GLEN SULLIVAN, JANI-KING OF NE\ry YORK,INC., JANI

Transcription

ACCEPTED
225EFJ016963764
FIFTH COURT OF APPEALS
DALLAS, TEXAS
12 July 6 P4:13
Lisa Matz
CLERK
ln the Court of Appeals
for the F'Ífth District of Texas
at Dallas
No. 05-11-01546-CV
GLEN SULLIVAN,
Appellant,
vs.
JANI-KING OF NE\ry YORK,INC.,
Appellee.
On Appeal from the 160th District Court of
Dallas County, Texas
APPELLEE'S BRIEF
Ken Stone
State Bar No. 19296300
LOOPER REED & McGRAW, P.C.
4600 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201
(214) 954-4135 - Telephone
(214) 953-1332 - Facsimile
Jonathan M. Hyman
J.J. Hardig, Jr.
LOOPER REED & McGRAW, P.C.
1300 Post Oak Blvd., Suite 2000
Houston, Texas 77056
(713) 986-7000
(713) 986-7100
- Telephone
- Facsimile
ATTORNEYS FOR APPELLEE,
JANI-KING OF NEW YORK, INC.
Orøl Arg ument Requested
TABLE OF CONTENTS
TABLE, OF CONTENTS
INDEX OF AUTHOzuTES
...........iii
IDENTIFICATION OF THE PARTIES
1
STATEMENT REGARDING THE RECORD..
2
STATEMENT RE,GARDING ORAL ARGUMENT .........
3
STATEMENT OF THE CASE
4
STATEMENT OF THE ISSUES .....
5
STATEMENT OF THE FACTS
6
.
SUMMARY OF THE ARGUMENT
..........
ARGUMENT
......,...13
I.
APPLICABLE STANDARDS OF REVIEW...
A.
Factual sufficiency standard of review
B
Legal sufficiency standard of review
C
Standard of review
D.
II.
for
13
..,..13
.15
evidentiary rulings-abuse of
discretion.....
16
Standard of review for denial of a Motion for JNOV-legal
sufficiency
17
SULLIVAN DID NOT PRESERVE A FACTUAL SUFFICIENCY
CHALLENGE FORAPPEAL
A.
...17
A motion for new trial is required to preserve a factual
suff,tciency challenge
B.
l0
..........17
Sullivan's Motion for JNOV does not meet the requirements
of a motion for new trial
.........18
III. THE TRIAL COIIRT DID NOT ERR IN
RENDERING
JUDGMENT IN FAVOR OF JANI-KING..
20
A.
More than sufficient evidence supports the jury's finding that
Sullivan breached the Settlement Agreement (Issue 1)....................20
B
Sullivan breached the Settlement Agreement f,rrst (Issue 2)............22
C
Jani-King's failure to comply with the Settlement Agreement
is excused, as a matter of law, because Sullivan breached the
Settlement Agreement first (Issue 3 ) .............
D
Sullivan failed to establish the jury's rejection of his fraud
claim was against the great weight and preponderance of the
evidence (Issue 4)
E
F
G
H
I.
24
.........2s
Sullivan failed to comply with the Franchise Agreement
(Issue 5) .........
29
More than suff,rcient evidence supports the jury's finding that
Sullivan operated a competing commercial cleaning business
after May 1,2004 (Issue 6).....
3l
The trial court properly allowed Cabrales to testif,i regarding
Jani-King's attorneys' fees and more than sufficient evidence
supports the jury's finding that Jani-King was entitled to
$80,000 of Attorneys' Fees (Issue 7) ................
33
The trial court properly admitted Bean's testimony regarding
Jani-King's damages and more than sufficient evidence
supports the jury's inclusion of advertising fees in its damage
award (Issue 8)
36
The trial court properly denied Sullivan's Motion for JNOV
seeking reformation
of the judgment and aî
damages against Jani-King (Issue 9)........
CONCLUSION AND PRAYER,...
CERTICIATE OF SERVICE
l1
award of
39
INDEX OF AUTHORITIES
Pase(s)
Cases
Aquaplex, Inc. v. Rancho La Valencìe, Inc.,
297 5.W.3d768 (Tex. 2009)
.26,27
Arthur Andersen & Co. v. Perry Equíp. Corp.,
945 S.W.2d8l2 (Tex. 1997)
TT,36
Austín Neighborhoods Councí|. v. Bd. of Adjust.,
644 S.W.2d 560 (Tex. App.-Austin 1982, writ refld n.r.e.)
18, 19
Barry v. Barcy,
193 S.W.3 d72 (Tex. App.-Houston [1st Dist.] 2006, no pet.)..
18,19
Bowie Mem'l Hosp. v. Wright,
79 S.W.3d 48 (Tex. 2002) ..
14, 16
Carrasco v. Stewart,
224 S.W.3d 363 (Tex.
App.-El
Paso 2006, no pet.) .....
15
Cecíl v. Smith,
804 S.V/.2d 509 (Tex. 1991)........
18
Cìty of Keller v. lV'ilson,
168 S.W.3d 802 (Tex.200s)
Columbia Med. Ctr. Subsídíary, L.P. v. Meier,
198 S.W.3d 408 (Tex. App.-Dallas 2006, pet. denied) .........
16,34,38
Croucher v. Croucher,
660 S.W.2d 55 (Tex. 1983)
14,15,28
Dow Chem. Co. v. Francís,
46 S.W.3d 237 (Tex.2001)
Finleyv. J.C. Pøce, Ltd.,
4 S.ü/.3d 3190 (Tex. App.-Houston lst Dist.] 1999, no pet.), dism'd on other
grounds,No. 01-99-00662-CV,1999 WL 997788 Tex. App.-Houston [1st Dist.]
Nov. 4 1999, no pet.)
lll
18
Fredonia Stote Bankv. Gen. Am. Life Ins. Co.,
881 S.W.2d279 (Tex. 1994)
10,17
Garzav. Alvíar,
395 S.W.2d82I (Tex. 1965)
l4
Golden Eagle Archery, Inc. v. Jackson,
116 S.W.3 d757 (Tex. 2003)
14, 15, 27, 24, 25, 28, 30, 32, 36, 39
In re J.P.B.,
180 S.W.3
d s70 (Tex. 2005)
16
Interstate Northborough P'ship v. State,
66 S.W.3d 2t3 (Tex.2001).......
...17,34,38
McMillinv. State Farm Lloyds,
180 S.W.3d 183 (Tex. App.-Austin 2005, pet. denied)....,.
l4
Mercer v. Band,
454 S.\M.2d S33 (Tex. App.-Houston [14th Dist.] 1970, no writ).....
t9
Mustang Pipeline Co., v. Driver Pipelíne Co.,
134 S.W.3d 195 (Tex. 2004) (per curiam) .
24,25
PopCap Games, Inc. v. MumboJumbo, LLC,
350 S.V/.3 d 699 (Tex. App.-Dallas 2011, no pet.)
t9
.
Prestige Ford Garland Ltd. Partnership v. Dallas Postal Credít Union,
No. 05-0 1-00560-CV, 2002 WL 1 88479 (Tex. App.-Dallas Feb. 7, 2002, pef.
denied) (not designated for publication)..........
Raw Hide Oíl & Gas, Inc. v. Maxus Expl. Co.,
766 S.W.2d264 (Tex. App.-Amarillo 1988, writ
denied).............
Ríchard Rosen, Inc. v. Mendivil,
225 S.W.3d 181 (Tex. App.-El Paso 2005, pet. denied).............
State Dept. of Transp. v. Barraza,
157 S.W.3d922 (Tex. App.-El Paso 2005, no pet.)
Sterner v. Marathon Oil Co.,
767 S.W.2d 686 (Tex. 1989)
I9
...........14
17,40
15
16,40
rv
Surgitek, Bristol-Myers Corp. v. Abel,
997 S.W.2d 598 (Tex. 1999)
18
Taylor v. Trans-Cont'l Props., Ltd.,
739 S.W.2d873 (Tex. App.-Tyler 1987, no writ)
t9
T.O. Stanley Boot Co. v. Bank of El Paso,
847 S.V/.2d218 (Tex. 1992)
Rules. Statutes
.30
& Constitutions:
Tex. R. Crv. P. 94.................
Tex. R. Ctv. P. 324(b)(2) .......
Tex. R. Cry. P. 324(b)(2), (3)
Tex. R. App. P.33.1(a)
Tnx. R. App. P. 38.1(d).............
Tex. R. App. P. 38.1(Ð
Tex. R. App. P. 44.1 ................
TEx. R. App. P.61.1
30
........18
...t7
t7
4
t7
.38
17,34
TBx. Rule or Evm. 612
T2
Tex. RurB opEvto. 803(5)
38
Tex. DrscreLINARyR. PRor"L Co¡¡oucr 1.04 (2005)
36
In the Court of Appeals
for the Fifth District of Texas
at Dallas
No. 05-11-01546-CV
GLEN SULLIVAN,
Appellant,
VS.
JANI-KING OF NEW YORK,INC.,
Appellee.
On Appeal from the 160th District Court of
Dallas County, Texas
APPELLEE'S BRIEF
TO THE HONORABLE JUSTICES OF THE FIFTH COURT OF APPEALS:
Appetlee Jani-King of New York, Inc. f,rles its Appellee's Brief in support of the
final judgment entered by the trial court and respectfully requests this Honorable Court
affirm the final judgment.
IDENTIF'ICATION OF THE PARTIES
Appellee Jani-King of New York, Inc., the plaintiff in the trial court,
will
be
referred to herein as "Jani-King." Appellant Glenn Sullivan, defendant in the trial court,
will be referred to herein as "Sullivan."
STATEMENT REGARDING THE RECORI)
The Clerk's Record was f,rled on December 30, 2011. Jani-King
will cite to the
Clerk's Record as (Volume CR Page). The Reporter's Record was filed on March
2An.
Jani-King
will
8,
cite to the Reporter's Record as (Vqlqmg RR PggÐ. The trial clerk
filed the First Supplemental Clerk's Record on June 11,2012. Jani-King will cite to the
First Supplemental Clerk's Record as (First Supp. CR at BggÐ. The trial clerk filed the
Second Supplemental Clerk's Record on June 26,2012. Jani-King
Supplemental Clerk's Record as (Second Supp. CR at
assembled an Appendix
will cite to the Second
Page). Jani-King has
also
of key documents for the court's convenience. Jani-King will
cite to the Appendix as (Tab Appx. Page).
)
STATEMENT REGARDING ORAL ARGUMENT
Sullivan has requested oral argument. Jani-King does not believe oral argument is
necessary to emphasize ar
elari$ the vrnitten arguments of the parties. However, should
the Court determine it would be beneficial to hear oral arguments, Jani.King respectfirlly
requests the opportunity to do so.
3
STATEMENT OF THE CASE
Sullivan did not provide a statement of the procedural history of this case pursuant
to T¡,x. R. App. P. 38.1(d). Therefore, Jani-King submits this statement of the
case-
Nature of the case
Jani-King sued Sullivan for breach of contract. (5 CR 18 at
C). Sullivan counterclaimed for fraud and breach of contract.
(6 CR 1-4).
Course of Proceedings:
After
week-longtrial, the jury found Sullivan breached the
contract f,rrst and excused Jani-King's failure to comply with
the contract. The jury also rejected Sullivan's fraud claim.
(Second Supp.CR 1) (3 Appx.). Sullivan filed a "Motion to
Disregard Jury Findings or Alternatively, For Judgment
Notwithstanding the Verdict," which the trial court
denied. (8 CR) (a Appx.).
a
Trial Court Dísposítion: On Augusf 15,2011, the trial court entered final judgment on
the jury's verdict and awarded Jani-King $303,075 in
damages, exclusive of interest and costs. (7 CR 1-2).
4
STATEMENT OF' THE ISSUES
Reply to Issue
1:
There is more than sufficient evidence to support the jury's finding
that Sullivan breached the Settlement Agreement.
Reply to Issue 2:
that Sultivan breached the Settlement Agreement first.
Reply to Issue 3:
Jani-King's failure to comply with the Settlement Agreement is
excused, as a matter of law, because Sullivan breached the
Settlement Agreement first.
Reply to Issue 4:
Sullivan failed to establish the jury's rejection of his fraud claim was
against the great weight and preponderance of the evidence.
Reply to Issue 5:
that Sullivan failed to comply with the Franchise Agreement.
Reply to Issue 6:
that Sullivan operated a competing commercial cleaning business
after May 1,2004.
Reply to Issue 7:
The trial court properly allowed David Cabrales to testiff regarding
Jani-King's attorneys' fees and more than sufficient evidence
supports the jury's finding that Jani-King was entitled to an $80,000
attorneys' fees award.
Reply to Issue 8:
The trial court properly admitted Jill Bean's testimony regarding
Jani-King's damages and more than sufficient evidence supports the
jury's inclusion of advertising fees in its damages award.
Reply to Issue 9:
The trial court properly denied Sullivan's Motion for JNOV seeking
reformation of the judgment and an award of damages against Jani-
King.
5
STATEMENT OF THE FACTS
The Janì-King System. Jani-King operates a system for, among other things, the
operation and franchising
businesses. (6
of
RREx.5 at2,\
comprehensive commercial cleaning and maintenance
1.1)
(2Appx.2T 1.1). Jani-King is authorizedto
grant
licenses to use its system, and related registered and proprietary trademarks, logos, and
other confidential and proprietary information. Id.
Jøní-King ønd Sullivan enter into the Franchise Agreement. On August
19,
1998, Jani-King entered into a Franchise Agreement with Sullivan, granting him a limited
license to use the Jani-King system in a specific territory, subject to the terms, covenants,
and conditions contained in the Franchise Agreement. (6 RR Ex. 5 at
Sullivan agreed to pay Jani-King
l)
(2 Appx. 1).
a'\oyalfy fee equal to ten percent (10%) of
[Sullivan's] gross revenues accruing each month". (6 RR Ex. 5 at 4, T 4.5.1) (2 Appx. a tl
4.5.1). Sullivan further agreed to pay Jani-King, among other things: [1] an advertising
fee of one half of one percent (05%) of the gross revenues generated from his Jani-King
franchise, 12) a Finder's Fee, and
[3] an
accounting fee
of three percent (3.0%) of
Sullivan's gross revenues. (6 RR Ex. 5 at 4-5, ffi 4.5.2, 4.6, 4.7) (2 Appx. 4-5,
TT 4.5 '2,
4.6, 4.7). In addition, the Franchise Agreement required Sullivan to pay "[a] fee of $25
per day (the "Non-Reported Business Fee") ... for each day [Sullivan] failfed] to report
all revenue [he] earned or received to Jani-King." (6 RR Ex. 5 aÍ 4,I4.5.1) (2 Appx. 4 fl
4.s.1).
6
The Franchise Agreement expressly provided that failure to timely pay Jani-King
constitutes a substantial breach of the Franchise Agreement. (6 RR Ex 5 at 8, T 4.8) (2
Appx. 8 l| a.8); see also (6 RR Ex. 5 at ll,n 4.17.2) (2 Appx. 11, T 4.17.2); (6 RR Ex.
5
at 18, TT 8.1(Ð & 8.1(e)) (2 Appx. 18,lH 8.1(Ð & (e)).
In addition, the Franchise
Agreement prohibited Sullivan from, among other
things, engaging in or having a financial interest in "any other business which performs
cleaning management services franchising or contracting cleaning management sales or
any related business anywhere." (6 RR Ex. 5 at 10, T 4.14) (2 Appx. 10 I 4.14); see also
(6 RR Ex. 5 at
13
,n
4
.ß .2) (2 Appx. ß
n
4.ß .2) .
The 2002 New York and 2003 Texas løwsuÍls. On Auguslzl,2002, Sullivan and
Lex-G, Inc. (an entity owned and controlled by Sullivan) commenced legal action in the
Supreme Court of the State of New York, County of Nassau, entitled Sullìvan, et al.
v.
Mike Gomez, et al.,Index No. 13886102 (the "New York Lawsuit"). (6 RR Ex. 6 at 1) (1
Appx. 1). Sullivan alleged Jani-King breached the Franchise Agreement. Id.
On June 2, 2003, Jani-King filed suit against Sullivan in the District Court of
Dallas County, Texas in a case entitled Jani-King of New York, Inc. v. Glenn Sullivan,
Cause No. 03-05 543-D (the "Texas
Lawsuit"). Id. Jani-King sued Sullivan for breach of
the Franchise Agreement based on his impermissible operation
of a competing
commercial cleaning business. (2 RR 85-89; 6 RR Ex. 6 at 1) (1 Appx.
l).
The 2004 Settlement Agreement. On May
l,
2004, Jani-King and Sullivan
entered into the Settlement Agreement to resolve their disputes in the New York Lawsuit
7
and Texas Lawsuit-though the Franchise Agreement remained in
(6 RR Ex. 6 at
l)
full force and effect,
(1 Appx. 1).
Sullivan brectched his obligations under the 2004 Settlement Agreement. The
Settlement Agreement acknowledged Sullivan's operation
of a competing business
in violation of the Franchise Agreement. (6 RR Ex. 6 at 4,
Settlement Agreement required Sullivan
to (i) "ímmedíately
3) (1 Appx. a fl3). The
and permanently cease
(il) "immediøtely and permanently
operation of the Competing Business"; and
steps necessary
\
was
take all
to assign or transfer all customers of the Competing Business to Jani-
King." (6 RR Ex. 6 at 4, ll3(a)) (1 Appx. a T 3(a)) (emphasis added). Sullivan did
neither. (2 RR 142;3 RR 8-13). Sullivan failed fo immedíately
cease his Competing
Business and likewise failed to permanently cease his Competing Business. (3 RR 13).
In fact, Sullivan continued to operate his Competing Business through the time of trial.
(2 RR I42; 3 RR 8-14). Sullivan also failed to immediately transfer the Competing
Business to Jani-King and repeatedly rebuffed Jani-King's offers to assist him with the
transfer of his accounts. (2 RR 93-94;2 RR
l5l-52;3 RR
15).
Sullivøn breached his obligations under the 1998 Frønchise Agreement, In
addition to failing to immediately cease operation of the Competing Business, Sullivan
breached the Franchise Agreement by (i) failing to report any reveîrres to Jani-King from
May 1,2004 through the time of trial; and (ii) failing to pay Jani-King any royalties or
fees from May 1, 2004 through the time of
I
trial. (3 RR 38-39; 3 RR 47-48).
By
Sullivan's own admission, he generated more than $1.6 million in revenue he neither
reported to Jani-King nor paid royalties on. (3 RR 37-38 3 RR 53; 6 RR Ex. 13).
Jøni-Kíng
fuffilled
its obligøtions under the 2004 Settlement Agreement. The
Settlement Agreement also imposed obligations on Jani-King. Specifically,
it obligated
Jani-King to provide Sullivan with $18,000 of new commercial cleaning business within
twelve months of the date of date of the Settlement Agreement. (6 RR Ex. 6 at
Appx.
2nÐ.
2,I2) (l
Thus, Jani-King had until May 1, 2005 to satisff its obligations to furnish
Sullivan with $18,000 of new cleaning business.
1d.
On June 16,2004 Jani-King offered Sullivan the Cheesecake Factory account-an
account that generated gross monthly billings of $16,440. (3 RR 84-86, 100); (6 RR Ex. 7
& Ex. 8). Garry Clark, the former President of Jani-King, Inc, testified the gross monthly
billings from the Cheesecake Factory account would have likely exceeded S18,000. (2
RR 99). Sullivan, however, rejected Jani-King's offer to service the Cheesecake Factory
Account. (3 RR 95-96).
9
SUMMARY OF ARGUMENT
A party must file a motion for new trial to preserve a factual sufficiency challenge
on appeal. Fredonía State Bankv. Gen. Am. Life Ins. Co.,881 S.W.2d279,281 (Tex.
1994). Sullivan did not file a motion for new
trial.
Instead, Sullivan filed a "Motion to
Disregard Jury Findings or Alternatively, For Judgment Notwithstanding the Verdict."
This motion should not be construed as a motion for new trial because it did not request a
new trial or request relitigation of any issues. Therefore, this Court should disregard
Sullivan's factual sufficiency challenges. Jani-King
will
nonetheless address each
of
Sullivan's error points.
Reply to Issue
l:
Sullivan failed to satisff his obligations under the Settlement
Agreement. Sullivan's testimony confirms there is more than sufficient
evidence
supporting the jury's finding that Sullivan breached the Settlement Agreement.
Reply to Issue
2:
Sullivan breached the Settlement Agreement
first.
The
Settlement Agreement required Sullivan to ímmediately and permanently satisfy certain
obligations, whereas
the Settlement Agreement required Jani-King to satisff
its
obligations within twelve months. There is overwhelming evidence supporting the jury's
finding that Sullivan breached the Settlement Agreement first.
Repty to Issue
as a matter
3:
Jani-King's breach of the Settlement Agreement is excused,
of law, because Sullivan breached the Settlement Agreement first.
Repty to Issue
4:
Sullivan relies on alleged misrepresentations made prior to
the execution of the Settlement Agreement in an attempt to establish the jury's rejection
10
of his fraud claim was against the great weight and preponderance of the evidence.
However, the alleged misreprcsentations either:
Settlement Agreement; or
(i)
transpired after execution
of
the
(ii) were not false, and therefore, not actionable. Moreover, to
the extent the jury relied on the credibility (or lack thereof) of Sullivan's witnesses, this
Court may not substitute its judgment because the jury is the sole judge of the credibility
of witnesses and the weight to be given to their testimony. As such, the jury's f,rnding
that Jani-King did not commit fraud against Sullivan is not against the great weight and
preponderance of the evidence.
Reply to Issue
5:
Sullivan admitted he breached the Franchise Agreement. Jill
Bean confirmed this testimony based on Jani-King's accounting records. More than
sufficient evidence supports the jury's finding that Sullivan failed to comply with the
Franchise Agreement.
Repty to Issue
6:
Sullivan's testimony and verifi.ed invoice log provides more
than sufficient evidence to support the jury's finding that he operated a competing
commercial cleaning business in violation of the Franchise Agreement.
Repty to Issue
7:
The trial court did not abuse its discretion in allowing David
Cabrales, Jani-King's attorneys' fees expert, to testiff because
Cabrales as an expert witness in February 2007; and
fees invoices.
In addition,
(i) Jani-King
designated
(ii) Jani-King produced its attorneys'
Cabrales' testimony regarding Jani-King's attorneys' fees
satisfies the Arthur Andersen factors. More than sufficient evidence supports the jury's
$80,000 attorneys' fee award.
11
Repty to Issue
B:
The trial court did not abuse its discretion by permitting Jill
Bean to review her notes reflecting basic arithmetic computations regarding Jani-King's
damages. The trial court properly permitted her to refresh her recollection pursuant to
Rule 612 of the Texas Rules of Evidence. Additionally, Sullivan's admissions regarding
non-payment
of
advertising fees and the Settlement Agreement provide more than
sufficient evidence to support the jury's damage award.
Reply to Issue
9:
More than a scintilla of evidence supports (i) the Jury's
refusal to award Sullivan damages; and
(ii) the trial court's denial of the "Motion
to
Disregard Jury Findings or Alternatively, For Judgment Notwithstanding the Verdict."
Jani-King satisfied its obligations under the Settlement Agreement by offering Sullivan
the Cheesecake Factory account. Sullivan rejected this offer. Sullivan's contention that
the trial court entered an improper judgment fails.
t2
ARGUMENT
I.
APPLICABLE STANDARDS OF'REVIEW.
Sullivan's nine issues on appeal essentially fall into three separate categories, each
corïesponding to a different appellate standard of review. First, Sullivan challenges the
sufficiency of the evidence supporting several of the jury's flrndings. (Apn. Br. 3-11:, 14-
15). Next, Sullivan argues the trial court erred in admitting certain documents
and
testimony into evidence. (Apn. Plr. 12-14). Finally, Sullivan contends the trial court
erred in denying his "Motion to Disregard Jury Findings or Alternatively, For Judgment
Notwithstanding the Verdict" ("Motion for JNOV"). (Apn. Br. 14-15)'
Sullivan's briet however, fails to articulate the standards of review applicable to
these issues. Consequently, Jani-King
will
set forth the applicable standards of review so
it may respond to Sullivan's error points. Sullivan's
issues one through six appear to
contest the factual sufficiency of the evidence supporting the
jury's findings. (Apn' Br.
3-11; 14-15). Sullivan's issues seven and eight appear to contest several of the trial
court's evidentiary rulings and also attack the sufficiency of the evidence supporting the
jury's findings. (Apn. B,r. 12-14). Finally, issue nine appears to challenge the jury's
failure to award Sullivan damages and the trial judge's denial of Sullivan's Motion for
JNOV, (Apn.Br. 14-15).
A.
Factual suffïciency standard of review.
The factual sufficiency standard of review governs issues one through six. (Apn.
Br. 3-11; 1a-15). It is a "familiar principle that in conducting a factval sufficiency
13
review, a court must not merely substitute its judgment for that of the
Hosp. v. Wright,79 S.V/.3d 48, 52.
sole judge of the
jury.
Bowíe Mem'l
It is an equally familiar principle that the jury is the
credibility of witnesses and the weight to be given to their testimony."
Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757,761 (Tex. 2003) (internal
citations omitted). Depending on which party had the burden of proof
aT
trial, a factual
sufficiency review is based on either (1) "insufficient evidence" or (2) fhe "great weight
and preponderance of the evidence." Raw Hide Oil
S.W.2d 264,275-76 (Tex.
(1.)
The
App.-Amarillo
1988,
&
Gas, Inc. v. Maxus Expl. Co.,766
writ denied).
insfficient evidence standard.
The insufficient evidence standard applies to issues where the appellanÍ. did not
cany the burden of proof
attrial. Croucher v. Croucher,660 S.W.2d 55, 58 (Tex.
1983).
The appellate court must consider and weigh all the evidence in the record to determine
whether the evidence supporting the finding is so weak, or the finding is so contrary to
the overwhelming weight of the evidence, that the finding should be set aside. Garza
v.
Alviar,395 S.W.2d 821,823 (Tex. 1965). Appellate courts give great deference to the
fact-finder's decisions regarding weight and credibility of testimony. City of Keller
lTilson, 168 S.W.3 d 802, 807 (Tex. 2005). Appellate courts
v.
will not reverse the fact-
finder merely because a diflerent finding is supported by a preponderance of the
evidence. McMíttín v. State Førm Lloyds, 180 S.W.3d 183, 201 (Tex. App'-Austin
2005,pet. denied).
t4
(2.)
The great weíght and preponderance standard.
The great weight and preponderance standard applies to issues on which the
appellant carried the burden of proof at
trial. Croucher,660
S.W.2d at
58. Under
this
standard, an appellate court must consider and weigh all evidence in the record and may
set aside a finding only
if the evidence is so weak or if the finding is so against the great
weight and preponderance of the evidence that
Eagle Archery, Inc.,
(3.)
ll6
it is clearly wrong
and unjust. Golden
S.W.3d at76l.
Factual sfficiency standards to be applied to Appellant's
issLtes.
The insufficient evidence standard should apply to issues one, three, five, and
six-the
issues on which Jani-King carried the burden of proof
attrial. The
great weight
and preponderance standard should apply to the factual sufficiency challenges raised in
issues two, four and
nine-the
issues on which Sullivan carried the burden of proof at
trial.
B.
Legal sufficiency standard of review.
In issue nine, Sullivan asserts both factual and legal suff,rciency challenges. (Apn.
Br. 14-15). A party challenging the tegal suff,rciency of an adverse finding on an issue on
which that party had the burden of proof at trial must demonstrate the evidence
conclusively established all vital facts in support of the issue as a matter of
law. Dow
Chem. Co. v. Francís,46 S.W.3d 237,24L (Tex. 2001); Carrasco v. Stewart, 224 S.W.3d
363,367 (Tex.
App.-El
Paso 2006, no pet.). A party attempting to overcome an adverse
fact finding as a matter of law must surmount two hurdles. State Dept. of Transp.
15
v.
Barraza, 157 S.W.3 d 922, 926 (Tex.
App.-El
Paso 2005, no pet.) (citing Sterner v.
Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989)). First, the record must be
examined for evidence supporting the f,rnding, while ignoring all evidence to the contrary.
Id.
(citing Sterner,767 S.W.2d at 690). Second,
then the entire record must be examined to see
as a matter
of law.
Id.
if no evidence
supports the finding,
if the contrary proposition is established
(citing Sterner,767 S.W.zd at 690). An appellate court will
sustain the error point only
if the appellant conclusively establishes the contrary position.
Id.
C.
Standard of review for evidentiary rulings-abuse of discretion.
In issues seven and eight, Sullivan challenges certain evidentiary rulings by the
trial court. (Apn. k. 12-14). An appellate court reviews atrial court's decision to admit
or exclude evidence under an abuse of discretion standard. In re J.P.B.,180 S.W.3 d 570,
575 (Tex. 2005); Columbia Med. Ctr. Subsidíary, L.P. v. Meíer, 198 S.W.3d 408, 411
(Tex. App.-Dallas 2006, pet. denied). Under this standard, an appellate court is not free
to substitute its judgment for the trial court's judgment. BowÌe Mem'l Hosp.,79 S.W.3d
at 52. A trial court abuses its discretion only if it acts in an arbifiary or unreasonable
manner without reference to any guiding rules or principles. Columbia Med. Ctr., 198
S.W.3d af 4IL.
To reverse a judgment based on a claimed error in admitting or
excluding
evidence, a party must establish the error (i) probably caused the rendition of an improper
judgment; or (ii) probably prevented the petitioner from properly presenting the case to
t6
the appellate courts. Interstate Northborough P'shíp v. State,66 S.W.3d 213,220 (Tex.
2001); Tex. R. App. P. 61.1. Typically, a successful challenge to a trial court's
evidentiary rulings requires the complaining party to demonstrate the judgment turns on
the particular evidence excluded or admiffed. Id.
D.
Standard of review for denial of a Motion for JNOV-legal sufficiency.
In issue nine, Sullivan also complains of the trial court's denial of his Motion for
JNOV. (Apn. Br. 14-15). An appellate court reviews the denial of a motion for judgment
notwithstanding the verdict under a legal sufficiency standard. Richard Rosen, Inc. v'
MendÌvi\,225 S.W.3d 181, 191 (Tex.
App.-El
Paso 2005, pet. denied).
If more thana
scintilla of evidence supports the jury's finding, the trial court properly denied the motion
for judgment notwithstanding the verdict. Id. af
IL
l9L-92.
SULLIVAN DID NOT PRESERVE A FACTUAL SUFFICIENCY
CHALLENGE FOR APPEAL.
A.
A motion for
new trial is required to preserve a factual sufficiency
challenge.
The lion's share of Sullivan's complaints on appeal appear to challenge the factual
sufficiency of the evidence supporting the jury's f,rndings.l
A party must present
a
complaint in the trial court in order to preserve that issue for appeal. Tnx. R. App. P.
33.1(a). The sole method of preserving a factual sufficiency challenge on appeal is the
frling
a
motion for new
trial. Te,x. R. Ctv. P. 324(bX2), (3); Fredonia
I
State Bankv. Gen.
Sullivan's lack of clarity throughout his brief forces Jani-King to assume he is challenging the factual sufftciency
of the evidence supporting the jury's findings, though Sullivan fails to articulate a clear basis for appeal and does not
state any applicabie standãrd o?review. Thus, Sullivan's brief violates TEX. R. App. P. 38.1(Ð, which requires'oclear
and coniisè-argument . . . with appropriate citations to authorities and to the record" supporting the brief.
l7
Am. Life Ins. Co.,881 S.W.2d,279,281 (Tex. 1994). Sullivan did not file a motion for
new trial, and thus, failed to preserve a factual sufficiency challenge for appeal. See id.
Sullivan's Motion for JNOV does not meet the requirements of
motion for new trial.
B.
Rather than
a
filing a motion for new trial, Sullivan filed a "Motion to Disregard
Jury Findings or Alternatively, For Judgment Notwithstanding the Verdict." (CR Ex' 8)
(4 Appx.).
A motion to disregard the jury's
findings and a motion for judgment
notwithstanding the verdict are proper methods to preserve a legal sufhciency challenge,
but they are not sufflrcient to preserve a factual suff,rciency challenge. Tex. R. Ctv'
P
32aþ)e); Cecìl v. Smith, S04 S.W.2d 509, 510 (Tex. 1991). Sullivan's Motion for
JNOV does not qualiff as a motion for new trial.
A "motion should be construed by its substance to determine the relief sought, not
merely by its form or caption." Surgitek, Bristol-Myers Corp. v. Abel,997 S.\M'2d 598,
601 (Tex. 1999). Consequently, courts look to the body of the instrument and its prayer
for relief to determine the motion's substance. Finley v. J.C. Pace, Ltd.,4 S.W.3d 319,
320 (Tex. App.-Houston
[lst Dist.] I999,no pet.), dism'd on other grounds, No. 01-99-
00662-CV,lggg WL 997788 (Tex. App.-Houston [1st Dist.] Nov. 4 1999, no pet'). In
other words, "the focus is on how the motion
will affect the litigation if the relief
requested is granted." Austin Neighborhoods Council. v. Bd. of Adiust',644 S.W.2d 560,
565 (Tex.
App.-Austin
1982, writ ref d n.r'e.).
A motion for new trial "must, by its very nature, seek to set aside
an existing
judgment andreqvestrelitigation of the issues." Barryv. Barry,193 S.W.3d72,74 (Tex.
18
App.-Houston [lst Dist.] 2006, no pet.) (emphasis added); see also Prestige Ford
Garland Ltd. Partnership v. Dallas Postal Credit Union, No. 05-01-00560-CV,2002WL
188479
at
t'c3
(Tex. App.-Dallas Feb. 7, 2002, pel. denied) (not designated for
publication); PopCap Games, Inc. v. MumboJumbo, LLC,350 S.W.3 d 699 (Tex.
Dallas 2011, no pet.).
If
App.-
an instrument "does not meet these minimum requirements, it is
not a motion for new trial." Id. (citing Mercer v. Band,454 S.W.2d 833, 836 (Tex.
App.-Houston [14th Dist.] 1970, no writ).
Throughout the Motion for JNOV, Sullivan requested solely legal remediesnamely that the trial court strike or reform certain jury answers. (CR Ex. 8 at 6-7) (4
Appx. 6-7). The Motion for JNOV did not request a new trial or otherwise seek to
relitigate any factual issues-a necessity of a motion for new
S.W.3d at
74. The Motion for JNOV
trial.
See
Barry, 193
lacked any request (or even implication) that the
trial court grant a new trial. See Taylor v. Trans-Cont'l Props., Ltd.,739 S.\M.2d
876 (Tex.
App.-Tyler
873,
1987, no writ).
Sullivan's Motion for JNOV does not meet the minimum requirements of a motion
for new trial. See Barry, 193 S.W.3d at 74. Similar to Mercer, and in contrast to
PopCap, Sullivan's motion failed to request the judgment be vacated and the issues be
relitigated. Mercer,454 S.W.2d at 836; PopCap,350 S.V/.3d af 716. In fact, had the
trial judge granted Sullivan's Motion for JNOV, a new trial would not have resulÍed.
See
Austin Neìghborhoods Councí\, 644 S.W.2d at 565. Rather, the Motion for JNOV
requested the court strike
or reform the jury's
l9
answers,
or
altematively
to render
judgment notwithstanding the verdict in favor of Sullivan. (CR Ex.
7).
I
af.6-7); (4 Appx. 6-
Consequently, Sullivan failed to properly preserve a factual sufficiency challenge for
appeal. For these reasons, Sullivan's various factual sufficiency challenges should be
ignored, and the trial court's judgment should be affirmed.
III.
THE TRIAL COURT DID NOT ERR IN RENDERING JUDGMENT IN
FAVOR OF'JANI.KING.
More than sufficient evidence supports the jury's finding that Sullivan
A.
breached the Settlement Agreement (Issue 1).
Sullivan erroneously contends the jury erred in finding he breached the Settlement
Agreement. (Apn.Br. 10-11). Sullivan's contention arises out of QuestionNo. 1 of the
Charge of the Court that provides as follo
OUESTTON NO.
.
I:
Did Mr. Sullivan fail to comply with the Settlement Agrecment?
Answer "Yes" or "No."
Ânswer:
4tS
(Second Srpp. CR 1 at 3) (3 Appx.
evidence supporting the
3).
Sullivan's error point ignores the overwhelming
jury's finding.
The Settlement Agreement acknowledged Sullivan's operation of a "competing
professional cleaning business" (the "Competing Business"). (6 RR Ex. 6 at 4, tf 3)
Appx. 4,
,1T
(l
3). The Settlement Agreement then obligated Sullivan to (i) "immediately and
permanently cease operation of the Competing Business"; and (ä) "ímmedíately and
permanently take all steps necessary to assign or transfer all customers of the Competing
Business to Jani-King."
Id.
(emphasis added). Sullivan did neither. (2 RR 142;3 RR 820
l3).
Sullivan admitted he failed to immediately
cease
his Competing Business. (3 RR
13).
a
You did not immediately cease operation of the competing business
after entering into the Settlement Agreement, did you?
A.
No
Id.
Sullivan likewise admitted he failed to permanently
cease
his Competing Business. (3
RR 13).
a
You did not ever permanently cease operation of the competing
A.
No.
business after entering this Settlement Agreement, did you?
Id. In fact, Sullivan admitted he continued to operate his Competing Business through
the time of trial. (2 RR I42;3 RR 8-14).
In addition, Sullivan admitted he failed to immediately fransfer his Competing
Business to
Jani-Kiî5. (2 RR 151-152;3 RR 15).
a
You have never transferred the accounts listed in this exhibit to the
Settlement Agreement to Jani-King, have you?
A.
No.
(3 RR 1s).
There
is
overwhelming evidence
in the record, let
alone merely suffrcient
evidence, supporting the jury's finding that Sullivan breached the Settlement Agreement'
See Golden Eagle Archery,
Inc., 116 S.W.3d af 767. For this reason, Sullivan's
contention that the jury erred in finding he breached the Settlement Agreement fails.
2t
More than suffïcient evidence supports the jury's fÏnding that Sullivan
breached the Settlement Agreement first (Issue 2).
B
Sullivan eroneously contends the jury erred in finding he breached the Settlement
Agreement prior to Jani-King's breach of the Settlement Agreement. (Apn. B.r. 4'7).
Sullivan's contention arises out
of
Question
No. 2 of the Charge of the Court-
0UJSTION NO.2:
Did Jani-King fail to comply with the Settlement Agreement?
Answer t'Yes" of "No,"
Answer:
VtS
(Second Supp.CR 1 at 3) (3 Appx. 3).
Sullivan's error point ignores the overwhelming evidence in support of the jury's
finding. The Settlement Agreement obligated Jani-King to provide Sullivan with
S18,000 of new commercial cleaning accounts within twelve months of the date of date
the Settlement Agreement. (6 RR Ex. 6
until May
I,
business.
,i'd.
2005
In stark
at2,\2)
of
(l Appx.2,l2). Thus, Jani-King had
to satisff its obligations to furnish Sullivan $18,000 of new cleaning
contrast, Sullivan's obligations under the Settlement Agreement were
immediate. The Settlement Agreement required Sullivan to
permanently cease operation
(i)
"immediately and
of the Competing Business"; and (ä) "immediotely
and
permanently take all steps necessary to assign or transfer all customers of the Competing
Business to Jani-King." (6 RR Ex. 6 aI 4,
\
3a) (1 Appx. 4, 'l[ 3a) (emphasis added).
Sullivan readily admitted he failed to do either. (2 RR 142;3 RR 8-13).
22
Sullivan contends Jani-King breached the Settlement Agreement first because (i)
Jani-King allegedly failed to provide him with new accounts; and (ii) Jani-King allegedly
failed to pay him fees under the Settlement Agreement. (Apn.
k.
4-7). In so doing,
Sullivan flatly ignores the Settlement Agreement's divergent temporal requirements.
Sullivan's obligations under the Settlement Agreement were immediate. (6 RR Ex. 6 aI
4,
\
3a) (1 Appx. 4,
I 3a). Jani-King, in contrast, had twelve months to satisff its
obligations. (Id. at 2,\2) Qd.at2,I2).
Desperate to advance a theory that Jani-King breached the Settlement Agreement
first, Sullivan also contends Jani-King failed to prepare and provide Sullivan the
necessary forms (i.e., maintenance agreements) to allow him to immediately effectuate
the transfer of his accounts to Jani-King. (Apn. Br. 4-6). In so doing, Sullivan attempts
to impose a non-existent contractual obligation. The Settlement Agreement did not
require Jani-King to draft maintenance agreements that did not otherwise exist, nor did
require Jani-King to furnish such documents to Sullivan. (6 RR Ex. 6
aT
it
4'5,1T 3a) (1
Appx. 4-5, fl 3a). Rather, the Settlement Agreement merely notes such agreements had
already "been drafted by Jani-King." Id.
Even
if the Settlement Agreement did create such obligations, Sullivan knew Jani-
King maintained the form maintenance agleements in its New York office-less than
quarter
a
of a mile from Sullivan's house-and that he could obtain the maintenance
agreements at any
time. (2 RR 140).
23
There
is
in the record, let alone merely sufficient
evidence, supporting the jury's finding that Sullivan breached the Settlement Agreement
first.
Inc., 116 S.W.3d at 761. For this reason, Sullivan's
contention Jani-King breached the Settlement Agteement first fails.
C.
to
comply with the Settlement Agreement is
excused, as a matter of law, because Sullivan breached the Settlement
Agreement first (Issue 3).
Jani-King's failure
Sullivan effoneously contends the jury erred in finding Jani-King's failure to
comply with the Settlement Agreement was excused. (Apn. Br.
contention arises out of Question No. 3 of the Charge of the
7-8).
Sullivan's
Court-
OUESTION NO.3:
Who failed to comply with thc Scttlement Agreement first?
Answer "Mr. Sullivan" or "Jani-King."
Answer:
tA( /;tt lìvn,n-l
Jani-King's failure to comply with the Settlement Agreement is excused, as
matter of law, because Sullivan breached the Settlement Agreement
first.
Pípelíne Co., v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004)
a
See Mustang
þer
curiam).
Sullivan's obligations under the Settlement Agreement were immediate whereas Jani-
King had ¡¡,'elve months to provide Sullivan with $18,000 of new commercial cleaning
contracts. (6 RR Ex. 6 at3-5, tffl 2e-3a) (1 Appx. 3-5, TT 2e-3a). There is overwhelming
evidence in the record, let alone merely sufficient evidence, that Sullivan breached the
24
Settlement Agreement
first by failing to (Ð "ímmediately and permanently cease
operation of the Competing Business"; and
(ii) failing to "immediately and permanently
take all steps necessary to assign or transfer all customers of the Competing Business to
Jani-King
J' Id.
Because the
(emphasis added); see Golden Eagle Archery, Inc., 116 S.W.3d at 76I.
jury found Sullivan breached the Settlement Agreement first, Jani-King's
breach of the Settlement Agreement is excused as matter of
law.
See Mustang Pipeline
Co., 134 S.W.3d at 196. For this reason, Sullivan's contention the jury erred in finding
Jani-King's non-compliance with the Settlement Agreement was excused fails.
D.
Sullivan faited to establish the jury's rejection of his fraud claim was
against the great weight and preponderance of the evidence (Issue 4).
Sullivan erïoneously contends the jury erred in finding Jani-King did not commit
fraud against Jani-King. (Apn. Br. 8-10). Sullivan's contention arises out of Question
No. 6 of the Charge of the
Court-
QUESTTON NO.6
Did lani-King commit fraud against Mr. Sullivan?
Fraud occurs when
a.
a
-
party makes a material misrepresentation, and
b. the misrepresentation is made with the knowledge of its
falsity or made
recklessly without knowledge of the truth and as a positive assertion, and
c.
the misrepresentation is made with the intention that it should be acted on by
the other party,_gl!_
d.
the other party relies on the misrepresentation and thereby suffers injury.
25
Misrepresentation means
a.
-
a false ståtement,
or
b. a promise of future performance made with an intent, at the time the promise
was made, not to perform as promised, or
c. e statement of opinion that the maker knows to be false, or
d.
'
an expression of opinion that is false, made by one claiming or implying to have
special knowledge of the subject matter of the opinion.
"special knowledge" means knowledge or information superior to that
possessed by the other party and to which the other party did not have equal
access.
Answer "Yes" or "No."
Answer:
(Second Supp. CR
r{D
I at 4-5) (3 Appx. 4-5).
To find Jani-King committed common law fraud, the jury would need to have
made the following specific
See
findings-
a.
Jani-King made a material misrepresentation to Sullivan, prior to May 1,
2004, and such material misrepresentation was made by Jani-King for the
purpose of inducing Sullivan into entering into the Settlement Agreement;
b.
The material misrepresentation was made by Jani-King with knowledge of
its falsity or made recklessly without any knowledge of the truth, and was
further made as a positive assertion;
c
The material misrepresentation was made by Jani-King with the intention
that Sullivan act on the material misrepresentation;
d.
Sullivan reasonably relied on the material misrepresentation; and
e.
Sullivan suffered injury as a result of his reasonable reliance on Jani-King's
material misrepresentation.
Aquaplex, Inc. v. Rancho La Valencía, 1nc.,297 S.W.3 d768,774 (Tex.2009).
26
Sullivan proffers a litany
of purported misrepresentations made by Jani-King
regarding the Settlement Agreement. (Apn. Br.
8-9).
Such alleged misrepresentations
includea
Jani-King's alleged failure
to return Sullivan's phone calls after
the
execution of the Settlement Agreement;
to
make payments
to
Sullivan after the
execution of the Settlement Agreement; and
o
to provide Sullivan with
maintenance
agreements to transition his accounts to Jani-King after the execution of the
Settlement Agreement.
(Apn. Br. 8-9). These alleged misrepresentations related to Jani-King's post-Settlement
conduct are, aL best, alleged failures by Jani-King to comply with the terms of the
Settlement Agreement-though the Settlement Agreement imposes no obligation on Jani-
King to "return phone calls" or "provide Sullivan with maintenance agreements." They
are not material misrepresentations or even representations made by Jani-King
prior to
the execution of the Settlement Agreement. See Aquaplex, lnc.,297 S.W.3d aI 774
(emphasis added). As such, these alleged representations do not support a fraud claim.
Id.
The only purported misrepresentations Sullivan contends transpired prior to the
execution of the Settlement Agreement are alleged statements by Garry Clark, the former
President
of Jani-King, Inc., that he would personally (i) help Sullivan
accounts of his Competing Business to Jani-King; and
Sullivan. (Apn.Br. at 9).
27
(ii) secure new
transfer the
business for Mr.
The record reflects numerous offers by Clark to assist Sullivan with the transfer
of
the accounts; however, Sullivan rebuffed these offers. (2 RR 93'94). Clark's testimony
on this matter included the following statements-
said, I'11 be more than happy to come back up and we'll go out on the
sales call together and see if we can convince these people at Alcan they
should sign an agreement with Jani-King for you to continue the services.o'
(2 RR e3).
"I
a
"[Sullivan] said, I don't need you to come up here ... I sold this account, I
know these people, this guy was a friend of mine, that's how I signed the
account. I certainly don't need you to come up here and help me sign it."
(2
RR e3).
o "In the end [Sullivan] said I don't need you, I can get it myself. [I can]
bring it into the Jani-King office." (2 RR 94).
Sullivan failed to establish the jury's rejection of his fraud claim was against the great
weight and preponderance of the evidence. Croucher,660 S.W.2d at 58; Golden Eagle
Archery, Inc.,
ll6
S.V/.3d atT6L As such, this Court should affirm the judgment of the
trial court.
With respect to Clark's alleged promise to personally assist Sullivan in securing
new business, the only evidence of this representation came from Mr. Croutier, Sullivan's
attorney
in the New York Lawsuit. (3 RR 156-153). The jury, however,
either
determined Croutier's testimony as to Clark's alleged representation was not credible, or
that the evidence proffered did not satisff the four additional elements of a fraud claim.
Inc., 116 S.W.3d aI 761 ("...in conducting a
factual
sufficiency review, a court must not merely substitute its judgment for that or the
28
jury...[who]...is the sole judge of the credibility of witnesses and the weight to be given
to their testimony.").
The
jury's finding that Jani-King did not commit fraud against Sullivan is
against the great weight and preponderance of the evidence. See
not
íd. For these reasons,
Sullivan's contention that the jury erred in rejecting his fraud claim fails.
E.
failed to comply with the Franchise Agreement (Issue 5).
Sullivan erïoneously contends the jury erred in finding he failed to comply with
the Franchise Agreement. (Apn.
No.
I
of the Charge of the
Br. 10-11). Sullivan's contention arises out of Question
Court-
OUESTION N.O.8:
Did Mr. Sullivan lìril to comply rvith thc Ëranchisc Âgrccmcnt?
Ansrver t'Yest' or "No.tt
Answer:
(Second Supp. CR 1 at 5) (3 Appx. 5).
The Franchise Agreement required Sullivan to (i) report all gross revenues from
the operation of his commercial cleaning business to Jani-King; and (ii) pay Jani-King
royalty and advertising fees. (6 RR Ex. 5. at 4,
'lfJ[
4.5.1-4.5.2) (2 Appx. 4, TT 4.5.1'
4.5.2). Sullivan admitted he failed to report øny reveînes to Jani-King from May 1,2004
through the time of trial
a.
-
You have not reported all of your gross revenue earned or received
by you from the operation of your franchisee business to Jani-King
since May 1, 2004, isn't that right?
29
A
Yes, Sir
a
As a matter of fact you haven't reported any income to Jani-King
since May 1, 2004 have you?
A.
No, sir.
(3 RR 37-38).
Jill Bean, Jani-King's
Vice-President
of Internal
Operations and Director of
Franchisee Accounting, testified Sullivan failed to pay Jani-King any royalties or fees
from May 1,2004 through the time of
trial-
a.
From May 1, 2004, until the present time, has any money come into
Jani-King of New York from Mr. Sullivan or Lex-G's customers?
A.
No.
(3 RR 47-48).
There
is overwhelming evidence in the record, let alone merely
sufflrcient
evidence, supporting the jury's finding that Sullivan breached the Franchise Agreement.
Inc., 116 S.W.3d at76l.
Sullivan contends the jury's finding was improper because Jani-King waived its
right to assert a claim for breach of the Franchise Agreement and because Jani-King
failed to provide written notice of Sullivan's breach of the Franchise Agreement and a
thirty day opportunity to cure. (Apn. Br. 10-11). Both assertions fail.
First, a party must plead and prove waiver as an affirmative defense. Tex. R. Ctv.
P" 94; T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218,223 (Tex. 1992).
Sullivan failed to plead the affirmative defense of waiver and further failed to request the
30
Court submit a waiver question to the
jury.
(6 CR 1-3; Second Supp. CR 2 at 1-3). Thus,
Sullivan's assertion that Jani-King waived its right to contend Sullivan breached the
Franchise Agreement fails.
Next, the Franchise Agreement does not require Jani-King to provide Sullivan
notice of breach and a thirty day opportunity to cure merely to assert a breach of contract
claim. Rather, the notice and cure provision applies only when Jani-King terminates the
FranchiseAgreement-notthe circumstances of this dispute. (6 RREx.5 at 18 fl 8.1g)
(2 Appx. 13 tf S.1g). For these
reasons, Sullivan's assertion that Jani-King's failure to
provide notice and a thirty day cure period nullifies the jury's f,rnding regarding breach of
the Franchise Agreement fails.
F'.
operated a competing commercial cleaning business after May 1, 2004
(Issue 6).
Sullivan erroneously contends the jury erred
competing commercial cleaning business after
in finding that he operated a
May l, 2004. (Apn. Br. ll'12).
Sullivan's contention arises out of Question No. 10 of the Charge of the CourtOUESTION N(): t0
Mayl, 2004, whcthcr incJividually, or as an agcnt'
stockholdcr, cmploycc, dircctor, owncr, parlncr, of a conrpany, cngagc in or had any lìnancial
interest in a business that provided profcssional clcaning services other than Mr. Sullivan's JaniDi<i Mr. Sullivan, at any time after
King franchisc?
Ansrvcr "Yes" or No."
Ansrver
4es
31
Sullivan admitted he continued to operate his Competing Business after executing
l, 2004 Settlement Agreement
the May
a
A.
(3 RR
l3).
a
and through the time of
trial-
You did not ever permanently cease operation of the competing
business after entering this Settlement Agreement, did you?
No.
Sullivan further
testified-
t...1 you're still operating a competing professional
services company
in the territory described in the
cleaning
franchising
agreement?
A.
(3 RR
Yes.
8). In addition, Sullivan testified that the invoice log contained a correct
description of each customer he serviced, the customer's locations, the fees he charged,
and the fees he
received-
a.
As a matter of fact, you verified that the information provided in that
invoice log is true and correct, didn't you?
A.
Yes, sir.
a.
As such, this is a true and accurate summary of the chart which
shows the amount of the invoices to each of your customers since
May 1, 2004 to the present, I'm sorry, through the end of January
201I, and how much was paid on each invoice, correct, sir?
A.
Yes, sir.
(3 RR 40;6 RR Ex. 14). There is overwhelming evidence in the record, let alone merely
sufficient evidence, supporting the jury's frnding Sullivan engaged
in a competing
commercial cleaning business after May 1,2004. See Golden Eagle Archery, Inc., 116
32
S.W.3d at
761. For this
reason, Sullivan's contention the
jury erred in finding
he
operated a commercial cleaning business after May 1, 2004 fails
G
The trial court properly allowed Cabrales to testify regarding JaniKingts attorneyst fees and more than sufficient evidence supports the
jury's finding that Jani-King was entitled to $80,000 of Attorneys' Fees
(Issue 7).
Sullivan contends the trial court improperly permitted David Cabrales to testiff
regarding Jani-King's reasonable and necessary attorneys'
fees. (Apn. Br.
12'14).
Sullivan frrrther contends the jury erred in awarding Jani-King $80,000 of attorneys' fees.
Id.
Sullivan's contentions arise out of Question No. 11 of the Charge of the
OUESTION NO.
Court-
II:
What is rcasonablc f"cc f'or thc nccessary serviccs of Jani-King's atlorncy, statcd in dollars
and cents?
Answcr with an amount f'or each of the follorving:
n in thc trial court.
a
ïæ,ooo
b.
Answer:
c
For represcntation through appeal to the court ofappeals
t
For representation at thc petition for review stage in Supreme Court of Texas.
Answer:
d.
For representation at the merits briefing stage in Supreme Court of Tcxas.
Answcr:
e.
For representation through oral argument and thc completion of proceedings in
the Supreme Court of Texas.
Answer:
JJ
(Second Supp. CR 1 at 6-7) (3 Appx. 6-7).
1.)
The trial court did not abuse its díscretion in allowing Cabrales to testífy
and admittíng Cabrales' testimony.
The trial court did not abuse its discretion in either allowing Cabrales to testiff or
admitting cabrales' testimony. see columbia Med. ctr.,198 s.w.3 d at 411 (a trial court
abuses
its discretion only
if it acts in an arbitrary or unreasonable manner,
or without
reference to any guiding rules or principles). Jani-King designated Cabrales as an expert
witness in February of 2007-four years prior to
trial. (First Supp. CR
1 Ex.
A
at fl 6).
Therefore, Sullivan's assertion that Jani-King did not properly designate Cabrales as an
expert witness is baseless. (Apn.
Br. l2). Likewise, Sullivan's
assertion that the trial
court erred in admitting Cabrales' testimony because Jani-King failed to produce its
attorneys' fees invoices is likewise baseless. Id. Per Sullivan's own pleadings, Jani-King
produced its attorneys' fees invoices on January
2I,2011. (First Supp. CR 1 at l-2).
Regardless, Cabrales' testimony regarding Jani-King's reasonable and necessary
attorneys' was not based upon his review of attorneys' fees invoices or other documents'
(3 RR 132-33).
Even assuming the trial court erred in admitting Cabrales' testimony, which it did
not, Sullivan has not demonstrated this alleged error (1) probably caused the rendition of
an improper judgment or (2) probably prevented the petitioner from properly presenting
the case to the appellate courts. Interstate Northborough P'ship,66 S.W.3d at220;Tøx.
R. App. P. 61.1. As such, the trial court did not abuse its discretion in allowing Cabrales
to testiff regarding Jani-King's reasonable and necessary attorneys' fees.
34
2.)
More than sufficient evidence supports the Jury's 880,000 attorneys'fee
award.
Sullivan contends the jury erred in awarding Jani-King $80,000 of attorneys' fees,
despite Cabrales' testimony that
(i)
$175,000 constituted a reasonable and necessary
attorneys' fee and (ii) Jani-King attorneys' fees far exceeded $175,000. (Apn. Br. 13); (3
RR 120). Cabrales' testimony included the following-
a
Based upon taking into consideration all of the facts under Rule 1.04
of the Texas Rules of Professional Conduct, and what you know
took place in this case, do you still feel confident that your testimony
regarding the amount of attorneys fees is fair and reasonable?
A.
I absolutely
do.
(3 RR 133). Cabrales turther
testified-
a.
And what would a reasonable attorneys' fee be for the pretrial work
and the trial work of this case based upon those factors?
A.
Considering those factors, I would say the fee would be at least-a
reasonable fee would be at least 150,000 to 175,000, if not more.
(3 RR 120). Cabrales also testif,red regarding the specific work performed during the
course of the lawsuit, including: (i) traveling to New York for multiple depositions, (ii)
obtaining discovery from New York based non-parties; and (iiÐ motion practice
including discovery disputes and motions for summary judgment. (3 RR 132'133).
Sullivan falsely contends the evidence is insufficient merely because Cabrales'
opinion was not based upon a computation of the number of hours worked multiplied by
the applicable hourly rate. (Apn. Br. at 13). This assertion ignores that "time, skill, and
labor involved" is but one sub-component of the non-exclusive, eight-factor test utilized
35
to determine the reasonableness and necessity of attorneys' fees. Arthur Andersen &
Co.
v. Perry Equip. Corp.,945 S.W.2d 812,818 (Tex. 1997) (citing TBx. DIScIPLINARY R.
PRor'L CoNoucr 1.04) (2005).2
There
is
evidence, supporting the
attorneys'
fee.
jury's
in the record, let alone merely suff,rcient
f,rnding that $80,000
is a reasonable and necessary
See Golden Eagle Archery, Inc., 116 S.W.3d at
761. For this
reason,
Sullivan's contentions that the trial court erred in admitting Cabrales' testimony, and that
there was evidence to support the attorneys' fees award, fail.
H.
The trial court properly admitted Bean's testimony regarding JaniKing's damages and more than sufficient evidence supports the jury's
inclusion of advertising fees in its damage award (Issue 8).
Sullivan enoneously contends the jury erred in assessing damages against him.
(Apn. Br. 14). Specifically, Sullivan asserts the (i) trial court erred by failing to exclude
testimony from Jill Bean; and
(ii) Jani-King offered no evidence regarding advertising
services provided to Sullivan after January 1,2005. Id.
Sullivan's contention arises out of Question No. 10 of the Charge of the Court-
2
The eight non-exclusive factors include: (l) the time and labor required, the novelty and difhculty of the questions
involved, and the skill required to perform the legal selice properly; (2) the likelihood that the acceptance of the
particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality
ior similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the
client or the circumstances; (6) the nature and length of the professional relationship with the client; (7) the
and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed
experience, reputation,
-on
results obtained or uncertainty of collection before the legal services have been rendered' Arthur
or contingent
Andersen & Co. v. Perry Equip. Corp.,945 S.V/.2d 812, 818 (Tex. 1997).
OUE$TION NO; l{l
Did Mr. Sullivan, at any tÍmc afler Mayt.20Û4, rvhcthcr individually, or as an ag,cntr
srockholdcr, cmploycc, dircctor, owncr¡ partncr, of t conrpany. cngagc irr or had any lìnancial
inrerest in a business rhar provicled profcssional clcaning services othcr than Mr- Sullivan's JaniKing franchise?
Ânsrvtr "Ycs" or Ns."
4t^ç
,q,nsrver:
(Second Supp. CR 1 at 6) (3 Appx. 6).
Sullivan first contends Bean based her testimony on documents Jani-King failed to
produce. (Apn. Br. 14). This assertion is false. Bean testified regarding the royalties and
fees owed
by Sullivan pursuant to the Franchise Agreement. (3 RR 47-55).
The
Franchise Agreement mandated Sullivan pay Jani-King (i) a royalty fee in the amount
ten percent (I0%)
of
of Sullivan's gross revenues; (ii) an advertising fee in the amount of
one half of one percent (0.5%);
(iii)
a non-reported business fee in the amount of $25.00
for each day Sullivan failed to tender the requisite royalty; and (iv) advertising fees. (6
RR Ex. 5 at 4
TlT
4.5.1 - 4.5.2) (2 Appx. 4 TT 4.5.1 - 4.5.2). Thus, Bean relied upon the
Franchise Agreement to determine the appropriate percentage or fees for each category
of
damages. (3 RR 47-55).
Bean then relied upon Exhibit
Sullivan-Ío determine the gross
through
l4-an
invoice log prepared and verffied by
revenues Sullivan generated from January
trial. (3 RR 48-49; 6 RR Ex. 14). To calculate the royalty
l,
2005
fees Sullivan failed to
pay Jani-King, Bean multiplied the gross revenues (as set forth in Exhibit 14) by ten
percent. (3 RR 51-55). To calculate the advertising fees Sullivan failed to pay Jani-King,
Bean muttiptied the gross revenues (as set forth in Exhibit
37
la) by one half of one percent.
(3 RR 54). To calculate the non-reported business fee, Bean multiplied $25.00 by
2,243-the number of days between January 1,2005 and the first day of trial. (3 RR 5455). Rather than manually perform these calculations in front of the jury, the trial court
allowed Bean
to review notes she prepared that reflect the sum of the calculations
referenced above. (3 RR 54-55).
The trial court did not abuse its discretion by permitting Bean to review notes
reflecting basic arithmetic computations regarding Jani-King's damages. See Columbía
Med. Ctr., 198 S.W.3d at 411 (a trial court abuses its discretion only
if it acts in an
arbitrary or unreasonable manner, or without reference to any guiding rules or principles).
A witness may review documents she prepared to refresh her recollection for purposes of
testiffing at trial. Tex. RuLE oF EVID. S03(5). This is precisely what the trial court
permitted Bean to do. After refreshing her recollection, Bean testified precisely how she
made the calculations. (3 RR 52-55).
Even assuming the trial court erred in admitting Bean's testimony, which
it
did
not, Sullivan has not demonstrated this alleged error (1) probably caused the rendition of
an improper judgment or (2) probably prevented Sullivan from properly presenting the
case to the court
of appeals. TEx. R. App. P. 44.1; Interstate Northborough P'ship,
66
S.W.3d at 220. As such, the trial court did not abuse its discretion in allowing Bean to
testiff regarding Jani-King's damages. For this reason, Sullivan's contention the trial
court erred in admitting Bean's testimony fails.
38
Sullivan's assertion that the trial court committed reversible error by not reforming
the
jury's damage award to exclude advertising fees is likewise groundless. (Apn. Br.
14). The Franchise Agreement obligated Sullivan to pay Jani-King advertising fees of
onehalf of onepercentof hisgrossrevenues. (6RREx.5 at4,\4.5.2) (2Appx.4,tf
4.5.2). Sullivan admitted he failed to make the required payments. (3 RR
19-20).
Contrary to Sullivan's assertions, the Settlement Agreement did not require Jani-King to
offer evidence that it provided advertising services specifically for Sullivan's franchise.
(Apn. Br. 14). There is overwhelming evidence in the record, let alone merely sufficient
evidence, supporting the jury's damage award in favor of Jani-King. See Golden Eagle
Archery, Inc., 116 S.W.3d at 761. For this reason, Sullivan's contention that insufficient
evidence supports the
L
jury's damage award fails.
The trial court properly denied Sullivan's Motion for JNOV seeking
reformation of the judgment and an award of damages against JaniKing. (Issue 9).
Sullivan effoneously contends the trial court entered an improper judgment
because (i) the
jury failed to award damages in his favor and (ii) the trial court improperly
denied his Motion for JNOV and further erred by not reforming the Judgment to award
damages in his favor. (Apn. Br. 14-15). Sullivan is wrong for several reasons.
First,
a
judicial determination entitling Sullivan to damages for Jani-King's breach
of the Settlement Agreement would require the Court to disregard the jury's findings that
(i) Sullivan breached the Settlement Agreement f,rrst (Jury Question No. 3); and (ii) JaniKing's failure to comply with the Settlement Agreement is excused (Jury Question No.
39
4). (Second Supp. CR at 3) (3 Appx. 3). The trial court must have (i) concluded the jury
erred in determining Sullivan breached the Settlement Agreement first;
(ii) concluded the
jury erred in finding Jani-King's breach was excused; and (iii) determined an appropriate
amount of damages in order to reform the judgment as requested. As articulated herein,
more than sufficient evidence supports the
jury's findings that Sullivan
breached the
Settlement Agreement first, thereby excusing Jani-King's breach. See supra, $$
II(B)
and (C).
Furthermore, the trial court did not render an improper judgment because more
than a scintilla of evidence supports (i) the Jury's refusal to award Sullivan damages and
(ii) the denial of the Motion for JNOV. When aparty attacks the legal sufficiency of
an
adverse finding on an issue on which the party has the burden of proof, the party must
demonstrate on appeal the evidence establishes, as a matter
of law, all vital facts
in
support of the issue. Sterner v. Marathon Oil Co.,767 S.W.2d 686, 690 (Tex. 1989).
Similarly, an appellate court reviews the denial of a Motion for JNOV under a legal
sufficiency standard. Rìchard Rosen, Inc. v. Mendivil, 225 S.W.3d 181, 191 (Tex.
App.-El
Paso 2005, pet. denied).
If more than a scintilla of evidence supports
the
jury's
finding, the trial court properly denied the motion for JNOV. See id. at l9I-92.
Evidence amounts to more than a scintilla
if
given the facts proved in the particular case.
reasonable minds could arrive at the finding,
,See
id. at 192.
More than a scintilla of evidence supports (i) the Jury's refusal to award Sullivan
damages; and
(ii) the denial of the Motion for JNOV. In the summer of 2004-well
40
within the twelve-month time frame-Jani-King offered Sullivan the opportunity to
service the Cheesecake Factory account. (3 RR
92). The account
generated gross
monthly billings of $16,440 at the time Jani-King offered it to Sullivan. (3 RR 86; 6 RR
Ex.7 and Ex. 8). Clark testif,red the gross monthly billings from the Cheesecake Factory
account would have tikely exceeded $18,000 in gross monthly
billings-the volume of
business the Settlement Agreement obligated Jani-King to offer
Sullivan-within a few
months. (2 RR 98-99;6 RR Ex. 6 at2,\ 2) (1 Appx.2,n2). Sullivan voluntarily rejected
Jani-King's offer to service the Cheesecake factory account. (3 RR 95-96). For these
reasons, Sullivan's contention that the trial court entered an improper judgment fails.
CONCLUSION AND PRAYER
To the extent Sullivan has preserved error, the record contains more than sufficient
evidence
to support the jury's verdict. Not only does sufficient evidence support
jury's verdict, Sullivan has wholly failed to meet his burdens on appeal. For
the
these
reasons, Jani-King requests the Court overrule Sullivan's error points and affirm the trial
court's judgment.
4t
Respectfully submitted,
LOOPER REED & McGRA\ry, P.C.
M.
State Bar No.24032455
J
J.J. HARDTG, JR.
LoopeR Reen & McGnaw, P.C.
1300 Post Oak Blvd, Ste. 2000
Houston, Texas 77056
(713) 986-7000 - Telephone
(713) 986-7100 - Facsimile
jhyman@lrmlaw.com
KENNETH C. STONE
4600 Thanksgiving Tower
1601 Elm Street
(214) 954-4135 - Telephone
(214) 953-1332 - Facsimile
kstone@,lrmlaw.com
ATTORNEYS FOR APPELLEE JANI.
KING OF NE\il YORK, INC.
42
CER]TIF'ICATE OF SERYICE
A ûue and correct copy of the foregoing has been forwarded to the following
counsel of record this 6th day of July, 2012, in accord.anee with tho Texas Rules of
Appellate Procedure 9.5.
Stephen Enda
V{erNEn Gl¿ss & Renp, LLP
6440 N. Central Expressway, Suite 700
Dallas, Texas 75246
M.
43
APPENDIX
1
2A0 4)
Settlement
Agreement (May 27,
27, 2004)
Settlenrent Agreement
2
1998)
Franchise Agreement
Agreement (August 20, 1998)
Franchise
3
(Feåruary 21,
2l,20ll)
Charge of the Court (February
2011)
Charge
4
ACCEPTED
225EFJ016963764
FIFTH COURT OF APPEALS
DALLAS, TEXAS
12 July 6 P4:13
Lisa Matz
CLERK
JudgmentNotwithstanding
Motion to Disregard
Disregard Jury Findings or Alternatively, for Judgment
Notwithstanding
the Verdict (September 14,
2011)
14,2017)
TAB 1
SE.TTLEMENT
SETTLEMENT AGREEMENT
This Settlement
Agreement (the
(the'Agreement")
"Agreement") is
is made
made and entered
entered into as of
1 ,2004,
among Glenn
May 1,
2004, by and among
Glenn Sullivan
Sullivan ("Sullivan")
("Sullivan") and Jani-King of New
york, Inc.
New York,
lnc.
("Jani-King").
WHEREAS, on or about August 19,
19, 1998, Sullivan
WHEREAS,
Sullivan and Jani-King entered into
into aa
Janí-King
New York, Jnc.
lnc. Franchise
Jani-King of New
Franchise Agreement
Agreement ('lFranchise
("Franchise Agreement"),
pursuant to
Agreement"), pursuant
whích Jani-King granted to Sullivan
which
Sullivan a license
license to use
use the methods,
methods, procedures
procedures and
and
products developed
developed by Jani-King in
in the business of operating
products
operating a professional cleaning
services
company in a specified
specified territory pursuant to the terms, covenants and
services company
conditions contained in
in the
conditions
the Franchise
Franchise Agreement;
Agreement; and,
WHEREAS,
WHEREAS, on or about August 21,
21,2002,
2002, Sullivan and Lex-G, Inc.
lnc. commenced
commenced
an action in the Supreme
Supreme Court of the State of New York, County of Nassau, entitled
enti¡ed
,Action,'),
sullivan, et al. y.
v. Mike Gomez,
Gomez. et
Sullivan,
et al.,
al., Index
rndex No.
No, 13886/02
13g96/02 (the "Action"),
in which
plaintiffs
plaintiffs allege, inter alia, that
that Jani-King
Jani-King breached
breached the parties' Franchise
Agreement;
and,
WHEREAS,
WHEREAS, on June 2,
2003, Jani-King
2,2003,
Jani-King commenced
commenced an action against
agaínst Sullivan
Sullpan in
in
the District Court of Dallas County,
County, Texas
Texas entitled Jani-King
Jani- no of New York.
lnv. y.
v. Glenn
York, mv.
Glenn
Sullivan, Cause No. 03-05543-D (hereinafter the "Texas Action"),
Action"), in which plaintiff
sullivan breached
parties' Franchise
breached the
alleges that Sullivan
the parties'
Agreement; and,
WHEREAS, the parties wish to
WHEREAS,
to resolve
resolve all disputes between them, solely
solely to
to avoid
avoid
the costs and expenses of further
further litigation;
litigation; and,
and,
WHEREAS,
hereto is
is an
WHEREAS, no party hereto
an infant
infant or incompetent
incompetent natural person for
for whom
whom
guardian or conservator has
a guardian
has been
been appointed,
appointed,
NOW,
consideration of
NOW, THEREFORE,
THEREFORE, in consideration
of the
the mutual
mutual promises
promises set forth herein,
the parties agree as follows:
1.
The parties hereby acknowledge
acknowledge and agree that the parties'
parties' Franchise
Franchise
remains in full and
and force
force and
Agreement remains
and effect,
effect, and except as otherwise
othenryise specifically
specifically
provided
provided herein, this Agreement does
does not
not supersede,
supersede, amend,
amend, or replace
replace the terms,
covenants and conditions
parties'respective
contained therein. The
The parties'
covenants
conditions contained
respective rights
rights and
remedies
remedies arising
arising from
from the other party's non-performance
non-performance of paragraphs 1-3 of this
Agreement
Agreement shall be governed exclusively by the parties' Franchise Agreement.
Agreement.
2.
Supplementing and amending Section
Section 6.1
6.1 of
of the parties' Franchise
Agreement, within twelve months
months of
of the
the date
date of this Agreement,
Agreement, Jani-King
Jani-King shall
good
shall in
in good
faith offer Sullivan the opportunity to
provide service to Jani-King commercial
to provide
commercial cleaning
cleaning
and/or maintenance
maintenance contracts with
with cumulative
cumulative gross monthly billings
billings in
in the total amount
(the'Additional
of at least $18,000 (the
"Additional Contract
contract Service
service Offer"),
offed'), as follows:
a. The
The contracts
contracts to which Sullivan will be offered
offered the right to service shall
shall
minimum of $2,000 per month in
gross billings,
each have aa minimum
in gross
billings, and shall
shall
premises within
require cleaning services
services at premises
within eastern
eastern Queens,
Queens, Nassau,
Nassau,
and/or
Suffolk counties
and/or western Suffolk
counties of
of the
the State
State of
of New
New York.
York. The eastern
eastern
boundary of
of this
this territory
territory shaU
shall be and inctude
include both sides
sides of
of Route
Route 110;
110;
the western boundary is delineated on the map annexed hereto as
Exhibit A.
b,
ln
provide service
In the
the event Jani-King offers Sullivan the right
right to
to provide
service to
to any
contracts with gross monthly
monthly billings of less than $2,000, such
contracts
credited against
will be credited
against the Additional
contracts wifl
Additional Contract
Contract Service
Service Offer
Offer
provide service is accepted
only if the offer to provide
accepted by Sullivan, which offer
offer
2
he is free
free to accept
accept or
or reject. In
Sullivan is offered
offered the right
ln the event Sultivan
to provide service to any Jani-King
Jani-King client located
located outside the territory
described in paragraph 2(a) and Sullivan
accepts the right to provide
sullivan accepts
provide
such services,
services, the offer(s)
offe(s)will
will be counted
counted towards Jani-King's
Jani-King's
fulfillment of the Additional
Additional contract
fulfillment
Contract service
Service offer.
Offer. In
ln the
the event
sullivan declines
declines to accept the offer to provide service to Jani-King's
Sullivan
located outside
outside the territory, such offer will not
client(s) located
not be
be counted
Jani-King's fulfillment
fulfillment of
towards Jani-King's
of the
the Additional Contract
Contract Service
Service Offer.
c. Once
Once Jani-King
Jani-King has fulfilled
fulfilled the
the Additional
Additional Contract
Contract Service Offer, JaniKing's
section 6 of
King's obligations under Section
of the
the parties' Franchise Agreement
Agreement
shall be deemed complied with, regardless
regardless of if and for how
how long
long
Sullivan continues
continues to provide service
service to each of the Jani-King contracts
Sullivan
his franchise
franchise is
provide service.
is offered
which his
offered to
to provide
service.
d.
sullivan
Sullivan shall not be required to pay to Janì-Kìng
the Finder's
Finder's Fee
Jani-King the
paragraph 4.6 of
in paragraph
parties' Franchise
described in
of the
the parties'
Franchise Agreement
Agreement in
in
connection with the
the Additional
Additional Contract
Contract Service Order
connection
Order or
or the
the Sullivan
Sullivan
paragraph 3,
Clients (as defined
defined in
in paragraph
3, below).
below).
ln the event that Jani-King
e. In
Jani-King fails to offer Sullivan the Additional
Additional Contract
Service Offer within twelve months of the date of this Agreement,
Agreement, JaniJaniSullivan an amount
King shall pay to Suflivan
amount calculated
calculated as 25% of the
difference between $18,000 and the actual cumulative
cumulative gross monthly
monthly
billings of the contracts offered by
by Jani-King to Sullivan as of that
that date.
date.
30th
payment monthly, starting on the 30th
Jani-King shall make that payment
day
period expires,
month period
expires, and the amount shall
after the twelve month
shall be
be
3
recalculated
recalculated each month.
month. lt is expressly
expressly agreed
agreed that
that Jani-King
Jani-King shall be
payment to
make payment
to Sullivan
required to make
Sullivan under
under this
this subparagraph
subparagraph only if
monthly billings offered to Sullivan does not
the total amount of gross monthly
not
equal or exceed $18,000.
Should Jani-King
provide the
Jani-King provide
$18,000. Should
the Additional
Additional
Contract Service Offer, but Sullivan declines
declines to service one or more
accounts
accounts which make up that offer so that the total gross billings
actually
serviced by Sullivan is less
less than
actually serviced
than $1g,000,
$18,000, Jani_King
Jani-King is under
no obligation
obligation to pay Sullivan under
under this subparagraph.
3.
3.
that he
(or aa company
he (or
Sullivan acknowledges that
company for
for which he is either
associated with or has an operating interest
associated
interest in)
in) has
has operated a competing professional
professional
cleaning
company and/or offered and sold professional
professional cleaning services
cleaning services
services company
seruices in
in the
parties' Franchise
described in
in the
the parties'
territory described
Franchise Agreement
Agreement (hereinafter
(hereinafter referred to as
as the
Business"):
"Competing Business"):
a.
a.
Sullivan agrees to immediately and permanently
Sullivan
operation of
of the
the
Competing Business and to immediately
immediately take all steps necessary
Competing
necessary to assign
assign
or transfer all contracts, accounts
accounts and/or customers of the Competing
Competing
Business to Jani-King.
Sullivan represents
represents that
Business
Jani-King. Sullivan
that every
every customer
customer currently
currenly
serviced
serviced by him or a company for which he is either associated
associated with or has
an operating
operatlng interest
ínterest in
in is
is listed in
"sullivan Clients"), and
in Exhibit B (the "Sullivan
that
and that
these are the only accounts he
servicing. Sullivan
he is currently
currently servicing.
Sullivan agrees to
to
transfer to Jani-King
Jani-King all
provide service
all rights
rights to
to provide
service to all
all Sullivan
Sullivan Clients
Ctients and
and to
take any and all steps necessary to effectuate
the signing
signing of
of a maintenance
effectuate the
maintenance
agreement,
agreement, which has been drafted by Jani-Kirig,
Jani-King, by each of the Sullivan
Sullivan
Clients, and to take any other steps necessary
order to transfer
transfer that
necessary ìn
in order
4
business
Jani-King agrees
business to Jani-King.
Jani-King. Jani-King
agrees to make
make reasonable
reasonable efforts to
persuade
Sullivan's client Alcan to transfer
persuade Sullivan's
transfer its business
business to Jani-King (which
(which
efforts
include, if necessary,
necessary, an in-person
efforts shall include,
in-person sales
sales catl
call by Mr. Garry
Garry Clark,
Clark,
accompanied by
accompanied
by Sullivan).
Sullivan). lt is expressly
expressly understood
understood and
and agreed
agreed that in the
event
transfer its business
event that Alcan refuses to transfer
Jani-King, Sullivan may
business to Jani-King,
not continue
continue to service Alcan
Alcan outside
outside of the
the Jani-King
Jani-King system.
system.
b.
1 ,2004
1, 2005,
Between July 1,
2004 and January 1,
Jani-King shall waive all
200s, Jani-King
all fees
and charges
charges otherwise due to it pursuant to the parties' Franchise
(other than
than any
any fees
fees or
or charges
Agreement (other
charges related
related to the Business
Business
Protection Plan referred to paragraph 4.12.4
Protection
4.12.4 of the Franchise Agreement)
Agreement) in
connection with Sullivan's
Sullivan's continued
continued servicing of the Sullivan
connection
Sullivan Clients
paragraph 3(a)
this paragraph
pursuant to this
3(a) above.
above.
c.
participate in the Business Protection Plan referred to
Sullivan may elect to participate
Sullivan
paragraph 4.12.4 of the Franchise
Franchise Agreement,
in paragraph
Agreement, and if he so elects,
elects, he
he shall
pay to Jani-King
Jani-King the fees and costs of that Plan, as defined in the Franchise
pay
Franchise
Agreement, as
percentage of all
as computed
computed as
as aa percentage
all business
business revenue, including
including
all revenues
revenues derived
derived from
from the
the Sullivan
Sullivan Clients,
Clients. Sullivan
Sullivan shall advise
advise JaniKing in writing of such election.
d.
ln
In the event
event that
that Jani-King
Jani-King has offered
offered Sullivan
Sullivan the
the opportunity
opportunity to service
service
commercial cleaning
cleaning and/or
Jani-King commercial
andlor maintenance
maintenance contracts
contracts with
with minimum
cumulative
pursuant to paragraph
cumulative gross monthly billings of $9,000 pursuant
paragraph i1of
of this
this
on or
or before
before January
January 1,
1, 2005,
200s, the
Agreement on
the royalty
royalty and
and fee
fee abatement
(b), above,
in subparagraph
subparagraph (b),
outlined in
terminate. lf,
above, shall
shallterminate.
If, however, Jani-King
Jani-King
offer Sullivan
Sullivan the
has failed to offer
the opportunity
opportunity to service
service Jani-Kirig
Jani,King commercial
commercial
5
cleaning
maintenance contracts
contracts with
cleaning and/or maintenance
with cumulative
cumulative gross monthly
billings
billings of $9,000
$9,000 on or before January
January 1, 200s,
2005, the royalty
royalty and fee
abatement
shallcontinue,
abatement shall
continue, from month
month to month,
month, until Jani-King has offered
provide service
service to Jani-King
Sullivan the right to provide
Jani-King contracts that have
have
gross monthly
cumulative gross
monthly billings
billings of
cumulative
of at
at least
least $9,000.
$9,000.
e.
e.
The parties acknowledge
acknowledge that Sullivan's agreement
agreement to immediately
immediately and
operation of the Competing
permanently
Competing Business is an essential
essential
inducement
agreement of
of Jani-King
Jani-King to settle
inducement to the agreement
settle the
the Action
Action and
and the
the Texas
Texas
Action, and that breach
breach of this provision, or the underlying provisions
provisions of the
the
concerning competition
parties' Franchise Agreement concerning
competition with Jani-King, may
injury to Jani-King. Therefore,
result in irreparable injury
Therefore, in
in the
the case
case of
of any
threatened or actual breach
breach of any of the non-competition
provisions herein
non-competition provisions
herein
or in the Franchise Agreement,
Agreement, the parties agree that Jani-King may
may obtain
obtain
injunctive relief from aa court of competent jurisdiction and its
injunctive
its expenses
expenses of
securing same (including reasonable
reasonable attorneys'
paid by
attorneys'fees)
securing
fees) shall
shall be
be paid
by
Sullivan.
4.
pursuant to aa Stipulation
The Action shall be
be discontinued
discontinued with prejudice pursuant
Stipulation of
Discontinuance in the form annexed
annexed hereto
hereto as
as Exhibit
Discontinuance
Exhibit C, which Stipulation
Stipulation will
will be
be
parties and
executed by counsel for the
the parties
filed with the clerk
and filed
clerk of the
the Court
Court by
by Sullivan's
Sullivan's
parties' execution
immediately after
counsel immediately
after the
the parties'
execution of
of this
this Agreement.
5.
pursuant to
The Texas Action shall
be discontinued
shall be
discontinued with prejudice pursuant
to aa
Stipulation
Discontinuance in
in the
form annexed
the form
annexed hereto
Stipulation of Discontinuance
hereto as
asExhibit
ExhibitD,
D,which
whichStipulation
Stipulation
partiesand
executed by
will be executed
by counsel
counsel for
forthe
theparties
and filed
filedwith
withthe
theclerk
clerkofofthe
theCourt
Courtby
byJaniJaniparties' execution
King's counsel immediately
immediately after
the parties'
after the
execution of this Agreement.
Agreement.
6
6.
6.
Jani-King, Sullivan and Lex-G, Inc.
lnc. shall, immediately
immediately upon the execution of
this Agreement,
Agreement, execute and tender to each adverse party a General Release
Release in
in the
forms
forms annexed
annexed hereto as Exhibit E.
7.
7.
The parties agree that neither this Agreement
Agreement or anything incorporated
incorporated herein
or executed
executed in connection herewith
herewith shall
shall be
be construed, implied or inferred as an
admission
hereto or any
admission by any party hereto
any liability
liability or wrongful
wrongful conduct whatsoever.
party to this Agreement
8.
8.
Each party
Agreement represents and
warrants to the others that:
and warrants
a. This Agreement has
has been
been duly
duly executed and delivered by
by him
him or itit and
and
its legal,
legal, valid and binding obligation, enforceable
constitutes his or its
enforceable in
accordance with its terms.
accordance
b.
consents or approval of, or notices
notices to or filings
No consents
filings with, any person
person or
or entity
entity
are required
required in connection
connection with the execution,
execution, delivery and performance
performance of
this Agreement by
by him/it.
him/it.
c.
He/lt has received independent
independent legal
legal advice from an attorney
attorney of
of his/its
his/its
choice with respect
respect to the
the advisability
advisability of making
making this Agreement
Agreement and
and the
the
provided for herein.
Releases
Releases provided
d.
Except
expressly set forth in this Agreement,
Except as expressly
Agreement, no party has
has made
made any
statements, representations,
representations, warranties or promises upon
upon which any other
party has relied in executing this Agreement
Agreement or in making the settlement
settlement and
and
Releases provided for herein.
Releases
herein.
e.
He/lt has made
made such
pertaining to
such investigation
investigation of
of the facts pertaining
to this
this Agreement,
Agreernent,
pertaining hereto,
and all of the matters pertaining
hereto, as he/it deems necessary.
necessary.
9.
9.
This
may not
not be
be amended
amended or modified except in
This Agreement may
in writing signed
signed by
the parties to whom the
the modification
modification or
or amendment
amendment applies.
7
parties hereto
10. The parties
hereto agree
agree to execute such other documents
perform such
documents and perform
10.
further
further acts as may be necessary or desirable to carry out the purposes
purposes of this
Agreement.
Agreement.
parties agree
11. The parties
li.
agree that
that in
in any
any action arising from or related to this Agreement,
the prevailing party shall be entitled to recover its/his reasonable
fees and
attorneys'fees
and
costs incurred in connection
connection therewith.
therewith.
12.
This Agreement shall
shall be binding upon and inure to the benefit of the parties
parties
and their
executors, administrators,
their respective
respective heirs, executors,
administrators, trustees, legal representatives,
representatives,
successors
successors and assigns.
13. This Agreement may
may be
be executed
executed in
in multiple
multiple counterparts,
counterparts, each
each of
of which
which
but all of which together
shall be deemed an original, but
together shall constitute one and
and the
the same
same
instrument.
lN WITNESS WHEREOF,
WHEREOF, this Agreement has been
IN
been signed
signed as of
of the
the first
first day
day
written
written above.
YORK
)
)ss.:
)ss.:
couNwoF
NEWYORK
COUNTYOFNEWYORK
)
On the
on
year2004
the úo^vday ofo¡Wthe
zoo|before
in the year
before me,
me,the
personaily
theundersigned,
undersigned,personally
STATE
STATE OF NEW YORK
appeared Glenn
proved to
appeared
Glenn Sullivan,
Sullivan, personally
personally known
knownto
to me
me or proved
to me
me on the
the basis
basis of
satisfactory evidence
be the
the individual(s)
individual(s) whose
whose name(s)
satisfactory
evidence to be
is
(are)
subscribed
name(s) is (are) subscribed to
to the
the
within instrument and acknowledged
acknowledged to
to me that
that he/she/they
he/she/they executed the same
same in
in
and that
his/her/their capacity(ies), and
that by
byhis/her/their
his/her/their signature(s)
signature(s) on the
the instrument,
instrument, the
person upon
individual(s), or the person
upon behalf
behalf of
individual(s),
of which
which the
the individual(s)
individual(s) acted,
acted, executed
executed the
in
instrument.
KIM ILOWITE
ILOWITE
Notary
of New
New York
York
State of
Notarv Public
Public, State
No.
011L5047637
No.0i115047637
Nassau County
CountY
Qualified in Nassau
Commission
Expires08-07Q8O7-0 05
Commlssion Expires
'
Nota ry Public
Notary
3-
I8
Jani-Ki
of New York-lnc.
York.,lnc.
(a
By: c#rR
(%_
L
&.kRL&
By: 4¿'RFY
VI
Title:
Title: Vtc€
PÉê5nesr
P1Sa&cr
STATE OF TEXAS
)
)ss.:
)ss
COUNTY
COUNTY OF DALLAS
DALLAS
)
On the
On
the 2 g4 day
aay otffiin
of'in the the
yearyear
2004
before me, the
2004before
the undersigned,
unders igned, personally
personally
appeared
personally
appeared (rr,(J,jrk
personally known
known to
to me or proved to me on the basis
basis of
,
satisfactory evidence to
satisfactory
to be
be the
theindividual(s)
individual(s) whose
whose name(s)
name(s) is
¡s (are) subscribed to the
instrument and
a nd acknowledged
acknowledged to
within instrument
he/she/they
to me
me that
that h e/she/they executed
executed the same
same in
in
his/her/their capacity(ies),
capacity(ies), and that
that by
by his/her/their
signature(s) on the instrument,
instrument, the
the
individual(s),
individual(s), or
or the person upon behalf
behalf of which
which the
the individual(s)
individual(s) acted, executed the
instrument.
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[xhibit B
Exhibit B
Sullivan Clients
1
Alcan
1403 4th
4th Street
New Hyde Park
Park
New York
Att:
Att Tom
Tom Dicofmaker
Dicofmaker
516.355.2000
2.
Long Island
lsland FertiUty
Fertility
2001 Marcus Avenue
213 Marcus
Marcus Avenue
Lake
Success, New
York
LakeSuccess,
NewYork
Aft:
Att: Lauren
Lauren
3.
Lake Success Urology
Urology
2001 Marcus
Marcus Avenue
216 Marcus
Marcus Avenue
Lake Success, New
York
NewYork
Aft:
Att: Debbie
Debbie
516.437.8224
516.437.8224
4.
Long Island
lsland Surgery
777 Zeckendorff
Blvd.
Zeckendorff Blvd.
Garden City, New
New York
Aft:
Att: Rita
Rita
516.683.1600
5
Mandelbaum Smolloff
Smolloff&
Muller
Mandelbaum
& Muller
2001 Markers Ave.
Ste.
204
Ste.204
Lake Success, New
New York,
Aft:
Verrid
Att Verrid
10
C,
=1
M
[rhiüit C
.:.'.'...,.jj
SUPREME
SUPREME COURT
COURT OF THE STATE
STATE OF NEW
NEW YORK
COUNTY OF NASSAU
COUNTY
GLEN SULLIVAN and
and LEX-G
LEX-G INC.,
lNC.,
STIPULATION OF
OIDISCONTINUANCE
DISCONTINUANCE
WITH PREJUDICE
PREJUDICE
Plaintiffs,
-against-
Index
lndex No.
No. 13886-02
13886-02
MIKE GOMEZ,
GOME4 CORPORATE CLEANING
CLEANING
SERVICE, PRO HEALTH CORP.,
SERVICE,
CORP., PRO
PRO
HEALTH AMBULATORY SURGERY
SURGERY
CENTER, INC.,
INC., DAVID
DAVID COOPER,
COOPER,
CYNTHIA KUBALA, BOB
BOB RUSSO,
RUSSO, and
JANI KING
KING OF
OF NEW
NEW YORK,
YORK, INC.
INC.
Defendants.
Defendants.
lS HEREBY
lT IS
HEREBY STIPULATED
IT
STIPULATED AND
AND AGREED,
AGREED, by
by and
and between
between the
theundersigned,
undersigned,
parties
the attorneys of record
record for
for all
all the
the parties to
to the
theabove-entitled
above-entitled action,
action, that
that whereas
whereas no
no
person for
infantor
party hereto is
is an
aninfant
orincompetent
incompetent person
for whom
whom aacommittee
committee has
been
has been
party has
appointed and no person not
not aa party
has an
an interest
in the
interest in
the subject
subject matter
matter of
of the
the action,
action,
the above-entitled
above-entitled action (including
(including all claims and counterclaims)
counterclaims) be, and the
the same
same
preiudice. without
discontinued, with prejudice,
hereby is discontinued,
without costs to either party as against the other.
This stipulation
stipulation may be
be filed without further notice
notice with the Clerk
Clerk of
of the
the Court.
Court.
Dated:
Dated
New York, New York
May
, 2004
KAUFMANN, FEINER, YAMIN,
KAUFMANN,
GILDIN
GILDIN &&ROBBINS
ROBBINSLLP
rrp
Attorneys for Defendant
Attorneys
Defendant Jani-King
Jani-King of
_,2004
lnc.
Ne,Xprk, Inc.
By:
/
in
n M. Shelley
She
Avenue
777 Third Avenue
New York,
New
York, New
New York
York 10017
10017
212.755.3100
Hammill, O'Brien, Croutier, Dempsey
Hammill,
Dempsey &
&
Pender, PC
Attorneys
Attorneys for Plaintiffs Glen Sullivan and
and
Lex-G, Inc.
lnc.
,_-1
By:
William J. Croutie
, Jr.
C
Jr
138
Mineola Blvd., P.O. Box
138 Mineola
Box 351
351
Mineola NY
11501
NY11501
212.746.0707
[rhiffi
Exhi ítD
Ð
+l
I
!
-Ê
È..
CAUSE
03-05543-D
CAUSE NO. 03-05543-D
YORK, INC.
rNC.
JANI-KING OF NEW
NE\ry YORK,
IN THE DISTRICT COURT
COURT
$
§
§$
Plaintiff,
$
§
$
§
§
$
Y
V.
DALLAS COUNTY,
TEXAS
OF
o[' DALLAS
CO['NTY, TEXAS
§$
$
§
$
§
$
§
GLENN
GLENN SULLIVAN
Defendant.
Defendant.
DISTRICT
95th JUDICIAL DISTRICT
§
$
AGREED ORDER OF
WITH PREJUDICE
OX' DISMISSAL WITH
presented this order
to the
reported to
the
parties presented
order to
the Court
Court and
andreported
to the
the parties
On the date signed below, the
in this
lawsuitaccording
tothe
theterms
terms
this lawsuit
according to
claims and
and counterclaims
counterclaims in
Court that they had settled all
all the
the claims
parties agreed
to
agreement, the
tothat
thatsettlement
settlement agreement,
theparties
agreed to
of a written
Pursuantto
agreement.Pursuant
written settlement
settlement agreement.
is
this lawsuit,
lawsuit, which
which intent
intent is
dismiss
claims and
and counterclaims
counterclaims asserted in this
dismiss with prejudice all claims
on this order.
order.
of record
record on
confirmed
of counsel of
confirmed by the signatures of
prejudice. Each
partywill
Eachparty
will bear
bear
therefore ORDERED
case is dismissed with prejudice.
It is therefore
ORDERED that this case
own court
court costs
costs and
and attorneys' fees.
fees.
its own
SIGNED the _
of
day of
2004.
, 2004.
PRESIDING
PRESIDING JUDGE
AGREED ORDER
ORDER OF
OF DISMISSAL
DISMISSAL WITH
WITH PREJUDICE
PREJUDICE -- Page 1
AGREED
AGREED:
AGREED¡
G. Cabrales
David G,
Counsel
for Plaintiff
Counsel for
William H. Hart
Counsel
fo¡ Defendants
Counsel for
AGREED
ORDER gF
OF ÞISMISSAL
DISMISSAL \VITITJREJUDICA
WITH PREJUDICE *Page?
- Page 2
AGREAD ORDER
DALLAS:45519/84651:
1260238v!I
DÂ,LLÀs:4ss I gla 4651 :t260238v
frh¡bit
E
To all
whom these Presents
come or may Concern, Know
allwhom
Presents shall
shallcome
That JANI-KING OF
KnowThatJANI-KING
NEW YORK, INC.,
lNC., a corporation
corporation organized
organized under
under the
the laws
laws of
of the State of Texas, as
RELEASOR, in consideration
consideration of the sum of Ten Dollars
RELEASOR,
good and
Dollars and
other good
and other
and valuable
vatuable
consid
consideration
($10.00),
$10.00),
suLLlvAN, receipt
receiptwhereof
received from GLENN SULLIVAN,
whereof is
is hereby acknowledged, releases
releases and
discharges GLENN
GLENN SULLIVAN,
SULLIVAN, his
hisheirs,
heirs,executors,
executors,administrators,
administrators, successors and
and
assigns (collectively referred
referred to
assigns
"RELEASEES")
from
all
actions,
herein as
to herein
as the
the'RELEASEES") from all actions, causes of
of
dues, sums
action, suits, debts, dues,
sums of
of money,
money, accounts, reckonings, bonds,
bonds, bills,
bitls, specialties,
speciatties,
covenants, contracts,
contracts, controversies,
controversies, agreements,
promises, variances,
agreements, promises,
variances, trespasses,
trespasses,
damages, judgments, extents, executions,
executions, claims,
damages,
claims, and demands whatsoever, in
in law,
admiraltyorequity,
admiralty or equity, which against
againstthe
the RELEASEES,
RELEASEES, the
the RELEASOR,
RELEASOR, RELEASOR'S
RELEASOR'S heirs,
heirs,
administrators, successors
successors and
executors,
and assigns
assigns ever
ever had,
had, now
now have
have or hereafter can,
can,
shall or may have, for, upon,
upon, or
reason of any matter, cause or thing whatsoever
or by
by reason
whatsoever from
beginning of the world
the beginning
world to the day
day of
of the
the date
date of
ofthis
thisRELEASE.
RELEASE. Specifically
Specifically excepted
excepted
Release are
are the
the continuing
parties, from
continuing obligations
from this Release
obligations of the
the parties,
from this
this date
date forward,
forward,
pursuant
to
the
Franchise
Agreement dated
pursuant the Franchise Agreement
dated August
August 19,
19, 1998
1998 and
and the
theSettlement
Settlement
Agreement dated as of
2004.
of May
May 1,
1 ,2004.
The words "RELEASOR"
"RELEASEE" include
"RELEASOR" and
and "RELEASEE"
include all releasors and
and all
all releasees
releasees
under this RELEASE.
RELEASE.
This RELEASE may
may not
not be
be changed
changed orally.
lN WITNESS WHEREOF,
WHEREOF. the RELEASOR
IN
RELEAS OR has hereunto set RELEASOR'S
RELEASOR'S hand
hand
and
and seal
sealon
onthe
the2øû
Z& day
ofofMay
day
&lay2004.
2004.
fu¡^¿
presence
In
of:
ln
JANl-KJ'cÍG OFN
OF NEW 'a K, INC.
'
by:
STATE OF TEXAS
TEXAS
)
)ss.:
)ss
COUNTY OF DALLAS
COUNTY
DALLAS
q*eF/ Cu*¿4
vlcâ ?PgsrÞ€l\rf
vc
)
year2004
On
On t,e'1day of
otffinthe
zoo4before
personally appeared
the year
before me,
undersigned, personally
me, the undersigned,
personally
proved
known
personally knownto
to me
me or
or proved to
to me on the basis
Virrc-j Ot't,(
basis of
,
sati
evidence to
to be
satisfactóry
be the
the individual(s)
individual(s) whose
name(s) is
whose name(s)
is (are) subscribed
subscribed to the within
ry evidence
instrument and acknowledged
acknowledged to me that he/she/they
he/she/they executed
executed the same in his/her/their
his/her/their
capacity(ies), and
and that by
by his/her/their
capacity(ies),
the
individual(s),
signature(s) on the instrument,
instrument,
individual(s), or
person upon
upon behalf
behalf of which the individual(s)
the person
individual(s) acted, executed
executed the instrument.
instrument.
7ç
ic
Notary PUblic
244C
shall come
allwhom
Presents shall
come or
or may
may Concern,
KnowThatJANI-KING
To all
whom these Presents
That JAN I-KING OF
Concern, Know
NEW YORK, INC.,
lNC., aa corporation
organized under
under the laws
laws of the State
State of
of New
New York,
York, as
RELEASOR, in consideration
good and
consideration of the sum of Ten Dollars
RELEASOR,
Dollars and other
other good
and valuable
valuable
conside
consideration
($10.00),
$1o.oo),
received from LEX-G,
LEX-G, INC.,
lNC., receipt
receipt of
whÍchisishereby
ofwhich
received
herebyacknowledged,
acknowledged, releases
releases and
and
discharges
LEX-G, INC.,
lNC., and
its parents, subsidiaries,
and its
subsidiaries, and affiliates; and
and their
discharges LEX-G,
their current
current and
and
former
officers, directors
former officers,
employees and
and employees
directors and
and their
theirrespective
respective heirs,
heirs, executors,
administrators,
(collectively referred
assigns(collectively
andassigns
referred to herein as
the
as the
'RELEASEES') ,, from all actions,
"RELEASEES")
actions, causes
causes of action,
action, suits,
suits, debts,
debts, dues,
dues, sums
sums of money,
accounts, reckonings,
reckonings, bonds,
bonds, bills,
bills, specialties,
contracts,controversies,
specialties, covenants,
controversies,
promises,
judgments,
agreements,
agreements,
variances, trespasses, damages,
extents,
extents, executions,
executions,
claims, and demands
demands whatsoever,
whatsoever, in
admiralty or equity,
in law, admiralty
equity, which
which against
against the
the
RELEASEES, the RELEASOR, RELEASOR'S
RELEASOR'S heirs,
heirs, executors,
ever had,
had, now
now have
have or
or hereafter
hereafter can,
and assigns ever
can, shall
shall or may
may have,
have, for,
for, upon, or by reason
from the beginning
of any matter, cause or thing whatsoever from
beginning of
of the
the world
world to the day
day of
of the
the
of this
thisRELEASE.
date of
excepted from
from this Release
Release are
arethe
thecontinuing
continuing
parties, from this
pursuant to the
date forward,
fonryard, pursuant
this date
obligations of the parties,
the Franchise
Franchise Agreement
Agreement
dated August 19, 1998
1998 and the Settlement
dated
Agreement dated
dated as
as of May 1,
1 , 2004.
to
'RELEASEE" include
and "RELEASEE"
include all releasors and
The words'RELEASOR"
words "RELEASOR" and
and all
releasees
all releasees
RELEASE.
under this RELEASE.
This RELEASE may
may not
not be
be changed
changed orally.
lN
RELEASOR has hereunto
IN WITNESS WHEREOF,
WHEREOF, the RELEASOR
hereunto set RELEASOR'S
RELEASOR'S hand
hand
and seal
on the 2grr'
and
sealonthe
2' dayofMy2004.
day' of Wy 2004.
ú$¿_
ln
In presence of:
4L
JANI.KI
JANI-KI
bv:
by:
STATE
STATE OF TEXAS
)
OF NEW
,
INC.,
tNc
QpcA{ ¿
vUE kesrpe¡sf
aG.Scp?M.1-
)ss.:
)ss
COUNTY
COUNTY OF DALLAS
DALLAS
)
4
-dlnr'A/
year2004
On thøt!&//Åay
the
th&Zday of of*{av
May in
the
year
2004before
beforeme,
me,the
personally appeared
theundersigned,
appeared
- in
, personally known to me or proved to me on the basis
basis of
of
satisfactodT
eviOe
ncetotobe
bethe
individual(s)whose
(are) subscribed
satisfacto.' evidence
is (are)
theindividual(s)
whosename(s)
name(s)is
subscribed to
to the
within
the within
acknowledged to me that he/she/they
his/her/their
executed the same in
in his/her/their
capacity(ies), and that by his/her/their signature(s)
signature(s)on
on the instrument,
instrument, the individual(s),
individual(s), or
person upon
behalf of
upon behalf
of which the individual(s)
the person
individual(s) acted, executed
instrument.
to.." l/¿.t
6rcc.1
(/',-'
Notary Pub
shallcome
Presents shall
allwhom
KnowThat
LEX-G, INC.,
To all
whom these Presents
come or
That LEX-G,
or may Concern, Know
lNC., a
asRELEASOR,
corporation
organized under
under the
the laws
laws of
of the State of
New York,
York, as
RELEASOR, in
of New
in
consideration of the sum of
Dollars and
good and
of Ten
Ten Dollars
and other
consideration---consideration
other good
and valuable
valuable consideration
10.00),
($10.00),
below, receipt
as defined
defined below,
received from RELEASEES, as
receipt of
of which
which is
is hereby
hereby acknowledged,
acknowledged,
INTERNATIONAL, INC.;
JANI-KING INTERNATIONAL,
lNC.; JANI-KING,
releases and discharges JANI-KING
JANI-KING, INC.;
lNC.; JANIJANINEW YORK, INC.
lNC. and their parents, subsidiaries, and
KING OF NEW
current
and affiliates;
affiliates; and
and their
theircurrent
and former officers,
employees and their
officers, directors
directors and
and employees
respective heirs,
their respective
heirs, executors,
executors,
administrators,
andassigns
assigns (collectively
referred to
(collectively referred
to herein as
as the
the
causes of action,
"RELEASEES") ,, from all
'RELEASEES')
all actions,
actions, causes
action, suits,
suits, debts, dues,
dues, sums
sums of
ofmoney,
money,
accounts, reckonings, bonds,
bonds, bills,
bills, specialties, covenants,
controversies,
agreements,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions,
claims, and
anddemands
demandswhatsoever,
whatsoever, in
in law, admiralty
admiralty or
equity, which
or equity,
whichagainst
against the
the
RELEASEES, the RELEASOR, RELEASOR'S
RELEASOR'S heirs,
heirs, executors,
RELEASEES,
successors
and
have or
hereaftercan,
or hereafter
and assigns
assigns ever had, now have
can, shall or may have, for, upon, or by reason
of any matter, cause or thing whatsoever from the beginning
beginning of the world
world to
to the
the day
day of
of the
the
date of
of this
thisRELEASE.
excepted from
from this Release are
are the
thecontinuing
continuing
pursuant to the Franchise
obligations
obligations of the parties, from this date forward, pursuant
Franchise Agreement
Agreement
dated
dated August 19, 1998 and the Settlement
Agreement dated
dated as
as of
of May 1,
2004.
1 , 2004.
"RELEASEE" include
words'RELEASOR"
include all
The words
"RELEASOR" and
and "RELEASEE"
all releasors
releasors and
and all
all releasees
releasees
under this RELEASE.
This RELEASE may
may not
not be
be changed
changed orally.
orally.
lN
IN WITNESS
WITNESS WHEREOF, the RELEASOR
hereunto set RELEASOR'S
RELEASOR'S hand
hand
tday
and
sealon
onthe
the A'l
2)
and seal
day of May
May 2004.
2OA4.
ln
In presence of:
L
YORK
STATE
NEWYORK
STATE OF NEW
COUNTYOF
couNTY oF NASSAU
NASSAU
n
)
)ss.:
)ss.:
)
ontneúvof
year2004
the year
before me,
the undersigned,
personatly appeared
appeared
2[o4before
On the?- day of May in the
me, the
personally
proved
Sullivan, personally known
Glenn Sullivan,
known to
to me or proved to me
me on
on the
thebasis
basis of
satisfactory
ofsatisfactory
(are) subscribed
to be
be the individual(s)
individual(s) whose
evidence to
whose name(s)
is (are)
name(s)¡s
subscribed to
to the
the within
within instrument
instrument
to me
me that
that he/she/they
and acknowledged to
capacity(ies),
thesame
executedthe
same in
in his/her/their
his/her/theircapacity(ies),
that by
by his/her/their
signature(s) on
instrument, the
and that
on the
the instrument,
the individual(s),
individuat(s), or
person
or the
theperson
theindividual(s)
ind
upon behalf
behalf of
of whi
whic the
upon
instrument
s)acted,
acted, executed
Notary Public
WILLIAM J. ROUTIER, JR.
Notary Public, State of New York
No. 30-4702538
Qualified in Nassau County
Commission Expires July 31, k
\
To all
Presents shall
shall come
all whom
whom these
thesePresents
come or
Concern,Know
Know That
To
or may
may Concern,
ThatGLENN
GLENN
in consideration
RELEASOR, in
consideration of the sum
TenDollars
Dollarsand
sum of
of Ten
SULLIVAN, as RELEASOR,
andother
good
other good
consideration-----
and valuable
and
valuable consideration
($10.00),
---($1O.OO¡,
received
RELEASEES, as defined
defined below, receipt whereof is
received from RELEASEES,
is hereby
hereby acknowledged,
acknowledged,
releases and discharges JANI-KING INTERNATIONAL,
INTERNATIONAL, INC.;
lNC.; JANI-KING,
JANI-KING, INC.;
lNG.;JANIJANIKING OF NEW
NEW YORK,
parents, subsidiaries,
YORK, INC.
lNC. and
and their
their parents,
subsidiaries, and affiliates;
affiliates; and
and their
their
and former
former officers,
officers, directors
directors and
andemployees
current and
employees and
andtheir
theirrespective
respectiveheirs,
heirs,
executors, administrators, successors
successors and assigns (collectively referred to
to herein
herein as the
'RELEASEES") ,, from all actions,
"RELEASEES")
actions, causes of action, suits, debts, dues,
dues, sums
sums of
of money,
money,
accounts, reckonings,
reckonings, bonds,
bonds, bills,
bills, specialtles,
specialties, covenants,
controversies,
judgments, extents,
agreements, promises, variances, trespasses, damages, judgments,
agreements,
executions,
demandswhatsoever,
anddemands
whatsoever, in
claims, and
in law, admiralty
admiralty or
equity, which
whichagainst
or equity,
against the
the
RELEASEES,
RELEASOR'S heirs,
RELEASEES, the
the RELEASOR,
RELEASOR, RELEASOR'S
heirs, executors,
administrators,
successors and
or hereafter
hereafter can, shall
successors
and assigns
assigns ever had, now have or
shall or
or may
mayhave,
have, for,
for,
upon, or by
by reason
reason of
of any
any matter,
matter, cause
cause or
or thing
thing whatsoever
upon,
whatsoever from the
the beginning
beginning of
of the
the
world to the day of the date of this RELEASE.
Release
excepted from
from this
this Release
parties, from this date
are the continuing
continuing obligations
obligations of the parties,
pursuant to
date forward,
forward, pursuant
to the
the
19, 1998
1998 and
the Settlement
and the
Franchise Agreement
Agreement dated August 19,
Agreement dated
dated as
as
of May 1,2004.
1,2004.
The words "RELEASOR" and
'RELEASEE" include
and "RELEASEE"
include all
all releasors
releasors and
and all
all releasees
releasees
under this RELEASE.
This RELEASE may
may not
not be
be changed
changed orally.
orally.
lN
IN WITNESS WHEREOF, the RELEASOR
hereunto set
set RELEASOR'S
RELEASOR'S hand
and seal
seal on the
ay
May
2004.
of
May
2004.
7
&ú^v
ln presence of:
In
STATE OF NEW YORK
)
)ss.:
)ss
COUNTY OF NASSAU
NASSAU
)
year
personally
On the
theyear
2OO4
me,the
7'" day ofofMay
2004
before
the Ltday
Mayininthe
beforeme,
theundersigned,
appeared
appeared Glenn
Glenn Sullivan,
Sullivan, personally
personallyknown
knowntotome
meor
or proved
proved to
to me on the
the basis
basis of
of
(are) subscribed
satisfactory evidence
satisfactory
evidence to be
individual(s) whose name(s) is (are)
be the
the individual(s)
subscribed to the
the
within instrument
acknowledged to
that he/she/they
he/she/they executed the same
to me that
in
same in
his/her/their capacity(ies),
his/her/their
capacity(ies), and that by
signature(s) on the
by his/her/their
the instrument,
instrument, the
person upon
individual(s), or the person
individual(s),
upon behalf
which the
the individual(s)
individual(s) acted,
behalf of
of which
acted, executed
executed the
the
instrument.
Public
WLLIAM J.J.CROUTIER,
CROUTIER,JR.
JR.
^ WILUAM
Notary Public,
Pubtic, State
Stare of
of New
ñéw York
Vö*
No,3O-4702538
No.
30-4702538
in Nassau
Qualified in
Nassau County
gt,Al
Læõ
Commission ExpiresJuly
Expires July 31.
49_2-c
Counru ç-
TAB
2
:o
_o
EG:
D
l.¡ ;"
È*/J
¿U iy3J
JANI-KING OF NEW
NE\ry YORK,
YORK, INC.
FRANCHISE AGREEMENT
AGREEMENT
FRANCTilSE
-
ACREEMENT made and entered into
AN AGREEMENT
into in
in Dallas,
Dallas, Dallas
Dallas County,
County, Texas
Texasby
byand
andbetween
berween JANI-KING
JANJ-KJNG
OF NEw
NEW YORK,
YORK, [NC.,
INC., aa Tcxas
Texas Coqporation,
Corporation, hereinafter
hereinafter referred
OF
relcrred as
as either
either "JANI-KING"
"JANI-KING" or
or,,Franchisor",
"Franchisor", and:
and:
Glenn
Sullivan
Glenn S¡ll
I i van
hereinafter
as "Franchisee", doing
collectivcly, as
hereinafrer referred
refcrrcd to, singularly
singularly or collectively,
doing business
busincss as
as a:
a:
[f
[
)| Corporation,
incorporated under
under the
¡hc
incorporated
laws of
of
la*s
Partrership
] Partnership
x) Sole
Solc Proprietorshi,
Proprietonhii
fI X)
allowing Franchisee
Franchisee to
for the purposes of allowing
to operate
oper¿te aabusiness
busincss as
asaaFranchisee
FranchisceofofJANI-KThICJ.
JANI-KING.
I
FRANCHISE SU?vÍMARY:
FRANCItrSESUIvfIVIARY:
EFFECTIVE
DATE:
EFFECTIVEDATE:
PLAI.I: F-4
PLAN:
F+..
,
l99
teet.
INITIAL FRAIÍCHISE
INITIAL
FRANCHISEFEE:
FEE:(Sj$JS!^QL_J
(S 1675i0
)
-.Th-iLcM
ç,ivtapn
ïhnr<a'rl Çe!¡pn
l{svlmd Fifty
Fìfty------ìn Hnlred
Sxtcn
DOWNPAY¡IIENT:
PAYMENT:
$ 12,55L
DOWN
$-L3-.55ir.m._
(S
INITIAL BUSINESS: (S
TMTIAL
A¡\IOUNT
AMOUNT FINANICED:
FINANCED: $$ 4,2t).O0
4.2.Ð
(Interest)
,1,0æ.æ ))
4,ODO.00
INITIAL
IMTIAL OFFERING
OFFERING PERIOD:
- - ------_-_-;_-__.______=-_=
Dollars
TERM:
TEtuV: 24
?-4 .
(Months)
Fair
fq¡¡-----
(Thousand)
ùp H^rdrcd
Cn
Ithdri Fifty
Fiftv-
15g)
DAYS
) DAYS
L15l_)
(
Vn
TERRITORY:
Counties: N/A
TERzuTORY: Counties:
iii
in the State of New Jersey.
Èrru,
I &&i
l(íngS,
el
Qr-n;,
itl., Ynrlr,
aff,)lk, übStche<rar,
.*. ll¡SSaU,
&.
Qirlmn{
s!SSH
errj.Ên¡kl¡ni
..i .s . .s fr¡ntieç
e
e
s
in the State of New York.
York.
FRANCHISEE
FRA\CHISEE ADDRESS:
ADDRESS:
Lan.
22
22 LIon
Llon Lan¿
llestbury
CITY:
CITY: We&tbury
STATE: N:w
Nw York
Y'rrk
sTATE:
COUNTY:
COLilrïl: Nassau
T:L3PliCI.iE NLIVÍB ãR.: ( 516997-4689
997 -4689
TELE?HCNENUMBER:
EXHIBIT
JANIKING OF
OF NEW YORK.
YOR.K. INC.
tNC.
JANI.KJNG
FRANCHISF
FRANCHISã :&GREFMENT:
.'¡-GREEMEIÍT: 5,98
5r98
I
1,l590
ZJPCODE: 11590
ZIpCODE:
/. fflT$r'\rÉA-Ð,rr
DAC
DÀnE
it r\E'ra
r\)q
a
T
RECITALS
SECTION 1I
l.l.
1.1.
professional cleaning
andmaintenance
andfranchising
cleaning and
maintenance
operating and
business of
ofoperating
franchising professional
thebusiness
in the
Franchisor is in
including, but
performancc of comprehensive
comprehensivc cleaning and
businesses which
which cngage
engage in
in the performance
and maintenance
maintenance services including,
businesses
as
the
cleaning
services,
residential
cleaning
as
well
as
the
sales,
sales, leasing
and
leasing
institutional
industrial,
limited ¡o,
ro, commercial,
institutional and
not limircd
grant
liccnse
and is authorized to grant aa license
JANI-KING and
cquipment under the name JANI-KJNG
distribution of
of rclated
related supplies and equipment
or distribution
mean
all
thcrervith.
used
trademarks,
herein
shall
mean
all
trademarks,
Trademarks
names
connected
and
trade
to
use
the
trademark
and
connected
therewith.
Trademarks
as
the
trademark
use
to
JANI-KING or
limited to,
to, the
the mark
mark JANI-KING
orany
any other
but not
not limited
other
trade
service marks, slogans and
including, but
ånd logos,
logos, including,
names, seryice
trade naines,
writing
by
an
KING.
JANI-KING
ofliccr of JANIJAIII- KING. JANL-KING has
authorized in writing
trademark
or service
service mark which may be
officer
be authorized
t¡ademark or
and trade
certain trademarks,
trademarks, service marks, and
uade names
control certain
namcs that
that
and control
developed
and used and continues
use and
continues to use
devetoped and
qualiry
lo
superior
standards
products
of
and'services
impan
have
become
associated
with
its
products
and'
services
so
as
to
impart
to
the
public
superior
standards
of
quality
wirh
havc become associared
by JANI-KING
developed by
JAIÍI-KING ininits
itsbusiness
business
andtechniques
techniques developed
and service.
service. Franchisee
reputationand
utilizethe
thereputation
desires to
toutilize
Franchisee desires
and
Franchisceas
a JA¡\I-KING
JANi-KflG Franchisee.
as a
SECTION 22
1o use
use
tlre Franchisee
Franchisee aa license
2.1. The
that the
license to
desire that
thc Franchisor
Franchisor grant to the
thisAgreement
parties to
Ageementdesire
tothis
The parties
2.1.
clcaníng
of
opcrating
the
business
methods,
procedures
and
products
developed
by
JANI-KING,
in
the
business
of
operating
a
professional
cleaning
JAIIII-KING,
methods, procedures
governed by
bc governed
by terms,
lerms,
services
company in
in the territory described
agrce that such business shall be
berein and agree
described herein
scrviccs cornpany
Agreement.
contÂined in
covenants
and conditions
conditions contained
in this Agreement.
covenants and
SECTION 33
FRÄNCHISE
GRANT OF FRANCHISE
covenants,
performance of each
erch and every one of the covenants,
3.1. For
and faithful
faithful performance
of the
the full
full and
considention of
in consideration
For and
and in
the
grants to
the Franchisor
to the
the Franchisee
Franchircr grants
Franchisee the
to by Franchisee,
Franchisee, the
and agreed
agrecd to
and conditions herein contained and
terms and
described in
inthe
theFranchise
Franchise
within the
'TERRITORY' described
right
tl¡e"TERRITORY"
ôanchise within
JA¡\I-KING franchise
operateaaJANI-KING
and operate
csrablish and
right to establish
Summary.
Summary.
within said
tenitory
location of its choosing
Franchisee shall
shall operate
operate tlre
the business
business at
at or from
choosing within
said territory
fum a location
3.2. Franchisce
3.?.
set
with
compliancc
terms
conditions
the
subject
to
the
approval
Franchisor
and
Franchisee's
continued
compliance
with
the
and
conditions
set
continued
Franchisce's
Franchisor
of
subject to the
forth herein.
berein.
SECTION 4
FRANCHISEE PLEDGES:
ihe Territory
Tcntory
sompany in
in the
4.1. To
and maintenance
maintenance services company
Franchise cleaning
cleaning and
JANt-Kiì,iGFranchise
J.l.
operarca¡JANI-KING
To operate
cl/b/a
Doe, drtia
described herein.
herein, using
using the
the rrade
trade name
naine "Jfu\I-KING"
"JANI-KINO" in
in conjunc¡¡on
conjunctionwi¡h
withia
itsbusiness
businessname.
name,as
as"John
John Doe,
describeC
JANI-KING",or
or"ABC
"ABC Inc..
[nc.. üb/a
dlb/a JANI-KINC".
JANI-KrNG". Franchisec
Franchisee ag¡ess
agreesnot
nottotouse
useas
as pan
part of a corporate
ccrporate ilarne
name or
or
Jfu\l-l(JNO",
/(
iÇq e{
'jï*ÍÏ:"olå1YJ3*H*l"t; 3:H
JANI-KrNG OF NEW YORX. NC.
dfLS1C! At'.brtXACMT :OQ
tTh
I
p.
o
o
other
legal name,
name,(i)
(i)the
thename'"JANI-KING
name"JANI-KJNG OF
0F (any ciry,
city, state,
othcr lcgal
statc, or other region)", (ii)
(ii) any
any other
other janitorial,
servicc
name
cleaning
in
conjunction
their
maintenanceoror cleaning service name in conjunctionwith
with their formal name,
ma¡ntenancc
name, i.e.
i.e. such
such as
as "ABC
"ABC Custodials",
Custodials",
(iii)
"ABC Cleaning
CleaningServices"
Services"etc.,
etc.,
(iii)aaname
nameprefìx
prefixofof"JANI-",
"JAN!-", or any other
other similarly
similarly
Maintcnance", "ABC
"ABC Maintenance",
(iv) any
othertrademarks,
anyother
lradernarks, trade names
spelled or
or sounding
sounding prefix
prefix or (iv)
that
has
scrvice marks or any
spellcd
names or service
any name
name
has not
not
wrinen
grantcd
been grantedprior
prior written approval
approval by
by the
the Corporate
Corporate Office;
Office; and
and lhat
that all
all such intellectual
becn
intellectual properties
properties shall
shall remain
remain
use of
Alluse
ofthe
theJANI-KING
JANI-KINGtrademarks,
the sole property of
of Franchisor.
Franchisor. All
tradcmarks,trade
tradenames
names or
or service
service marks
marks by
by
Franchisee
Franchiseeshall'
shallinure
inure1otothe
thebencfit
benefitof
of Franchisor
Franchisorand
andshall
shaltremain
remainthe
thesole
soleproperty
propertyof
of JANI-KING.
JANI-KrNG. All
advcnising, letterhead,
lenerhead, or
visual or
printedmatter
directory
orprinted
directory listings, advertising,
or any
any other visual
rnatterused
usedby
byFranchisee
Franchisee to
co¡nmunicate
communicateto
to anyone
anyoneshall
shallconform
conform to
to establishcd
establishedJANI-KING
JANI-KJNGpolicics
policies and
and shall
shall be subject
subject to
to review and
and
priortotouse
Franchisee; and
uscby
byFranchisee;
and Franchisee
approval
approval by
by JANI-KING
JANI-KING prior
agrees to
to submit to Franchisor,
prior
to
use
Franchisee agrees
Franchisor,
to use
samplesofofany
anyand
andall
alladvertising
advertisingand
andpromotional
promotional plans
plans and
and materials
materials of
of any type which contain
by Franchisee,
Franchisec, samplcs
contain
thc trade
trade names,
names, service marks,
in any manner
marks, trademarks,
trademarks, slogans
slogans and logos as
are now
now or which
mûnner any of the
as are
which ininthe
the
for use
use by
approvcd for
by Franchisee.
Franchisee.
future
be approved
furure may be
Franchisee âgrses
and effort
4.2.1. Franchisee
agreesto
to devote
devotesüffic¡ent
stfflcient time
time and
4.2.1.
efforttotoitsitsbusiness
pursuant to
business pursuant
to this
thisAgreement
Agrcement
andservices
petformed under this Agreement
workand
services performed
and that all
will be
by
all work
Agrcement will
performed and/or
beperformed
and/or supervised
supeÑised by
agentlemployecs
Franchiseeor
orauthorized
authorized agents/employeesofofFranchisee
Franchiseethat
thatcomply
complywith
with all
all terms of this Agreement.
Fnnchisee
Agreement.
Franchisee, its
its a-eents,
agents,and
andemployees
employeeswill
will follow
follow current
JANÌ-KING policies,
4.2.2. Franchisee,
4,2.2.
current established
established JAIII-KING
policics,
pract¡ces
practices and
and procedures,
procedures,and
andasasthey
theymay
maybe
beamended
amendedfrom
fromtime
timetototime,
time, and
and agrees
agreesnot
not to
to dcviate
deviate therefrom
therefrom
wrinen consent
consent of Franchisor.
Franchisor.
without prior written
and all
all owners,
owners, officers,
ofiìcers, directors
directors who
participate in
4.23.
Franchisec and
413. Franchisee
who will
will actively
activelyparticipate
in the
the operations
operations of the
the
¡he
initial
franchise
businessagce
agreetotosuccessfirlly
successfullycomplete
complete
the
initialtraining
trainingprogram
programwithin
within slr
six (6)
(6) months
months of
of the
the signing
signing .
franchise busincss
of this
this Agreement.
Agrcement.
*PLAlf identified
the franchise
In
grantèd under
under the
the "PLAN1'
In consideration
considera¡ion of the
franchise herein grantèd
identified in
inthe
tl¡cFranchise
Franchise
performed
services
Summary, and
andthe
theínitial
initial services to be performed by Franchisor
Franchisor as
as pledged herein,
herein, Fra¡rchisee
Franchisee shall
shall pay
pay to
to the
the
Summary,
Franchisor
thesum
sumidentifTed
identifiedininthe
theFranchise
FranchiseSummary
Summaryasas
the "INITIAL FRA]¡CHISE
FRANCHISE FEE",
the'IMTIAL
Franchisor the
FEE", upon
execution of
upon execution
of
¡urangements defined
under the financing arrangements
this instrument,
defined ín
in the Franchise
the
instn¡menç or under
Franchise Summary,
Summary, by the
the tendering
tendering of
of thc
sum identified
identified as
as thc
the 'DOWNPAYMENT'
"DOWNPAYMENT" and
and thc
the execution
executionof
of aa Promissory
Note for
for the sum of
of the
Promissory Note
the
withinterest
interestatatthe
(12.0%)Percent,
therate
rateofofTwelve
"AMOUNT
FÍNA,\CED",with
Twelve(12.0%)
'AMOUNT FINANCED",
PercenÇ payable
payable over
over the
rhe number
of
number of
identified as
as the'TEfuV".
the "TERM".
monthly installments
installments identilied
4.3.
43.
4.3.1.
Paymcnt of
4.3.1. Payment
of this sum shall entitle Franchisee
to the
the right
right to
Franchisee to
to operate
opeÉte a JANI-KING
JAIII-KINGfranchised
franchised
business in
in the
thc Territory
described herein.
herein. Franchisor
Franchisor will
will secure
business
Tenitorydescribed
seiure and
and offer
offcrcommercial
commcrcial cleaning
cleaningand
and
would
maintenanceconùacts
contractstotothe
theFra¡rchisee
Franchiseethat
that
wouldprovide
provideinitial
initiaigross
grossmonthly
monthlybillings
billings in accordance
with
the
maintenar¡ce
with
accordance
purchased by
Plan purchased
by Franchisce,
Franchisee,and
andFranchisor
Franchisoragees
agrees
offerto
to Franchisee
the opportunity
opportunity to
to service
totooffcr
Franchisee the
service
which
commercial
cleaningand
andmaintenance
maintenancecontacts
contracts
whichwill
will provide
provide cumulative
cumulative gross
gross monthly
monthly billings to
commcrcial cleaning
to
Franchisee
in the
theamount
amountdefined
definedasasthe
the"IMTIAL
"INITIAL BUSINESS" in
in the
the Franchise
Franchise Summary.
Franchisee in
Summary.
4.3.2. Except
otherwise noted
noted herein,
herein,the
theInitial
Initial Franchise
Franchise Fee
Fee ís
is non.refundable
non-refundableand
andisisin
in addirion
addition to
to
Except as otherwise
payments set
se¡ out herein.
herein.
royalties and
¡nd other payments
Franchisor is
unable to
4.3.3. In
to secure
secure and
andoffer
offer to
to the Franchisee
the cumulative
cumulative amount
amount
4.3.3.
In the
thc event
cvent that Franchisor
is unable
Franchisce the
gross
within
billings
monthly
within the
thc time
time frame
thePlan
purchased. aa portion
portion of
of the
initialgross monthly
frame allocated
alloc¡ted for
Plan purchased.
for the
of initial
¡he
Franchisee
Fe may
may be
berefundable.
refundable. If the
the Franchisor
Franchisor thils
amoun¡ of
fails to
to offer
offer the full
Franchisee Fte
full amount
of initial
inirialgross
gross monthly
monrhly
Business"), an
billings
Plan purchased
purchased("lnitial
("Initial Business"),
an x¡nount
amountcqual
equal :o
to three
three t3)
(3) ¡imes
times ¡he
the amounr
amount of
of Initial
under the Plan
billings under
lnitial
will
Business
notoffereC
offeredtotothe
theFranchisee
Franchisee
willbe
berefunded.
refunded.Any
Anysuch
suchrefund
refundwill
will be first
Business not
lìrst applied
applieC to
curren¡,
ro any
any current,
INC.
JANI-KINO OF
OF NEW
NEW YORK
YORK. [NC.
JAN¡.KING
J/93
FRANCHISE
AGRFFMENT: 5I9
FRÂNC¡{ISË AGR.EEMENT:
1NT-{NT
wrêz?¿¡rt fL(
lLL
PA(T
PA(iF ì IIF
"R
¡
I
.
any other
outstanding
then to
to any
other outstanding
Report, and then
Franchisce Reporq
negativc due Franchisee
in aa negative
unpaid
thar would result in
chargcs that
fees or charges
unpaid fees
promissory note;
note; with
with the
anypromissory
including but
but not limited to, any
.....baiance
thc Franchisee,
Franchisee, including
'balance owed
Franchisor by the
owcd to Franchisor
and
writing,
in
by
Franchisor
td
unless
agreed
to
otherwise,
in
writing,
by
Franchisor
and
Franchisee,
theFranchisee,
to the
remaining
any, credited
credited to
remaining sum, if any,
provision
will
fulfitl
parties,
under
this
the parties, under this provision will fulfiLl
agreement between
bctwecn thc
rvrinenagreement
or other
othcrwritten
refund, or
Franchísee.
Franchisee. A refund,
calculate the
the refund.
refund.
to calculate
Initial
Business used to
podion
InitialBusiness
remaining
any
Franchisor's
obligation
to
offer
any
remaining
portion
of
the
Franchisor's obligation to
as
Franchísee by
by Franchisor
Franchisor as
to Franchisee
Package provided to
and Advertising Package
Supply and
4.4. In
Officc Supply
to the
the Office
addirion to
ln addition
4.4.
theProfessional
Professional Products
Products and
pucchasc the
required to purchase
Agreemenr, Franchisee is required
described
in Schedule
Schedule One of this Agreement,
described in
provide
or provide
purchase,
also
lease
and
Equipment
Package",
and
also
purchase,
lease
or
Package",
as
"supply
the
Equipment
"Supply
Schedule One
listcd in Schedule
Equipment listed
the following:
following:
proof
of ownership to Franchisor of the
prôoiof
and aa
wet/dry vacuum
vacuum and
commercial wet/dry
polishcr, a
floor polisher,
a commercial
commcrcial floor
A commercial
commercial vacuum cleaner, aa commercial
"Additional
as
and
cloth
bag,
identified
(canister
type)
w/shoutder
strap
and
cloth
bag,
identified
as
"Additional
w/shoulder
(canistcr
clcaner
compact portable vacuum cleaner
andAdvertising
Supplyand
Advertising
in the
thcOffice
OfñceSupply
included in
arenot
notincluded
itcms are
One. These
These items
Schedule One.
Electric Equipment"
Équipment" in Schedule
Eleciric
Franchisor.
bY Franchisor.
Package furnished
Rmishe¿ by
'
the
be obtained
obtaincd by the
'the Additional
Electric Equipment must be
and'the
Addirional Elecric
Package and
Equipmenr Package
The Supply and Equipment
offercd'
be offered.
Business will be
Franchisee
Franchisee before any Initial Business
month a
(5th) day of
each month
of each
the fifth
fifch (Sttr¡
iu designee,
desigpce, by the
Franchisee agrces
agrees to pay to
Franchisor or its
to Franchisor
4.5.1.
4.5.1. Franchisee
rcvenue
to
Franchisce.
Gross
accruing
each
month
Franchisee.
Gross
revenue
isis
cach
month
accruing
gross revenues
revcnues
(10%)of
royalty fee
of the gross
fee equal to ten percent (10%)
for
of Franchisee,
Franchisee, for
the benefit
bcnefit of
another person for the
or paid to anothcr
Franchisee or
by Franchisee
rcceived by
*h.th.r received
defined
ali income,
incom., whether
as all
¿"¡n.O as
whctl¡cr
goods,
whether
equipment
performed,
salcs
of
one-time
cleans,
extra
work
performed,
sales
supplies,
equipment
or
goods,
work
cxtra
services, one-time
contract services,
any contract
from
dcrived
or
and
any
other
revenue
related
to
or
derived
from
the
rcvenue
related
to
o¡hcr
agents,
or agents,
employces or
its employees
performed
Franchisee, its
perfonn.¿ or sold by Franchisee,
to,
comnercial,
including, but
limited to, commercial,
but not
notlimited
servicæ including,
and maintenance
maintenance services
clcaning and
comprehensivc cleaning
provision
pro.rision of any comprehensive
relatcd
of related
or
disribution of
as
the
sale,
leasing
or
distribution
sale,
leasing
well
as.lhe
sewices,
industrial,
institutional
residential
cleaning
services,
as
and
.L¿uro¡"t, institutional
The
of Franchisee's
Franchisee's business
business or otherwise. The
opcratiou of
the conduct
conduct and operation
with the
supplies
conncction with
in connection
cquipment in
and equipment
supplies and
and
(12)
of
operation
monthly du¡ing
during the
the first twelve (12) months
rronths of operation and
(550.00) monthly
Dollan ($50.00)
minimum royalty
.yri.y shall be Fifty Dollars
annual adjustment
adjustrnent for
subject to
to annual
'oin'í,nu.
is subject
Such minimum
minimum royalty is
per month
thercaftcr. Such
(5100.00) per
monrh thereafter.
One Hundred
Oolt.o ($100,00)
Hundrcá Dollars
One
increases in the Consumer
Consumer Price
Price Index.
Index.
increases
*}{on-Rcported Business Fee")
day
cach day
for each
will be charged
charged to
toFranchisee
Franchisee for
(rhe"Non-Reported
perday
day(the
A fee
Business Fee') will
S25 per
of$25
fee of
Franchisce's
opcrations of
of Franchisee's
from operations
reccived by Franchisee from
rcvenue earned or received
ali gross revenue
t*ppn aLl
Franchisee fails to
to report
Fra¡¡chisee
and
due and
amounts
other
fees,
payments,
dharges,
chargebacks,
or
other
amounts
due
any and
and all
all fces, payments, iharges, chargebacks,
business
in addition
addition to any
bereunder, in
btsiness hereunder,
collected
result of s¡ch
such gtoss
gross revenues,
not collected
revenues, whether or not
as aa result
agteement as
owing
this agreement
of this
terms of
Franchisor under the terms
owing Franchisor
payment
of
the
The
payment
of
the
Non-Reported
Non-Rcporred
payabtc.
The
and
Such
amounts
shall
be
immediately
duc
and
payable.
due
be
iämediatcly
shall
Fiurchisce. Such
by Franchisee.
rcmedies
any other
other remedies
and shall
shall be in addition to any
penalty, and
Business Fee shall constitute
constin¡te liquidated damages and not a penalty,
Busincss
in equity.
cquity'
available
available to Franchisor at law or in
(lf}%) of
percent (1(2%)
advertising fee
fee equal
equal to one half of one
one percent
pay Franchisor
Franchisor an advertising
4.5.2. Franchisee
agrees to
to pay
Franchisee agrees
4.5.2.
the
to the
fee, in
agrees to
to pay
pay the advertising fee.
addition to
in.addition
Franchisec agfecs
above. Franchisee
dcfined above.
Franchisee's
as defined
¡..u.nuct
Fra¡rchisee's gross
Eoss revenue
(Sth)
day
of
every
(sth)
fïfrh
the
continuing
on
fifth
(Sth)
day
of
month
u¡d
and
continuing
on
fifth
(sth¡
the
month
the frfrh
royalty payment,
commencing on the
paymenr, commencing
royalry
foradvertisina
advertisinc and
pa)¡ment to
tothe
theFranchisor
Franchisor for
This Fee
Feeisisaapayment
¡he term.
fern. This
of the
month
thereafter
for
the
remainder
the
,",ooind.t
månth t¡.*¡n*
Fee.
to the use of the Fee.
ælated to
Fra¡rchisee related
related
Franchisor does not have any duty to Franchisee
coss and
and Franchisor
relared costs
or contracts
contracts
additional business
busincss or
rny additional
pay to
ro Frnnchisor
Fnnchisor a Finder's Fee on any
4.5.
acrels to
to pay
funher agrees
4.5. Franchisee
Fnnchisee further
such
to
franchise:
servisc
designation,
from
Franchisor,
as
authorized
franchise:
to
service
Franchisor, as tuthorized
the designarion.
o"..po the
of which
r¡.hich the
Fnnchis". aczepts
thcFranchisee
for
connact price for
resUltedfrom
froman
an inc;ease
increase in the contract
conùîc: resûlted
or contract
business or
business,
addirional business
that additional
nor that
whe¡her or not
business. whether
new
or completely
comple:ely neW
existing business
business at thc
the samc
same or other
other locations,
locations, or
for exisring
existing
an expansion
expansion of
of sc¡vice
service for
busin¿ss. rn
exisring business,
Ifll,Í',ï,!-o:xÏJ3:51lt; ffixLL
JAN1-KING OF NEW YORK, iNC.
%'t f?CC PflC J)J'T'. 'C/ÛQ
INT JÇ.
PA?.P .t ÖP ')
¡
o
..
o
are ¡ti
addition to
to royalties
payments set
in addition
and other
royaltics and
other payments
Finder's Fees are
sÊtOut
out in
inthis
business.
thisAgreement,
Agrcement, and are
business. Findcr's
a¡e
: calculated on the
gross monthly
billin! for
morithly billing
for an
anaccount
account according
¡hcformulas
formulaslisted
according to
tothe
the gross
listedbelow.
bclow.Franchisor
Franchisor has
hæno
no
Franchisce for
foradditional
additional business
business or
or contracts
contractsbeyond
beyondthe
obligation to
billings
designate Franchisee
theinitial
grossmonthly
1o designate
initialgross
monthly billings
purchased.Should
Franõhisor, in
thc Plan purchased.
ShouldFranchisor,
inits
itssole
soleopinion,
opinion,decide
decidctotodesignate
as determined
detcrmined by the
designatcany
anyadditional
additional
contracls to Franchisee's franchise,
franchise, Franchisee
Franchisee may
business or contracts
may cither
either reject or
at the
the
or accept
accept such
business
such designation
designation at
time
they
are
made.
tirne
' Upon designation and acceptance
acceptance of
of any
any additional
additional business or
or contract,
contract, the
theFranchisee
Franchisce agrees
agrees to
pay an
an
to pay
guidelines established
the guidelines
Fce according
according to
to the
cstablished by the Franchisor.
amount as a Finder's Fee
Franchisor. Franchisor
Franchisor will,
will, from
from time
rimc to
guidclincs, policies
policies and procedures
procedures as necessary
calculate the
nccessary to calculate
establish such guidelines,
time, establish
the applicable
applicable Finder's Fee,
Fce,
industry standards
standards and increases in costs and expenses
cxpenìcs of
taking
into consideration industry
øking into
of soliciting
soliciting new
new accounts,
accounts, and
to increase
increase or decrease
decrease the Finder's Fee
Fee in
in all
all categories.
Franchisor reserves
rcserves the right to
categories.Currently,
Cunently, the
thefollowing
follorving
guideline
guidelines
guidelines will
will apply,
apply, but any guideline or policy regarding
regarding the
the calculation
calculation of aa Finder's
Finder's Fee
Fee or
or the
thepayment
payment
bc changed by tþe
anytime
priortotothe
account, may be
Franchisor atatany
timeprior
thereof,
te Franchisor
theoffering
offcringof
ofthe
the account:
thereof;, for any account,
account:
(¡)
of any
anyadditional,
additional busincss,
acccptance of
will sign
business, the Franchisee will
anAccount
(I) Upon acceptance
signan
AccountAcceptance
Accepnnce
Findci's Fee
include the Finde?s
Fee calculations,
calculations, and the terms
of aa Finder's
Agreement, that
that will include
Note for
tcrms of
Finder'sFee
Fee Promissory
Agreemenç
PromissoryNote
provisions set
portion of any Finder's
aly, according
according to the
Findcr's Fee,
Fee, ifif any,
tha provisions
set out
Schedules
out in
in the
the Finder's
the financed
financed portion
Finder's Fee
Fce Schcdules
below.
(2) For each of the
the Finder's
Finder'sFee
FccSchedules
Schedules set
out below,
bclow, the
thefollowing
followíng terms
set out
termsapply
(2)
apply to
tocalculate
calculate the
the
for the
the additional business:
business:
Finder's
Fee for
Finder's Fee
proper formula
"OVER" l/ "UP TO":
determinethe
Todetermine
theproper
formula for
"OVER"
TO":To
Finder'tFee
payment structure
for aa Finder's
Feepayment
structure within
within the
tl¡e
categories a¡c
Billing categories
appropriate Schedule,
are listed by ranges, where the
Schedule, the Monthly Billing
the monthly
monthly billing
appropriatc
billing will exceed
cxceed
tha¡r the amount
amount listed
but less
less than
the amount
as "OVER", but
listed as
as ÍUP
"UP TO".
TO". If[fthe
listcd as'O\¡ER",
themonthly
amouht listed
monthtybilling
tbe
billing may
may fluctuate,
fluctuate,
will be
gross monthly
Billing will
the proper category of Monthly Billing
be determined
determined by
maximum gross
by the
thc maximum
monthly billing
thc
bitling allowed
by the
allowed by
account
conEact.
rccount contract.
Theinitial
DOWN PAYIVÍENT:
PAYMENT: The
payment due
initialpayment
duc at
at the
the time
time of
acceptance of
of acceptance
DOWN
account, or
of the
theaccount,
or as
as otherwise
otherwise
guidelines,
thesc guidelines, calculated
calculated by multiplying
established under
under these
multiplying thc
the percentage
percentage stated in the appropriate
category of
of
establíshed
appropriatc category
Paymen! times
timcs the appropriate
under Down
Down Payment,
appropriate gross monthly billing.
Monthly
billing.All
will be
DownPayments
Paymens will
Monrhly Billing under
AllDown
be
Fint Full
calculated using
billing for the First
Full Month
Month of
of Scrvicel
Service. "First Full
using the gross billing
Full Month
salculatcd
Month of
of Service",
purposes
Service', for
for purposes
as the
thc first
Down Payment,
Paymcnq is
is defined
dcfined as
which the
first month
i¡i which
the service
of calculating
calculatíng the Down
month hi
service isisperformed
performed on
the
or before
bcforc the
on or
partial month
month is
15th
day of
of tÌ¡c
the month.
month. If a partial
is the
thc First
Fint Full
FullMonth
Monthof
ofService,
Scrvice,the
grossmonthly
thegross
for
t5th day
monthlybilling,
billing, for
tbe Down
is determined
detcrmined as though
Down Payment,
Paymenç is
though'tbe
purposes
the account
for
the
entire
purposcs of calculating the
account had
had been
bccn serviced
scrviced for the cotire
after the
15th, the
the following
following month will be
begins service
the l5th,
month.
the account
account begins
servicc after
be used
purposes of
ronth. IfIf the
used for
for purposes
of the
the Down
Down
period.The
initial period.
for the
thc initial
DownPayment
Payment,
and no payment is due for
ThcDown
Paymcntisisdue
Paymcn! and
duealong
alongwith
witbthe
themonthly
monthly
(and second
First Full
Full Month
Month of
franchisee report
of Service
Service (and
rcquired) and
second month
month as
asrequired)
rcpo¡t for the First
and may
payablc as
as aa
may be
bc payable
the franchisee
on the
Fanchisce report.
rcport.
deduction from the account billing on
MONTHLY PAYMENT:
P.{YMENT: The
The,payment
paymentmade
madeeach
each month
month for the
the designated
dcsignated number
number of
months,
ofmonths,
percentag. stated
the percentage
multipl¡ring the
stateC in
in the
the appropriate
appropriate schedule
calculated by multiplying
schedule under
under Monthly
calculateC
Monthly Payment,
Payment, times
timcs the
the
the
cunent
tccounling
However,
thc
billing
for
the
current
accounting
month.
However,
the
total
of
the
amounts
paid
as
Monthly
gross monthly
month.
the
paid
total
monthly
of
amounts
as lvlonthly
the Down
Down Payment)
grcater than
Pa¡rment) shall not exceed a sum greater
(a) for
Payments
(exclusive of the
tha¡r 300%
300% of:
of: (a)
for Multi-Tenant
Payments (cxclusive
Multi-Tenant
gross monthly
billing that
that would
would be
generated in
Accounts,
monthly billing
be generated
rnarimum gross
in aa month
monthin
which the
was at
at aa
thebuilding
Accounrs, the maximum
in which
building was
(1009/o)
perctnt (100%) occupancy
occupancy factor.
one hundred
factor. exclusive
exclusiveof
of any
any down
down payment;
payment; or (b) for Public
hundred percent
Public Event
Evcnt or
gross monthly
thc average
avenge gross
Seasonal Accounts. the
monthly billing for
for the
the first
fint twelve
twelve months
mon¡hsservice
Serson¡l
performed under
thc
se¡r,iceisisperformed
undcr the
SANt-KING OF
OF NEW
NEW YORK
YORK. INC.
fNC
IAN¡.KING
jrUttD\ÁIJT. IQQ
{/OE
Ël' AXI¡'TIÍQË À¿DçÉl/lENT.
INT4..
rNrÆ{. n«
rNr X
nAr.rr,r1Q
D ¡r ñE < f'lÉ te
I¡
I
;l
following any
any
willbegin
beginthe
thcmonth
rnonth following
Paymentswill
payment. Monthly
Monthly Payments
any down payment.
account contract,
cxclusive of any
contrac¡, exclusive
PaYment.
scheduled Down
Down Payment.
tÌ¡c terms
made under the
terms of the Finder's
Monthly Payment must be made
of months
months aa Monthly
number of
MONTHS: The number
Payment.
of
Monthly
the
defìnition
promissoryNote,
manimum sum described in the definition of Monthly Payment.
Fee Promissory
Note, subject to the maximum
Fce
bç
definitions and
and thc
the Finder's
Finder's FeeFee will be
following definitions
the following
according to the
Accounts will
will be identified
identified according
(3) Accounrs
(3)
account:
of
the
type
Finder's
Fee
Schedule
for
the
type
of
account:
Fee Schedule for
our in
calculated using
in the
the appropriate
appropriate
set OUt
formula Set
the formula
using the
calculated
the
cstablished by the
constant monthly
monthly billing established
account that has aa constant
SINGLE
TENANTACCOUNT:
ACCOUNT: An account
SINGLE TENANT
of
at
the
time
fult
Finder's
Fcc
may
of
one
year
or
longer.
The
Finder's
Fee
may
be
paid
in
full
The
year
longcr.
account contract,
and has
has a term
contract, and
accounr
gross
of
tl¡e
maximum
(3)
the
amount
Franchisee will pay three
times
the maximum
threc
which event,
cvent, Franchiscc
in which
acceptance of
the account, in
of the
Schcdulc.
according to the Schedule.
the
fee
and
payment
will
be
structured
according
paymcnt
¡hc
or
conrracr,
monthly
billing
allowed
under
the
contract,
under
the
allowed
,oonihty
t.
1INDER'S FEE
FEE SCHEDULE:
sctrEDuLE:
FTNDER's
fp
DÓWN
DOWN
PAYÑIENT
PAYMENT
1,500
3,000
3,000
6,000
10,000
unlimited
60%
60%
40%
40%
30%
15%
t5%
5%
MONTHLY BILLING:
BILLING:
IVfONTHLY
ovER
OVER
,
50
1,500
3,000
ó,000
6,000
10,000
UP TO
uP
MONTHLY
MONTHS
PAYa,ÍENT MONTHS
?AYMENT
2A%
20%
t5%
15%
10%
l0%
l0o/o
10%
5%
l3
13
20
30
32
65
6s
on
billing that
that may
may fluctuate, depending on
ACCOUNT: An account
monthly billing
account with aa monthly
2. MIJL1T-TENANT
MILTI-TENAI.{T ACCOLINT:
pcr square
service area,
based on a set price
area, a¡rd
and has a
price per
squarc foot of service
whe¡c the billing is based
propefy, where
the occupancy
drc property,
the
occupancy of the
as
a
Multi-Tcnant
be
bid
city,
State
or
Federal
account
or
Public
School
will
be
bid
as
a
Multi-Tenant
School
or
Public
Federal
Statc
y.* or longer.
länjer. Any
temi of
of one
ãn. year
term
whicb event,
evcnt,
account, in
in which
acceptance of the
the account,
timcofofacceptance
thetime
full
in
The
Finder's
Fee
may
be
paid
in
full
atatthe
Finder'r}..
account.
account. The
-ay
gencrated in
in
gross monthly billing that would be generated
marimum gross
amount of the maximum
Franchisee
three (3) timcs
times the amount
Franchisee will pay three
and
payment
or
thc
fee
(100%)
factor,
percent
occupancy
building
was
at
a
one
hundred
percent
(100%)
occupancy
factor,
or
the
fee
at a one hundred
Paymcnt
whiðh the
tl¡e
a month in
in which
will be
sur¡cn¡rcd according to the Schedule.
be structured
SCHEDTJLE:
FINDER'S FEE
FEE SCHEDULE:
MONTHLY BILLING:
UP TO
OVER
O\Æ.R
50
3,000
6,000
3,000
3,000
6,000
unlimited
DOWN
DOV/N
PAYMENT
PAYÌvfENT
M°NTHLY
MONTHLY
30%
30%
15%
r5%
5%
51ro
5%
5%
5%
MPNT}IS
PAYMENT MONTHS
PAYMENT
72
72
72
j.
limited period
period of
of time
time but may
SEASONALACCOLINT:
ACCOUNT: An
An accounr
account that
that will
will be seÍiced
serviced for
for a limited
SEASONAL
Down
A Down
billing amount. A
fluctuating monthly
monthly billing
constantor
orfluctuating
basis. This
rnayhave
havcaaconstant
accountmay
This account
se¡sonal basis.
recur on aa seasonal
as
lvlonthly
the
total.paid
Monthly
Payments
are
due
each
month
until
the
total.
paid
as
Monthly
each
month
duc
Payments
payment
season.
initial season.
Payment is
onl¡r for the initial
is due only
billing
for
the first twelve
service is performed
welve months
months ssvicc
paymenu
monthly
the
ave¡¡ge
Payments is
equal
to
300%
of
the
average
gross
monthly
io
3009á
is aqual
several
seasons.
seaSOnS.
Over Se'¿eral
which may
may occur
Ocqur over
under
contract which
rccOun¡ cgntrtrcl
under the account
.TANI-KINGOF
OFNEW
NEWYORK
YORK. INC.
NC.
JANI.KING
aiOO
r-âEÉr,ell?.
.-!%rl,At%rr.
C.'OQ
-r ¡ s'Ârrr-F
/tj-_
rNrlã-Nr
INT AÍÞôf.ìtr Á rôf ,
"R
[NT
¡
a
a
FÍNDER'S FEE
FINDER'S
FEE SCHEDULE:
SCFIEDULE:
MONTHLY BILLING:
MOÌ_fTHLYFJ,LNG:
DOWN
PAYMENT
PAYMENT
Any Amount
MONTHLY
PAYMENT
PAYMENT MONTHS
t0%
10%
20%
20%
Varies'
Varies
tUntil Payments
Avenge Gross
Grdss Monthly
Monthly Billing for first
Paymcnts equal 300% of Average
lìrst twelve
*(jntjl
months.
twelveinonths.
4. PUBLIC
PUBLIC EVENT
EVENTFACILITIES:
FACILITIES: An account
account involving
involvingaa public
public facility
facility that
that houses
houses special evenrs
events for
a
but
similar
events
recur
regularly
scheduled
a limited
similar events recur on
scheduledbasis.
basis. The
The monthly
a
duration,
monthly billing
will fluctuate,
limited duration,
billing will
fluctuate,
facility, where
typc of
depending on the type
of cvcnt
event or use of the facility,
where the
the bilting
billing isis bascd
based on
on lhc
the labor-hours
required to
to
depending
labor-hours rcquired
property, and
Þfonthly PaymenS
service the
and has
has aa term
term of
of one
one year
year or
or longcr.
longer.' Monthly
Payments are
are duc
due cach
each month until
until ttrc
the total
thc property,
Payrnens is
average gross
300%o. of the average
paid as
is cqual
equal to 300%
gross monthly
monthly billing
billing for
for thc
the first
as Monthly
Monthly Payments
firsr twelve
rwelve months
months
pcrformed under
under the account
account contraót.
contract.
service is performed
FTNDER'S FEE
FEE SCHEDULE:
FINDER'S
SCHEDULE:
r I-L rÈ¡ G :
M OJ{THLY--BBILLING:
MONTHLY
Any
Any Amount
DOWN
DOWN
PAYMENT
PAYMENT
MONTHLY
PAY}fENT
PAYMENT
MONTHS
MONTHS-
l0%
10%
20%
20%
Varies'
Varies
fUntil
Until Paymcns
Payments equal
equal 300%
300% of
of Average
Average Gross
Gross Montl¡ly
Monthly Billing
Billing for
for firs
first nrelve
twelve monrhs.
months.
TURNAROUND: fui
An account
account whcre
where one
one or
or morc
more aparutents
apartments or other
APARTMENT TURN.AßOUND:
5. APARTMENT
othe¡ facilities
are
faeiliries are
makc ready
rcady between
bcnrccn.occupancies
serviced on a recurring
basis as
as a make
occupanciesororother
otheruscs.
uses. The
rccuning basis
servic?d
The monthly
monthly billing
witl
billing will
but thc
dcpending on
fluctuate
on ¡he
the numbcr
number of
of units
units serviccd,
serviced but
the account
contract has
has aa term
term of one yea¡
year or more.
account contract
flucn¡ate depending
FEE SCHEDULE:
FINDER'S FEE
SCTIEDULE:
DOWN
MONTHLY
BILLING:
MONTHLY BTLLTNG:
Any Amount
fuiy
PAYMENT
PANENT
20%
z0%
MONTHLY
PAYMENI
?AYMENT
MOlf
MONTHS
lrs
All.
10%
t0%
A11
tEach
Each month
service is performed.
month service
OTHERNON:STAI{DARD
NONSTANDARDACCOUNTS:
ACCOUNTS:The
TheFnnchisor
Franchisorwill
willcstablisb
establishthe
theFindcr's
Finder's Fce
Fee oo
on any
6. OTHER
thc above
abovc definitions,
other
that does
does not
not fall within
within onc
one of the
priorto
to the
the account
account being offered
definitions, prior
othcr account thât
the
offercd to the
Franchisee
designation
of
service.
The
Finder's
Fee
Fse
on
nonrecurring
contracts,
initial
one
time
designation
of
service.
conÈacts,
for
noruecurring
initial
cleaning
or
.
will vary
cleaning contracts
vary but
but do not
not cuncntly
currently cxc:cd
exceed twenty-five
twenty-fivepercent
percentQío/ol
(25%)of
ofthe
thetotal
total invoic:d
invoiced amount.
amount.
conbtcß will
(4)
(4)
Policies and
and ProceCr¡¡es
Procedures will
will be
be cstablished
established by
by Franchisor
Franchisorfrorn
fromtime
time to
to time which regulate
Policies
the
regulate the
payment
calculation.
terms
of
credis
ternination
amount and
on terminationor
ortransfers
transfers of
of accounts,
accounts, and óther
a¡nount
urd calculation, terms of payment. credits on
issucs
other issues
Fess.
concerning Finder's Fees.
conc;ming
4.7.
4.7. Franchisee
agreesthat
that Franchisor
Franchisorshall
shallh¡ve
havethe
theelclusive
exclusiveright
rightto
to perform
perform all billing
Fnnchisee oq¡æs
and
billing and
accounting
for the
the se:y¡c:s
services provided
provided by
by Franchise.
Franchisee,unlcss
unlessothen¡rise
otherwisenorified
notified in
in writing
writing by
by Franchisor.
Franchisor.
accountíng functions
fi¡nctions for
fNC.
FfuTNCTÍISEAGREEMENT:5/98
JANI-KING
NEW YORK
YORK. NC.
,AN¡-KrNG OF NËW
FRANCHISE AGREEMENT: 5/98
rNrffrNT
NTINT-M,
J(
PAGETbF2S
PAGE 7bF 2S
-\
r
4
o
.
o
Franchisee
Franchisee &grces
agrees to
to pay
pay Franchisor
Franchisor thrcc
three perccnt
percent (3%)
(3%) of
of the
the gross
gross revenues
revenues accruing to
to Franchisee,
Franchisee, monthly, as
Accounting Fee, to cOver
cóvcr Franchisor's
defined hcrein,
herein, as an Accoünting
Franchisor's administrativc
administrative costs'for
costs for this
'dcfined
this service (See
(see Section
Section
Fivc).
Five). Depending
Depending on
on the
the monthly
monthly gross
gross revenue
produced the
the Franchise, Franchisee
revenue produced
Franchisce may be eligible
cligible for a rebate
rebate
This rebate
rebatc will
will be
on the accounting
accounting fees
fees paid
paid by the Franchisc.
Franchise. This
be aa percentage
percentage reduction
reduction of
ofthe
theaccounting
aicounting fee for
month(s) in which Franchisee is eligible
eligiblc a¡¡d
the month(s)
and will be
be calculated
calculated each
eachmonth
monrh using the
the following
fo¡owíng table.
table.
eligibility for the
Franchisee's eligibility
the rebate
rcbate shall
shall be
Franchisee's
be determined
determined solely by
by Franchisor,
Franchisor, and the calculation
calculation of the rebate
performcl.solely
Franchisor.Any
shall be performed
solely by Franchisor.
Anyrebate
rebate Franchisor
Franchisordetermines
determines Franchisee is eligible for will
will be
be
issued to
ycar at aa time
tp Franchisee
rrvicc per year
Franchisee twice
Franòhisor.
t¡m€ determined
detennined solely by
by Franchisor.
Monthly Gross
RevenuefDollarsl
Revenue
(Dollars)
Accounting
fPcrcentì
Rebate (Percent)
0-25,000
0-25,000
25,001-45,000
25,001-45,000
45.00t-65,000
45.001-65,000
65,001-E5,000
65,001-85,000
E5,001-Over'
85,001-Over'
0
0.5
l.o
1.0
¡.5
1.5
2.0
4.7'1,
Franchisor each month will invoice
4.7.1. Franchisor
invoice clieots
clients serviced
scrviced by the
the Franchisee
Franchisce for the cost of services
services
rendered or
Thesc monies
rendered
or supplics
supplies provided
provided by
by Franchisce.
Franchisee. These
monies will
will be
be collected by the
the Franchisor
Franchisor and paid over to
the Franchisee
Franchise? on
a.fter deduction
dcduction of
on aa monthly
monthly basis,
basis, after
of all
aIl appropriate
appropriate fees
fees and charges
charges including,
including, but
buinot
not limited
ten
to, the ten percent
fec, the
the. one to
(10%) royalty
royalty fee,
threc percent
percent (l-3%)
to three
(l-3%)Accounting
Accounting Fee,
Perccnt ÇA%)
Fee, any
any fInanced
financed note
notc
paymerts
fce, Finder's
Finder's Fees,
payments for
for thc
the initial franchise fee,
Fees,advertising
advertising fees,
fces,transfer
transferfees,
fees,cha.rgebacks
chargcbaãks on past
past due
due
advances made to
invoices, any advances
tothe
thefranchisee
invoices,
franchisceby
byFranchisòr,
Franchisór,Non-Reported
Non-ReportcdBusiness
Busincss Fees, as
asdefined
dcfined
hereinafter,
hereinafter, or
or anorneys
attorneys f:::
fees and court costs
costs incurred
incurred by
by Franchisor
Franchisor in
in enforcing
enforcing payment of accounts by clients.
cliens.
ry_d.::urt
Franchisor will,
(5u) day of each
.Franchisor
will, on
on tbe
the fift.h
fIfth (Sth)
each month,
montl\ disburse
disburse to
to Franchisee
FranchisJ.- all
aitmonies
monies due
dueFranchisee
franchisee as
rcported
reported in
in thc
the Due
Due Franchisee
Franchisee Column
Column of_the
of the Franchisee
FranchiseeRcpolt
Report for
for the
the preccding
preceding month
month less
lcss any monies not
("Cfrarge
collccted
from
prior
Back'), and
collected from prior TPlqt
months ("Charge Back"),
and all
all current
current ¡eccivables
receivables become the
propcrty of
thc property
of Franchisor.
Franchisor. In
ln
fifth (5u)
the event the fifth
(5th) day of the
the month
month falls
falls on
on aaSaturday,
Sarurday, Sunday
Sunday or
or recognized
recogniied'hol-iday,
holiday, then all such
such
ar¡ounts
amounts due
due to
to Franchiscc
Franchisee will
will be
be disbuned
disbursed before
before the
the cnd
end of
of thï
the ncxr
next business
business Aay-.
day,
4-8.
Franchisee agrees
agrees to
to make
4.8. Franchisee
make all
paymens due
all payments
due Franchisor
Franchisor promptly
promptly in
in accordance
accordance wirh
with the
the terms of
this Agreement,
Agrecmcnt, and
and recognizes
recognizesthat
that any
any failure
failure on
on thc
the part of
of the
theFranchisee
Francbisee to do
do so
soshall
shall be
bedeemed
deemcd aa
subs¡an¡ial
Agreement, and
substantial breach
breachof
of this Agreement,
and shall give
givc Frandhisor
Franihisor the right
right to
to terminate
terminate this
thisAgreement
Agrcement
imrnediately arid
and retain
immediately
retain all
aIt sums
sums previously
previously paid
paid to
to Francbisor
Franchisor by
by Franchisee.
Franchisee.
4.9.1. During
During the
the term
term of
ofthis
4.9.1.
rhisAgreement,
Agreemcnt, Franchisee
Frun.his". shall
shatt maintain
maintain and
and prcserve
preserve full, complete and
urd
books, records
accurate books,
records and accounts regarding
business.
rcguding the Franchise
Franchise
4.9.2. Franchisee
Franchisee shall,
atits
shall, at
its sole
sole cost
cost and
and expense,
cxpense, prepare
prepare and
ar¡d submit
submi¡ to
to Franchisor,
Frar¡chisor, upon request,
s'd
rsquest, and
within thirty
within
days aft,er
after said request,
requesl a complete
'ùirry (30) days
complete financial
fina¡¡cial statement
statemcnt for the preceding
precÊding twelve
twelve month period or
or
calenda¡ yær.
any other calendar
financiat statement
year, or aa financial
compiled and reviewed
su¡lcmcnt compiled
reviewcd by aa certified
cenified accountant
accoun¡ant år
public
or public
accounting firm,
information in such form and
accounting
firm, toge'Jrer
together with
with such other information
and detail
detail as
as shall
shatl be
be necessary
necessary or in such
such
¡s Franchisor
forrn as
Franchisor may reasonably
rcasooably require
form
and request,
rcquirc and
request, so
so as
as to
to allow
¡llow Franchisor
Franchisor to
to determine
determine that
tt¡at Franchisee
is
Fr¡nchisee is
properly reporting
reporing and
for all income
properly
and accounting for
income that mures
inures to it
JANI-KING franchisee.
it as a JAI.ÍI-KING
franchisee.
{.9,i. Franchisor
4.9.3.
Frcnchisor reseryes
reserves the righr
right ro
to inspec:
inspect or
or cxamine
examine the
the accounts, books,
books. records and
and ta,'
returns of
t¿x returns
Fnnchisec. al
re¡sonable timc.
Franchisee,
at any reasonable
time. so
so far,
fgr as
æ the
the same
pe:rain to
same pertain
ro the
¡he business
businessof
ofoperating
operatin-l aaJANI-KrNG
JANI-KINC
Franchise. Franc
Franchisor
Franchise.
hisor sh¡ll
shall also have the right,
have
righr. at any time, to
¡o havc an independent
indcpendc:rt audit
audir made
madJ of the books or
or
JANI.KING
JANI-KING OF
OF NEW YORK.
YORK. INC.
5t98
FR.{NCHISE
FRANCHISE AGREEMENT:
AGREEMENT: 5/98
nrr<ts-nrr
[NT-4NT fi.
B
PAGE 880E
PAGE
OF 28
28
L
o
a
auditshalt
performed at
independcn¡ audit
shallbe
beperformed
financial
records of
of Franchisee.,Any
Franchisee.. Any such
such inspection,
inspection, examination
examination or independent
atthe
the
frnancial records
provide the
of Franchisee
Franchisee to
toprovide
cost
of Fnnchisbr
Franchisor unless
unless the
the same
same is necessitatcd
necessitated by the failure of
the reports
reports
expensË of
cost or expense
tlre inspection,
provided herein,
inspection, examination
examinal¡onor
requested or
or to
to preserve
preserve rccords
records as provided
herein, or unless the
orindependent
independent audit
audit
requested
is
in
crror
to
an
extent
(5%)
percent (5%) or
discloses
that any
any statement
statement or report
report made
made by
by Franchisee
error
of five
five percent
or more,
more, in
in
discloses ¡hat
and shall
reimburse Franchiser
which case
case Franchisee
Franchiseeshall
shall immediately
immediatelypay
payto
to Franchisor
Franchiser the
the amount in error and
shall reimburse
Franchisor
rvhich
rviththe
audit(including,
(including,without
theinspection
inspectionororaudit
rvithoutlimitation,
andexpenses
expensesconnected
connectedwith
for any and
limitation,
costsand
altcosts
and all
fees).
reasonable accounting
accounting and
and anorneys'
attorneys' fees).
rcasonable
Franchisee agrees
agrees to
to be solcly
solely responsible for the services and results
results of
ofservices
services performed
performed at
4.10.
4.10. Franchisee
performed
are
pursuant
to
this
locations
where
cleaning
and
maintenance
services
are
performed
pursuant
this
Agreement,
and
seryices
Agreement,
and to
cleaning
and
maintenancê
tohold
hold
locations wherc
by Franchisee
Franchisee or
its employees.
employees.
harmless
indemnify Franchisor
Franchisor from any and allclaims
all claims arising from actions by
or its
harmless and indemniff
placc of
businessinincompliance
compliancc with
withOSHA
clean and
andsafe
safeplace
ofbusiness
and
agrees to
to maintain
maíntain aa clean
4.11.
OSFIA and
4.11. Franchisee
Franchisee agrees
busincss
a
would
goodwill
and
to
conduct
that
manner
and
other
governmental
and
industry
standards
and
to
its
business
in
a
manner
that
would
bring
goodwill
and
industry
standards
bring
and
othcr governmental
'
and JANI-KrNG.
JANI-KÍNG.
isclf arid
public
approval to itself
publiJapproval
foi any leases of real
reat or personal property in
responsible for
in connection
connection with
4.11.1.
with the
the
is solely
solely responsible
4.t l.l. Franchisee
Franchisee is
must
approve
ofüce
location,
but
agrees
that
Franchisor
fiurniturc
dccor
operation
of
its
business,
but
agrees
that
Franchisor
must
approve
office
location,
furniture
and
decor
thereof
thercof
to
business,
is
opcration
rnust
at
all
times
têrm of this Agreement
protect the
the imagc
image and
and rcputation
reputation of
of JAI.il-KING.
JANI-KING.Franchisee
Franchisee must at all times during the term
Agrccment
protcct
good order
equipment located thereon in good
and
maintain such
such officc
office a¡rd
and all fixtures,
signs and equipment
fixtures, furnishings,
furnishings, signs
ordcr and
rnaintain
with
systcm
image
as
such
may
the
JAl.iIKING
bc
Franchisor
condition,
and
in
conformity
with
the
JANIlUNG
system
image
as
such
be
prescribed
by
Franchiser
from
from
conformity
and
ïn
condition,
within aa reasonable
time specified
spccified by
by Franchisor,
Franchisor, make
make all
all necessary
reasonable time
ncccssary additions,
additions,
time
must, within
time. Franchisee
Franchisec must,
timc to time.
Franchisor, but
wíthout Franchisor's
but no
noothers
otherswithout
alterations,
repairs and
and replacemcnts
replacements to
to the
the oñice
office as
as required
required by Franchiser,
Fra¡chisor's
altcrarions, repain
pcriodic repainting
or replacement
rcpainting or
fumishings,
prior wrincn
written consenç
consent, including,
including, but
but not
flot limitcd
limited to, periodic
replacementof
ofsigns,
sígns,furnishings,
prior
premÍses
utilized
operatc
out
of
its
equipment
or
decor.
No
other
business
venture
shall
operate
the
premises
utilized
by
Franchisee
for its
vÊnture
by
Franchisee
business
equipment or decor.
coosent of Franchisor.
office without
without the
the prior
prior wrincn
written consent
ofüce
andhold
for and
and indemnify
indemnifyand
4.12.1. Franchisee
agrees to
to be
bc solely
solcly responsible
rcsponsiblc for
boldharmless
harmless Franchisor,
Franchisor, JaniJuriFranchisee agrees
damage
King International,
Inc., Jani-King,
Ja.ni-King,Inc.
Inc.and
andtheir
theirofiìcers,
officers,directors,
directors,urd
and employees
employees for
for all loss or
or damage
International, Inc.,
originating
from or
or in
in connection
connection witlt,
with,the
theoperation
operationof
of the
the business
business and
and for
for all claims or demands
damages
demands for damages
originating from
persons directly
to property
orindirectly
indircctly resulting
resulring therefrom
theref¡om of
whatsoevcr nature.
of persons
dircctly or
Datu¡e.
death of
ofwhatsoever
or death
properry or for injury or
Franchisee also
also agrees
agrees to
to obtain and carry
carry appropriate
ofinsurance,
insurance,naming
arnounts of
appropriate amounts
uamingFranchiser,
Franchisor, Jani-K.ing
Jani-King
Fnr¡chisce
carrying an
International, lnc.,
Inc.,and
andJani-King,
Jan-King, Inc. as "Additional
Insureds", from an insurer
an A.M.
Bests' Rating
insr¡rcr carrying
A.M. Bests'
"Additional fnsurcdsn,
lntemational,
with proof
proof of
of such
sucb
amounts. Franchisee
Franchisde shall provide Franchisor
of A or
minimum amounts.
Franchisor with
inthe
thefollowing
following minimum
bener, in
or better,
demand
required
covcrage on demand
rcquired coverage
TYPE
TY"E
"3-D" Comprehensive Crime Insurance
"3-D"
Comprehensive
Gcneral LLiability
iability
Comprehcnsivc General
Comprehensive General
Gcneral Liability
Liabiliry
Comprehensive
Hired and
Non-Owned Äutomobilc
Automobile
Hired
a¡d Non-Ov¡ncd
tnsurance
Insurance
Excess
Exc¡ss or Umbrella
Umbrella Insurance
lnsurancc
LIMITS
LTMITS
$250,000
s250,000
2,000,000
$ 2,000,000
(Aggresate)
(Aggregate)
$1,000,000
sl,o0o,0o0
(per Occurrence)
Occurrcncc)
$1,000,000
s1,000,000
(per
(per Occunencc)
Occurrence)
$20,000,000
s20,000,000
(Aggregate)
(Aggreate)
Workers'
Workers' Compeasation
and Employcr's
Ernployers
Compensation rnd
Liability
lnsurancc
Liabilir-v Insurance
INC.
YOR& rNC.
JANI-KING OF
OF NEIV
NEW YORK,
JAN¡.KING
5/98
FRANCHISE
AGREEMENT: 5/98
FR.ANCHISE AGREEMENT:
Statutory
Staturor,v Limits
Limis
rNT'rNT
¡n64ntr&{
f,
PAGE
PAGE 990F23
OF 2E
¡
T
o
include, but
ínsurance shall include,
Compensation
but not
notbe
belimited
to,Worker's
Workcr's
limitcdto,
4.12.2.
4.12.2. Such insurance
CompensationInsurance,
Insurance,
Insurance,
Liabiliry
Automcjbile
and
Propcrty
Damage
Employer's
Liability
Insurance,
Automôbile
Liability
and
Property
Damage
Insurance,
Uninsured
Motorist,
Liability
lnsurance,
Uninsured Motorist, Non
Employe/s
NonComprehensiveGeneral
Genera!Líability
Liability and
and Propcrty
Property Damage
Damage Insurance and
Automobile, Comprchensive
Owned Automobile,
and an
anEmployee
Employee
may be
Dishonesty Bond. The
various limits
limits may
beincreased
increased or
or have
new types
types of
The various
have new
of coverage
coverage added
added as
Dishonesty
ascircumstances
circumstances
provideFranchisorwithproofoftherequiredinsurancccoverageandensurethat
may
dictate. Franchisee
shall provide Franchisor with proof of the required insurance coverage and ensure that
Franchisecshall
maydictate.
Franchisor any cancellation
carrier witl
the
will provide
provide directly to Franchisor
cancellation notice no less than thirty (30) days
insurance carrier
the insurance
days prior
canccllation.
to cancellation.
to secure
securc such
fails to
suchinsurance
insurancc to
the satisfaction
satisfaction of
4.12.3.
Franchisee fails
to the
4.12.3. IfIf Franchisee
of Franchisor,
Franchisor, Franchisor
Franchisor may,
may, in
in
for the
the benefit
insurance for
benefit of Franchisee
addition to
purchase such insurance
remedics, purchasc
Franchisee and
and seek
seekprompt
prompt reimbursement
othcr remedies,
to other
reimbursement
Franchisee shalt
from Franchisee
for all
all premiums
premiums and
and other
other costs incurred. Franchisee
shall be
beresponsible
responsible for
Franchisce for
premiums and
forall
allpremiums
and
including the date
date Franchisor
other costs
Franchisor up to and including
Franchisor grants Franchisee
incuncd by Franchisor
wrinen approval
costs incurred
Franchisec written
approval of
Franchisee's
insurance. Franchisce
Franchisee agrees
agreesto
to indemnify
indemnif' and hold
hold Franchisor
Franchisor harmless
harrntes from
or
from any
any claims,
Franchiscc's insurancc.
claims, loss
loss or
damagc.
damage.
to Franchisee,
and Franchisee
Franchisee, and
Franchisee may participate
participatc in
4.12,4.
4.12.4. Frarichisor
Franchisor will offer to
in aacontributory
contributory "Business
"Business
whichincludes
offercd,which
includesthe
theextent
cxtentoffered,
theFranchisee's
Franchisec'sminimum
Protection
Plan" to the
minimuminsurance
Protcction Plan"
insurancecoverage
coveragc
cxcep¡ for
forAutomobile
requirements
above, except
Automobile Liabiliry
Liability and Property
Property Damage
Damagc Insurance,
rcquirements as set out in Section 4.12.1 abovc,
lnsurance,
cguipmenl, supplies,
Uninsured
Motorist Coverage,
Coverage,and
and covcrage
coverage for your equipment,
supplies, or building,
building, ififdifferent
Uninsurcd Motorist
different from
&om
to participate
pan¡cipatc in
Franchisec decide
dccide to
inthe
theBusiness
Busincss Protection
Franchisor.
Should Franchisee
Prolection Plan,
Plan,Franchisor
Franchisor shall
Fra¡rchisor. Should
shallhave
have the
the
plan
and
charge
a
reasonable
Franchísee
fee
this plan and
Franchisee reasonable fee for
for the cost of
administer this
of administering
administcring said
program;
right to administer
said program;
and Franchisor,
or its parent
parent corporations,
corporations, may derive income
income from
from the
the plan.
plan. The
The Business Protection
Plan also
also
Fra¡rchisor, or
Protection Plan
¿ssistance, safety
publications and
management assistance,
safery publications
includes
andtraining,
includcs risk management,
managcment, claims management
training,and
andregulatory
regularory
Protection Plan may changc
tÌ¡c Business
Business Protection
compliance. The
change in the future
ñ¡turc due
Thc cost of the
due to
to changes
changes in
in the
the costs
costs
Fr¿nchisor retains
the right
relating
Business Protection
Protection Plan.
Plan. Franchisor
retains the
right to discontinue
discontinuc the
the Business
rclating to the Business
Business Protection
Protection Plan
Plan
upon the
of rcasonablc
reasonable notice
notice to the Franchisee.
Franchisce.
thc granting of
to indemnify
its agreement
ag¡eement to
indemniþ and
4.13. In
connection with its
and hold
hold harmless Franchisor,
Franchisor, Jani-King,
In connection
Jani-King, Inc.,
Inc., JaniJaniemployecs (the "Jani-King parties") for
King International,
Inc., thcir
their oflicers,
officers, directors, and employees
Intcrnatíonal, Inc.,
for all
allloss
lossor
ordamage
damagc
Fnnchisee agrees to defend
defcnd the
Agreemcng Franchisee
the Jarii*King
Ja¡ri.King parties and any of its
as set
Section 4.12.1 of this Agreement,
sct forth
forth in Section
is
subsidiaries
named in
in any
any lawsuit
lawsuit based
based on
on such
such loss
loss or damage
damage and
and to
to pay all costs
and reasonable
costs and
subsidiaries named
attorneys'
any of
parties wishes to retain
the Jani-King
Jani-King parties
of the
their own
fees associatcd
associated with
with such
suchdefense.
defense. If any
reøin their
fecs
own counsel
counsel to
defcnd
to defend
any such action, Franchisee
Franchisee agrÊcs
agrees to
to reimburse
reimburse the Jani-King partics
parties all
all rcasonable
reasonable costs and
incurred
and legal
legal fees
incurrcd
fees
rcimbursÊment shall
by the
the Jarri-King
Jani-King parties
partiesfor
forsuch
suchdefense.
defense. Said reimbursement
shall be
be made
made to Franchisor in a timely manner
as
by
mann€r a!;
to Franchisee.
Franchisee.
arc incurred by
by Franchisor
Franchisor and billed to
fecs are
such fees
Franchisee (where Franchisee
including officcrs
officers or directors of Franchisee
a corporation),
Frurchisee, including
4.14.
4.14. Franchisee,
Franchisee is
is.a
corporation),
cngage in, or have
bavc any financial interest
agree during
during the
the term
term of
of this
this Agreement
Agreement not to engage
intcrest in,
in, either
cither as
asan
agrce
anofficer,
ofücer,
parmer,
director,
employee,
owner
or
any
agent,
stockholder,
employee,
director,
owner
or
partner,
other
business
which
performs
cleaning
other
business
which
pcrforms
agcnç stockholder,
cleaning
'In
clcaning management
management sales
management
services franchising
franchising or
or conracting
contracting cleaning
sales or any related business anywhere.
managemcnt services
an¡vhere. 'In
terminated or
assigned, terminated
the event
sold, assigned,
anyreason
ortransferred,
transferred, for
forany
whatsoever,Franchisee,
this Agreement
Agreement is sold,
reasonwhatsoever,
cvcnt this
Franchisee,
(where
directors
Franchisec
corporation),
of
Franchisea
is
a
including officers
officers or
or directors of Franchisee (where Franchisee is a corporation), will have
have no
including
no such
suchinterest
intcrest
nvo (2)
within the territory
covered by
by this
this Agreenent
Agreement for a period of two
(2) yerrs,
years, or in any other
tenitory covered
other territory
tenitory covered
covercd by
by aa
JANI-KrNG Franchisc
Franchise Agreement
Agreement for
for ra period
period of one (l)
(1) yea¡,
year, from
from the
the effec¡ive
effective date of such
Jfu\I-KING
such termination
termination andlor
urd/or
period. by
such period,
byinfluencing
influencingor
it during
during such
orattempting
attempting to
previously existing
transfer,
toinfluence
influence previously
bansfer, nor will it,
clients,
existingclients,
diven or attempt
whether of Franchisee
or othe:'
other Franchisees.
Franchisæs. divert
¡neÍnpt to divert
diven from
whether
Franchisee cr
from JAN!-KrNG
JANI-KINC or
an¡,
itsFranchisees
orits
Franchisees any
business of any kind
JANI- KING or
or its F;anchisces
Franchisees rve;e
were engagËC
engaged u
at any time during
kinci in which JANI-KINC
prcceding
during the
theyear
."-err preceding
cnd/or transfer.
iransfer.
such termination
¡ennination and/or
YORK INC.
fNC.
JANI-KING
NEV/ YORK.
JANI.KING OF NEW
5/9S
FRANCHISE
4/q
PAGE lO OF 28
Nr(æ*{r
fNT(-4NT
P.{GE IO OF 3E
ti
Q;
o;
4.15. Franchisee
pay all
ro pay
4.15.
allpersonal
personalproperty,
propcrty, sales,
Franchisee agrees to
cxcisc, use
use and
sales, excise,
and other
other taxes,
taxes, regardless
regardtess of
may be
naturc, which may
be imposed,
imposcd, levied,
levied, assessed
assessedor
type or nature,
charged, on,
oichargcd,
on, against
against or
connection with
or in
inconnection
with any services
sold
furnished hereunder, whether from any
any state,
sold or furnished
county or parish, or other governmental
municipality, counry
state, municipality,
govemmintal unit
jurisdiction
which
have
or agency,
may have
over such
products, service
agency,
over
suchproducts,
service and
and equipment.
4.16. Franchisee
Franchise-e agrees to timely
timcty pay
payall
4.16.
alldebts,
debts,obligations,
obtigations, and
and encumbrances
encumbrances that might arise
arisc as aa
JANI- KING
result of its operation of a JANIKING Franchise,
Franchise.Franchisee
Franchisee understands
understands that in the
the event
evcnt it
ir be
be adjudicated
adjudicated
bankrupt,.or
bankrupt,.or becomes
becomes insolvenq
insolvent, or
or aa receiver
receiver (whether
(whether permanent
permanentorortemporary)
temporary)ofofFranbhisee's
Franhisee's property, or any
appointedby
jurisdiction, or
thercofl shall be appointed
bya aCourt
Courtofofcompetent
part thereof,
if
Franchisee
competentjurisdiction,
or if Franchiseeshalt
shallmake
general
mui. a general
judgment
of creditors,
creditors, or
orififany
assignment for the benefit of
anyjudgment against
againstFranchisee
Franchisee remains
remainsunsatisfied
unsatisfied for thirty (30)
lf O¡
if Franchisee
Franchisec defaults
defaults on
on any
longer, or if
days or longer,
anypayments
payments or
or obligations
obligations due
due Franchisor or its suppliers
suppliers or others
or the
the purchase
purchase or
supplies or
arising out of the purchase of supplies
or lease
leasc of equipment
equipmcnt for use
use in
in the
the operation
operàtion of
of aa JANIJANIFranchisce infringes,
KING Franchise,
infringes, abuses
abusesor
Franchise, or if Franchisee
ormisuses
misuses any
any of
of the
thc JANI-KING
JANI-KING trademarks
trademarks or trade names,
na¡nes,
thc Franchisee
or if the
Franchisee fails to
to comply
comply with
withany
any.of
provisionsof
ofthe
theprovisions
thisAgreement
ofthis
Agreementexcept
exceptas
astotoperformance
performance on
forth below,
customcr
below, and
and has
hasfailed
failed to
customer accounts
accounts Írs
as set forth
totake
takeappropriate
appropriatc corrective
conective action
action to
to the
the satisfaction
satisfaction of
(30)
within
days
Franchisor
written notice
after written
Franchisor within thirty
thirty
after
noticc by
by Franchisor
Franchisor of such failure or default,
dcfault, then
then Franchisor
Franchisor
may terminate this
all rights
rights of
of Franchisee
Franchisee hereunder
hereunder shall cèase
this Agrecmcnt
Agreement and alt
cease ar
at the end of said thirry
thirty p0¡
(30) day
day
pcriod
period or such longer.period
longer period as
as rcquircd
required by law.
4.17.
to be
Franchisee agrees
agrces to
be solely
sotelyresponsible
responsiblefor
4.17. Franchisee
forthe
thc services,
scryiccs, and
and results
results of
of such
such services,
services, performed
at locations
wherc cleaning
locations where
cleairing and/or
and/or maintenance
maintenance services
services are
pcrformed pursuant to this
arc performed
Agreement,
and will
this Agreemenl and
provide all labor, materials,
tools
and
supplies
necessary
materials, tools
necessary to servíce
service such
suchprcmises.
premises. All
All of
of such
such services
services will
wilt be
workmanlike manner,
performed
and workmanlike
manner, to
performed in a good and
tothe
thesatisfaction
satisfaction of
customer for
of the
the customer
whom such
forwhom
such services
services are
performed,
theCleaning
Cleaning Schedule
performed, and
and in accordance with the
Schedule and
and to
theperformance
performancc standards
to the
standads of
of JANI.KtNG.
JAI.II-KING.
Franchisce
tha¡ Franchisor
Fr¿nchisor may
Franchisee undcrstands
understands and agrees that
premises serviced by
Franchisee
may inspect
inspect any premiscs
by Franchisee at any time
¡ha¡ the quality of
to ensure that
of service
scrvice being
bcingrendered
renderedisisininaccordance
aceorda¡rcewith
withJANI-KJ.NG
JANI-KING standards.
sanda¡ds.
Thc
following procedures
The following
procedures apply if any
anyaccount
account we
wepreviously
previously provided
provided to
to you as part
par of
of the
tbe Initial
Initial
Business requests
requcs¡s a transfer to
to another
another franchisee
Business
franchisee or
canccls the
orcancels
the cleaning
clcaning contract:
contract:
( I ) If an
a¡r account canccls
uansferrcd to
cancels or is transferred
to aanew
ncwfranchisee
F¿nchisee due to non-performance,
non-performancc, theft,
theft, your failure to
se¡vice the account properly, or your failure
service
comply
with
the
Policies
and
Procedures,
failure to
to comply wíth the Policics
Procedures, we will not replace the
account.
sccount.
(2) If an account cancels at
yours before
at no
no fault
you service
fault of
of yours
beforc you
service the
the account
accouot for
for12
12full
fi,rllmonths,
months, the
the full
firll gross
montbly
will be
be replaced
monthly billing
billing value
value of that account will
another account
within aa reasonäble
replaced within
reasouâble period of tizne
time by
by a¡other
account or a&
combination of
additional cost
combination
of accounts,
accounts, at
at no additional
cost to
you. This
toyou.
provision applies
Tbis provision
applies until you have
have serviced
that
scrviced that
replacement
account
replacement account for
for the
the remainder
remainder of
of the
the initial
initial 12
monthpcriod.
period. IfIf any replacement
12 month
rcplacement account
account or combination
combination
accounts has a greater value than
thu the
tl¡e original
originalaccount,
of accounts
will be applied to the obligation of other
account, the
the excess
cxcess will
othcr
Initial
Business obligation
obligation has
Initial Business, or if the Initial Business
Finder's
has been
been fulfilled,
fulfilled, Finder's Fees
will be
Fees will
charged.
be charged.
grossbilling
with aamonthly
An account
account with
EXAMPLE: An
monthly gross
billingof
p€r month
of$1,000
S1,000 per
month cancels
cancels after
after 77 months.
months. We will
anothcr account having
replacc
having aagross
gross monthly
replace üle
the account with another
billing
of
at
least
$1,000
monthly
at tcast S1,000 per month. If the
the
replaccment
no fault
fault of
you at any time
replacement accounl
account also
also happens
happens to cancel at no
of you
timc during the
thc next
ne:c 55 months
months you service
servicc
agaín replace
accounl we will again
replace the
withanother
the account.
theaccount
accountwith
urother $1,000
S1,000 account.
account. If
If either
cither of
$,ere
ofthe
theaccounts
accounts were
rvirh an account
tccount billing
replacsC with
billing at
at$1,500
permonth,
S1,500per
replaced
month.the
theadditional
additional$500
wouldapply
$500would
applyagainst
against other Initial
Initiat
Business obiigation,
obii2ation, or
or Finde:-s
Finder's Fees
Business
Fres would be charged.
chargaC.
lorus
ustotoreplace
No
replâcsthe
thecontracts
No othcr
other obii*zations
obiigations exist or
conntctsifif the
tlre contracts
conrracts are
are canceled
c¡ncelcC before
before the full term.
JANI.KING
JANI-KTNG OF
OF NEW
NEW YORK. [NC.
NC.
FRANCHISE ACR.EEMENT:
5i98
FRANCHISE
AGREEMENT: 5/98
¡NT
rNré|Frr.LL
fNT <
PAGE
PAGE II
t i OF28
0F 28
t¡
o
T
.
andeach
eachof
ofits
its employees
employccs must
4.17.1. Franchisee
Franchisce and
must be
bc in
an approved,
approvcd, neat
4.17.1.
in an
and clean
neat and
clean uniform
uniform at
at any time
they
they are
are perfonning
performing services
services at
at aa client's
client's facility.
facility. A personal
personal identi$ing
identif'ing name
be
considered
part of
of
name tag shall
shall bc considered aa part
personnel while
all personnel
whilc on the premises
premiscs of an account.
and is required
rcquired for
for all
the uniform arid
account.
withany
theFranchisee
Franchiseetotocomply
comply with
provisionsof
Failureof
ofthe
anyprovisions
4.17.2. Failure
4.17.2.
ofthis
thisAgreement
Agreementororestablished
establishedJANIJANIwithin seventy-two
Procedures within
seventy-two (?2)
KÍNG
Policies and Procedures
KING Policies
(72) hours.after
hours after Franchisor has given notice to the Franchisee
Franchisee
will be
bcsufficient
suftìcient cause
cause for
for Franchisor
Franchisor to sùspend
of noncompliance
nonicompliance will
sùspend the authority
authority of Franchisee
Frurchisce to perform
pÊrform
or
all
accounts
designatcd
Franchisor,
for
any
by
until
services
services
or all accounts designated
Franchisor, until such
such time
time as Franchisor
is satisfied
that
Franchisor is
satisfìed that
tvith such provisions,
provisions, or,
will comply with
or, at
at the
the option
option of Franchisor,
transfer the account
account to another
Franchisee will
Franchisor, to transfer
another
dclay.
Franchisee, without
without not¡ce
notice or delay.
Franchisee,
will inspect
ofFranchisor
Franchisor will
A representative
representative of
inspect the accounts from time to time
4.17.3. A
timc in
in order to insure
insurc that
*¡at
being performed
performed in
the service
o[all
in accordance
accordancc with the Cleaning
all accounts isis being
the performance
servicc of
Cleaning Schedule
Schedulc and to thc
whåther through
anytime,
JANI-KÍNG.IfIfatatany
through complaint
standards
standards of JANI-KtNG.
time, whether
complaíntor
or inspection,
inspection, aa deficiency
dcficiency in performance
ierformance
staff to the
discovered, Franchisor can dispatch its own staff
thc account
eccount and correct
is discovered,
corrcct all
all deficiencies
dcficiencics in
in performance,
performance.
in determining
dctsrmining urgency
Fra¡rchisor has sole discretion in
Franchisor
urgency and
and thc
the time frame when
dispatching its staff to
when:dispatching
to an
account.
account.
coopÊratc fully
4,17.4. Franchisee rnust
4.17.4.
pay aI reasonable
must cooperate
fully with
with Franchisor's
Franchisor's staff, and
and pay
rcasonable hourly
hourly rate
plus expenses
and travel
travel time,
Fee"), plus
erpenses and
timc, on
each occasion
on each
occasion Franchisor
("Service Fee"),
to
an
Franchisor dispatches
dispatchcs its
its staff
suffto an account
accountinin
deficiency
performance.
a
in
will
corect
The
Scrvice
be
order to correct deficiency in
The Service Fee
Fce will be established
established exclusively
cxclusively by Franchisor from
from
cxceed the
¡be rate of $50.00
will not exceed
$50.00 per
per"labor
"labor hour".
hour". In order to promote full compliance with all
time to time, but witl
all
and policies,
st¿ndards and
JAIII-KING
JANI-KrNG performance
performance standards
policies, the
the Complaint
Complaint Fce
Fee may
may also
also bc
be charged
charged against
against tbe
the Franchisce
Franchisee
as provided in Sectíon
Section 4.23.
performance requires
the deficiency
If the
deficicncy ininperformance
requircs immediate action
act¡on to rncet
4.17.5. If
4.17.5.
meet the
thc client's demand
demand for aa visit
visít
üle client's
premises in less
client's premises
or performance
performance of services at the
lcss than four (4)
(4) houn,
hours, and Fra¡chisor
Franchisor is
is not
not able
able to reach
reach
the Franchisee
is not
not available
availablc for an
Fra¡rchisee is
the Franchisee,
Franchisee, or the
an immediate
immediate visit or
pcrformance of services,
or performance
services, the
the
the Service
Service Fee,
cxpedses, for thc
Franchisee
the operations representative's
Fee, plus expenses,
Franchisee will be assessed the
rcpresentative's time and
and effort
afrort to
to
satisfy
satisfr the needs
necds of the customer.
pcrform the
Ln the
the event
eventFranchisee
Franchisce fails
fails to
to perform
4.11.6. In
the cleaning
ctcaning services
4.17.6.
scrviccs as required
rcquired by this
tlris Section,
SectÍon,
and intent
pur:¡uant
intent of
of this
thisAgreement,
AgreemenÇ and such deficiency
pursuant ¡o
to the spirit and
shall continue
continuefor
for fîvc
five (5)
(5) days
deficiency shall
days
(90) day
day period,
period, Franchisor
Fra¡rchisor may suspend
cumulative within
within aa ninety (90)
cumulativc
suspend the authority
authority of Franchisee
Franchisce to perform
perform
accountsdesignated
desígnatcd by Franchisor,
services for any or
or all
allaccounts
Franchisor, unt¡l
until such time as
services
asFranchisor
Franchisor is
thar
is satisfied
satisfied that
withall
performance standards
will comply
allperformance
comply with
sunda¡ds and polícics,
Fanchisee will
policies, or,
or, at
at the
the option
option of Franchisor,
to trar¡sfer
transfer
Franchisee
Fnnchisor, to
the account.
tbe
account.
4.17,7, Franchisor
exercise the
4.17.7.
Frarichisor may also exercise
the option
option to üa¡rsfer
transfer an account immediately
immediately upon receiving aa
from the customer
ransfer or cancellation from
culomcr or if Franchisee
requcst
request for transfer
Franchisee services any customer in aa capacity
other
capacity other
Fra¡rchisor.
than as aa bona
bona fide Franchisee
Franchisee of
of Franchisor.
waive any
d.17.3.
Franchisee shall
shall waive
any and all
rll payments
paymens for services which may become
4.17.3. Franchisee
become due and payable
option to transfer
after Franchisor
Franchisor has exercised the option
uansfer an
an account
account under
under any
any of the Sections 4.17.1
4.17.1 through 4.17.7,
4.17.7,
lo any
ôny refund,
refund, rebate
rebate or reduction
and shall not
any fe:s
fees previously
previously paid
paid or
or pledged
pledged in
in connecrion
connection
urd
nol be entitled
Enti¡lei to
reCuction of any
F;ar¡chisor does
with ¡ha¡
con¡¡rc:.¡flfFranchisor
does not
not exercise
that ;us:omer's
either in dart
¡usiomer's contract.
exerc¡se any
rny option
opt¡on hereunder,
hereunder, either
pan or in full
futl as to
or det'aull
default, ¡hat
that shall not constitu¡e
constituteaa waiver
waiver of
of such
such righrs
rights æ
as ro
to the
any deficiency
defTciency or
the same
same or
or any
any subsequent
subsequelr
deficiency or default.
JANI-KING
NEW YORK.
YORK INC.
INC.
JANT.KÍNG OF NEW
5/98
FR.ANCHISE AGREEME¡IT:
FRANCHISE
AGREEMENT: 5/98
rNr($srr
n-L
1NT'4NT f1
S.__
PAGE 12
I? OF 28
38
o
a
all of
ofFranchisee's
Fnnchisec's
Franchisee shall
shall providc
provide Franchisor,
Franchisor,upon
upon Franchisor's
Franchisor'stcguest,'a
request, a list
list of all
4.18. Franchisee
4.18.
part (hereof
lhereof shall
be disclosed
disclosed by
contracts. Customer
shall not
not be
Customcr lists or any part
by
customers and
and copics
copies of
of their respective
respcctive contracts.
customers
prior
wrinen
consent.
without
employees
Franchisee
to
anyone
other
than
its
without
Franchisor's
prior
written
consent.
than
its
Franchisee to anyone other
term of
Principat shall, during the
the term
of this
¡his Agreement
Agreernent or
any Controlling
Controlling Principal
or
franchísee nor any
4.18.1. Neither franchisee
4.18.1.
persons,
person,
partnership,
association
of
any
other
üse
the
thereafter,
communicate,
divulge
or
use
for
the
benefit
of
any
other
person,
persons,
partnership,
association
or
benefit
or
divulge
or
thereafter, communicate,
Agreement, they shall
for their
their ow
shall not use for
termination of this Agreement,
own
corporation and,
and, following
followingthe
the expiration
expiration or termination
corporation
the
concerning
methods
of
concerning
the
methods
operation
the
or
knorv-how
knowledge
of
thc
benefit,
any
confidential
information,
knowledge
or
know-how
information,
confìdential
benifiq
which
thcy
may
be
apprised
connection
to
or
of
with
in
franchised
business
which
may
be
communicated
to
them
or
of
which
they
may
be
apprised
in
connection
with
cornmunicated
franchised business which may
and Controlling
Principals shall
Controlling Principals
of this
this Agreement.
Agrcement. Franchisee and
terms of
shall
the
Franchise under the terms
the operation
operarion of the Franchise
employees
have
access
to
it
in
order
of
such
order
divulge
such
confidential
information
only
to
Franchisee's
employees
as
must
only
to
information
divulge such confidential
techniques and
and any materials used
know-how, techniques
uscd in
in
knowledge, know-how,
information, knowledge,
operate thc
the Franchise.
Franchise. Any and all information,
to opcrate
with
connection
thisAgreement
plovides to
inconnection with this
Agreement shall
to Franchisee
Franchisee in
shall be
be
Franchisor provides
System which Franchisor
!hê System
rilated to the
or related
northe
Conûolling
Principals
Franchisee
nor
the
Controlling
Principals
shall
at
NcitherFranchisee
of
this
Agrèemcnt.
purposes
deemed
confidential
for
purposes
of
this
Agreement.
Neither
for
confidcntial
deemcd
duplicate,
record
or
othcrwise
copy,
Franchisor's
prior
written
Consent,
duplicate,
otherwise
make
the
same
wrinen
sarne
prior
consent,
without
any time,
t¡me, without
shall survive
survive the
the expiration,
expiration, termination
in this
this Section
Sectíon shall
termination or
available
to any
any unauthorized
unauthorized person.
person. The
or
covenant in
fie covenant
aui¡labl. to
binding
perpetually
cach
binding
upon
Franchisee
and
each
of
Franchisc¿
and
shall
be
hercin
intercst
transfer
of
this
Agreement
or
interest
herein
and
shall
be
perpetually
or
any
Agreement
this
of
üansfer
ing PrinciPals.
the Controll
Controlling
Principals.
tÌ¡e
(10) days
wrinen notice
lcast ten
ten (10)
dayswritten
notice of
ofeach
each
agrees to
to provide Franchisor
with at least
Fra¡¡chisor with
Franchisce agrees
4.19.1. Franchisee
4.19.1.
busincss, and to
to obtain
obtain the
thewritten
written consent
conscnt of
of
occasion
upon which
which itit desires
desires to discontinue
service to aa business,
discontinue service
occasion upon
any
evcnt
Fra¡rchisee
fails
to
service
account
as
a
bona
Franchisor
before
doing
so.
On
this
happening,
or,
in
the
event
Franchisee
fails
to
service
any
account
as
a
bona
or,
in
the
this
happening,
so.
On
doing
Frar¡chisor bcfore
Franchisor rcse¡"rcs
reserves the right to begin serviciñg
scrvicing
tide
Franchisee for
for a period
period of two cumulative
ôumulative days Franchisor
JANI-KING Franchisce
fide JANI-KING
which
account, in which event Franchisee
such account,
Fra¡lchisce
senricing such
to begin
begin servicing
another Franchisee
Franchisce to
such
account itself
itself or to allow another
such account
(regardless
when
services
were
rendered)
of
services
payments
due after
rendered)
any
and
all
shall
be
considered
as
having
waived
any
and
all
payments
(regardless
of
waived
as
having
shall be considered
Franchisee no
no longer
longer se¡vices
services thc
the account,
account, and
and Franchisee
Franchisee shall not be entitled
entitled to any refund or rebate
of any fces
fees
rebatc of
Franchisce
paid or
or pledged
pledged previously
previously to
to Franchisor
Franchisor for such
such business.
business,
paid
contracts to
providc cleaning
and
cleaning and
Additionally,thc
the Franchisee
Franchisee may
may solicit and obtain
obtain contracts
to provide
4.19.2. Additionally,
4.lg.Z.
the agreement
an
maintenance scrvices.
services. Thc
The terms of
must be
be an
by Franchisor
Franchisor and
and the
agreement must
the contracts
contracts must
must be
bc approved
approvcd by
of the
maintenancc
provide that
The contract
contract must
mustprovide
Franchisor
approved form,
form, the
the master
master format
format of which is
providcd by
thatFranchisor
is provided
by Franchisor.
Franchisor. The
approvcd
be
assigned
to
franchisor
if
the
Franchise
franchisor
if
the
Franchise
contract
may
such
agrcement
is
a
third
party
beneficiary
to
agreement
and
that
such
contract
may
to
the
¡i i ftrir¿ party bcneficiary
to
Continue
servicing
such
contract
wish
continue
tlona
servicÍng
contract as a bona
docs not
Agreement
is tcrminated
terminated or
or expires,
expires, if Franchisee
Franchisee does
Agteement is
quality standards
JAI.{I-KING
tide
Franchisee, or
or if Franchisee fails to
the quality
standa¡ds established
established by JANI-KING
to maintain
maintain the
JAìI-KING Franchisee,
fide JANI-IUNG
t
contract is subject
policies
and procedures.
procedures. The contracts
providc that the
thê contract
subject to all of the terms
tcrms and
further provide
conüacts shall further
policies and
be
to
submined
immediately
conditions
containedin
in this
this Agreement.
Agreement. A
thecontract
shallbe submitted to Franchisor
Fnnchisor immediately
copy of
ofthe
contractshall
A copy
londirions contained
upon signing.
uryreason,
nËason, Franchisee
4.20.
Agrecment for
forany
Franchisee shall
shall immediately
immediately
this Agreement
ofthis
or non-renewal
non-renewal of
termination or
4.20. Upon
Upon termination
and all
all aspects
JAI'{Iaspects of
of the
the JANIof JA.NI-KTNG
JA¡\I-KING trademarks,
and
trademarks, trade names, trade secrets, and
use of
cesse all use
permanenrly cease
and permanently
and
any
s¡ill a
clieng
Franchisee
that
it
is
still
verbally
to
other
Franchisee
KING
systeme
and
shall
cease
indicating
verbally
or
in
writing
to
clients
and
any
índicating
ce¡se
KING sysrcm, and shall
or
products
JANI-KINO
Franchisee.
Franchisee
shall
immediately
return
to
JAN1-KING
all
matter,
products
or
to
JANI-KING
all
advertising
maner,
immediately rÊn¡rn
JANI-K1NG Franchisce. FranchÍsce
proprictary
information of aa proprietary
writing
that con¡ain
contain JA,i\l-KINC's
JAN1-KJNG'sùade
trade níune!
name, logo
logo or
or copyright,
copyright, as
as well
well as any information
writing that
such
and
All such
operational
documents
information.
All
operational
documents
similar
pertaining
customers,
nature
such as lists
lísts and files pertaining to customers,
nailre such
lo
rerrain the exclusive
exclusive propeny
An:/ keys to
lists, filcs
tiles snd
and rhe
the information
contained therein shall remain
property of Franchisor. Any
information connined
lists,
ceas€
Fnnchisor at the time the Franchisee
Fnnchisee is to cease
buildings. securir.v
security posses
passesand/or
and/or codes
codes shall
shall be tumeC
turned ovet
over to Franchisor
buildings.
buåiness.
servicing
x:vicing the business.
fNC.
JANZ-KJNG
OF NEW
NEW YORK. INC.
JANI.KING OF
J/98
FRANCHISE ACREËMENT:
AGREEMENT: 5/98
FRANCHISE
¡NTfl4T/(.n$éfrt\.tr,LrPAGE 13 0F 28
PACE 13 OF
3E
I
.o
o
anyreason,
rc&son,such
notrenewed
rencwedfor
forany
suchtermination
termination or
ornon-renewal
termina¡edor
ornot
non-renewal
4.21.
thisAgreement
Agreementisisterminated
4.21.Iflfthis
propérty
allproperty belonging
to'Franchisor
belongìng to
toFranchisor
Franchisor including,
:.shall
Frarichisor all
including,
suncnders to
untilFranchisee
Franchiscesurrenders
cffectíve until
:..shall not
not be
beeffective
contractsbetween
bctweenFrartchisor
andall
allcontracts
Franchisorand
andClient.
Client. Franchisee
clients'buildings
buildingsand
Franchisec
toall
allclients'
kcys to
limited to, keys
but not limited
also pay,
pay, in
prope(y of Franchisor. Franchisee must
must also
all amounts
in full,
full, all
amoung
abovc-namcd items are the property
agrees that the above-named
andall
surrenderany
anyand
allequipment
ornon-renewal
non-renewal and
and surrender
eguipment belonging
of termination
termination or
belongìngto
to
owed to Franchisor at the
date of
the date
owed
thisAgreement
with each
hereunder, this
each obligation
Agreemcntshall
shatlbe
effective
complics with
obligation hereunder,
bedeemed
deemedeffective
Franchisec complies
Jani-King.
Jani-King. Until Franchisee
paragraph, this
opinion, complied
complied with
rvith this
in Franchisor's
Franchisor's sole
soleopinion,
thisparagraph,
Franchisee has, in
this
not terminated.
terminated. Once Franchisee
and not
and
terminatedAgreement shall be
deemed terminated.
bc decmed
renewed the
proclaimed to have
terrninated or not
notrenewed
theAgreement
have terminated
Agreemcnt and
and refused
refused to
to
If Franchisee has proclaimed
4.22. lf
4.22.
pay One
($1,000.00) per
parties agree
shall pay
agree Franchisee
Franchisec shall
Thousand dollars
dollars ($1,000.00)
the parties
One Thousand
surrender the items described herein,
herein, the
surrcnder
paragraph.The
partiesacknowledge
with the
the foregoing
foregoing paragraph.
Theparties
acknowlcdgethat
thatdamages
complied with
damages
it has
has not
not complied
day for each
cach day that it
paragraph
difTicult
to
ascertain
and
therefore
for Franchisee's
failure
to
adhere
to
the
foregoing
paragraph
are
difficult
to
ascertain
and
therefore
agree
that
arc
agree
thatthis
this
to
adhere
to
thc
forcgoing
Franchisec's failurc
penalty.
as aa penalty.
damages and
and not
not as
amount shall be payable as
as liquidated
liquidated damages
with all
pcrformance standards
JANI-KING performance
policics, aa
cornpliance with
all JANI-KING
standards and policies,
promote full
full complìancç
ro promote
4.23.
4.23.' In order to
who
does
with
will be
any Franchisee
comply with the
tlre time
charged to any
Franchisec who does not
not comply
time frames
frames
Fec will
bc charged
(550.00) Complaint Fee
Fifty dollar ($50.00)
rcquiring the
the Regional
pcrsonnel
to aa customer
cus¡orner complaint,
complainç requiring
Ofïice personnel
corrective action
act¡on to
Regional Office
allotted for
or corrective
initial response or
alloned
lor initial
to" the
thecomplaint
complaint in
inthis
thiscase
"rcspond to"
casemeans
means
to the
tl¡ecomplaint.
complaint. "Serviced"
"Serviced" or "respond
of Franchisor
to respond
respond to
Fr¡nchisor to
and
what
the
complaint
the
the nature
needs to
to be
be done
done to
toresolve
communicating
natur¿ of
of the complaint and what needs
resolve the
to determine
detcrminc the
whh the client to
communicating with
protectthe
docs not
Ey to
to protect
theaccount.
account.. ft
necessary to try
It does
not mean
mcan
simation, and
and to provide the customer
culomer relations
rclations necessary
situation,
*Sewice Fee"
Anadditional
additional "Service
Fee"
providing clcaning
cleaning or
or maintenance
maintenanceservices
servicestotothe
theclient
client to
to solve
solve the
the problem.
problem. An
providing
expcnses
materials,
bc
assesscd,
supplics,
equipmcnç
established
in
Section
4.17.4
will
be
assessed,
plus
expenses
(i.e.,
labor,
materials,
supplies,
equipment,
etc.),
for
4,17 ,4
cstablished
the complaint
the Regional
personnel timc
time spent on commercial
cleaning sewices
services rcguircd
required to
to recti$
rectif' the
or
commercial clea¡ing
complaint or
Officc personnel
Regionat Office
the Complaint
proccdure for
satisfy the
the unhappy
client. The
the procedure
charging the
Complaint Fee:
Fee:
for charging
The following
following isis the
unhappy client.
satisff
performancc is
inspection,aadeficiency
is
whetherthrough
orinspection,
deficiencyininperformance
complaint or
anytime,
time,whether
throughcomplaint
If atatany
(4) hour
which
period in
discovered concerning
has aa four
four (4)
hour period
cleaned by Franchisee,
Franchisee, Franchisor has
Ín which
8n account
account cleaned
concerning an
(calling aa minimum
to
once each
each hour)
hour)and
andreport
to make contact
minimum of
of once
report the
tbe complaint
complaint to
the Franchisee
Franchisee (calling
contacr with the
Franchisee.
Franchiscc.
will be
The Complaint
Fee, plus the
be charged
charged under
under either
eitherof
a¡rd expenses,
e¡(penses, will
following
the Service
Fee and
ofthe
thefollowing
Service Fee
Complaint Fce,
The
conditions:
conditions:
pcriod (calling
(calling aa minimum
oncc
Franchisor cannot locate tlre
the Franchisee
minimum of once
Fnnchisee during the four (4) hour period
(a) Franchisor
.
or,
each hour) and the Operations
tde complaint; or,
Deparunent must respond to the
Operations Department
cach
thc
hours after
aftcr the opening
knovm to the Franchisee,
Franchisee, and if two (2) hours
opcning of the
(b) If the complaint was made known
of the
the
performancc has
has not
not been
bcen corrected
corrcctedto
to the
business
thesatisfaction
satisfaction of
deficiency in
ín performance
morning, the
thc deficiency
ne¡ct morning,
business the next
Opcrations Department
Deparunent of Franchisor
Franchísor to respond
client and
to the
the Operations
respond to'the
rcquiring the
and Franchisor,
Fr¡nchisor, thus requiring
complaint.
complaint.
(550.00) Complaint
Se¡vice Fee
Fee and
and expenses,
cxpcnses, will be
be charged to
4.23.
1. The Fifty
Complaint Fee, plus the Service
Dollar ($50.00)
{.13. l.
Fift.v Dollar
it,
the account
sccount
the
Franchisee
responsible
for
the
complaint,
even
if
the
account
must
be
transferred
to
save
it,
or
if
be
tra¡¡sfened
save
or
if the
complainl
forthe
the Frcnchises
arc
will
payable
the
they
incuned.
terminates for non-performance.
be payable in
in the month
month they are incurred.
fees will be
Thc fees
non-perform¡¡ncc. The
tcrminates
policies and/or
pertaining to the
proceCures pertaining
and/or procedures
reserves 'Jre
the right
ro establish
company policies
riglrt to
establish company
-1.:+.
4.24, Franchisor
Fanchisor resei./es
ägress
will
operation of Fnnchiscs's
Franchisee's franchised
this Agreement. Franchisee
be bound
by said
Franchiscc agrees that it
bound b,v
franchised business,
busincss. or this
operarion
manu¿l
Franchisorshall
shallkeep
keepaacurrent
curentupdated
updatedmanual
policies and/or
rec:ipt of same
same by Franchisee.
Franchisee. Franchisor
procedures upon receipt
polic:es
rnd/or procedures
fNC.
JANI-KJNG OF NEW
NEW YORIq
YORK, [NC.
JANI.KING
CF.MNT: 5/98
FP ÂN.!{IqF
JI98
NC-tIS ÂGREEMENT:
ni,r(g r.ff-rt
INTfNT
J ÁPAGE 14
I{ OF 28
t
I.
o
o
proccdures at
a!Franchisor's
Franchisor's corporate
corporate office.
the event
cvcnt that
that policies
policies and
ides and
policics
and procedures
ofiicc. In the
procedures
and procedures
such pal
of all such
.kept
policies
by
Franchisee,
and
proccdurcs
kept
the
maintaincd
kept by Franchisor differ
from
those
kept
by
Franchisee,
the
policies
and
procedures
maintained
in
Franchisor's
diffcr from those
in Franchisor's
controlting.
corporate
be controlling.
shallbc
corporatc office manual shall
acknowledges that
that the
thesystem
system must
continue to
evolve¡n
must continue
to evolve
4.25. The
TheFranchisee
Franchiseeacknowledges
inorder
order to
toreflect
4.25.
reflect the
the
customer
andchanging
changingcustomer demands,
demands, and
to meet
meetnew
newand
andthat
thataccordingly,
accordingly, variations
variations and
changing market
market and to
and
changing
timc to timc
ordcr to
additions to ¡he
the system may be required from time
time in order
to Preserve
preserve and
and enhance
enhance thc
the public
public imagc
imageof
of
addirions
generally.'
opcrational
cflìciency
of
the
continuing
Franchisees
the
system
and
to
ensure
the
continuing
operational
efficiency
of
Franchisees
generally:
Accordingly,
the
and
to
ensure
Accordingly,
the systern
thc
totime
timchereafter
or otherwise
the Franchisor
may from
from time
time to
hcreafrcr or
othe¡'wise change
changethe
thesystem,
Franchisee agrees that the
Franchisor may
system, including,
including,
Franchisee
and use
products,services,
useof
ofnew
neworormodified
modif iedtrademarks,
trademarks,products,
without limitation,
services,equipment
equipment and
without
limitation, the adoption and
and
preparation,
rclating
sale,
promotion
techniqucs
and
furnishings
and
new
techniques
and
methodologies
relating
to
the
promotion
and
marketing
of
marketing
furnishings
of
promptlyaccept,
agrees to
topromptly
accept, implement,
use and
and display
The Franchisee
implemenÇ use
display in
service and supplies.
Franchiseeagrees
supplies. The
in the operation of
seryice
additions, modifications
and changes
changcs at
sole cost
cost and
modifications and
at its
its sole
and expense.
expense.
the franchise
such additions,
busincss all such
franchise business
develop any
cmployeesdevelop
anynew
brany
anyofofitsisemployees
process or
agrees that
that if
if itit br
ncwconcept,
concept, process
Franchisec agrees
4.26. Franchisee
4.26.
prornotion
will
promptly
the
Franchised
it
or promotion of
of the Franchised Business,
Business, it will promptly notify
notifyFranchisor
improvement
¡n thc
the operation or
Franchisor and
and
improvement in
withoutcompensation.
conceming same,
informationconcerning
same,without
compcnsation. Franchisee
provide Franchisor
with all
allnecessary
necessaryinformation
próvide
Franchisor with
process or
orimprovement
improvement shall become
become the
the property
propcrty of
conccpt, process
acknowledgesthat
that any such concept,
ofFranchisor
Franchisor and
and
acknowledgcs
as
such
information
other
firanchisccs
utilizc
1o
it
detcrmines
Franchisor
may
utilize
or
disclose
such
information
to
other
franchisees
as
it
determines
to
be
appropriate.
be
appropriatc.
Franchisor
SECTION 5
SECTION.5
NONCOMPETITION
NONCOMPETITION
punuurt to this Agreement,
acknowledges that,
5.1. Franchisee
thaÇ pursuant
Agrecmenl Franchisee
Francbisec and Franchisee's
specifically acknowledges
5.1.
Franchisee specifically
tradesecrets
confidentialinformation,
employees
valuablespecialized
uaining, trade
secretsand
andconfidential
specíalized training,
information,including,
including,
receive valuable
employees will receive
promotional and
rcgarding the
tlreoperational,
sales, promotional
andmarketing
and
without limitation,
operational, sales,
methodsand
mar*etingmethods
information regarding
limitatíon, information
program
the
JAIJI-KING
ovcr
the
techniques
of
Franchisor
and
the
JANI-KING
program
over
and
above
the
ordinary
skills
and
experience
ordinary
skills
and
experience
Fra¡rchisor
techniqucs
parùters, investors
priorto
investort and
and employees
employees prior
execution of
possessed by Franchisce,
Franchisee, Franchisee's partners,
to execution
ofthis
thisAgreement.
Agrecment.
possessed
rade secrets
confìdential information,
Franchisec, including
trainíng, trade
sccrÊts and
and confidential
infonnation, Franchisee,
including officers
ofüccrs and
consideration for such training,
In consideration
tl¡e term of
directors of Frurchisee
Franchisee wherc
where Franchisee
is aa corporation,
corpontion, agrees
aEees that during the
of this
this Agreement,
Franchisee is
Agreemenç and for
directon
uninterrupted period còmmencing
commencing upon
upon cxpiration
expiration or
or termination
termination of
of this
this Agreemcnt,
Agreement, regardlcss
regardlessof
of
a continuous
conrinuous unintemrpted
(?) years
years thereafter,
writing by
a¡¡d continuing
continuing for
for (2)
thereafter, except
cxcept as
as otherwise
otherwise approved
by
approved in writing
termination, and
the cause for termination,
Franchisor,
neither Franchisee,
Franchisee, nor
nor thc
the officers
ofricers or
dircctors of Franchisee,
Frurchisee, nor
nor Franchisee's
Franchisee's employees
or directors
employees shall,
shall,
Franchisor, ueither
person,
conjunction with
with any
persons, partnership
partrrenhip
directly
through, on
behalf of,
of, or
any person, persons,
on behalf
or in
in conjunction
ilsslf, or
or through,
indirectly, for itself,
dircctty or indirectly,
or corporation:
thebusiness
divert any
anybusiness
businesi or
of the
âny
(a) Divert or attempt
attempt to
to divert
orcustomer
customer of
business franchised
franchised hereunder
or any
hereunder or
JAN1-KINGFranchisee
Franchiseean¡nvhere
anywhereto
to any
any competitor,
competitor, by
by dircct
direct or
or indi¡ect
indirect inducement
or
inducement or otherwise,
otherwise, or do or
JAITII-KING
goodwill
prejudicial
associatcd
witl¡
act
injurious
to
the
perform,
directly
indirectly,
any
other
act
injurious
or
prejudicial
to
the
goodwill
associated
with
Franchisör's
Franchiidr's
or
indirectly,
perform, directly
anyrherc.
Franchise program
trademarks
tradc names or the Franchise
tndemarks or trade
Prog¡am anywhere.
pcrson who
who i5
cmployed by
other
Employ or seek to
any person
at that
to employ
employ any
is at
thot time employed
by Franchisor
Franchisor or by
b¡r any
any other
(b) Employ
directly or
or indirectly
indirectly induce
leavc his or her employment.
franchisee of Franchisor, or otherwise
olherwise directly
induce such person to leave
employmenr
frurchisee
asor
or
operate. engage
engrg? in or have any
any interest in any business
the same
same as
(c) Own,
business which is the
Orvn, maintain.
maintain. operatewi¡hin
business
is.
or
be,
loc¡teC
of
ttris
similar to
franchised
business,
which
business
or
is
intended
to
be,
located
within
the
territory
of
this
business.
is
in¡ended
the
teritory
franchiseC
io the
'Jre
byaaJANT-KING
JANI-KIIIIG Franchise Agrænent
(l) year.
yea¡.
teritor.vcovered
covereCby
period of
Agreement: or in any
Agreement for
for a period
rny other
other territory
of one (1)
Agreernenr:
INC.
JANI-KING OFNEW
OF NEW YOR.ç
YORK. INC.
JANI.KING
5/98
FRANCHISE AGREEIIENT:
AGREEMENT: 5/9S
FRANCHISE
rNT4NTJ
Nréih'nû_L
OF 2E
PAG1S
8
PACË IJ OF
t
a
a
partiesagree
thateach
cachof
agreethat
ofthe
theforegoing
52.The
Theparties
foregoing covenants
covcnants shall
5.2.
of any
shall be
bc construed
construed as.independent
as.indepcndent of
provision of
ofthis
thisAgreement.
or provision
Agreement. If all or
other covenant
covenant or
or any
any portion
potion of
of aacovenant
Section
is
covenant in
in this
this icction is hcld
held
unreasonable or
or unenforceable
unenforceable by
by aa court
court or
or agency
agency having
having valid
validjuriSdiction
juridiction in
unrcasonabte
in any
any unappealed
unappcaled final
final decision
decision to
Franchisee and Franchisee's
Franchisee's employees
which
employecs expressly
exprcssly agree
agree to
which Franchisor
Franchisor is a party, Franchisee
to be
be bound
bound by
by any lesser
tcrms of such
covenant
such covenant
covenant subsumed within lhe
the terms
covenant that
that imposes
imposes the
the maximum
maximum dury
duty permitted
as ifif the
the
pcrmincd by law,
law, as
separately stated
statedin
inand
part of
and made
made aa part
resulting covenant
covenant rverc
vere separately
is Section.
Section.
resulting
of th
this
'5.3.
understands and
and acknowledges
acknowledges that
Franchisee understands
that Franchisor
Franchisor shall
shall have
5.3. Franchisee
the right,
havi the
right, in
in its
irs sole
sole discretion,
discretion,
scope of any coveßant
to reduce
reduce the scope
covenant sct
set forth in
in this Section,
Section, or
or any
any portion
portion thcrcof,
thereof, without
without its
its consent,
consent, effective
effective
Franchisee; and Franchisee
Franchisee agrecs
immediately upon
immediately
upon rvrinen
written notice to Franchisee;
agrees that
that ¡th shall
shall comply
comply forthwith
forrhwith with
rvith any
covsnant
rnodified, which shall be
fully enforceable
be ftilly
enforceable notwithstanding
covenant as so modified,
notwithstanding thc
the provisions
provisions of
of any
any other
other Section!
Sections
hcrcof,,
hereof.
5.4.
5.4. Franchisee
Franchisee expressly
expressly agrccs
agrees that
that the
the existence
existence of
of any claims itit may
mayhave
havcagainst
againstFranchisor,
Franchisoç
arisïng from this Agreement,
whcther
Agrcernent, shall
whether or not arising
shall not
not constitute
constitute aa defense
defense to the enforcement
by Franchisor
Franchisor of
of
enforcemcnt by
Section.Franchisee
Fra¡lchisec agrees
agrees to
the covenants
covenants in this Section.
¡o pay
pay all
all costs
and
expenses
(including
reasonable
attorneys'
costs and cxpcnscs (including reasonable anorneys'
conncction with the enforcemcnt
fees) incurred
incurred by Franchisor
Fnnchisor in connection
enforcement of ¡his
this scction
section of this
rhis Agreement.
Agrcement.
5.5. Franchisee
5.5.
this Section
would result
Franchisee acknowledges
acknowledges tl¡at
that aa violation
violation of
of thc
the terms of this
Section would
resultin
inirreparable
ineparable
adcquate remedy
no adequate
rcmcdy at law
la\¡/ may be
injury to Franchisor for which no
available,
and
Franchisee
accordingly
be available, and Franchisee accordingly consents
conduct by Franchisees
Franchisees in
in violation
violation of this Section.
to the issuance
issuance of an injunction prohibiting any conduct
Scction.
5.6. At Franchisor's request,
Franchisee shall
requcsç Franchisee
shall require
and obtain
5.6.
require and
obtain execution
cxecution of
of covenants
covenants similar
similar to those
thosc
(including covenants
covena¡rls applicable
applicablc upon
Set
forth in this Section
upon the termination of aaperson's
Scction (including
set forth
person'srelationship
rctationship with
with
any
all
or
managers
and
Franchisee)
managers of
any other
ñom
of Franchisee
Franchisee
personncl employed
Frurchisee) from
othcr personnel
cmployed by
by Franchisee
Fnnchisee who have
have
receivc training from
received
received or will receive
from Franchisor.
Francbisor. Every
Every covenant
covcnan¡ required
rcquíred by
by this
thisParagraph
Paragraph shall
shall be
bein
in a form
including, without limitation,
Franchisor, including,
satisfactory
satisfactory to Franchisor,
limitation, specific
spccific identification
identification of Franchisor
Franchisor as aa third
party
third party
beneficiary
bcncficiary of such covenants with the
the independent
independent right to
to enforce
cnforce them.
them. Failure
Failurc by
by Franchisee
Franchiscc to
to obtain
obtain
covenanl rcquired
execution
execution of
of a covenant
required herein
herein shall
shall connitute
constituteaa material
materialevent
event of
of default
default under
under the
the terms
terms of
of this
this
Agreement.
Agreement.
SECTION 6
sEcTrQN
FR.ANCHISOR
FRANCHISOR PLEDGES
PLEDGES
securcand
andoffer
offerFranchisee
Tosecure
Frar¡chiseethe
theopportunity
opportunity to
6.1.1.
6.1.1.To
toservice
servicesigned
commercial cleaning
signedcommercial
cleaning and/or
and/or
totalwould
maintenance
contracts that
that in tota!
would provide
provide aa minímum
minimum in
in gross
gross monthly
monthly billings
billings in an
an amount
defined as
maintenance cooftcts
as
amount defincd
in the
the Franchise
Franchise Summary,
Sunmary, front
from services
the "IMTIAL
"INiTIAL BUSINESS" in
Territory
as
described
servíces within the designated
designatcd Tenitory as described
will be
secured and
besecured
and offered
herein.These
contracts will
offered within the number
herein.
Thesecontracts
uumbcr of days
da¡rs identified
identified in the
the Franchise
Franchise
OFFERING PEzuOD',
Summary
Summary as
as the "INITIAL
PERIOD",such
suchtime
timepeiod
periodbeginning
beginningon
on the
the date all
"IMTIAL OFFERING
all required
required
obtained. the Acknorvlcdgment
equipment
supplies havc
have been obtained,
Acknowledgment of
of Completion
Completion of
of Training
Training is
¡s signed
signed and
and proof
proof
cquipmcnt and supplies
provided to JANI-KING
JANI-KINO or
of required
or such
such later'date
laterdate as
rcquircd insurance
insurance is provided
as requested
rcquened by
by the
rhe Franchisee
Franchisee and
which isis
and which
provided below.
below.
agreed
agrced to by Franchisor,
Fnnchisor, or as provided
and offer
The actual
actual time
timc to
tosecure
secure and
¡he Initial
6.1.2.
6.1.2. The
offer the
lniticl Business
the Franchisee
Business to the
Fnnchisee may.
ma¡r. at
at Franchisor's
sole
Franchisor's sole
extendeC under
under the
(l) IfIfFranchisee
discretion, be automatically
automaticelly extended
the following
follorvin,¡ conditions:
discretion,
conCirions: (1)
Franchiscsrequests
requests a de!ay
delay in the
ttre Franchisee
Business; (l)
() IfIf the
Frurchisec is in
offering of the Initial
lnitial Business:
unCcr the terms
n de:äult
default under
telrns and
rrrd conditions
condi¡ions of the
rhc Franchise
Fmnchise
agrcements benvæn
Agreement
Agreement or
or any
any other agreements
between Fnnchisc:
Franchiseeand
and Franchisor:
Franchisor;or
or (3)
(3) If
1f any
any of
of rhc
the Initial
tnirial Business
Busincss
lNC.
:oQ
oJrutc
Acoevx,w.Jr.
.rNaL¡fQÊ
¡ aiDftrIlç\lT. (,'Oe
JANI-KING
NEW YORK.
YOR.K. INC.
JAN!-KrNG OF NEW
CD
.l
lNTÑT
rxftfi1rrrr ¡ .Ç
o¡ YJ¿ nc rd
AP
t
P%t'
'
s
o
Ç
prcviously
Fnnchisçc requests
requests a transfer to another
previously provided
another Franchisee
Franchisee or requests
Provided to Franchisçe
reguests to be cancelled due to
to
non-performance,
non-performance, then
then Frarichisec
Franchisee must
must successfully
succesflully repeat
repeat and
and complcte
complete to
to Francfiisor's
Franchisor's satisfaction
satisfaction aU
all JAITIIJANIFranchisor will
KING
rvill have thc
KING training
training classes.
classes. Franchisor
the remainder
remainder of
of the
the Initial
Initial Offering Pcriod
Period or a minimum
minimum of
of 120
120
thc date: (l)
(I) Franchisee
days, which ever is longer, from the
Franchisce notifies
notifi¿s Franchisor
Fnnchisor that
that they
thcy are
arc ready
rcady to accept other
provided any
business
any documentation
documcnlation requircd
business and has provided
required under
under the Policies and
and Procedures;
Proccdurcs; (2)
Franchísce has
has
12) Franchisee
(3) the
any default;
default; or
thc acknowledgment
or (3)
acknowledgment of retraining
cured any
signed, to offer the
rctraining is signed,
the balance
balance of initial
lnitial Business to
guaranry that the
Franchisee. We
We do not
not guaranty
the Initial Business will reach or remain
Franchisee.
remain at
at thc
the stated
stated levet
level of
of the plan you
through the
term of
the Franchise
the term
Franchise Agreement.
purchase through
of the
Agreement.
To provide
provideFranchisee
with the Office Supply
6.7. To
Franchisee with
6.2.
Supply and
and Advcrtising
Advertising Package
Package outlíned
outlined in
in Schedule
Schedule One
One of
this Agreement.
6.3.To
availableto
Tomake
makeavailable
toFranchisee
Franchisce applicable
applicablc confidential
6.3.
manuals, training aids
aids and any pertinent
confidential manuats,
pertinent
"ny
information concerning
conccrning JAN1
JAM- KING
KING methods
methods, and
and practices.
practiccs.
provide an
6.4. To
To provide
an initial
initial local
local training
training progr¡m
6.4.
program to
to include
includeJAITII.KING
JANIKiNG cleaning
cleaning methods,
mcrhods, systems and
programs using
using established
programs
established JAltll-KING
SANt-KINGprocedures
proceduresand
andforms.
forms.Franchiscc
Franchiseeagrccs
agreestotosuccessfully
successfullycómplete
complete the
the
(6)
within
raining
six
after
months
date
the date of
of this
rhis Agreement.
training within six (6) months after the
Agrecmcnt.
6.5. To continue appropriate
appropriate assist¡nce
6.5.
assistance and
and guidancc
guidance until
until Franchisee
Franchisee has
has been
been offered
offered clients
clicns that
generate initial gross monthly billings
generate
billings as rcquircd
required by
by the Franchisc
Franchise plan
plan purchased;
purchased; to provide marketing
marketing and
technical assistance
assistancc and consultation and
and advice
adviceon
on operating
operatingproccdures;
procedures;and
andtotooffcr
offer sales,
sales, marketing,
marketing, technicat
technical
assistance and consultation and advice
advicc on
procedures.
oo operating
opcrating proccdures.
provideadditional
6.6.To
Toprovide
additionaltraining
raining and
6.6.
and support
support for
for Franchisee
Franchisce at
at reasonable
rcasonablc rates
ntes as
as established
cstablished by
by
JA¡¡I-KINC
policics
proccdures, currently
JANI-K1NG policies and procedures,
currently at
at aa rate
rate of
of Fiffy
Fifty Dollan
Dollars ($50.00)
($50.00) per hour, plus
plus expenses.
expenses.
6.7. To
Frar¡chisee the
To allow
allow Franchisee
lhe non-exclusive
non-exclusivc right
6.7.
right in
in thc
the tenitory
territory described
described hereinabove to use the JANIJAIIIKING marks,
marks, insignia,
insignía, logo, design
desígn and
and color
color scheme
scheme subject
subject to
to limitations
limitations and
and restrictions
restrictions herein,
hcrein, and to utilize
thc processes,
proccsses, methods,
mcthods, materials,
cquipment urd
materials, equipment
the
and promotional
promotional plans
plans developed
developed by
by JAITII-KING.
JANI-KING.
pcrmit Franchisee
To permit
6.E. To
Franchisce the
the right
right to profit from
6.8.
ûom its
is efforts,
effors, commensurate
commensurate with
with its
its status as owner of its
and, correspondingly, to bear the risk
business, and,
risk of
of loss
loss or
or failurc
failure that
that isis characteristic
characteristic of this
this status.
6.9.To
Tohave
havcavailable
availablcfor
forFranchisee
6.9.
Franchisec all
all appropriate
appropriate facets of the
the JANI-KING
JAIII.KINC sytem
system as
as well
well as all
all
pcrtincnt
ncw developments
pertinent new
developments in thc
the cleaning
cleaning services
services indrstry
industry including
includingprocedurcs
procedures for
for improved
improved efficiency.
6.10.
availabtc for
To have
have available
6.10, To
at Franchisor's
Franchisor's discretion
discretion and
and at a reasonable
for Franchisee,
Fnnchisee, at
reasonable cost, promotional
promotionat
materials, salesand
sales'and service
manuals, equipment
cquipment and othcr
other materials
se¡vicc manuals,
materials as
are
æ they
dcveloped
they are developed that
that o,ori¿
would bc
be retevant
relevant
to the operation of a JANI-KING franchise.
sEcTroN
SECTION 7
ADDTTIONAL
ADDITIONAL SERVICES
7.1. Tlterc
There shall
shall be no other
other acii¡ionalsc:rices
additional services providcd
provided by
by Fnnchisor
Franchisor to Franchisee
7.1.
Franchisee except as explicitly
explicitl¡r
sct
set out in this Agreement.
Agrc:ncnt.
INC.
JANI-KING OF
YORK. INC.
OF NEW YORK.
5i98
FR/ì,NCHISE
INI ,-t
Nr$rxr
INT<
r.lC-
PAGE 17
17 OF 28
¡
,a
.
SECIION
SECTION 8s
DEFATJLT AND.TE
DEFAULT
AND TERMINATION
RMINATION
8.1.
8.1. Franchisee
Franchiseeshall
shallbe
be deemed
deemed to
to be
be in default,
defautt, and
and Franchisor
its option,
Franchisor may,
may, at
at its
option, terminate
terminare this
Agreement and
and all
Agreement
aU rights
rights granted
granted hcreundeç
hereunder, yvithout
without affording Franchisee
Franchisee any ópportunity
opportunity to cure
cure the
thedefault,
default,
effectivc.immediately
effective.immediately uPon
upon the provisiori
provision of notice
notice to Franchisee,
Franchisec, cither
either uy
by"ny
mailing
mirini or hand
hand delivery, upon the
occurrence
occurrence of any of
of ¡he
the fotlowing
following events:
(a) If Franchisee
Franchisee or
or any
any of
of its Principals
Principals is convicted
convicted of a felony,
felony, aa crime involving moral turpitude,
turpirude, or
othcr crime
crime or offense
any other
offense tlat
that is reasonably likely, in the sole
sole opinion
opinion bf
Franchiror, to
to-"duersety
of Franchisor,
adversely affect
uff¿"t the
tt e
JAì'¡I-KING franchise
JANI-KING
franchise Program,
program, any
any JANI-KING
JANl-KING trademarks,
tradernarks, trade
radc names
names or
or the
the goodwilt
goodwill associated
assodated therewith
tl¡erewirh
or Franchisor's
Franchisor's interest
interest therein.
therein.
,
(b) IfIf Franchisee
Franchisee or
or any
any of
of its
its Principals
Principals discloses
discloses or
or divulges
divulges the
the contcnrs
contents of
of any confidential Franchise
Franchise
operatious
or
Policics
and
Procedures'Manuals,
Operations Policies
Procedures
Manuals, or any other radisccrcts
trade secrets or
or confidenti"t
confidential information
infor-.tion provided
Franchisee
Franchisee by
by Franchisor
Franchisorcontrary
contrarytotothe
theterms
ternisand
andconditions
conditions of
ofthis
tl¡is Agreement.
Agrccment.
(c) If
Franchisce abandons
If Franchisee
abandons the
the JAI'II'KING
JAM-KING Franchise
Fra¡rchise business
business or orherwise
forfcis the
otherwise forfeits
the right to do
do or
or
ùansacr
transact business
business in
in the
the tenitory
territory where
where the
the licensed
licensed business is located.
located.
(d) IfIf Franchisee
Fra¡rchisce or
or any of
of its Principals
Principals purport
purport to
to transfer
transfer any
any righs
rights
Agrcemenr
Agreement to
to any
any third
third party
partywirhout
withoutrhe
the Fnnchisor's
Franchisor's prior
prior wriuen
written consent.
is
or
or obligations
obligations under
under this
(e) If
If Franchisee
Fra¡rchisee makes any
any material
material misrepresentations
misrcprcsentarions relating
relating to the acquisition
acquísition of
of the
thefranchise
fra¡cbise
oustness.
business.
(Ð If
If the
thc Franchisee
Fra¡rchisce repeatedly
repeatedly fails
fails to comply with one
one or
or more
more rcquirements
requirements of the Agreement,
Agreement, any
operations
procedure,
operations procedure, or
or Jfu\-KING
JANI-KING Policies and
and Procedures,
Procedures, whether
whether or
not
or not corrected after notice;
c|rrected after notice]
(g) If Franchisee
Franchisee fails
failsto
to comply
comply with
with any
any provísion
provision of
of this Agreemeng
Agreement, any other
other agreement
egresment between
between
a¡d Franchisee,
Franchisor and
Franchisee, and
and tl¡creafter
thereafter fails to cure such deLault
deãutt tototh"
thesarisfactión
satisfaction of
of the
the Franchisor
Franchisor within
withín
(30) days
days after written
wrinen notice has been given thereof.
thirty (30)
thercof. Defaults
Defaults by
by the Franchisee shall
shall include,
include, without
occu¡rence of
limitation, the occurrence
of any of the following
following events:
cvents:
(i)
Franchisee fails, refuses,
lf Franchisee
reñtses, or
If
or neglects
neglects promptly
promptly to pay
pay any
any monies
monies owing
owing to
toFrañchisor
Fra¡ichisor or its
its
subsidiaries
subsidiaries or
or afliliates
affiliateswhen
whenduc,
due, or
or to submit
the
submit the financial
financial iniormatión
information requíred
required bylranchisor
by Franchisor under
under this
this
Agrecment, or makes
makes any false
Agreement,
false statemcnts
statements in connection therewith.
thcrewitl¡.
(ii)
If Franchisee
Franchisee fails
maintain the
If
fails to maintain
the standards
standards that
that Franchisor
Franchisor requires
requires in this
this Agreement
A-sreement
providec
in the confidential
confìdcntial Franchise
provided in
Franchise Opentions
Operations lvfanual
Manual or
policies
or JANI-KING
JANI-KING Policies an¿
and Procedures Manual.
pioc.J;*rîil;i.
as
or as
(¡i¡) IfIf Franchisea
Franchisee englgcs
engages in
in conduct
conduct which reflects
rcflecs materially
materially and unfavorably
unfavorably upon
up'on the
rhe operation and
rÊputation of
of the
rhe JAN1-KING
JAM-KINC franchise
reputation
franchise business or system.
(iv) IfIf Fnnchísæ
Franchisee fails.
fails, refi¡ses
refuses or
or neglects
neglects to
to obtain the
the Franchisor's
Franchisor's prior
prior wrinen
written approval or consem
¡s
consenr as
requirec
rhis A-ureernell
required by this
Agreement, orher
other than
than as providec
provided in Section s.l(d).
8.1(d).
JANI-K¡NG OF
OF NEW
JANI-KJNG
NE'r¡/ YORK. [NC.
tNC,
FRÂNCHÍSE AGREEMENT: 5/98
FRANCHISE
5i98
/(;L
_$Z
rhrréiìk¡¡r
4NT
PACE IE
OF 28
38
PAGE
180F
tNT
I
o
ç
:
(v)
(y) If Franchisee
Franchisee or
or any of its
is Principals
Principals misuses
rnisuses or
or makes
makes any
any unauthorized
unauthorized use
useof
ofthe
theJANI-KrNG
JANI-KING
proprietary
proprietary trademarks,
trademarks, trade
trade names,
names, service marks
marks or
or other
other materials,
materials,_including
any forms
including any
formsof
ofadvertising,
advcrtising, or
othenvise
otherwise materially
materially impairs
impairs the
the goodwill
goodwill associated
associated therewith
therewith or Franchisor's rights
rigñs therein.
therein.
(vi) 1fIl Franchisee
Franchisee is
is declared
(vi)
dectared insolvent
insolvent or bankrupt,
bankrupt, or
or makes
makes any
any assignmenr
assignment or trust
trust mortgage
mortgage for the
the
benefit
guardian, conservator,
benefit of
of crcditors,
creditors, or
or if aa receiver,
receiver, guardian,
conservator, trustee
trustee in
in banknrptcy
bankruptcy or similar
officer
simila¡
ofticcr
shall be
be
appointed to
part of
appointed
to takc
takecharge
chargeof
of'all
all.or
or a part
of Franchisee's
Franchisee's property
court of
jurisdiction. This
property by a court
åfcompetent
compctcnt jurisdiction.
provision may
provisioS
may not
not be
be enforceable
enforceable undir
under federal bankruptcy iur"
U.-S.C.a., Sec.
Sec.101
law tf
(Ili U.S.C.A.,
l0t et
ct seq.)
8.2. The tcrmination
8.2.
Agreement shall be
termination of this Agreement
be without
wiúout prejudice
prejudice to any
any remedy
remedy or
causcof
orcause
of action
action
which
which JANI'KING
JANI-KINGmay
may have
have âgainst
against Franchisee
Franchisec for the
the recovery
rccovcry of
ðr any monies
roni.udue
SANT-KING
due
¡n¡n-rrNG.or
any
r any
"ny recover damages
equipment
equipment or
or property
property of
of JANI-KING,
JANI-KJNG, or
or to any other right
right of
of JANE-KING
¡n¡n-rcrNOto
for any
to recover damages for
a'y breach
breach
hercof.
hereof.
8.3. If the
the provisions
provisions of
8.3.
of this
thisAgreement
Agrcemcnt provide
provide for
for periods
periods of notice
noticeless
lessthan
thanthose
thoserequired
required by
applicable
applicable statc
state law,
law, or
or providc
provide for termination, cänceltation,
câncellation, non-renewal
non-renewal or the
the like
tikeother
otherthan
thanininaccordance
accordance
wíth applicable
applicable state
11.2.2. of
with
state law,
law, Section
Section 11.2.2.
of this
this Franchise
Franchise Agrecment
Agreement shall apply.
SECTION 9
A¡TD EXTENSION
TERM ANT)
EXTENSION
9.1. Subject
9.1.
Subject to Section 9.2
9-2 herein,
hcrein, this
this Agreement
Agreemcnt and
and the
the franchise and
a¡¡dlicense
licensegranted
grantadhereunder,
hercunder,
for a period of
of Twenty
Twcnty (20)
years
from and
and
1ãO¡years from
añcr
after the'EFFECTI\rE
the "EFFECTIVE DATE"
DATE" of
of this Franchise
Franchise Agreement,
Agrcemcnt, being
being the date identified in
in the Franchise
f-ran"'t is" Summary,
and
and shall
shall cxpirc
expire immediately
immediately on
on that date.
unless soonerterminatcd,
unless
sooner terminated, shall
shall bc
be and
and remain
remain in
in full
full force
force and
and effect
effect
9-2.
Upon the
thc expiration of the
rhe term
9.2. Upon
tcrm of this agreement,
agreement" if Franchisee
Frar¡chisee shall give
give Franchisor
Franchisor written
wrinen notice
of its
iu intent
intcnt to
to erercise
exercise the
the provisions of this Section
Section not
not less
less than
than eight (8)
(8) months
montis nor
nor more
more than
than twelve
(12)
twelvc (12)
rnonlhs
months prior
prior to
to the
the expiration
expiration date, and provided Franchisee
Franchisec shall
shall not
notthen
te in
in default
then be
default thereunder,
further
thereundci and
*à
funher
condi¡ioned
conditioned upon
upon Franchisee
Franchisee complying
complying with
with the
the provisions
provisions of Sections
Sections 9.3 and 9.4
9.4 of
of this
ttir'Àg¡u.**nf
Agreement,
Franchisee shall
privilege, and option to
Franchisee
shall have
have the
the rig¡t,
right, privilege,
to enter
entËr into a new franchise
Êanchise agreement
agreemcnt for
for an additional
addítionat
period
period of
of Twenty
Twenty(20)
(20)ycars.
years. This right may be exercised
excrcised for the
tlic three
rhree (3) additional
additionaiTwenry
Twenty (20)
(20) year
ycar periods
following
followingthe
thefirst
firstexercise
exerciseperiod,
period,for
for aa total
total of one hundred
hundred (100) yean
years when
when initial
additional
initial periods
periê and
lä-i¿¿it¡on.t
a¡c combined.
combincd.
terms are
9.3.
9.3. Prior
Prior to the
rhe end
end of
of the
thethen
thencurrent
current term,
term,Franchisee
Franchisee shall
shall execute
executc a general
general relcase,
relase, in
in aa form
forur
prescribed
Franchisor,
by
of
prescribed by Franchisor, of any
any 8nd
and all claims
claims against
againstFranchisor
Franchisor and
and its
its subsidiaries,
subsidiaries, and
their
respective
and their respcctive
ofücers, dírectors,
officers,
directors,agents
agents and
and employees
employees in their
their corporate
corporate and
individualcapacities,
and individual
capaciriis,including
includingwithOut
wirhout
limiøtion,
limitation, claims
claimsarising
arising under
under tbis
this AgreemÊnt
Agreement and any federal,
federal, state
state arid
and tocal
local larvs,
laws, rules and
and ordinances.
ordinancis.
9.4.
9.1. Prior
end of
Prior to the end
of the
thethen
thencurrent
cur¡entterm,
term,Franchisee
Franchisee a*crces
to execute
execute the
agrees to
thestandard,
standard, franchise
franchise
agrcement
agreement then
then being
being used
used by
by Frar¡chisor
Franchisor to
to offer¿
offer a similar
similar program
program to current,
currenq franchise
franchise prospects,
prospects, which
which may
differ
differ substantially
substantiallyfrom
from the
the agrecmenl
agreement under
under which the Franchisee
Franchisee has
has operatcd;
operated; and
and will execute such other
ancillar-v
ancillary a9lcsments
agreements ¡nd
and documcnts
documents ¡s
as Franchisor ma,v
require.
Franchisee
understands that
rhat the
may require. Franchisee understands
¡he newly
newly executed
execured
acresment
agreement shall
shallcovern
governrelations
relations betrvesn
between Franchisor
Franchisorand
and Frar¡chise:
Franchise: for the
¡l¡e following Twenty
Trvenry (20)
yean.
1:O¡ years.
HoweveÍ,
However, no
no additional
additionalInitial
Initial Franchise
FranchiseFee
Feeor
or renewal
renewal fce
fee shall
shall bc
be paid by Franchisee
Fnnchir.* at
uì the
thetime
tirne of
òf renewal,
åneurol,
nor
nor shall
shall Franchisor
Franchisor bc
beobligateC
obligated to
to provide
provide any
any additional
additional Inirial
Initial Business
Business or
oi training.
uainins.
JAN¡.KING OFNE\Y
JANI-Kfl'LG
OF NEW YOzu(
YORK. INC.
FR.ÂNCHISE
FRANCHISE AGREEMENÎ
AGREEMENT: 5/98
rNré=\rNr /í ç
INTNT
I9 OF 28
PAGE 19
?T
..
a
o
o
SECTION 10
IO
Tzu\NSFER
TRANSFER
l0'l' This agréement
agréement shall
10.1.
shall inure
inure to
to the
the benefit
benefit cif
of the successors
successors and assigns
assígns of
of Franchisee.
Franchisee. The interests
ínterêsts
Franchisee in this Agreement
Agreement are
of Franchisee
and
arc personal
not be
besold,
Personat and may not
sotd, assigned,
assigned,transferred,
tra;;ferrcd, shared
sharcd or
or' divided
¿¡u¡o*a in any
manner
manner by
by Franchisec
Franchiseervithout
without the
the wrinen
written consent
consent of
of Franchisor,
Franchisor, ih¡.ú
consent shall
which consent
shall not
not be
beunreasonably
unreasonably
wíthheld''For
purposes of
Forpurposes
of Section
withheld.
section 10,
10, any
change
any changein
in stock
stock orvnership
ownership or
or voting
voting or
or other
other control
conr¡ot whatsoever
whatsoever of a
corPoration or a partnership
partnership which is
corporation
is aa Franchisee
Franchisee under
Agreement constitutes
under this Agreement
consiítutes a transfer. Any
Anytransaction
transaction
or series
series of transactions
transactions which
which would have
havc such
such an effect must
must-be
be approved- by
Franchisor on
uy-irrncr,iror
v'¡
the
rrre
-¿
same basis
the same
basis as
as
"ppror"J
any other sale
sale or
or Eansfer,
transfer, as
as sct
set fonh
forth herein.
-
herein.
l0'2'
Franchisee agrees
agrecs that
10.2. Franchisee
that aa transfer
transfer fee
fec equal to the
grearer of
q" greater
of Two
TwoThousand
Thousand Dollars (52,000.00)
(s2,000.00) or
ten pcrcenl
(1070)
the
sales price is
percent (10%) of
sales
is appropriate
appropriate ai
a
ransfer-fee
as transfer fee and shall be
paid to
be-paid
ro Franchisor
r;.ìL;;lràr,o
prior to the
tr,"
granting of consent
consentto
to thc
thesalc
saleorortransfer.
transfer. IfIf no
monetary consideration
consideration or other exchange
no monetary
c*.hang" of value
value is
is made
made
for
transfer of
the transfer
of a franchise'
franchise, no
no Transfer
Transfer Fee
Feewilt
will be chargid
charged for a transfer
ûansfer to:
(l) any
to: (1)
any party
parry currently
cunentty holding
hording
an
intercst in the
thc franchisc
interest
franchise at
at thc
the time
time of the
transfer, (2) a
tlie transfeç
a õnrolled
corporat¡on ìí*ni.h
controlled corporation
in which the
the current
cunent owners
owners
of the
thc
franchise
franchise rctain
retain ninety (90%) percent
greater of the
or greater
the outstanding
outsunding shares
Percent or
of stock; or (3)
rnL, oi*o.¡q
(3) ififthe
¡hc transfer
is
to
ransfer
¡s
ro
an
an
immedia¡c family member
mernber of the
immediate
the current
cunent owr¡er,
owner, whether
whether aa life time
tiäe transfer
*"ri"r-"r
,pon death.
death. An
or upon
administrative
An
administative
fce will
willbe
bccharged
charged to
tocover
covernecessary
fee
necessary and
and reasonable
rcasonable costs
or the
costs and
and preparat;on
preparation of
*,. documents
åocumcnts associared
associated with
with the
assessed' The
transfer if no Transfer Fee isisassessed.
The current
adminisrative
rce is
current administrative fee
is $250.00,
$250.00, but
but may be
u"
inci""sco
increased
by
uy
fätfiåf,il,ffitJ::.Fee
Franchisor
in the future.
10.3.
103'
Franchisee
Franchiseeshall
shall provide
provide to
to Franchisor
prior to the
Franchisor prior
the sale
sale or
ortransfer
üa¡¡sfcr
a copy
a copy of
ofany
anywritten
wrinen
agrccments rclating
agreements
relating to the proposed sale or transfer, or any additional
additional information
which Franchisor may require
informationlhich
"ny
in ordcr
order to
to determine
determineififitit witl
will grant
consent to
¡ts consent
Sranl its
to the
the proiosed
proposedsate
saleorortransfer.
transfer. ItIt is agrccd
agreed that consent
consent for sale,
sale,
transfcr
transfer or
or assignment
assignmentwill
will be granted
granted only
only when
when all
all oblìgations
bereundcr are
are meÇ
obligations hereunder
all debts
debs of
met, all
ofFranchisee
Fra¡lchisee a¡e
are
of the
¡he sale
paid at the time of
sale or
or transfer,
transfer, the
the buyer
buyer agrees
agrees tã
to und.rgo
undergo oe
the e"ining
training required
rcquired
a
of
a
new
JANI-KING
JAI'I-KING
-,r,.n
Franchisee and the buyer agrees
a-srees to
Franchisee
to execute
execute a
a Franchise
Franchise Agrecmenl
Agreement of the
the type
a¡p" then being
bcing used
used by
by JANI-KING,
JANI-KrNG,
may differ substantially
substantially from
which may
from the
lhe agreement
agreement under
under r*hi"h
which the seller
seller or
oJu-"r¡sr"ror
transferor has
has operated.
operated.
l0'4' Franchisee
Franchisee also agrees to provide, as a condition of
10.4.
ofFranchisor
Fra¡¡chircr approving
approving the
rhe sale, transfer, or
assignment
purchaser, in addition
assignment aa pcrsonal
personal covenant
covenant to
to the purchaser,
addirion to
tgthe
thecovenant
covenantcontained
.onL¡n.¿ï
,rr¡, Agreement,
in this
Àä.rrenr, an
aSreement
agreement not
not to
to competc
compete h
in the cleaning
cleaning and/or maintenance
maintcnance services
iervices indusry,
industry, nor
no, to
,o seek
scek to
to divert
business
divcrt
business
from Franchisor
Franchisor and its Franchisees
for a period
Franchisees fora
period of at least two (2)
(2) years
y.cars after
aftei¡ansferor
transfer or sale. The
transferor
The
transferor
exccutc aa general
must also execute
general release,
release,in
in aa fo¡m
form satisfacrory
satisfactory to Franchisor,
Frar¡chfuår, of any and all claims
ctaims against Fruchisor,
Franchiser,
Franchisor's
f"
-Ja¡
Franchiser's Parent
parent corporation and affiliated
affìliated corporations,
corporations, and the
tbe"rÀy
officers,
officcrs, directors,
directors, shareholders
shareholden and
and
employees of Franchisor
Franchisor and
and each
parcnt and
employees
each parent
and affiliate
afüliaie corporation
corporar¡on hr
their ;;;r¿re
[n.lh^.tf
corporate and individual
individual capacities
capacities
including, without
witl¡out limitation, claims
claims arising
including,
arising under
under this Agreement
Agreement and
and federal,
federal, state ar¡d
and local laws,
rules
laws,
rules and
and
ordínances'
Provided however,
however, that all rights
ordinances. Provided
righls enjoyed
enjoyed by the
the Franchisee
Franchisec and
ar¡d any
*y
."u.u, of
action
causes
of
action
arising
in
its
.ririöiJ¡o
favor from the provisions
provisions of
of Article
Article 33 of the
rt" General
ôen.ål Business
qf the
Business Law
Law of
york
*¡e State
of
New
State of
York and
and the
the
issued thereunder
regulations issued
thereunder shall
shall remain
renrain in
in force:
force; it being the intent
intent of this
this-provision
provision
that
non-waiver
tl¡ar the
rhe
non-waiver
provisions
rhe General
of the
General Business
provisions of
Business Law
L¡w Section
sec:ion 537.4
5s7..1 and
and osi.s
687.5 be sarisfied.
satisfied.
"
l0'5' This Agreement
Asreelnenl is fully
10.5.
full.vassignable
assignable by Franchisor
and shalt
Franchiser and
shall inure to
to the
the benefit
benefit ofofany
anyassignee
assignee or
other le2al
legal successor
successor to
to the
the interest
interest of
of Franchiser.
Franchiscr.
THIS
THIS S?ÅCE
SPACET¡.¡T:NTIC}iALLY
INTENTiONALLY LEFT BL.INK
BL.{NK
,ANI,KING OF NEW YORX.
YOR.K. INC.
JANI-KING
fNC.
FRANCHISE AGREEMEìVT:
FRANCHISE
AGREEMENT: 5/98
5te8
rNr3/-s+y Z.¿\1NT4NT
fi
PACE 20
]O OF 23
PAGE
28
I
o
.
SECTION 11
II
GENERAL
ll'l'
Nothing'in
I Ii. Nothing
in this
thisAgreement
Agreement shall
shatl be
beconitrued
conwed to
to prevent
prevent Franchisee
Franchisee from
from freely setting its
its own
prices
prices and
and discounts
discounts for
for services and products
products which
whích it may render or sell.
1ll'2'l'
1.2.1. Should
shoutd any part of
Agreement for any reason
of this
¡his.Agre.ement
reason be
be declared
dectarcd invalid,
invatid, such
such decision
decision shall not
affect
the
validiry
affect
validity of the remaining poltioq',"hich
remainíng portion
portion, which remaining
porrion shall
shall remain
remaìn in
in
force
force and
and effect
effect as if this
this
Agreement had been executed
executcd with the
Agreement
the invalid
invatid portion
portion tt.r"o?"liminated,
thereof eliminated, and
anJ'i'ti
t.r.uy
it
is
hereby
declared
declared
¡he
intenrion
the intention
of the parties hereto that they would have executed the remaining
remaining portion
portioniitr,i,
of this Agreement
ngre.r.nt
*¡tÀ*t
¡ncluding
without
including
herein any such Part,
part, parts, or
or portion
portion which may, for
for any reason,
r..ron, hereafter
hercafter be
be declared
dectared invalid.
ínvatid.
"ny
any applicable and
ill'2'2'
i .2.2. If any
Jaw or rule of any
and binding
binding,law
anyjurisdiction
jurisdiction requires
requires a
greaterpríor
a greater
prior notice of the
trre
termination of or
termination
or refusal
refusal to renew this Agreement
Agrcemenr than is required
requirid hereunder,
h.r.unJ.r,-;;;.
or
the
taking
taking
of
some
other
action
acrion
not required
required hereunder,
hereunder, or
or ifif under
under any
applicabtc and binding
any applicable
binding law
taw.or
jurisdiction, any
or rule
any jurisdiction,
provision of
-r" ofår""y
any provision
the Agreement
Agreemcnt or any
the
any specification,
specifìcation, itanåa¡¿
or
op.rurinJ-froccdure
tandard or operating procedure prescribed
pr.ririuä
by
Franchisor
by
Franchisor
is
invarid or
is
invalid
unenforceable, the
unenforceable,
the prior
prior norice
notice and/or
and/or other action required by such får*
such
law
or
rule
shall
oì
*t.
r¡"tt
be
?g.r
l.,i:l'requirJa-by
substioted
be substituted for the
the
comparable
comparable proúisíons
provisions herco{
hereof, and
and Franchisor
Franchisor shall
ttu""'tr,"
,¡ghi in its sole discretion,
shall have
the right,
il.r.,¡on, to modify
modis
such
invalid
or
unenforceable
provísion,
unenforceable provision, specification, standard
standard or operating
operating proccdure
to
the extent required
procedure
to
requircd
to
be
valid
valid
urd
and
cnforceable'
Franchisec'agrees to be
enforceable. Franchisceagrees
be bound
bound by
by any
any promise
på*iri-år
covenant imposing
imposing the
or covenant
rhe maximum
maximum duty
dury permitted
permined
law which is comprehended
cornprehended within tl¡c
by law
tc¡ms of
oi"ny
the terms
any provision hereof,
h.r.oi, as
;il;;;i
wcre separately
though it¡r were
separately articulated
articulated
a¡rd made
made a part of
in and
of this
this Agreement,
Agreemcnq that may
rry result
r.ruí,äom
from striking
rá,o any
gil<in-e from
;yîi',r,"
of
the
provísions
hereo{,
provisions
hereof,
any
or any
specification'
specification, standard or
operating procedure
proced.ure prescribed
or operating
ui Franchisor,
r.".""rnir"r, any portion or portions
irescribed by
portions
whích
which
a
court
-v'i*ion
court
may
bc unenforeeable
may hold to be
unenforceable in a final decision
decision ¡o
which Franchisor
Fránchisor is
to which
¡t a p"ró,'o.
from reducing
party, or from
rcducing the
the
scope
of
any
promisc or covenant
coven¡¡nt to the
promise
extent
required
thc axtent required- to comply
"
comply with such
such a court
.ourt
ä¿.r.
order. such
modifications
Such
modifications
to
this
this
Agreement
" elects to give them
Agreement shall be
be eflective
effective only in such
jurisdiction, unless
such jurisdiction,
untess Franchisor
them
greater
applicabiliry,
fiu"
o'
greater
applicability,
cnforced as originatly
and shall be enforced
originally made and
entercd into in allf,.1,,:hi:"1."r""s-to
and entered
the
rtre.¡u;sai"tionr.
"ti
jurisdictions.
I I '3' This
This Agreement
11.3.
Agreement is
is the entire
entire agreement
agrÊement between
benpeen the parties and supersedes
supersedes any
any and all
a1 sgreÊmenrs,
agreements,
including
including any
any other
other Franchise
Franchise AgreamenÇ
Agreement, previously
påviously made between
bewcll the
tlr. parties
parties
herein.
All
úerein.
.4,11 transactions
uansactions
between
berween
Franchisee and Franchisor
Fra¡rchisor regarding
Franchisee
regarding any
any operation
operation of
of aaJANI-KING
JA|,ÍI-KING franchise
franchise business
business granted
granted
under
any
Franchíse
Agrecment dated prior to
Franchise Agreement
to this
thís Agreement
Agreement shall
shall be
be controlled
conrolled by this Agreement.
Agreemenr. Any
Any
amendment
amendment
or
modÍfication
modification to
to this
this Agreement
Agreement is invalid
invalid unl"ss
unless made in writing and signed by all
all the
the parties.
partics.
'
'4'
Il
11.4.
Fra¡rchisee acknowledges that
that neither Franchisor
Franchisee
Franchisor nor
nor anyone
anyone on
on its behalf
behalf has
has made any
any
representations,
agreements' orally
representations, promises
promises or agreements,
orally or
otherwise,
respecting ,r,"
or otherwise, respecting
the subject
,uÇ"¡
matter
of
this
of
this
Agreement
Agreement
which are
are not
not embodied herein.
is
ll'4'¡' Franchisee
Franchisee acknowledges
acknowledges that it
11.4.1.
ít-has
ca¡efully.read
has carefully
read this
this Agreement,
that ample
ample opportunity
Agreement, that
opportuniry has
provided for Franchisee
been provided
been
F¡anchisee to obtain
ob¡ain the services
of an
services of
an independent
iídepcna*t legal
r"["i
or
financial advisor,
*în*.¡.1
advisor,
and that
rhat the
rhe
Franchisce
had the
Franchisee has
has had
theopportunity
oPPomrnity to
havethe
to have
theFranchise
Franchise agr..rät-uiä
Agreement and all
supporring
all supporting disclosure
disclosure
documentation, as well as anv
any other
other information gathered
by th
thd rr*õtr;r;¡.*.¿
Franchisee, reviewed by ur anornel,
-ea¡hered
*ff:f||tffi;:tt"ï
advisor of its own choice.
an attorney or financial
rinarrciat
ll'4':'
11.4.2. Franchisee further
furthe; acknowledges
ac.knowlecees that
that Franchisor
Franchisor does
does not
not authorize
aurhorizeany
an)/representative
represent¡tive of
Fmnchisor
to
malie
an¡' oraL
Franchisor make any
orat' written,
rvrinen. visual
visual or
cr other
orher claim
claim or
orrepresentation
represenration outside
oucide
of
the offering
of the
offerinc circular
c¡rcutar
providcc
Fnnchisor. and
provided by Franchisor.
and does
does n"l
pemit any
not permit
an.vpromises,
promises, agreements,
,sr.rÀ.nu, contracts, commitments or
or
representations
representations excepr
except those
those stated in this
rhis Agreement.
Agreenent.
;;;;;*;'';;ilñ;r"
JANÍ-KING OF
OFNEW
YORK INC.
JANI-KJNG
NEW YORK.
]NC.
FRÂNCHISE
AGREEMENT: j/98
5/98
rNçfur,f.rr¿L
1N-r4T
PAGE:I
PAGE
21OF23
0F28
¡
o
e
'l11.5.
t.5. Franchisor
Franchisor may also
àlso conduct
conduct the
type of
of business
thc type
businbss operated
operated by
by the Franchisee.
I11.6.
l'6' In
In the
thc event
cvent itit becomes
becomes necessary
necessary for
for Franchisor
Franchisor or
or Franchisee
Franchisee to
to institute suit against
against the other
securc or
party to secure
or protect its rights
rights under
under this
thisAgreement,
Agreement, the prevailing
prev_ailing party shall
shall be
be entitled to
tolecover
recover as
as parr
part
any judgment
entered thcrein
of any
judgment entered
therein in-its
in'its favor
favorreasonable
reasonablc attorncys'
fe.s, ã's'*.ú
attorneys' fees,
as well as
as court costs
costs and damages.
damages.
11.7.
I l'7' It is
agrced and
is agreed
and understood
understood that
thatFranchisee
Franchisee will
act at all
will act
alt times
tímes as an independent
contractor and
and
- ind"pendent conrractor
will
noÇ
at
any
time,
will not, at any time, directly
directly or indirectly,
indirectly, hold
hotd itself
itself out
outas
an agent,
as an
agcn¡, servanr ",
cmployee of
servant or employee
of Franchisor,
Franchisor.
I11.8.
l'8' No
No waiver
waiver by
by Franchisor
Franchisor of
of any default
default in
performance
in performance
the part
part of Franchisee,
on the
Franchisee, time
on
time being
beíng of the
of the
essence hercof
essence
hereofand
andofofpcrformance
performance hereundeç
hereunder, or
or like waiver
waivcr by
by.Franchiso.
Franchisor oi.nyir.ach
of any breach or series
series of
of breaches,
breaches, of
of
any of the terms,
terrns, covenants
covenants and
and conditions of
of this
this franchise
franchise shall
shall constitute
constitu,. a *"'ir.r
of any
any subsequent
waiver of
subscquent breach
breach or
waivcr of said
"
tcrms, conditions
saíd ternis,
waiver
conditions or covenants.
covcnants
¡¡'9' Any
Any notice
notice required
reguired or
11.9.
or permitted
permincd to be given shall
shall be
be in
in writing
writing and
and may be
be given
givcn by
by personal
personal
service
service or
or by
by dcpositing
depositing a copy thereof in
mail, certified, return
in the
the U.S.'
u.s.'mail,
return receipt
receipit.q"*"i,
requested, with
wiõr postage
postag.'ù.r.on
thereon
prepaíd,ininaasealed
fullyprepaid,
fully
sealedenvelope
cnvetopeaddressed
addressed to
ro Franchisee
Franchisec ar
at rhe
the address
listed for
for the Franchisee
address listù
Frurchisee in the
thc
Frar¡chisc
Franchise Summary.
given totoFi-anchisor,
If notice
notice is
is to
to be
bc given
If
Franchisor, such
such notice
notice shalt
bc sent
shall be
sen! to:
JANI.KING
OF NEW
NEW YORK,
JANI-KING OF
YOru<. INC.
rNC.
CITY PLAZA,
PLIúÅ,,SI,JITE
SUITE 203
GARDEN CITY,
C[TY, NEW
GARDEN
NEW YORK 11530
II53O
4OO
400 GARDEN
GARDEN
The address
addrcss bereby
herebygiven
given for
for the service
service of
of notice
noticc may be
bc changed
changed at any
ar¡y time by either
eirher party through
wrinen notice
notice to
to be
written
given to the other as provided herein.
be given
hercin.
II.IO.
THE
PARTIES AGREE
THE PARTIES
AGREE AND
AI\TD INTEND THIS
T}IIS INSTRUMENT
INSTRUMENT TO
TO BE
BEEXECUTED,
E)GCUTED,
INTERPRETED fu\D
INTERPRETED
AND CONSTRUED IN
IN ACCORDANCE
ACCORDA}¡CE WITH THE LAWS OF
OF THE
TTIE STATE OF TEXAS.
TEXAS.
JT.'RISDICTION
IS DECLARED
JURISDICTION AND
AND VEì\TIJE
VENUE IS
DECLARED TO
TO BE EXCLUSIVELY
EXCLUSNæLY IN DALLAS
DALLAS COUNTY,
COI.JNTY, [N
IN THE
THE
11.10.
STATE OF
OF TEXAS. HOWEVER,
HOWEVE& THE
STATE
THE FOREGOING
FOREGOING CHOICE
CIiOICE OF
OF LA1V
LAW SHOULD
SHOI,,LD NOT BE
BE CONSIDERED
CONSIDERE;
A
ìVAT\æROF
OFANY
AI{YRIGHT
A WAIVER
RIG¡ITCONFERRED
CONFERRED UPON THE,
THE. FRANCHISEE
FR,{I.¡CHISEE BY
BY THE PROVISIONS
THE PROVISIONS OF
OF
ARTICLE 33
OF THE NEW YORK
33 OF
ARTICLE
YORKSTATE
STATEBUSINESS
BUSTNESS LAW.
'
ll'll'
Thc submission
submission of
ofthis
11.11. The
thisAgreement
Agrcernent does
docs not constitute
constituti a¡r
an offer
offer to license,
ticense, and this
tt¡is Agreement
become effective
shall become
effective only
only upon execution
execution thereof
thercof by Franchisor and
and Franchisee.
Il'12'
This Agreement
Agreement shall not
11.12. This
not be
be binding
binding on
Fra¡rchisor untess
on Franchisor
unless ar¡d
and unril
until itithas
basbeen
been accepted and
signed
by
an
signed by an offrcer
officer or director of Franchisor
Franchisor at
at Franãhisor's
Franchisor's home
home oñice
office in Dallas,
Dallas
Daltas,
County, Texas.
Texas.
I11.13.
I'13' The
The numbers
numbers and
and headings
hccdings of
pangaphs used
ofparagraphs
used herein
herein ue
are for
for convenience
convenience only and
and do not affect
substanca of thc
the substance
the paragraphs
paragraphs themsetves.
themselves.
ll.14' The
The Franchisee
Franchisee certifies
11.14.
ccrtifies and
warr¿ns that all
and warrants
all owners
orvner and
of owners
and spouses
spouscs of
owners or parmers,
partners, ifif the
franchise is a sole
franchise
sole proprietorship
proprietorship or partnership:
partne::hip: and
and all
pcrsons who are
all persons
are aa súareholder.
shareholder,oftic:r
officer or
or iirector'of
director of any
an¡,
corpomtion who
corporation
who holds
holds the
thefranchise:
franchise: (l)
(1) are listed
tisrec in
in the
SCHEDULE OF
the attached
pRINclp.{LS; and
anachec sCHEDULE
oF PRINCiPALS;
(l)
arid (2)
that
rhcr
all such
such parties
parties will
will execute
all
execure alt
all Guarantees
cuannrels or other
orher documents
documentsæquired
requiredb¡,byJÁ,r\l-KbrG.
JANIKiNG.
JANI-KrNC
JANI-KING OF
NEW YOFJÇ
YORK, ¡NC.
OFNEW
rNC.
¡.GREEMENT: 5/98
FRANCHISE
NréÊi*{t
7Q1L
PAGE 23
PAGE
22 OF 28
38
¡
o
o
"
:
'IYHEREOF, th
WITIIESS WHEREOF,
IN WITNESS
thé pårties
"" ' IN
pârties hcretö
heretó havc
have set their
their hands
hands .1¡,¡is
'this f
day of
lïÚday
bac>,
tee:L.
£7
j
JAM.zuNG
JANI-KJNG OF
OF NEW
NEW YORK,
YORK, TNC.
rNC.
I 44I
a'21.
F
FRA
BY:
TITLE:
TiTLE:
.
5,
-,
j4
J
j2ì44-
Ofücer)
Officer)
(Yc'/V4"
(Prin
(Print Name)
e)
Social Securiry ,ttt
ner or Authorizcd
Authorized
PL6v4v:'
Socia! Security # 003,'1
lt
(Signarure of
By: (Signature
By:
of Partner or Spouse)
Spouse)
(Print Name)
Namc)
(Print
Social Security
Securíty #
Socia!
(Signature of Partner
By: (Signature
Parrrer or Spousc)
Spouse)
(PrintName)
(Print
Name)
¿)
Security #
Social Security
COMPLETE
TF FOR CORPORATION:
COMPLETE IF
CORPORATION:
(Corporate Narue)
(Corporate
Naine)
(Title of Authorized
Authorizcd Officer)
(Title
Ofücer)
Federal Tax
Federal
Ta¡cLD#:
ID#:
llo¡ne Offrce
by the 1-lome
Office of
of Franchisor
Franchisor
I
onthi*-l/%y
on
thi,/
of
>-
199 d'.
I99.
Rcpresentative
JANI.KING OF
JANI-KING
OF NEW
NEW YORK
YORÇ [NC.
fNC.
FR.ANCHISE ACREEMENT:
5t9E
FRANCHiSE
AGREEMENT: 5/98
Nréã¿#rr _^L.F
rNT'T
0F 28'
P.cGE ?3
PAGE
23 OF
t
C
I
I
-t
SCHEDULE
SCHEDULE OF
OF PRINCIPALS
PRINCiPALS
AI{Y
ANY OTHER
OTHER PERSON NOT LISTED
LISTED IN
TN THIS
THIS AGREEMENT
AGREEMENT WHO
WHO IS
SPOUSE, PARTN
¡S A SPOUSE,
PARTNER, OR
AN OFFICER,
OFFICER, DIRECTOR
DIRECTOR OR SFIAREHOLDER
SHAREHOLDER OF FRANCHjSEE
iRAÑðHISEE:
Name:
Relationship:
Tarpayer ¡D:
Taxpayer
ID:
Address:
Addrcss:
Te
Telephonc:
leph one:
Name:
Narne:
Relationship:
Relationship:
Tarpayer ID:
Taxpayer
ID:
Address:
Telephone:
Name:
Relaiionship:
Relationship:
Ta.xpayer ¡D:
Taxpayer
ID:
Address:
Telephone:
Name:
Rclarionship:
Relationship:
Taxpayer ID:
ID:
Address:
Telephone:
Tclephonc:
,ANI-KING
OF NEW YORK INC.
fÑC.
JANI-KINGOFNEWyQRIÇ
FRÂNCHISE
AOREEMENT: 5/98
StgB
Nrß rNr./.
[NT(
[WI
P.{GE 24
PAGE
24 OF
0F 23
38
I
t
o
SCHEDT.ILE Or(E
SCHEDULE
OT\TE
SUPPLY AND
"OFFICE SUPPLY
AND ADVERTiSING
ADVERTISTNG PACKAGE"
PAf ¡¿qç6,,
..OFFICE
LIST OF
OF MATE
MATERTALS
REALS PROVIDED
PROVIDED TO FRANCHISEE
FR/¡i,NCHISEE
ITEM
ITEM
AIVIOUNT
AMOUNT
Bus
Business Cards (imprinted logo)
1000
JANI
JANI-KrNcJ
Letterhead
Lcnc
enve
(matching envelopes
and stationery)
and
Advertising Brochures
JANE-KING Tunics
Tun
IInspection Pads
Memo
Memo Pads
2s0
250
125
125
4
5
t0
IO
Pæt Performa¡rce
Past
Performance Pads
Pads
Account Bid Sheet
Account
Sheet Pad
Contac¡ Evaluation
E
Contact
on Pad
Pad
acc as
a3 needed)
(replace
10
I
I pad
1 pad
JANE-KING Loto Binders
JANI.
JANI-K1NG
Executive Pad Holder
2
II
JANI-KING Infold
I
JANI-KING Training Tapes
JAN I-KING Trust Your
Yor¡r Keys
cys Video
Accounr Foi low-up Sheets
Account
Shcets
I set
sct
I
S
5
(replace as
a:¡ needed)
ew Account Start-Up
New
(replace as
a5 needed)
5
initial Clean Sign-Off
Sign.OtrSheets
5
(replaceeas
as needed)
Franchisee Request Cards
as needed)
(replace as
S
5
fotExtra Work
Authorization for
w Forms
orlns
55
a¡t needed)
(replace as
Eushess Card Order Forms
JANI-KING Business
Fonn¡
JANI.KJNG OFNEV/
JANE-KING
OF NEWYORJÇ
YORK INC.
fNC.
AGREEMENT: ji98
5/98
A¡ Needed
As
Needcd
rNTC(rNT
PAGE 2(
PAG1
25 OF
(W ''T
R
PZa
t
C
C
"suPPLY AND
AND EQTIIPMENT
"SUPPLY
PA6¡ç4ç8,,
EQUiPMENT PACKAGE"
THE FOLLOWING
FOLLOWINC SUPPLIESSUPPLIES AND EQUIPMENT
EQUIPMENT MUST
MUST BE PURCHASED
PURCHASED
FR'A'ITCHISEE PURSUA¡¡T roìHe
BY EACH FRANCHISEE
PURSUANT TO THE TRANcHIST
naùeuENT
FRANCHISE AGREEMENT AND
AlrD
PRI'R ro
PRIOR
TO FRAN.HIS'R
FRANCHISOR OFFERING ANY
nÑlr OF
on THE
rHE ñifrÀ¿ìusnuess
INITIAL BUSINESS
'FFERIN.
products listed
The products
listed may
may be
be purchased
purchased from
fromFranchisor,
Franchisor, subject
subj..e1,r ro
to shipping
shípping restrictions,
rcstricrions, or
source' Prices
Priccs currently
currentty charged by Franchisor may
or any other
source.
other
.t.ngiJ
u.
may be changed or
or modified
modified in the future.
futurc.
ITEM
All Purpose Cleaner
(Biodcgradable for
for use
(Biodegradable
on walls,
wal formica,
form
on
etc.
Ncural
Clea¡er
Neutral Floor Cleaner
Pr¡mice
Pumice Srone
Stone
Ne
Rinse Neutralizer
Small Trash
TrashTFLiners
(10-12
gallon capacity)
capaciry)
(10-12 gallon
Large Trash
TrrshTinenLiners
(40-45 galIon capacity)
(40-45
Dust Mop Treatment
Treaonent
Restoorn Disinfectant
DisñFcraniRestroom
7" Red
17"
Red Buffing Pads
Pads
I17" Black Stripping
Pads
-a-round Trash
Roll-a-round
Cootainer
gaüon
Container (32 gallon
AMOUNT
li --onega
one gallon container
(or
(or cquivalcnt)
equivalent)
gallon container
one gallon
iI -- one
or equivalênt)
(or
cach
I each
t - one gallon container
(or
(or equivalent)
equivalent)
I case
Ii case
I can
on€ gallon container
iI -- one
container
(or equivalent)
equivalent)
(or
5
capacity)
Carry-AIl Caddy
Maid Cany-AEl
Containcr
Container
¡
Whdow
14"
Window
rvitb Sleeve
Stripwasher with
Slecvc
16" lVindow
Window Squeegee
Squcegee
Rubbcr Blade
Rubber
8rt
8" Window Squeegee
Sgueegee
Rubbcr
Rubber Blade
I' Extension Pole
8'
Trigger Sprayer
I
6
Mop Wringer
lVringcr
.,
Euckcr
Bucket (For Mixing 3n
and
,rfsPcnS¡n Solutions)
Solu¡ions)
Dispensing
Dust Mop Head
,ANI.KÍNG OF
OFNEW
JANI-K1NG
NEW YORK.
YORK INC.
fNC.
FR^NCHISE
ACREEIv|ENT:
St98
gtæsclcurF-
AJAX Scouringåo
Powder
Floor Finish Stripper
Floor
Carpet Cleaning
Con ceotrarê (8on¡et
Concentrate
(Bonnet
Method)
High Gloss Floor Finish
¡niih
Carpet Spot Remover
Stainless Steel Clcaner
Cleaner
AMOUNT
II - one gallon Container
container
(or equivalent)
(or
quart containers
22-one
- one quart
contahcrs
(or equivalent)
2 gallons
1I gallon
galloos
5 gallons
I can
Late.r
Latex Gloves
iI can
carr
.66 pair
Disposable Gloves
6 pair
S
17" Bonne tfBnzsh
iI
Combinatíon
Combination
Brute
Brute Container Caddy
I
Dr¡st Pan
Janitor Dust
Pa¡
i
iI
i
I
2
ITEM
Glass Cleaner
16" Window Squeegee
Sgueegec
Cha¡nel
Channel
8" Window Squeegee
Squeegee
Cba¡rnel
Channel
Window Squeegee
Handle
One Quart Spray Bottle
Mop Bucket(26
Auct<e4ælF
Mop
quart
lll inimum)
minimum)
Swivel Dust Mop
}lop
!{andlc
Handle
Wer Mop Head
(l,l oZ)
He:d (:4
Wet
oz)
I
6
2
4
I
rNrff Nr y'tt
10
'o
pr ri^cI14T
NT
p.l¡,:E îÁ
¡
I
o
"SUPPLY AND
AND EeUIPMENT
EQUIPM}NT PACI(AGE"
'SUPPLY
PACKAGE" - Continued
Co¡rinued
ITEM
Dust Mop Frame
Wett Mop Handle
AMOI.JNT
AMOUNT
iI
22
San
Sanitary
Bowl
BowlSwab
Swab
Toy Broom
2
II
Carpct Rake
Carpet
II
Commercial Sponge
I
I
8 oz. Measuring Cup
toz
cup
¡ otlet Bowl Brush
Toilet
(non-metal)
Doodla Bug Holder
Doodle
Holdcr and
Pads (3)
Tippcd Handle for
Metal Tipped
Doodle Bug
Elcctonic
Electronic Pager (not
avail¿blc through
available
through
Franchi5or)
ITEM
¡TEM
las
Plastic
Angler Broom
Broom
Packagc of Disposable
Package
Wipes
Putty Knife
K¡rife
Lambswool Duster
(Telescoping)
Clelcscoping)
Commercial Sponge
wi¡h Scrubber
with
Sc¡ubbcr
lVct Floor Caution Sign
Wet
Counter Brush
AMOUNT
I
I
-
II
Cotton Cleaning Cloths
I
Rubber Door Stop
Rubber
I
I
I
¡
1
i
5 lbs.
rEi.
-
Ii
I
I
Franchisor may adjust the items included
i¡cluded in
the Supply
in'the
supply and
a'd Equipment
Equipment package
Package as
as industry
indusuy standards
nandards change
cbange
JANI-KING
JANI-KrNG OF NEW
YORK. rNC.
NC.
NEI,V YOR.K.
ACREEIÍENT: 5i98
/93
1WI2NT
11
-o
5l1ffig:a:ç\
P4(
I¡
o
e
'ju
II
DITIONAL ELECTRIC
"AD
"ADDITIONAL
ELECTRIC EQUIPMENT"
EQITIpMENT
"
THE FOLLO
FOLLOWING
THE
WING EQUIPMENT
EQUIPMENT MUST
MUST BE PURCHASED
PURCHASED
BY EACH
EACH
FRANCHISEE PURSUANT
PURSUANT TO THE FRANCHISE
FRANCHISEE
FR.ANCHISE ACREEMENT
AGREEMENT AND PRIOR
PR¡OR
TO FRANCHISOR.
FR.ANCHISOR OFFERING ANY
ANY OF
OF THE
THE rN¡rrruãUiÑESS
INITIAL BUSINESS
producs listed
The products
listcd may
bc purchæcd
may be purchased Êom
from Franchisor
Frarichisoror
or any other
orher source.
source.
Príces
currcntly chargcd
Prices currently
charged by Franchísor
Franchisor may
may be
be cha¡ged
changed or modificd
modified in
in the
thc future.
ñ¡rurc.
QUANTITY
IUANT!TY
I
I
I
I
DESCRIPTION
I12"Iipright commercial 7 AMP vacuum with
w
UNT PRICE
UNIT
s270.67 each
$27067
cloù bag, 50 ft.
top-filled cloth
headlamp.
ñ. cord, headlam
I17" Floor Buffer with 1.5
.5 HP electric motor,
motor,
capacitor Start,
5ta¡t, àl
capacitor
all sæel
steel planctary
planetary gearing
gearing
(includcs pad driver)
(includes
vacuum with 15
Wet/Dry vacuum
gallou tank,
I gallon
including too!
tool package
Compact Portable Vacuum Cleaner (Canister
Tvp") w!
dsboutder
Type)
shoulder strap and
and cloth
cloth bag
s762t
$762.77 each
eúñ-Sa5l.79 each
$451.79
ãcI-
st
$126.00
each
each
(cAsH ONLY)
(CASH
OM.y)
or
Bacþack Vacuum
Vacuum Cleaner including
Backpack
including tool
package
JAN¡.KING
JANL-KING OF
OF NElil
NEW YORK
YORK. INC.
fNC.
FRANCHISE AGREEMF¡\T:
AGREEMENT: 5/98
iigE
s332.87
$332.87
NTJNTJ..
fl:
H--
PAr ç r
,o
t
TAB
3
D
ÐoRrol
°rnoIN
TLED
FILED
CAUSE NO.
05-12092-H
NO.05-12092-H
JANI-KING OF NEW YORK,
INC.,
YORI(,INC.,
Jani-King,
vs.
GLENN SULLIVAN,
Defendant.
Defendant.
§$
§$
§$
$
§
$
§
s§
s§
§$
§s
DISTRI
coütr
IN THE DISTRICT
COI3F ErF
I
2011
2o1r
GARY
GARY ¡ . .,-t.t.,fll
tu^s
orntflF0l€ 3nrfr3Ê., TEXAS
othsrv
.
I oMI)EPAt,
L
DALLAS COUNTY, TEXAS
DALLAS
JUDICIAL
I60t JUDICIAL
IóO'h
DISTRICT
DISTRICT
CHARGE OF THE COURT
LADIES
AND GENTLEMEN
GENTLEMEN OF THE
THI] JURY:
JURY:
I,ADIES AND
you must
facts, which
which you
decide
thc facts,
must decide
This case is submitted
submined to you by asking questions about the
judges
hcard in this trial.
rial. You are the
thc sole
sole
thc credibility
credibility of
from the
the evidence
evidence you have heard
of the
the
o[thc
you must
must he
law, you
þ
witnesses and
and thc
the wcight
weight to
1o be given their testimony,
testimony, but in matters of law,
witnesses
you
discharging your responsibility
rcsponsibility on
thìs jury, you
governed by the instn¡ctions
on this
instructions in this charge. In discharging
given
you.
give
previously
you
now give you
bccn
shall now
will
observe all
all the instructions which have
been
you. II shall
will observe
your deliberations.
strictly follow
follow during
additional instructions which you should carelully
during your
deliberations.
carefully and strictly
addirional
l.
your deliberations.
prejudice or sympathy
Do not let
in your
sympathy play any part in
deliberations
lct bias, prejudice
2.
In arriving
arriving at your answers,
introduced here
evidencc introduced
herc
answers, consider only the evidence
yourconsideration
introduced for
for your
under
any, as have
consideration
have been introduced
ifany,
undcr oath and such exhibits, if
you have
what you
this courtroom,
that is,
is, what
have seen
seen and
hcard in
in this
courtroom,
the court,
court, that
and heard
under the rulings of the
your deliberations, you
you will
together with the law as given
givcn you
you by the
will not
the court.
In your
couf. In
not
togcther
evidence in
this case.
case.
consider or discuss anything that
not represented
represented by
by the
thc evidence
in this
that is
is not
considcr
3.
juror
Since every answer that is required
requircd by the charge
chargc is
is important,
important, no
no juror
is not
not important.
important.
should state or consider
any required answer
answer is
considcr that
that any
You rnust
must not
you think should win, and then try to
4. You
not decide who you
lo answer
answcr the
questions, and
not discuss
questions accordingly. Simply
the questions,
and do
do not
answer the
discuss nor
nor concern
concern
Simply answer
your answers.
yourselves with the effect
of your
answers.
effcct of
You will
will not decide the answer to a question by lot or by drawing
5. You
drawing, straws,
quotient verdict.
quotient verdict
not return
retum aa quotient
verdict. A
verdict
Do not
A quotient
othcr method of
of chance.
chancc. Do
or by any other
means that the jurors agree
the
result
to
to
be
reached
reached
by
adding
together
each
agree to
to abide
abide by
thc
result
be
adding
togelher
by
by
each
juror's
get an
by the
the number
number ofjurors
ofjurors to
to get
an average.
juror's figures
figures and
dividing by
average, Do
Do not
not do
and dividing
do any
any
trading
is, one
agree to
question
trading on your answers; that
one juror should
should not
not agree
to answer
answer aå certain
that is,
certain question
way.
to answer another
another question another
another way.
one way if others will agree to
9
6.
6.
Unless otherwise
instructed, you
you may
may answer
answer aa question
question upon
upon the
the vote
vote of
otherwise instructed,
jurors.
tcn or
or more
more
ten or more
more jurors. If you answer
more than
than onc
one qucstion
question upon
upon the vote
vote of
often
answer more
tcn
answcrs to
lo each of those
jurors, the same
those
at least
least ten
tcn of you must agree upon the answers
same group of at
questions.
'these
given you
you because your conduct
is subject
subject to
conduct is
to review
review the
the same
same as
as
These instructions are given
you have
be found
found that
part¡es, attorneys
have
attorneys and the judge. If
If iti¡ should
should be
that you
that
rhat of the
thc witnesses, parties,
require
another
will
b*
and
it
may
trial
disregarded
any
of
these
instructions,
it
will
be
jury
misconduct
and
it
may
require
another
trial
it
instructions,
disregarded
jury;
u'asted.
will have
have been
been wasted.
by another
another jury; then all of our time will
'
who observes
instn¡ctions shall
shall
The presiding
juror or any other who
observes a violation of the
the court's instructions
presiding juror
juror
to
violating the same and caution the
thc
nol to do
do so
so again.
again.
immediately warn the
the one
one who is violating
not
immediatcly
meaning commonly
commonly
When words
words are used in this charge in a sense that varies from the meaning
When
you
place
given
which
to
accept
in
proper
definition,
arc
bound
understood,
you
are
a
proper
legal
definition,
which
you
are
bound
to
accept
in
place of
of
you
legal
undcrstood,
any other meaning.
instnrcted. A "Yes" answer
¿¡nswer must
othcrwise instructed.
Answer "Yes"
"Yes" or "No" to all questions unless otherwise
Answer
you
you do
are otherwise
otherwise instructed.
instn¡cted. IfIf you
do not
not
unless you are
be
evidcncc unless
of the evidence
bc based
b¿sed on a preponderance of
lind that
that aa preponderance of the
the evidence
evidence supports
supports aa "Yes"
"Yes" ansriler,
answer, then answer "No." The term
term
frnd
credible evidence admitted
admincd in this
"preponderance
this
meâns the greater weight of credible
"preponderance of the evidence" means
witnesses
the
measured
thc
number
of
or
by
case.
A
preponderance
of
the
evidence
is
not
measured
by
the
number
of
witnesses
or
by
the
preponderance
evidence is not
by
case.
prepondcrance of
number of
of documents
documents admitted in evidence. For a fact to be
of the
the
bc proved by a preponderance
number
question
Whenever aa question
evidence, you must find that the
than not
not true.
likely true
true than
true. Whenever
the fact
fact is
is more
more likely
prcponderance of
requires an
an answer
answer other
other than
than "Yes" or "No," your answer must be based on a preponderance
requires
instructed.
the evidence unless you arc
a¡c otherwise
othcrwise instructed.
may be
"CIRCUMSTANTIAL EVIDENCE."
fact may
be established
established by
evidence or
or by
EVIDENCE." AA fact
by direct
direct evidence
by
"CIRCUMSTANTIAL
proved by
evidence when
when proved
circumstantial evidence or both.
fact is
is established
by direct
direct evidence
by
both. A
A fact
established by
words spoken.
witnesses who
the act
act done
done or
or heard
hca¡d the
the words
factisis
documentary evidence
who saw
saw the
spoken.AAfact
by witnesses
cvidence or by
established
reasonably inferred from
from other
other
fairly and reasonably
established by circumstantial evidence when it may be fairly
facts proved.
"Jani-King" shall mean Plaintiff
and Counter-Defendant
Jani-King of New York, Inc.
Inc.
Counter-Defendant Jani-King
"Jani-King"
Plaintiffand
Counter-PlaintiffGlenn
Glenn Sullivan.
Dcfcndant and Counter-Plaintiff
"Mr. Sullivan" shall mean Defendant
"Settlement
Agreement by
Jani-King
shall mean
mean the
Senlcment Agreement
by and
and between
bctween Jani-King
the Settlement
"senlement Agreement" shall
1,2004.
and Mr.
Mr. Sullivan
2004.
and
Sullivan dated May 1,
"Franchise Agreement"
Franchise Agreement
19,1998
1998 by
mean the
Agreement dated August
August 19,
by
Agreement" shall mean
the Franchise
between Jani-King
Jani-King and Mr. Sullivan.
Sullivan.
and between
2
I:
QUESTION
NO.!:
OUESTION NO.
Agrecment?
to comply with the Settlement Agreement?
failto
Sullivan fail
Did Mr. Sullivan
Answer "Yestt
"Yes" or "No."
Answgr
Answer:
Answer:
4ts
¿il I6
QUESTION
OUJSTION NO.2:
comply with
Did Jani-King
Jani-King fail to comply,
with the
the Settlement
Settlement Agreement?
Agreement?
Did
Answer ttYgs"
"Yes" or
or ttNo."
"No."
Answcr
Answer:
Answer:
Ll( 5
(4
(S
No.2,
and Question
then answer
answer Question
to both Question
If you answered
answered "Yes" rn
2, then
Question No.
Qucstion
Qucstion No. I and
not answer
3. Otherwise,
do not
arìswer Question
No. 3.
Othenrrise, do
Qucstion No. 3.
QUESTION NO.3:
OUESTION
Agreement first?
Who failed
failed to comply
comply with the Settlement
Settlcment Agreement
Who
Answer
Answer "Mr. Sullivan" or "Jani-King."
"Jani-King."
Answer:
Answer:
tY\(
'j7ja)
question.
answerthe
thenanswer
thefollowing
followingquestion.
No.2,2,then
you answered
toQuestion
answered "Yes"
lfIf you
"Yes" to
Question No.
qucstion.
Otherwise, do not answer the following
following question.
Otherwise,
QUESTION
NO.4::
OUESTION NO.4
with the
Agreement excused?
cxcused?
Was
to comply
the Settlement
Scnlement Agreement
Was Jani-King's failure
failure to
comply with
?-
failure to
with the
Agreement is
to comply
comply with
theSettlement
Scttlement Agreement
is
are instructed
instn¡cted Jani-King's failure
You are
pa¡ty repudiates
Settlement Agreement.
A party
excused by Mr.
Mr. Sullivan's prior repudiation
Agreement. A
rcpudiates an
rcpudiation of the Settlement
going to
perform his
not going
his
agreement
when he
he indisates,
indicates,by
by his
his words
words or
or actions,
that he is not
actions, that
toperform
agreement when
fixed intention
toabandon,
showing aa fixed
intention to
renounce,
obligations
under the agreement
¡n the
the future,
future, showing
abandon,renounce,
agrecment in
obligations under
agreement.
and refuse
rcfuse to perform the agreement.
Answer "Yes"
"Yes" or'No.t'
or "No."
Answgr
Answer:
Answer:
4¿5
4e'
3
"Yes"totoQuestion
questiononly
youanswered
answered"Yes"
"fani'King"
Answer the
"Jani'.King»
onlyififyou
the following
following question
Question2, 2,
"No"
question.
do
not
following
and
to
4.
Otherwise,
answer
to Question
3
and
"No"
to
Question
4.
Otherwise,
do
not
answer
the
following
question.
Question
Question
NO.5:
QUESTION NO.
5
QUESTTON
What sum of money, if paid now, in cash, would
would fairly
fairly and reasonably compensate
What
compensate
comply? Consider
Mr.
Sullivanfor
forhis
hisdamages,
damages, ififan¡
any,that
that resulted
resulted from
from such
such failure to comply?
Mr. Sullivan
Consider the
the
Mr. Sullivan
less the
agreed to pay Mr.
Sullivan but
but did not, less
theexpenses,
expenses, ifif any,
amount, if any, Jani-King
any,
f ani-King agreed
obligations required
under the
completing any obligations
Mr. Sullivan
Sullivansaved
saved by
by not completing
required under
theSettlement
Settlement
Mr.
intereston
Do not add any amount for interest
ondamages,
Agreement, ifif any,
any,and
and none
none other.
other. Do
AgreemenÇ
damages, ifif any.
any.
cents,for
any.
Answer in dollars and
and cents,
fordamages,
damages, ifif any.
Answer:
NO.66
OUESTION
QWSTION NO,
Mr. Sullivan?
Did fani-King
Jani-Kingcommit
commit fraud against Mr,
Did
Sullivan?
Fraud occurs
occurs when
when -
a. a party
party makes
makes a material
material misrepresentation,
misrepresentation, And
?J3L
theknowledge
knowledge of
of its
itsfalsity
falsity or
b. the misrepresentation
misrepresentation is made with the
ormade
made
'
recklessly without knowledge of
the truth and as a positive assertion, and
recklessly
of the
and_
made with the intention that
that itit should
acted on
c. the misrepresentation isis made
should be
be acted
on by
parry, and
the other party,
ild
party relies
on the
thereby suffers
d. the other party
relies on
the misrepresentation
misrepresentation and
and thereby
suffers injury.
injury.
Misrepresentation
Misrepresentation means false statement,
statement, or
a, a false
performance made
made with an intent, at the
promise
the time
time the
b. a promise of future performance
thepromise
promised, or
was made,
as promised,
made, not to perform as
or
c.
a statement of
knows to be false,
of opinion that the
the maker
maker knows
false, or
that isisfalse,
made by
d. an expression of
of opinion
opinion that
false. made
one claiming
claiming or
by one
or implying
implying to have
'
special knowledge of the subject matter of
opinion.
of the
the opinion.
"Special
"Special knowledge"
knowledge" means
means knowledge
knowledge or
or information
information superior
superior to
to that
perry and
which the other
parry did
and to
possessed by the other party
fo which
other party
did not
nothave
have equal
equal
access.
4
"No."
"Yes" or
or "No."
Answer "Yes"
t\
D
ND
Answer:
QUESTION NO.7
NO. 7
QUESTION
Otherwise,
"Yes" to
If
youanswered
answered "Yes"
to Question
Question 6,6,then
thenanswer
answer the
the following
following question.
question. Otherwise,
lf you
question.
following question.
do not
not answer the following
compensate
fairly and
and reasonably
reasonably compensate
would fairly
cash, would
What sum of money, ifif paid now, in
n cash,
What
if
amount, if
Considerthe
Mr.
Sullivanforhis
for hisdamages,
damages,ififany,
any,that
thatresulted
resulted from
from such
such fraud?
fraud? Consider
the amount,
Mr. Sullivan
Mr. Sullivan
Sullivan
any,Mr.
expenses, ififany,
the expenses,
Mr. Sullivan
any, Jani-King
Jani.Kingagreed
agreed to pay Mr.
Sullivan but
but clid
did not less the
any,
Agreement,
Settlement
undcr
the
require¡l
saved
by
not
completing
any
obligations
required
under
the
Settlement
Agreement,
ifif any,
obligations
completing
saved
any.
intereston
ondamages,
tlamages, ifif any.
amountfor
for interest
and none other.
other. Do
Do not
not add
add any
any amount
any
damages, if
if any.
cents, for
for damages,
Answer in dollars and cents,
Answer
Answer:
QUESTION NO.8:
OUESTION
ment?
rvith the
Did Mr.
Mr. Sullivan
Sullivan fail
Agreement?
thc Franchise
Ëranchisc Agrce
l'ail to comply with
Did
Answer t'Yestt
"Yes" or
or ttNo."
"No."
Ansç,er
Answer:
U¿q
No.3,3,or
orQuestion
1f
you answcrcd
answered "Ycs"
"Yes" to Question
and "Sullivan"
"sullivan" totoQuestion
lf'yrlu
Qucstion
QucstionNo.
Qucstion No. II and
thefollowing
follorving
No. 8,
8, then
then answer
answerthe
was nol
not answered, or if
you answered
to Question
"Ycs" to
if you
ansrvcrcd "Yes"
No. 3
3 was
Question No.
question.
following question.
not answer
answer the
the following
do not
Othcrwisc, do
QLJESTR)N NO. 9:
orIESTI0Ir1.NO.
compcnsatc
wouldfairly
fairlyand
andreasonably
paid now
cash, would
What
norv in
in cash,
any, ifif paid
$/hat sum of money,
moncy, ifif any,
with the
the
läilurc
to
comply
Mr.
Jani-King
fòr
its
damages,
if
any,
that
resulted
from
Mr.
Sullivan's
failure
to
comply
with
Sullivan's
from
that
rcsultcd
damagcs,
Jani-King for
h i se Agreement?
A grccmcnt?
greement or
Settlement
or Franc
Franchise
lcmcnt r\Agreement
Sctt
olhcr:
Consider thc
the lòllowing
da.mages, ifif any.
any, and
and nonc
none other:
of'damagcs,
fbllowing elements
clcments of
Considcr
5
a.
gross revenues
revenuc.sMr.
Mr.Sullivan
rcccivcd
Sullivan received
of'10%
10% of
ol'the
the gross
A Royalty
Royalty Fee
Fcc in
in the
thc amount
amount of
his
competing
busincss,
and
failctl
to
rcport
to
Jani-King,
from thc
the operation
of his competing business, and failed to report to Jani-King,
opcration of
afier January
l, 2005.
2005.
after
Janr¡ar1' 1,
b.
grossrevenues
rcvcnucsMr.
oî 0.5%
0.5Vo of
ofthe
thcgross
Sullivan
Adverlising Fee in the
thc amount
amount of
Mr.SuUivan
An Advertising
gcncratcd from the
of his
his competing
competing business,
business. and
and failed
failcd to
toreport
rcport to
to
generated
thc operation
operation of
after January
January 1,l, 2005.
2005.
Jani-King, after
e.
c.
per day
licc in the
thc amount of
ot'$25,00
day fòr
I'or each
each day
day Mr.
Mr.
A Non-Reported
$25.00 per
Llusincss Fee
Non-Rcportcd Business
SulLivanf'ailed
failedto
to report
report to
to Jani-King
Jani-King all
all gross
gross rcvenucs
revenues from thc
the opcrâtion
operation of'his
of his
Sullivan
al"ter January
January 1,
l, 2005.
2005.
competing business
compcting
businsss after
centst'or
fbr damages,
damage.s, if
if any.
any.
Answer in dollars and
Ansrvcr
and cents
AnswJ3, a16
ansrvcr the
bclow
If
you havc
have ansrvcrcd
answered "Ycs"
"Yes" to
to Question
No^ 8, then
thcn answer
thc Question
If you
Qucstion below.
Question No.
follorving Question.
Otherwise do not
not answer the following
Olhcrr,r,ise
Question.
lll
QUESTION NO:
N0: IO
OUESTION
l)id Mr.
1, 2004, whcthcr
whether individually, or
Mr. Sullivan,
any time
time after
after May
Mayl,
or as an
an agent,
agcnt,
Did
Sullivan, at
at any
partncr,
in
stockholder, cmploycc,
employee, dircctor,
director, owner, partner, of
of aa company,
conrpany, engage
cngagc in or
or had
had any
anyfinancial
lìnancial
stockholdcr,
profcssional cleaning
interest in
in aa business
business that
that provided professional
cleaning services
services other
other than Mr.
Mr. Sullivan's JaniJaniinterest
King franchise?
franchise?
N0."
Answer
"Yes" or No."
Ansrvcr "Ycs"
A n swer:
Ansrver
4ts
No. IIand
and"Sullivan"
No.3.
orQuestion
If you
'ou answered
3.or
If
"Ycs"totoQuestion
ansrvercd "Yes"
"Sullivan"totoQuestion
Qucstion No.
Question No.
Question
No. 3 was not
not anslvcrcd,
answered, or if you answered
No.
8,
then
answer
the
following
to Question
8,
ansrvercd "Yes" to
No.
lhen
ansrvcrthc
follos,ing
No.3
Question
qucslion.
qucstion.
not answer
answcr the
thc following
follorving question.
Olherrvisc, do not
QUESTION NO.
I I:
NO. 11:
OUÊSTION
lbr the
ths necessary
nccessary services
attorncy, stated
in dollars
What
reasonable fee
What is rcasonablc
fcc fòr
serviccs of Jani-King's attorney,
statc<! in
dollars
and cents?
wilh an amount
Answer
arnount for
l'or each
each of
of the
the following:
follorving:
Ansuer with
a.
An
b.
b.
in the
thc trial
trial court.
presentation
court
ion in
üæ,ooo
For rcprcscnlation
representation through appeal to the court
court ofappeals.
of appeals.
For
6
Answer:
c.
für review stage in Supreme
For representation at
al the petition for
Supreme Court
For
Court of
of Texas.
Texas.
Ânswer:
Answer:
d.
*g
irr Supreme
Suprcme Court
Coun of
Tcxas.
For representation
representation at the merits briefing stage in
For
of Texas.
Answer:
fuiswcr:
e.
€
g
proceedings in
For representation
representation through
arg¡rment and the
thc completion
completion of
through oral argument
of proceedings
in
the Supreme Court of
of Texas.
Answer:
Answer:
-3
7
presiding juror.
After
juror. The
return to the jury room,
room, you will select your own presiding
Thefirst
Afler you return
first
thing the presiding
presiding juror
juror will
will do is to
this complete
complete charge
read aloud
you will
to have
have this
charge read
aloud and
and then
then you
will
thing
questions
deliberate upon your answers to
the
questions
asked.
to the
presiding juror--lt is
the duty of thc
the presiding
It
i.s the
a.
preside during your deliberations,
to preside
deliberations,
b.
yourdeliberations
to
scethat
thatyour
delibcrations are
are conducted
conducted in an
anorderly
1o see
orderly manner
manner and
and in
in
accordance with the instructions
instn¡ctions in this charge,
accordance
c.
hand to
to the
bailiff any
any communications
communications concerning
to write out and
and hand
the bailiff
concerning the
the case
case that
that
judgc,
you desire to
delivered to
the
the
judge,
to have
have delivered
to
d.
questions,
to
lo vote on the questions,
e.
to write
writc your answers
provided, and
answers to the questions in the spaces
spaces provided,
f.
your verdict
provided for
to certify to your
verdict in
presiding juror's signature
in the
the space
space provided
for the
the presiding
signature
jurors
who agree
or to
to obtain
obtain the
the signatures
your
signatures of all
all the
the jurors who
agree with
wiù the
vcrdict ifif your
theverdict
verdict is
is less
lcss than
r¡nanimous.
than unanimous.
jury,
You should not discuss the
the case
case with
with anyone,
anyone, not
not even
with other
even with
other members
members of
of the
the jury,
jury
unless
all of
of you
you rire
are present
present and assembled
assembled in
in the
the jury room.
room. Should
Should anyone
anyone attempt
unless all
attempt to talk to
you about the case before
whether at
verdict is
ât the
the courthouse,
your home,
before the
the verdict
is returned,
rcturned, whether
courthouse, at
at your
home, or
or
elsewhere, pleasc
please inform the judge of this fact.
elsewhere,
fact.
When
the questions
questions you are
When you have answered
answered all the
are required
required to
to answer
answer under
under the
the
presiding juror has placed your answers in
provided
instructions
judge and your presiding
instructions of the
the judge
in the
the spaces
spaces provided
presiding juror or obtained the signatures, you will inform
and.signed the verdict
verdict as presiding
at
and.signed
inform the bailiff
bailiffar
you have
have reached
reached a verdict,
verdict, and then you will return
rettun into court
the door of the jury room that you
court
with your verdict.
Jordan, J
County, Te
I8
160
60
District Court, Dallas
Dallas
CERTIFICATE
questions as
foregoing questions
as herein
hercin dictated,
dictated, and
and
above and
and foregoing
We, the
the jury, have answered
answered the above
We,
verdict.
our verdict.
herewith
herewith return
retum same into court as our
unanimous.)
Presiding Juror
Juror ifif unanimous.)
(To be signed by the Presiding
Presiding
Signaturc
Presiding Juror's Signature
Presiding Juror's
Juror's Printed
Printed Name
Presiding
Namc
verdict ifif not
not unanimous).
unanimous).
(To be signed by
tho.se rendering
rendering the
the verdict
by those
Printed Names:
Namcs:
üwtor,t b)e
I nl¿(eij
gras/tì
gr¡
-rseLi EEi'aç
1TPex13o
c:½/YJ ;/4
/" h,, '..åvr
., e(-k0-uj
- h"l[ zl
:2;E)4J
IC
,h'úl¡ F. furon L
F
e
(Q
jA' f.(;AJukL
9
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4
L6:54
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16:54
ø9¡14/2ØlL
GLASS &
& REED
REED
WEINER,
I4E]NER, GLASS
?'1475ø9).27
21475C9127
PAGE
PAGE 53/58
ø3/99
causE
No.0s,1209?,
CAUSE NO.
05-1209Z
a
ír,,7*
),.
,
'/'qÞ
L
JANI-KING
OF' NEW
FTETV YORK
JAM-RING OF
YORK
þ;!
(,//
IN THE DISTRICT
DISTRICT COÏJRT.
COIIRT
//4
Fry
Vv-
FOR TIIE
THE T60!TI
l6O" JUDICIAì'
DISTRICT
JITDICIAiTTI$T,ICT
ÊLENN
SULLIVÂI{
GLENN SULL
WAN
DALLAS
COUNTY, TEXAS
DALLAS COUNTY,
TEX/LS
i'r"þ
MOTIO.¡¡
MOTION TO
TO DISREGARD
DISREGARD JURY
JURY FTNDTNG.$_
ENDINGS
0R
ALTFRNATTVELY. t'OR
OR ALTERNATIVELY,
FOR JULGMENT
JUDGMENT
N
OTWITH.STANT}ING TH
NOTWITHSTANDING
THE
VERDICT
Ë VÊRDICT
COURT;
TO THE HONOR.A.BIE
HONORABLE JUDGE
OF SAID
S^A.ID COURT:
ruDGE OF
GLENN
GLENN SULLfV¿fq,
SULL WAN, ÐefendautandCounter-Plaintiffinthe
Defendant and Counter-P1aintiff in the above-entitled
above-entitled and
numbered
aud numbered
jwy and
rause,
the jury
and to render
a[swers of
to strike
strike certain
aertain answers
disregard of
cause, moves
noves this
judgment in disregard
this Court
Court to
render judgmerú
of the
úo issue its
the Verdict
Verdict of
ofthe
Jury on the
alternatively, to
the Jury
those answers
strswers or, altematively,
Notwithstaflding the
íts Judgment
Judgnrent Notwithstanding
questions set forth
sup¡rort of this
questions
forth below, and in support
this Motion shows:
shows:
t.
On Thursday,
February 2+,Zl1l,
24. 2011, this
this ctsÊ
case \Ã,as
was submitted
jury
elevcn (11) jury
Thrnsday, Febnrary
submittËd to a jury on eleven
jury's verdict
questions. The
verdictwas
of the
the twelve
twelve jurors agreeing
agreeing to
was returned
to
in open
open Court,
Court, with
with ten
ten of
returncd in
The jury's
verdict.
the final
fiflål vsdist.
il.
IL
tlrat this
this Court
Sullivan.
Plaintiff and Counter-Defendant
the instant
instant suit,
suit, requests
requests that
Court strike
strike
Countcr-Dsfendant in the
Sullivan, Plaintiffand
judgment in
and to
to render
render judgtuent
the jury's answers
questions 1,
6, 8Sand
10 as
set forth
forth below
below and
andIO
asset
1, 3,4,
3,4,É,
in
ürs$¡Ers to jury questions
disregard
of those
those afl$wÊfs.
answers. Sullivan
wãs no evidence
svidonce to support
support the
the jury's
jurys
disregatd of
thcre was
ootrtends that there
$ulliven contends
tojudgment
answers and
that the widenoe
evidence conclusively
proves facts
thatestãblish
establish Sullivan's
Sullivan'sright
right to
judgment as
facts that
conclusivelyproves
andthfltthe
rn$wËrs
(Tex*åpp.
718S.W.2d
a matter
matter of
of'law.
law. Cítr¿
City of
o'Dailas
778-779 (Tex.App.
776,778-779
a
S.W¿d 776,
Dallas v.Moreau.
n. Moreau718
Corpus Christi
Chtisti
-- Corpus
questions and answers to Questions
I and
und 10
l0 arc set
sct forth
forlü bclow.
1986, ref.
ref. nr.e.)
n.r.e.) The
below.
Tho jury questions
1986,
Questions 8, 9
Firiding or
orAIternatívely
AlternatÍveþ'
Motlop to
to Dkrugard
Disregard Jury Findingr
Motlon
for Judyment Notwithstanding
Pag6 1I
theVerdllct
Vedlct -- Page
Notwlthrtandíng the
forJudgment
¡\
'i*,*l
/] us
ãs/1,412øIL
e9/14/2511
L6:54
1b:4
GLASS &
&REED
REED
WEINIER,
hJE]NER, GLASS
2L478ø9L27
21475e8127
PAGE 14/EIS
ø4/ø9
PAGE
ouestion No'
l; Did Mr,
Oucstion
No. 1:
Mr. Sullivan
sullivan fail to comply
comply with
wirb the Settlement
settlernent Agreeme,lrt?
Agreement?
Questiqn
Question No^
No. 3: who
Who fâited
failed to
with the Settlement
to conrply
eompy with
settlement
Agreement first?
Thtjury
The
jury answered
answered question
,,Mr.
question numbcr
number Ii "yaz"
and question
questionnuurber
'?es" and
number 33 "Mr.
sullivan,.
Sullivan".
The jury's
flnswers to these questions
The
jury's answers
were against the great
questions were
great weight
weÍght of
of undisputed
undisputed evidence.
evidencs. The
The
parties'
settlement Agreement
parties' Settlement
Agreementprovided
provided that Sullivan
sullivan wor¡ld
would ta,rsfer
transfer his
bis accorüts
accounts to
to Jani-King by having
specific customers
cugtomers sign
sign aa maintenance
specific
maÍnænanse agreement.
ageernenL The
The Settlement
settlemsfit Agreement
.A.greenrent mandated
mandated that the
¡naintonance
maintenance agreement
agreement 'has
"has been drafted
ùañed by Jani-King." (Settlement
(settlernenf Âgreement,
Agreement, pÈge
page 4
4, Section
section 3a)
Testinnony by witresses
Testimony
witnesses for both parties indicated
indicated that not only bad
had the maintenance
mairrtenânce agreement
agreement not been
given
given to
to sulliva4
Sullivan, but
but tbat
that Jarii-King
Jani-King nwer
never drafted it in the
the frrst
first place.
place. As aa result,
result, Jani-King's
Jani-King,e acts
ec* and
omissions
omissions regarding
regarding the rnaintenance
maintenance agreerrcnt
agreement constitute
constitute a breach
hreach of the parties,
settlement from
ûom the
parties' settlement
rnoment
moment it was
was dräftËd,
drafted, let
let alone
alone signed,
signed, and wËll
well before
before lvfr.
Mr. sullivan
Sullivan could
could take the
the first
first act
act of going
ofgoing to bis
clients and getting
geniug their permission
agreement to sign
permission and agreement
sign the
the nonexistent
nonen<istent maintenance
maiffenånce
agreÊmetrts.
agreements.
Thereforc, Defendant
Therefore,
Defendant rtquests
requests thatthis
that this Court strike
the jury's
jury's aú^+rrysrs
rtrike the
answers to
to questions
questions numbers Ii and
arrd 3.
3.
Question
No.4:
Qu.estion,No,4:
ttr/as Jani-King's failure
failure to
to comply
Was
coruply with
with the Settlement
Agreement excused?
settlement Agreeme,nt
excrued?
,,yes.,,
Thç jury
snswered question number
The
july answered
number 4 "yes."
Based
Based on
on the
the above
above nnalysis'
analysis, thejury's
the jury's answer
aüswËr to question
question number
nrrnber 4 is against
against the great
great reight
weight or
of
evidemcc
evidence as
aswell.
well. Mt
Mr. Sullívan's
SuIIivans undisputed
undisputed testimony was
was that
that he
he immediatelyset
immediately set out
outto
to pufmu
perform underthe
under the
parfies'
settlenrent Agreement
parties' Settlement
Agre ement arid
and fhat
even obtained the
that he even.
obtained the necessary
necessary clients' approval
approval that
that they
tlrey would sign
sigu
the Jani-King
Jani-King mal'ntenance
maintenance agreeruents.
The evidence
cvidence clearly showed
agreements. The
showed that
that Jan-King
Jani-King repudiated
rçudiated or hreached
breached
tfie settlement
settlement agreement
the
ågrcement right
away and
nglht away
and that
that Jaai-King
JaniKing did
dtd not
not offer
offer any evidence
evide,noe that
thãt it undertook
undertoolc any
actions
actions as
as requÍred
required by
by the
the Settlcment
Settlement AEtreementAs aa result,
rcsult, to conclude
Agreement. As
conclude that Mr, Sullivan
srllivan repudiated
repudiated the
**tt"ol
Settlement AFeern.ent
Agreement prior
prior to
hreach was to
to Jani-King's
Jani.-King's breach
to ignore
ignore the
the undÍsputed
undisputed testimony about Sr¡llívan,s
Sullivan's
to DIsrEgard
Þhregard Jury
Motloi
Jury Ftndingr
Bndings or
or Alúemativeln
Aftmatively,
lnotþn to
forJudgment
Holwtthsúândlng the Verdict
for
Judgment Notwlthstatidflng
Verdicr -_ Page
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PAGE
actions
actions and Jani-King's
Jani-King' s inactions
inaøtions to perform. Therefore,
Therefore, the
court should strike
the Court
shike the
the jury,s
fltrg\ryer to
jury's answer
ro
question number
nurnber 4.
question
Question
No 6:
euesrion No.
6;
Did
Did Jani_KÍng
Jani-King comnit
commit Êaud
fraud against Mr. Sullivan?
The jury
anstryered question
The
jury answered
question nr.¡mber
number 6.ho.,,
6 "no."
Agaifl' d¡a*ing
Again,
drawing on the
the analysís
analysis above and tbe
the lJücoiltuovÊrted
uncontroverted testimony
testimotry at
at trial, it is undisputed
undisputed that
Jani-Eing
Jani-King never
never intended to
to perform
perform under tle
thé parties'
partIes' settlement
setilement agreememt
Jani-King,s own witness
agreement. Jani-I(ing's
wifrress
f¿ilsd to identify
failed
identifi any
any affirmative
affirmative steps Plaintiff
Plaintifftook
took to fi¡Ifill
fulfill any
any of
o its
its obligations
obligations under the
the Settlement
settlement
Agreement
Agreement and
and the
the evidence
evidence clearly showed that
thåt Jani-King
Jani-King never
neyer even
eveü prepared
prepared documents it represented,
reprcsented,
both verbally
both
verbally and
and in
in writïng,
writing, to
sullivaü that
to Sullivan
that itit did. Sullivan
sullivan stated
stated that
that he relied
relied on
ou the
the latter
latter representations
representations
and that he
and
he would
would not
not have
have sntef,ëd
inûo the
entered into
the settlement
Agreement had he
lie ftnow
know that
that they
they were false
false and that
JEni-Kine never
nevcr intended ø
Jani-King
sr¡ch acts
a¿ts and
to perforrn.
perform, Such
and omissions
omissions clearly
clearly constitute
consütute fraud and, as
as such,
such, the
ntre
Ìuty's
answet should
shodd be
jury's answer
sfruck by the Court and
bc struck
and judgmcnt
judgment rendered
rcndqrd for Sullivan
sullivan that Jani-King did in fact
fast
commit fraud
commit
fraud against Sullivan.
No. 8:
Qtion
QuesfionNo.8:
Þid
Àdr. Sullivan
sullivan fail to comply
t)id Mr.
comply with
withthe
the Franchise
Agreement?
Franchise,A.greeurent?
Thejr¡ry
quesrion number t8 ..yes."
The
jury s¡+lvered
answered question
"yes."
Agan'
AgaIn, for
for brevity's
brevity's sakc,
sake, Sullivan
sultivan adopts
aualysis and arguments
adopts the analysis
argumcnts addressed h.erein.
herein. Sullivan
sullivan
contends that he did not b'reãÊh
contends
breach the
the Franchise
Franchise Agreement
and there is not any
any eviden.çe
^A.gttement aud
evidence (as a result
if JaniJani
result if
acts and
aüd omissions above)
King's acts
above) that
demonstrates that
that demonstrates
that he
be did. Specifically,
specifically, the
the undisputed
und,isputed evidence
evÍdencç and
jury's answer
f,nswer to
the jury's
question number 22 indicate
to question
indicate that
that Jani-King
Jani-King breached thç
the Settlement
settlement Agreement.
Agreernent.
Moreover'
Moreover, Sullivan's
Sullivan's obligations to perform under the Franchise
Franchise Agreement
Agreernent were stayed
*tayed until Jani-King
Jani-Kiug
perfornaed
performed iH
its obligations
obligations uuder
under the
the Settlement
Setrlemcnt Agreement
AgXee,rrent by
by handling the talrsfer
transfer of existing business
business and
ilotlon
Motion to Dleregard
Disregard Jury
Jury Findlnga
Findings or
orAlüemetively,
Alternatively,
for
pase 3
for Judgment
Judgment Noftyithstandlng
Notwithstanding the Verdict
Ventict *- Page
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by
by refsning
referring new
new business
business and biltings
billings to Sullivan.
s¡rllivan'
ø6/ø9
PAGE ElE/OS
PAGE
sections 2 and 3 of the Settlement
Sections
sEttlement Agruement
set fofth
Agreement set
forth
tÊryxs
and obligations
obligations that Jani-Khig
tenus and
Jarri-Kiug had to
to meet
¡neet before
before Sullivan
sullivan becaure
became obligated
obligated to
to pay any fees (Le,,
(i.e.,
damages) to
damages)
to Jani-King'
Jani-King. The facls
facts demonstated
demonstrated wíttrout
without dispute that Janì-King
thatJani-King uever
never offered up any business
to Sullivan
sullívan per the settlement
to
Agreement; Jani-King's
Jani-King's own
owrr wiüress
evcn admitted
admitted the IsttÉî
witness even
latter fact.
fflct. Therefore,
Therefore,
j,ry's answer
the
änswer to question
questiorr u'mber
thejury's
imrnaterial ¿nd
number 8g is immaterial
and should
should be
struck. Spencer y. Eag1 Star Ins. Co.,
@.,
876 S.w.zd
87G
S.W.2d 154,
157 ÇFex.
tS4,tSï
(Ter. r99a).
1994).
OuestionNo.
Question
No. i l0:
Q:
Did Mr.
l\dr' Sullivan,
sullivar¡ at any
tÍme after May, 1,
l, 2004,
any time
2004, whether
whether individually,
indivjdrally, or as
as an
an agent,
agent,
stockholdeç employee,
erlFloveæ,director,
stockholder,
director,
owner,$$u,ifu*rop*y,*grg"inorhadanyûnaneialinær*$t
owner, partner, ofa company, engage in or had any financial interest
provided professionur
in a business that
that provided
deaoiog services
professional cleaning
rr*ir"r other
othir than Mr.
Mr.Sullivuzf
sullivan,ss Jani-Kiug
.Iani-Kiug
Hrm#*s
franchise?
.,yes.,,
fte
The ju{y
jury n¡swercd
answered questíon
question number 10:
L0: "Yes."
sullivan mov€$
jury's answer
Sullivan
moves the Court to strike
strike the
the jury's
änsvi¡sr to
to this
question as it is
this question
is vague
vague and
and
imrnaterial'
Jani-King has
imniaterial. Jani-King
has admitted
admitted that it
ít isisnot
notterminating
terrninnting the
the Franchise
Frunchise Agreement
Agreement and its
requËsts for Injunctive
Injunotive Relief have
requests
havc been denied.
demied. Additiouaily,
Additionally, the fact that
thåt Mr. Sullivan
sultvan had an
a¡r
intËIEst
interest in a non-competing,
non-competing, se¡raate
separate ar¡d
and different
different cleaniug
cleaningbusiness
buiriess is immetcrial
immaterial to this lawsuit.
lawzuit
HalI
Hall v'
y. HuÞco,Ins.,292
HubcoJnc., 292 S.W.3d
$.u/.3 d,22,27
22,27 (Tex..{pp.
(Tex.App.-Houetou
Houston [t4ftDist.]
tl4thliisti 2006.p*.
de,nied); Faria.gv.
2006, pet. denied);
Ferias y.
Lar,edo
Laredo Nat'l
Nat'l Bark,
Bank, 985
985 s.lv.zd
S.W.2d 46i,470
465,470 (l'ex.
(Tex. App.
App.-- San
san Antonio
Antonio 1997,
lggz, pet.
per. denied)
denie
)
m.
UL
Sullivan ('Sullivan"),
Glenn Sullivan
("Sullivan"), Defendant
Defendant Ín
in the
the instatrt
instant suit"
suit. requests
requests that
that this Court strike
stike the
jury's
g, which reads
ansïyer to Jury Question
juxy's answer
rsflds as follows:
follow:
euestion 9,
tl*v,
IVhat
What sum
sinn olTorlv,
of money, if
íf paid now
any, if
now in
in cash,
cash, would
wourd fairly
fairþ and
and reasonably
reasonabry
comFelNate
Jani-King
compensate Jani-Kingfor
for its
its dqmägÉs¡
damages, ifif any,
any, that resulted
rezulted fom
from hfr.
Mr, Sullivan's
failure
failure to comply
comply with
with the
the settlemeni
Settlement Agreement or Franchise
Franchise Agreement?
Ageem"nt?
sullivan moves
move$ and states
Sullivan
states that the Court should disregard
drsregard tlrejury's
the jury's answ,eï
answer to the award
award of
S223,075indumagesässetfodl.inquestiong.
$223,075
in damages as set forth, in question 9. In
Int¡isiüstÈncs,Plaintiffswirresscouldnotqpeciff
this instance, Plaintiffs withes could not specii'
to
Dirrugerd
Findtngr or
Motion to Disregard Jury Fhid1ng
orAltarnetiveþ
AItematlieiy,
[tlotjoq
för Judgment Notwithstanding
Notwithsúandlng the Verdict
for
Vrldicr -- Page
4
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PAGE
G7/S
sxaÊtly
(invoices, payments,
exactly from
from wherc
where (invoices,
payments, etc.)
etc) all of
her calculations
ofher
calculations were denlved.
derived. Moreover,
Morcove¡ she
slre
testified and
testified
and Plaintiffwas
Plaintiff was awarded
awarded darnages
damages for
for costs
costs it claimed
claimed but
but admitted
admitted it never occurred.
occurred. For
example' part
example,
part of
of Plaintiffs
Plaintiffs claimed damages
damages were
were for
for advertising
advertiring and
and accounting
accounting expenses;
expemes;
however' during the time
however,
tirne period
period alter
aftu May
plaintiffadrnitted
May 1,
l, 2004, Plaintiff
admitted that it did
did not incrrr
incur any costs
or
or provide
provide any services
services to or
o¡ on behalf of Defendant
Dcfendant regarding
reguding advertising
advertsing
alternative' if the court
alternative,
Court does
does not
not set
set aside
aside this
this award
award of
of
or
accounting. In
In the
or accounting.
damages, then Defendant ¿sks thc
damages,
cor;rt to
asks the Court
reforur the
reform,
the darnages
damages award
award to an amount
a¡uount that Ís
is coneistÕnt
consistent \+,ith
withplaintiffs
Plaintiffs aLleged
alleged daruages,
damages, u¿hich
which
should
should not
not include
include craims
claims for charges or Ê)rp*nsËs
werE not incurred.
or expenses that were
rv.
IV.
Sullivan furrlrer
Sullivan
further requests
requests that
thaf the Court
strike thejury's
Cou¡t skike
theìury,s answer
answer to
to and Jury
Jruy Question
euestion
I l(a) which
which reads
reeds as follows:
li(a)
"what isis (sic)
'Wbat
reasonable fee
{sic) reasonable
fet for the necessary
necessary services
services ofJani-King's
of Jani-King's attorney,
sffo. mÊy, stfltÆd
stated
in dollars and
and cents?
"års$¡er with
wrth an amount
åmourt for each
"Answer
each of
ofthe
the following:
(a)
(a)
For
For representation
representation in the trial couït.
court.
*$g0,000,'
ïhejury
The jury answered
answered question li(a):
t I(a): 188,000"
sullivan rcincorporates
Sullivan
reincorporates his
bis Motion
lvfotion to Strike
strike Plaintiffs Evidcnce
Evidence on Attomey,s
Attorney's Fees
Fees e¡
as if
if
fi¡lly set
set fofth
fully
forth hereirr'
herein, sr¡Ilivan
Sullivan furtlrer
further moves
moves and states
that
staircs that
cou¿ sh.ould
jury,sanswer
the Court
should strike
the jnrys
shilne the
ansï'er
tto questio'n
to
question Ili.l' Specifically,
specificall¡ Janí-King's
Jaui-King s expert wholly
wholly failed
failcd to
to identify any specific
specífic activity
activíty over
any
any specific
specific time
time pr'riod
period with
with the
the
neccssary
oision for
necessary pr'e
precision
for proof
proofnor did
did he
offer any testimony
testimony as to
any
any act'al
actual bÍlling,
billing, eithereither. For example,
examplc, there
fhere was
ü,äg no sufficient
sufficfent evidence,
evidence, if any,
arry, as to the time and
required' th.e
thc fee customarily
labor required,
customarily charged
charged for any
any specific
specific activity on thís
this case,
Ésãer or
or the
the amount
amount
involved' As
Ås such,
such, said
involved.
said figure cannot
cauaot be
be considered
cousidered reasonable
reasona.bre and
and necessary (State
(state Bar Rules,
Motk,ngli:T914
to Disregard Jury Findings
or Alternatively,
Atre martveflr,
I"JP:
Jury Ftnd ¡nss or
rorJudgmant
for
Judgment Notwithstanding
Notwlthstending the
page 5
tha Verdict
Verdict_- Page
å
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PAGE
Rules
Rules ofProfessional
of Professional Conduct,
Conduct, Rule iL04
.04 (Fees))
(Fees)) and
and said
said requested
requested relief should
should not
uot be awarded
awarded as
as
pafi of
Thejury's award
part
of ajudgment'
ajtidgment. Thejury's
$80,000.00 for
award of
of$80,000.00
for question
1I (a)was
wasarbitrary
question li(a)
and inconsistent
arbiuaryand
inconsistent
with
with tüe
the wimesses'
witnesses' inability
inability to
to testify
testiIr as
as to any
any specific
specific activities,
activities, times
times and
and e4pense
regarding this
expensess regarding
Iawsuit
lawsuit, including
including his
his admission
admission that
that he did
did not even
work for
for Plaintiffs
Plsintifi's former
even work
former law
law fimr
flim for a
considerable amouÍ
considerabin
amount oftirne
of time while
while this litigation
litìgation was
was pending.
pending. Based oahis
statemÊffis? Sullivan
on his statements,
Sullivan
respeoffidly stresses
respectfiuily
stresses that
that thc
the evidence shows that
th¿t the witness
witress was not competent
competent to give
give opinion
opiniort
testimony and
that the
the Court
testimony
and thcrefore,
therefore that
Court should
should silike
strike the
thejury's
jury's an$wËrto
answer to question
question I11.
Cooper lire
I . Coopen
T-_¡re &
&.
Rubb
t¡. Merdea
$.\t/,3d 797, 804
Rubberq Co_.
Ço..v.
Meii4ez, 204.
204.S.W.3d
904 (Tex,
2006')
(Tec 2006)
vV.
Finall¡
thatthis
Finally, Defendnrrtreqræsts
Defendant requests that
this Court
reform the answerto jury questions numbers 55 and
CourtrcfonntleanswertojwyquestÍonsngmbers
stated;
7, which stated:
5: "What sum of money,
mone¡ if now
paid in cash,
would fairly
fairly and
nowpaid
cash r¡muld
compensaÊ Mr.
and rcasonably
$ullivan
for his damages, if any, that resulted
Sullivan for
rcsultcd from
Êom such
to comply'?"
such failure to
comply?"
7; "What
sum of
of money, if
7:
paid now in cash,
"What sum
ifpaid
casl¡, would fairly and reasonably
corrpensate Mr.
Sullivan for
Sullivan
for his
his damages,
damages, ifif an¡
any, from
from said
said fraud?'
fraud?"
The
sonclusivelyshov'rs
The evidenoe
evidence conclusively
shows that
Jani-King failed to uphold its
thatJani-Kinefailedtorçhold
ÍH obligations
regarding the
obligationsregardingthe
$ettlement Agreeme,lrt
Settlement
Agreement from its
its inoeption.
tnceptioar. Therefore,
Thereforc, pursuåtrt
pursuant to
to the terms
terms of
of the
theSettlement
Setgement
Agreeurent"
Agreement, based on its acts and omissions, Jani-King
Jani-Klng would
would be liable to Sullivan
Sr¡llivan for
fbr the sum of
$4'500.00 per
hrly 1,
$4,500.00
per month from July
2004, through
throueh the time of tiaJ.
1,2004,
Sullivan requests
rcquests this
irial. Sullivan
this Court
Courr to
ro
reformthejury's
reform thejury's answers
ansu/eß and.
to ìnsertthe appropriate sum
sndtoinærttheappropriute
zum of
ofdnmages
inthearnountof$360p00.00
damages in
the amount of $360,000.00
against
against Jãni-King
Jani-King to
to the
the åüswêr
answer for
for question
question 55 and
and a surr
sum of its choosing for
fot question number
nurnber 7.
?.
WIffiREE'ORE,
Sullivau moves
GleünSullivan
W*IEREFORE, Glenn
movëB thîs
rhis Court
to:
Coutt ro:
1. Sthke
Snike the
thejury's
âttswcrsto
1.
jury's answers
to questions
numbers 1,
3, 4, 6, 8, 9, 10
questionsnumbers
1,3,4,6,8,9,
and II(a)
li(a) because
this
10 and
becausethis
Dlsregard Jury FIndIngs
Itlot¡on to Dtsregard
Flndingr or Alternatively,
Motiofl
Altarnafively,
forJudgmant
Notwltlrdanding the
for
th+ Verdict
Verdict-- Page
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PAGE 88/58
jury's answers
ffisr¡/ers have
havc no
nosupport
jury's
supportin
evidence.
in the
ths evidence.
2. Reform
Reform the
the answers
answerg to
2.
toquestions
questions numbers
numbcrs 5 and 7? to award
awsrd damages to
to Sullivan.
Sullivan.
3.
Altemativeþ, to
to render its
3, Alteniatively,
judgment notwithstanding
itsjudgment
notwithstandíng the
the verdict
verdiot of
of the
the jrry
jury and
and that
thf,t JndJani-
Kingtakc
King take nothing by
by its
ìts claims
against Sullivan.
claims against
Sullir¿an.
4- To
To render
render judgment
jr¡ry findings.
onthe
judgment on
the remainder of
of tlre
the jury
findings.
5, For any further
fürther relief
reliefto
to which
whioh Sullivan
Sullivanmay
may be entitled.
entitledRespcúfrlly submitted,
Rcspectfully
WEINETLGLASS
cLÅSs&&REED,
VJMtR,
REED, LL.P.
L.L*P.
i'
L. ENDA
Ë.NDA
STEPHE L.
St¡te Bar
Ba¡No.
State
No. 06612500
6440N.
CenbalExprerewn¡
6440
N. Central
Expressway, Suite 700
DãlIås, Texas 75206
Dallas,
752A6
Tel:
Tel: 214/750-9509
2I4l75o-95A9
Fax: 214/7509127
Falc
2l4l7sg-9127
ATTORNEY FOR DEFENDANT
DEFËNDANT
ORDF,,R
SETTITTG FIEARING
TIEARqÛG DA,TE
ORDER SETTING
DATE
I7
*,fr-auv
day ot
of fifhtl'v''tt
foregoing Motion
hearing on the foregoing
Motion is set for the
in.
4"ãÉitr*iËi:
ii, at
,oil,
ar
lUD 7RES[D
CERTFTCATE
OF-SERVICE
CERTETI
OFJ1RYICE
This certifies that
day of September,
that on
onthe
the14th
I 4ft day
20 I 1, aa tn¡e
septrmber, 2011,
true and
and correct copy of the
the forcgoing
foregoing
iustnrment was served upon
upon counsel
instrument
in this proceeding,
çounsel for Plaintiff
Flaintiffin
proceedi¡& in accordance with
$,fth the
úE Texas
TExas
Rules of Civil
Procedure.
Civil P¡ocedurc.
Sæphen
Stephen L. Elida
Enda
Motion to
JuryFindings
Flndlngr or
Motion
foDl+mgeÉ
Dregard Jury
AterriativeIy,
orAlternrüvelp
Íor
pagi 7Z
Notwfthetending the Verdict
for Judgment
Vêrd¡êt - Page

GLEN SULLIVAN, JANI-KING OF NE\ry YORK,INC., JANI

Transcription

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