ITEM 1
THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
To simplify the language in
this offering circular, the term "we," "us"
"Company" or "our" refers to PortraitEFX Franchising
Corporation, the franchisor. We will refer to the person interested in buying
the franchise as "you" or "your". If you are a corporation,
partnership, limited liability company, or other entity, certain provisions of
the Franchise Agreement will apply to your owners. These provisions are
addressed in this offering circular where appropriate.
The
Franchisor. Its Predecessor and Affiliates
We were organized as a Nevada corporation on April 20, 2006. We maintain our principal business address at 2600 E Southlake Blvd., Suite 120-369, Southlake, TX 76092, and do business under our corporate
name and under the name "PortraitEFX". We currently do not operate a
PortraitEFX business. Our agents for service of process are identified in Exhibit
E to this offering circular. We have no predecessors or affiliates.
We grant franchises to operate
a professional photography business which utilizes the PortraitEFX name, marks,
training, support, marketing, business management and fulfillment systems.
We began offering franchises
as of June 1, 2006. We are not engaged in other businesses, and have never
offered franchises in any other lines of business. We currently do not operate
any company owned PortraitEFX businesses.
We grant qualified candidates
franchises to develop a photography business that operates under the
PortraitEFX system {the "System"), and offers professional portrait
photography services and related products to families, children, and other
individuals. The System includes distinctive service and product offerings;
proprietary marketing systems and collateral materials; workflow processes and
procedures; proprietary internet technology and ecommerce systems; integrated
fulfillment services; quality and uniformity of the products and services
offered; procedures for marketing, inventory, management and financial control;
training and assistance; and advertising and promotional programs, all of which
may be
changed, improved, and further
developed by us.
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You must operate your PortraitEFX franchise under the
"PortraitEFX" mark and other service marks, trademarks, logos,
slogans, and other symbols we designate {or may later designate) in writing for
use in the System.
Our Marks include the trade
name and service mark "PortraitEFX" and such other trademarks,
service marks, logos and other indicia of origin that we designate to identify
the Franchised Business. Our System refers to our proprietary business system
for operating and promoting a Franchised Business. It includes use of our
Marks, intellectual property and confidential information; use of our
proprietary web site and internet technology systems; use of our sales and
marketing procedures and materials; use of our operational procedures and
training materials; and other policies, procedures, standards and
specifications that we have developed for use in connection with operating the
Franchised Business.
You will operate the
Franchised Business according to our Franchise Agreement (see Exhibit G)
and our standards, specifications, policies and procedures, as they are amended
periodically (collectively, our "Standards"). We will communicate our
Standards to you in writing via our confidential operations manual and other
manuals and written directives (collectively, our "Manual").
Market and
Competition
The market for professional
portrait photography is well developed and competitive. You will be competing
with national chains and companies as well as local portrait and photography
studios and photographers that offer the same or similar services.
Franchisee/Industry
Contact Referral Program.
We will pay a referral fee of
$1,000 towards Franchisee Advertising and Marketing, Training costs to a
franchisee who introduces a prospective franchisee to us, if we approve the
prospect and we and the prospect sign a PortraitEFX� Franchise Agreement within
6 months after the referral is made and the prospective franchisee pays us the
associated initial fee. The prospective franchisee must have liquid assets of
at least $15,000 and a total net worth of $75,000. We will pay this referral
fee towards the franchisees Advertising, Training, or other fees when the
referred prospective franchisee''s Franchise Agreement is fully signed and the
initial fee is fully paid.
Industry
Specific Regulation
There are no regulations that
specifically govern the offering of professional photography services. In
addition, franchise owners and employees are not required to have prior
photography experience. To the extent you hire employees, the Franchised
Business will be subject to employment laws which include the Fair Labor
Standards Act, and various state and federal laws governing such matters as
minimum wages, overtime and working conditions. The Franchised Business will be
subject to other laws or regulations that are not specific to the photography
industry specifically, but that apply to businesses generally.
