additional franchises within defined territories?

7. Alternative distribution channels. Has there been any change in whether you or your affiliates may establish other franchises or company-owned outlets or other channels of distribution under a different trademark?

8. Minimum sales requirements. Has there been any change in whether you impose minimum sales requirements or other conditions for franchisees to keep their territorial rights or avoid default?

9. Modification of territory. Has there been any change in whether, or the conditions under which, you can modify a franchisee's territorial rights?

ITEM 13 - TRADEMARKS

1. New trademarks. Have you added any new principal trademarks or ceased to use prior disclosed trademarks or has there been any change in the applications or registration status of any of your trademarks?

2. Trademark litigation. Since last year's Offering Circular, have there been any determinations of the Patent and Trademark Office concerning validity, state trademark actions, or infringement/opposition/cancellation actions?

3. Trademark agreements. Has there been any change in currently effective agreements that significantly limit your rights to use or license any trademarks used by your franchisees?

4. Franchisees’ enforcement obligations. Has there been any change in franchisees’ obligations to notify you of possible infringements and assist in defending them?

5. Superior rights or infringing uses of others. Has there been any change in whether you have become aware of superior prior rights or infringing uses affecting a franchisee's use of your trademarks?

ITEM 14 - PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

1. New Patents and Copyrights. Has there been any change in any patent or copyright registrations or application/registration status?

2. Patent or copyright litigation. Has the Patent and Trademark Office made any determination with respect to validity or has any party instituted any actions challenging validity?

3. Patent and copyright agreements. Has there been any change in whether you are a party to any agreements that limit your rights to use any patents or copyrights that franchisees will also use?

4. Franchisees' obligations. Has there been any change in franchisees' obligations to notify you of infringing uses and to assist you in defending them?

5. Infringing uses. Has there been any change in whether you are aware of any infringing uses that might materially affect a franchisee's use of your patents or copyrights?

6. Trade secrets. Has there been any significant change in the type of proprietary information and trade secrets that you communicate to franchisees?

ITEM 15 - OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF FRANCHISE BUSINESS

1. Franchisee's participation obligations. Has there been any change in your agreements or practice concerning the extent of franchisee participation?

2. Managers. Has there been any change in manager approval, training, equity interest, or restrictions placed on managers?

ITEM 16 - RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

1. Restrictions on franchisee’s sales. Has there been any change in restrictions on what franchisees may sell or obligations that they sell only goods and services supplied or approved by you?

2. Mandatory products and services. Has there been any change in whether franchisees are obligated to sell all goods and/or services that you designate?

ITEM 17 - RENEWAL, TRANSFER, TERMINATION AND DISPUTE RESOLUTION

1. If there are any changes in your franchise agreement with respect to any of the following, please indicate and explain:

Renewals

Events of default

Your option to buy the franchise

Governing law

Dispute settlement

Consequences of termination

Non-compete covenants

ITEM 18 - PUBLIC FIGURES

1. Public Figures. Has there been any change in whether you compensate or give any benefits to any public figures who appear in your franchise name or symbol or who endorse or recommend your franchise?

ITEM 19 - EARNINGS CLAIMS

1. Has there been any change in whether you will make earnings claims in connection with offers and sales of your franchises?

ITEM 20 - LIST OF OUTLETS

Please fill in the chart below for each new franchise unit added during your most recent fiscal year.

New Franchised Units

ITEM 21 - FINANCIAL STATEMENTS

Please provide us your audited financial statements for your most recent fiscal year.

Attached    To follow

ITEM 22 - CONTRACTS

If there have been any changes since last year's Offering Circular in your Franchise Agreement or in any other agreements you will enter with your franchisees, or if any agreements will be added or deleted, please attach the new agreements marked to show changes from any prior versions.

END OF QUESTIONNAIRE

Thank you for your effort in answering this Questionnaire.