ITEM
1
THE FRANCHISOR AND ANY PARENTS. PREDECESSORS, AND
AFFILIATES The Franchisor
To simplify the language in
this Disclosure Document, the words "we," "DFC."
"us" and "our" refer to Dreams Franchise Corporation, a California corporation, the franchisor. "You" means the person or entity
who buys the franchise. We offer franchises to operate a retail store which is
physically located in a mall or other retail establishment, which stores
specializes in the retail sale of sports-related merchandise and
celebrity-oriented merchandise, sports collectibles, memorabilia, trading cards
and related merchandise and products that we have authorized and approved (a
"FOP Store").
DFC was incorporated in the
State of California on April 3,1990. Our principal place of business is Two South University Drive, Suite 325, Plantation, Florida 33324, (800) 749-7529. We do
business under the name "Dreams Franchise Corporation" and
"Field of Dreams" (a service mark of Universal City Studios, Inc.
that has been licensed franchised to us; please see Item 13 for more details).
We have no predecessors. We were originally incorporated and known as Sports
Archives, Inc. and changed our name to Dreams Franchise Corporation in May
1992.
Our agents for service of process are listed in
Exhibit C to this Disclosure document. Our Parent
We are a wholly-owned
subsidiary of Dreams, Inc. (f/k/a StratAmerica Corporation) (the "Parent"),
a Utah corporation incorporated in 1980. Our Parent''s general offices are also
located at Two South University Drive, Suite 325, Plantation, Florida 33324, (800) 749-7529. Our Parent has not conducted the business of the type you will
operate, and it has not offered franchises in this or any other business.
The Franchise Rights
Offered
Your FOD Store will operate
under the mark "Field of Dreams" and other trademarks, service marks,
logos and commercial symbols (the "Proprietary Marks") that we
designate. We have obtained, from Universal Studios Licensing, Inc.
("USL"), the exclusive right and license in the United States,
excluding properties owned or controlled by USL, to use and sublicense the use
of the mark "Field of Dreams�" to identify FOD Stores. However, if
our right to use the Proprietary Marks terminates for any reason, you must
discontinue your use of the Proprietary Marks and any associated logos or
commercial symbols immediately as directed by DFC or USL. We have also obtained
a non-exclusive right from USL to use the mark "Field of Dreams�" to
manufacture, sell and distribute sports memorabilia and paraphernalia that we
and our franchisees sell.
We will offer to you an
individual FOD Store at a mutually-agreeable location, which will be specified
in the franchise agreement that you and we will sign (a "Franchise
Agreement").
You may also enter into an
Area Development Agreement ("Development Agreement"), under
which you will obtain certain rights to develop FOD Stores within an area (the
"Development Area"), and according to a schedule (the "Development
Schedule"), specified in the Development Agreement. The minimum number
of FOD Stores to be developed under a Development Agreement is four.
FOD Stores operate under a
system we have developed (the "System") that is identified by
the Proprietary Marks, and which is characterized by procedures, techniques,
and methods for merchandising activities; distinct inventory specifications and
standards; the Field of Dreams� confidential operations manual (the "Confidential
Operations Manual"); as well as methods and techniques for inventory
and cost controls, record keeping and reporting, personnel management,
purchasing, sales promotion, marketing and advertising. We may change, improve
and develop the System during the term of your franchise.
Our Prior Business
Experience
We first conducted a business
of the type offered in this Disclosure Document in 1990. We have offered
franchises for FOD Stores since 1991. We have not offered franchises in any
other lines of business.
Affiliates'' Business
Experience
Dreams Products, Inc. ("DPI"),
is a Utah corporation that we own as a subsidiary. In November 1998, DPI
acquired the business and assets of Mounted Memories, Inc. ("MMI"), a
Florida corporation that manufactures and distributes sport and celebrity
related merchandise, collectibles, and related products to FOD Stores and
others. DPI has no significant operations other than the business purchased
from MMI and will continue to engage in the manufacturing and distribution of
such products. DPI''s principal business address of DPI is Two South University
Drive, Suite 325, Plantation, Florida 33324, (800) 749-7529. Neither MMI nor
DPI has conducted any business of the type you will operate, and neither
company has offered franchises in this or any other business.
Dreams Entertainment, Inc.
("DEI"), is also a Utah corporation, and is a wholly-owned
subsidiary of our Parent. DEI was incorporated to explore business
opportunities in the entertainment field. It is inactive and conducts no
present business, and it has not in the past offered franchises in this or any
other business. The principal business address of DEI is Two South University
Drive, Suite 325, Plantation, Florida 33324, (800) 749-7529.
Invest West Sports, Inc.
("IWS") is a California corporation which is 100% owned by Sam D.
Battistone, who is our Chairman. IWS has in the past, and may continue to,
lease real estate and sell fixtures, furniture and equipment to franchisees in
connection with their purchase of company-owned locations. IWS'' principal
business address is 1776 North State Street, Suite 160, Orem, Utah 84057 (702.493.4373). IWS has not conducted the business of the type you will operate, and
it has not offered franchises in this or any other business.
Competition
We believe that the market for
sports- and celebrity-related merchandising collectibles, memorabilia, trading
cards, and related products to be provided by the FOD Store is developing and
expanding. The FOD Store will compete with other retail stores, department
stores, specialty stores, mail order houses, internet websites, and other
businesses offering the same or similar products to the public. To the extent
that a consumer purchases items from our website or from MMI, those operations
may appear to or actually compete with you as well. Consumers may also obtain
these items, of course, directly from athletes and celebrities.
Industry-Specific Laws and
Regulations
You will, of course, be
required to comply with all laws and regulations that generally apply to
businesses. Because of the nature of the merchandise sold, you may also have to
comply with other laws that are not industry-specific, but that apply
generally, such as laws and legal standards concerning intellectual property,
copyrights in photographs, authenticity of autographs, individuals'' rights of
privacy and publicity, and publication of materials. You should consult with
your own attorney regarding the laws that may apply to your business.
