ITEM 1
THE FRANCHISOR, ITS
PREDECESSORS AND AFFILIATES
The
Franchisor
To simplify the language in
this Franchise Disclosure Document, the words "we," "us"
and "our" refer to UNITS FRANCHISING GROUP, INC., the franchisor of
this business. The words "you" and "your" refer to the
person who buys the franchise, whether you are a corporation, limited liability
company or other business entity. If you are a corporation, limited liability
company or other business entity, certain provisions of our Franchise Agreement
will apply to your owners as well.
We were incorporated in the
State of South Carolina on March 1, 2005 for the purpose of offering UNITS
franchises and supporting and supplying franchisees. Our principal business
address is 680 Bear Swamp Road, Johns Island, South Carolina 29455. We do
business only under our corporate name.
Our
Business Activities
We grant franchises to
qualified persons or business entities for the operation.of self-storage rental
and moving businesses in conjunction with the service mark "UNITSSM"
and certain other trademarks, service marks, trade names and associated logos
that we refer to as the "Marks." We refer to these businesses as
"UNITSSM Businesses." We refer to the UNITS Business you
will operate as the "Franchised Business."
UNITS Businesses offer the
delivery, warehouse storage and transport of portable, structurally secure,
modular self-storage units which may be delivered on-site and left at a
customer''s property, picked up and stored within a UNITS warehouse facility or
transported from one location to another. As a UNITS franchisee, you will
deliver a transportable rental storage container to your customer''s location.
Your storage rental customers may keep the container at their location (home or
business, event or construction site, etc.,) for as long as necessary. If
long-term storage is desired, you will pick the container up and store it in a
central warehouse until directed by the customer to re-deliver it to another
location. A Franchised Business typically requires at least 25,000 to 60,000
square feet of property for its operations, including a warehouse facility
ranging in size from approximately 15,000 to 50,000 square feet. To start up
your franchised business, however, we will require you to purchase or rent a
warehouse facility with approximately 5,000 to 10,000 square feet of space. You
must operate the Franchised Business according to our System,* which is
described in greater detail in our Franchise Agreement attached as Exhibit C to
this Franchise Disclosure Document. We will provide you with initial and
ongoing assistance as described in Item 11 of this Franchise Disclosure
Document.
We have offered franchises
since August of 2005. We do not offer and have not previously offered
franchises in any other line of business. In addition to offering and selling
franchises and supporting our franchisees, we also supply our franchisees with
UNITS transportable storage containers, lifts and trucks and other packing and
moving equipment and supplies. We are not engaged in any other line of
business. We do not currently own or operate a business of the type being franchised,
however, as described below, our affiliates through common ownership, own and
operate 2 UNITS Businesses in South Carolina.
Capitalized terms not otherwise
defined have the same meaning as in our Franchise Agreement.
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Our Predecessors and
Affiliates
We have no predecessors. We
have 6 affiliates under common ownership: MHM Group, Inc.; Units Mobile
Storage, Inc.; Units Mobile Transport, Inc.; Units Mobile Storage of Myrtle
Beach, Inc.; and Units Mobile Storage of Charleston, Inc. (our
"Affiliates"). MHM Group, Inc, a South Carolina corporation, was
incorporated in March 2005, and has developed or acquired certain intellectual
property and proprietary designs, which, according to licensing agreements, all
of our Affiliates have the right to use, including the word mark
"UNITS" and our design logo. We also have a right to sublicense these
assets to our franchisees for their use in the operation of UNITS Businesses.
Units Mobile Storage, Inc., a South Carolina corporation, was also incorporated
in March 2005. Units Mobile Storage, Inc. handles all ordering of the
transportable, modular containers, packing and moving supplies and equipment
for each of the 2 UNITS Businesses which are owned and operated by our Affiliates.
Units Mobile Storage, Inc. is also responsible for providing sales and
marketing support for our Affiliates'' 2 operating UNITS Businesses. Units
Mobile Transport, Inc. is a South Carolina corporation incorporated in March
2005. This Affiliate is responsible for managing, maintaining and administering
our Affiliates'' transportation licenses to comply with Department of
Transportation requirements.
Our Affiliate, Units Mobile
Storage of Charleston, Inc., is a South Carolina corporation incorporated in
June of 2004. From June 2004 until March 2005, Units Mobile Storage of
Charleston, Inc. operated under the name of Units, Inc. The Affiliate, Units
Mobile Storage of Charleston, Inc., (formerly known as Units, Inc.) founded the
first UNITS Business in June 2004, which is similar to the franchise we offer.
This UNITS Business is located at 680 Bear Swamp Rd., Johns Island, SC 29455
and is still operating.
Our other Affiliate, Units
Mobile Storage of Myrtle Beach, Inc. is also a South Carolina corporation
established in March 2005. Its principal business address is 4647 Hwy 501, Myrtle Beach , SC 29579. Units Mobile Storage of Myrtle Beach, Inc. operates a UNITS
Business in Myrtle Beach, South Carolina, which is similar to the franchise we
are offering. Our newest Affiliate, Units Mobile Storage of Greenville, Inc. is
a South Carolina corporation formed on October 10, 2007, and has a mailing
address at P.O. Box 1699 Mount Pleasant, South Carolina 29465. Since October
15, 2007, Units Mobile Storage of Greenville, Inc. has operated a UNITS
Business in Greenville, South Carolina. Our Affiliates do not and have not
previously offered franchises in this or any other line of business. Our
Affiliates do not furnish services or supplies to pur franchisees.
Market
and Competition
You will offer your services to
both commercial and residential customers. The market for self-storage,
transportation and moving services is well developed. We are one of many
franchisors and businesses in the highly competitive self-storage,
transportation, and moving industries. Some of these competitors offer similar
transportable storage units to the consumer. As a franchisee, you will likely
face competition from many competitors, including small independent operators,
national and regional chains and franchises. Local and national economic
conditions may affect this industry and are generally difficult to predict.
We grant our franchisees a Protected Territory. During the term of your franchise, we will not offer another franchise
or establish another UNITS Business within the specific geographic area that is
granted to you. This is your Protected Territory and within it, you will be the
only UNITS Business, but we are not required to take legal action against
another franchisee to protect your territory. Your rights within your Protected Territory are described in detail in ITEM 12 of this Franchise Disclosure
Document.
Industry
Specific Reputations
South Carolina and other states have enacted
laws that regulate the self-store and container storage industries. These laws
vary substantially from state to state, but typically, they govern the relative
rights between a self-storage
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