ITEM
1 : THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language of this disclosure document,
"Certa Pro" means Certa ProPainters Ltd., the franchisor.
"You" means the person or entity who buys the franchise.
CORPORATE HISTORY
In 1971, Cameron Greig Clark
and his partner, Stewart, founded Stewart & Clark Painting in Thunder Bay, Ontario, Canada. In 1972, they.changed the name of this company to College Pro Painters
and in August of 1975, incorporated as College Pro Painters Limited in Ontario, Canada. In 1978, College Pro Painters Limited expanded into the United States and formed a
subsidiary, College Pro Painters (U.S.) Ltd. ("College Pro"). College
Pro''s operations were seasonal and generally limited to offering exterior
painting services for single family homes and small residential buildings. Ail
franchises and company-owned outlets were (and continue to be) run entirely by
college students with assistance from College Pro. College Pro decided in 1991
to expand its operations and formed Certa Pro to offer a full range of interior
and exterior painting and decorating services throughout the United States.
Certa Pro was incorporated in Massachusetts on December 18, 1991. Certa Pro is a subsidiary of The Franchise Company (U.S.) Inc.
whose principal place of business is 5397 Eglinton Avenue, West, Suite 108, Etobicoke, Ontario M9C 5K9, Canada The Franchise Company (U.S.) Inc. absolutely and unconditionally
guarantees Certa Pro''s obligations under the Franchise Agreement. Certa Pro
does business under the names CERTA PRO and CERTA PROPAINTERS.
BUSINESS ADDRESSES
The address of Certa
ProPainters, Ltd.''s principal place of business is 150 Green Tree Road, Suite
1003, Oaks, Pennsylvania 19456.
Certa Pro''s Agent for Service
of Process in your state is disclosed in Exhibit D.
CERTA PRO''S BUSINESS
Certa Pro sells residential
and commercial painting and decorating franchises. We conduct our own franchise
sales as well as through the services of franchise brokers. We have offered
painting franchises in the United States since the fall of 1992 and in Canada since 1990.
THE CERTA PRO FRANCHISE
Certa Pro licenses franchise
rights to use the Certa Pro trademark, logo, operations manual, business
format, and computer programs for the operation of a residential painting and
decorating business. The license you are granted gives you the right to perform
residential painting and decorating services on certain types of residential
buildings within a defined geographic area ("Territory"). Certa Pro
provides you with operating information, trains you or a key employee in the
techniques of operating a painting business, assists you in marketing your
franchise, and provides you with assistance in the operation of your franchised
business.
You will operate your business
on a year round basis and will be authorized to offer, sell and perform
residential painting and decorating services of the interior or exterior of any
one, two, three or four unit residential dwelling; the interior of any individual
residential apartments, condominiums or townhouses; and, the interior or
exterior of individual business offices, not subject to the National Account
Program, provided that the aggregate contract amount does not exceed $15,000
for any one particular job ("Residential Services"). You are not
authorized to offer, sell or perform any Residential Services in any area
outside your Territory. We may offer qualified franchisees the right to perform
services not specifically identified as a Residential Service ("Commercial
Services") upon the payment of a one time non-refundable Commercial
Services Licensing Fee, signing our Commercial Services Addendum, and the
completion of
our Commercial Training Program and such other
conditions as we may require. While other Certa Pro franchisees with a
commercial services license are permitted to offer and sell their services in
your Territory, they will not be competing with you for residential customers.
See Item 12 for more information about the National Account Program and
Commercial Services.
Th� market for painting services
is well developed throughout the United States. Your competitors are local
painting companies, regional franchises, individuals in the painting business
and, in some areas, student run summer painting franchises. The Certa Pro
franchise is distinct from our affiliate, College Pro, in that College Pro''s
franchisees only operate primarily during the spring and summer, and are
generally college students, or college age individuals. Certa Pro may have other
national competitors. The amount of competition depends upon the location of
your franchise Territory.
INDUSTRY SPECIFIC
REGULATIONS
There are federal, state, and in some cases, local
regulations pertaining specifically to the painting industry, the building and
construction industry and your franchise, which vary and can change over time.
These regulations pertain to contractor licensing, lead paint removal and
disposal and hazardous waste handling and disposal. In addition, there are also
worker safety laws with which you will have to comply. Among the federal
regulations which are applicable to your franchise are the Federal Hazardous
Waste Management laws regulating the handling and disposal of wastewater and
Occupational Safety and Health Administration ("OSHA") regulations
pertaining to worker safety and health in the workplace. OSHA has also issued
regulations pertaining to exposure to airborne concentrations of lead above
certain levels. Many states and municipalities also have laws regulating the
handling and disposal of hazardous chemicals, including paint and solvents, as
well as laws and regulations pertaining to worker safety and health in the work
place. There are also many state and local codes, ordinances or statues
regarding contractor licensing requirements which could affect your operation
of your franchise.
You should investigate whether there are any state or
local laws, regulations or requirements that may apply in the geographic area
in which you intend to conduct business. One source of information
regarding.laws and regulations is Painting and Decorating Contractors
Association at pdca.org. You should consider
both the effect of any such laws and regulations on your business and the cost
of compliance. A summary of state contractor licensing laws is attached as
Exhibit M. Although we monitor legal requirements that affect our franchisees,
and we make our information available to you, because of the number of
potential state and local issues, we cannot guarantee that it will be complete,
current and accurate. Therefore, we recommend that before signing the franchise
agreement, you engage an attorney or other professional advisor to assist you
both in determining what laws, ordinances and regulations may affect your
establishment or operation of a Certa Pro business, and in complying with them.
You are responsible for obtaining licenses required in your locality.
CERTA PRO''S COMPETITIVE
EDGE IN THE MARKETPLACE
Certa Pro has a competitive
edge in the painting industry because we operate nationally, make substantial
investments in marketing, and provide our franchisees with a comprehensive
training program. Certa Pro is North America''s largest international,
full-time, full service, year-round painting franchise. Because of this, a
Certa Pro franchise offers entrepreneurs a unique opportunity to enter into a
service industry with very few competitive restraints. The residential and
commercial painting markets offer our franchisees a service marketplace that is
in large demand by property owners and management companies.
Certa Pro places
franchisees in franchise areas that have been researched and determined,
through demographic research, to have ample demand for our interior and
exterior, residential and commercial painting services. Through our marketing,
training and support programs, we assist our franchisees in getting their
businesses up and running quickly. We also assist our franchisees with supplier
discount programs designed to get you national pricing on products and
supplies. In addition, we offer a telephone answering service, payroll contacts
and other systems that help make managing the administrative aspects of your
business easier.
The following is a list of
Certa Pro''s affiliates including the principal address, a description of the
business, and the number of franchises of each. Neither Certa Pro nor its
predecessors or affiliates, except for Mamar, Inc. d/b/a Handyman Connection,
presently operate businesses of the type that they franchise, offer franchises
in any line of business or engage in any other type of business.
The market for painting
services is well developed throughout North America. Your competitors are local
painting companies, regional franchises, individuals in painting businesses
and, in some areas, student-run summer painting franchises. The Certa Pro
franchise is in direct competition with our affiliate, College Pro. Certa Pro
may have other national competitors. The amount of competition depends on the
location of your franchise area.
CALIFORNIA CLOSET COMPANY. INC.
California Closet Company,
Inc. is a California corporation with its principal place of business at 1000 Fourth Street, Suite 800, San Rafael, California 94901. California Closet Company, Inc. has
offered and sold franchises for the right to operate a franchised business
using the California Closet systems and trademarks in the area of customized
closet, office, garage, and other storage space design, production, and
installation services and related products to both residential and commercial
customers since 1980. As of December 31, 2007, California Closet Company, Inc.
had 96 franchises in operation in the United States, 1 company-owned store, 8
in Canada and 4 international franchises.
CERTA PRO PAINTERS LTD. (CANADA)
Certa ProPainters, Ltd. is a Canadian corporation with
its principal place of business at 5397 Eglinton Avenue West, Etobicoke, Ontario, M9C 5K6. Certa ProPainters (Canada) is a wholly owned subsidiary of College Pro
Painters Ltd., a Canadian corporation that maintains its principal place of
business at 5397 Eglinton Avenue West, Etobicoke, Ontario, M9C 5K6. College Pro Painters is wholly owned by The Franchise Company, Inc., a Canadian
corporation. Certa Pro sells residential and commercial painting and decorating
franchises and has offered painting franchises in Canada since 1990. As of
December 31, 2007, 22 franchises operated in Canada.
COLLEGE PRO PAINTERS (U.S.) LTD.
College Pro Painters (U.S.)
Ltd. is a Maryland corporation with its principal place of business at 71 Second Avenue, Floor 2, Waltham, Massachusetts 02451. College Pro sells exterior residential and
light commercial painting franchises. College Pro Painters (U.S.) Ltd. has
offered and intermittently operated painting franchises in the United States since 1978. During the 2007 season, there were 332 franchises in operation.
COLLEGE PRO PAINTERS LTD.
College Pro Painters Ltd. is a
Canadian corporation with its principal place of business at 5397 Eglinton Avenue West, Etobicoke, Ontario, Canada M9C 5K9. College Pro Painters Ltd. sells
exterior residential and light commercial painting franchises. College Pro
Painters Ltd has offered and intermittently operated painting franchises in Canada since 1972. All College Pro Painters Ltd. franchises are offered for a one-year term and
operate seasonally. During the 2007 season, there were 211 College Pro Painters
Ltd. franchises in operation.
PAUL DAVIS RESTORATION. INC.
Paul Davis Restoration, Inc. is a Florida corporation with its principal place of business at One Independent Drive, Suite 2300, Jacksonville, Florida 32202. Paul Davis Restoration, Inc. offers the rights to use the Paul Davis
trade name, logo, Operations Manual, business systems, and computer programs in
a general contracting business, as well as in providing cleaning services and
other specialized contracting services since 1967. As of December 31, 2007,
Paul Davis Restoration, Inc. had 228 franchises in operation.
Growers & Nomads, Inc. is
a Delaware corporation established in 2000 with its principal ptace of business
at 1000 Fourth Street, Suite 685, San Rafael, CA 94901. Growers & Nomads
provides marketing and brand development for Certa Pro.
TELE-LINK SERVICES
Tele-Link Services is a
Canadian company with its principal place of business at 700 Richmond Street, Suite 416, North London, Ontario, N6A 5C7. Tele-Link Services provides evening,
weekend, and holiday answering services for Certa Pro and its franchises.
Tele-Link also provides certain telemarketing and customer survey services for
Certa Pro and its franchisees.
PILLAR TO POST INC.
Pillar To Post Inc. is a Delaware corporation that was
incorporated in July 1994. Its principal place of business is located at 13902 North Dale Mabry Hwy., Suite 300, Tampa, FL 33618. Pillar To Post Inc. has offered for sale,
and.sold, franchises in the United States for residential home inspection
services for single family and various multi-family homes since March 1995. As
of December 31, 2007, Pillar to Post had 7 master franchises, 363 individual
franchises in operation and 2 developments in the U.S.
PILLAR TO POST INC. (CANADA)
Pillar To Post Inc. (Canada), a Canadian corporation with a principal place of business located at 5805 Whittle Road, Suite 211, Mississauga, Ontario, Canada L4Z2J1, has offered for sale, and sold,
franchises in Canada for residential home inspection services for single family
and various multi-family homes since September 1994. As of December 31, 2007,
Pillar to Post had 84 franchises in operation in Canada.
FLOORCOVERINGS INTERNATIONAL. LTD.
Floorcoverings International, Ltd. is a Georgia corporation with its principal place of business at 5182-B Old Dixie Highway, Forest Park, Georgia 30297. Floorcoverings International, Ltd. sells franchises in the mobile retail
floor covering and window blind business since 1998. As of December 31, 2007,
Floorcoverings International, Ltd. had 67 franchises in the United States and 6 in Canada.
ACTION WINDOW CLEANERS
Action Window Cleaners Inc. is
an Ontario corporation with its principal place of business at 100 Strada Drive, Unit 4, Woodbridge, Ontario, L4L 5V7, Canada. Action uses a seasonal student
franchise system to provide residential window cleaning across the Province of
Ontario, Canada. Founded in 1982 by a former employee of College Pro Painters
Ltd., it was acquired by The Franchise Company Inc. in 1993. During the 2007
season, there were 106 Action Window Cleaners Inc. franchises which operated in
the Province of Ontario only.
MAMAR. INC. D/B/A HANDYMAN CONNECTION
Mamar, Inc., doing business as (d/b/a) Handyman
Connection is an Ohio corporation with its principal place of business at 10250 Alliance Road, Suite 100, Cincinnati, OH 45242. Handyman was founded in 1993 and specializes
as a referral business for providers of home repair and light remodeling
services. As of December 31, 2007, Handyman has 138 franchises in the United States, 26 franchises in Canada, and 1 master franchise. Additionally, Handyman has 1 company
owned store located in Cincinnati, Ohio. At the end of 2007, Certa Pro acquired
Mamar, Inc. from The Franchise Company.
