2014 Franchise Disclosure Document

FRANCHISE DISCLOSURE DOCUMENT
Pla-Fit Franchise, LLC
(a New Hampshire Limited Liability Company)
26 Fox Run Road
Newington, NH 03801
(603) 750-0001
www.planetfitness.com
PLANET FITNESS® businesses are fitness training facilities offering exercise machines and free weights,
fitness training services, tanning services, related services and ancillary goods. We offer for sale PLANET FITNESS
franchises for new locations and for existing fitness facilities that want to convert to a PLANET FITNESS.
The total investment necessary to begin operation of a single PLANET FITNESS® facility ranges from
$824,200 to $2,881,500, if you finance your equipment, which most franchisees do. This includes $47,300 to $271,000
that must be paid to the franchisor or its affiliate. If you choose to purchase your equipment, the total investment
necessary to begin operation of a single PLANET FITNESS® facility ranges from $1,219,500 to $3,725,000. This
includes $383,200 to $880,000 that must be paid to the franchisor or its affiliate. These estimated initial investment
ranges also apply to the first location that you develop under the Area Development Agreement (plus the Area
Development Fee you pay at the time you sign the Area Development Agreement). If you sign an Area Development
Agreement, you must develop multiple PLANET FITNESS® facilities, and you will pay an Area Development Fee of
$10,000 per planned location in addition to the then-current initial franchise fees due for each location at the time the
Franchise Agreement for that location is executed.
This Disclosure Document summarizes certain provisions of your franchise agreement and other information in
plain English. Read this Disclosure Document and all accompanying agreements carefully. You must receive this
Disclosure Document at least 14 calendar days before you sign a binding agreement with, or make any payment to, us or
an affiliate in connection with the proposed franchise sale. Note, however, that no government agency has verified the
information contained in this document.
You may wish to receive your Disclosure Document in another format that is more convenient for you. To
discuss the availability of disclosures in different formats, contact our Director of Franchise Admissions at 26 Fox Run
Road, Newington, NH 03801 and (603) 750-0001.
The terms of your contract will govern your franchise relationship. Don’t rely on the Disclosure Document alone
to understand your contract. Read all of your contract carefully. Show your contract and this Disclosure Document to an
advisor, like a lawyer or accountant.
Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up
your mind. More information on franchising, such as “A Consumer’s Guide to Buying a Franchise,” which can help you
understand how to use this Disclosure Document is available from the Federal Trade Commission. You can contact the
FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue NW, Washington, DC 20580. You can
also visit the FTC’s home page at www.ftc.gov for additional information on franchising.
There may also be laws on franchising in your state. Ask your state agencies about them.
Issuance date: April 17, 2014
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STATE COVER PAGE
Your state may have a franchise law that requires a franchisor to register or file with a state
franchise administrator before offering or selling in your state. REGISTRATION OF A
FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE
FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE
DOCUMENT.
Call the state franchise administrator listed in Exhibit A for information about the franchisor,
about other franchisors, or about franchising in your state.
MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW
UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO
SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER
TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER
WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT
TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.
Please consider the following RISK FACTORS before you buy this franchise.
1. THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE
DISPUTES WITH US BY MEDIATION, ARBITRATION OR
LITIGATION IN THE CITY WHERE OUR CORPORATE
HEADQUARTERS IS LOCATED (CURRENTLY, NEWINGTON, NEW
HAMPSHIRE). OUT-OF-STATE MEDIATION, ARBITRATION OR
LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE
SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU MORE TO
MEDIATE, ARBITRATE OR LITIGATE WITH US IN THAT LOCATION
THAN IN YOUR OWN STATE.
2. THE FRANCHISE AGREEMENT REQUIRES THAT NEW HAMPSHIRE
LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT
PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL
LAW. YOU MAY WANT TO COMPARE THESE LAWS.
3. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Effective Date: See the next page for state effective dates.
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STATE EFFECTIVE DATES
This Franchise Disclosure Document is registered, on file or exempt from registration in
the following states having franchise registration and disclosure laws, with the following
effective dates:
California:
Hawaii:
Illinois:
Indiana:
Michigan:
Minnesota:
New York:
North Dakota:
Rhode Island:
South Dakota:
Virginia
Washington:
Wisconsin:
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April 17, 2014 (exempt)
April 17, 2014 (exempt)
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TABLE OF CONTENTS
ITEM
PAGE
ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND
AFFILIATES................................................................................................................1
ITEM 2
BUSINESS EXPERIENCE..........................................................................................4
ITEM 3
LITIGATION ...............................................................................................................7
ITEM 4
BANKRUPTCY.........................................................................................................10
ITEM 5
INITIAL FEES ...........................................................................................................11
ITEM 6
OTHER FEES ............................................................................................................12
ITEM 7
ESTIMATED INITIAL INVESTMENT ...................................................................17
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES ....................22
ITEM 9
FRANCHISEE’S OBLIGATIONS ............................................................................27
ITEM 10 FINANCING ..............................................................................................................28
ITEM 11 FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER
SYSTEMS AND TRAINING ....................................................................................28
ITEM 12 TERRITORY..............................................................................................................39
ITEM 13 TRADEMARKS ........................................................................................................41
ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION ....................44
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF
THE FRANCHISE BUSINESS .................................................................................45
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL.............................46
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE
RESOLUTION...........................................................................................................47
ITEM 18 PUBLIC FIGURES ....................................................................................................51
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS..........................................51
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION..................................................58
ITEM 21 FINANCIAL STATEMENTS ...................................................................................66
ITEM 22 CONTRACTS ............................................................................................................67
ITEM 23 RECEIPTS..................................................................................................................67
EXHIBITS:
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
List of State Agencies and Agents to Receive Service of Process
Nondisclosure & Non-Use Agreement
Franchise Agreement (including Addenda and Appendices)
Area Development Agreement (including Addenda and Appendices)
Financial Statements
List of Franchise and Corporate Locations
State Addenda
Form of General Release
Visionary License Agreement, Radiant Software Agreement, Purchase Order for
Visionary Products and Software, and Merchant Agreements
Table of Contents to Operations Manual
Receipts
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ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES
This Disclosure Document provides certain information about Pla-Fit Franchise, LLC
and the terms on which we currently offer franchises in the United States (as required by federal
regulations and certain state laws). This Disclosure Document cannot and does not provide all
the information a prospective franchisee should consider in making a decision on whether to
enter into a Franchise Agreement. Prospective franchisees should make an independent
investigation before making a decision to enter into a Franchise Agreement and should consult
with their own advisors, like an attorney or an accountant.
Unless the context otherwise requires, all references to “we,” “us”, or “our” refer to PlaFit Franchise, LLC and all references to “you,” or “your” refer to the person who is granted the
right to operate a PLANET FITNESS® franchise under a Franchise Agreement. If you are a
corporation, limited liability company, partnership or any other type of legal entity, the
provisions of the Franchise Agreement also apply to your owners by virtue of the requirement
that some or all your owners personally guarantee, and be personally bound by, your obligations
under the Franchise Agreement.
The Franchisor, Its Parents, Predecessors and Affiliates
We are a limited liability company formed under New Hampshire law on January 27,
2003. We do business under our corporate name and under the PLANET FITNESS name. We
began offering franchises for the operation of PLANET FITNESS businesses in February 2003.
Although we do not currently operate any corporate PLANET FITNESS locations, we may do
so in the future and we have affiliates who operate PLANET FITNESS locations. Throughout
this disclosure document, we refer to those PLANET FITNESS locations operated by our
affiliates as “company-owned” or “corporate” locations. Our principal business address
currently is 26 Fox Run Road, Newington, NH 03801. Our agents to receive service of process
are identified in attached Exhibit “A”. We have no predecessor.
Our parent, Planet Fitness Holdings, LLC (“Holdings”), was organized in the State of
New Hampshire on March 16, 2007, under the name “Pla-Fit Ridgmar, LLC.” On March 7,
2008, our parent changed its name to “Planet Fitness Holdings, LLC.” Holding’s principal
business address is the same as ours. On October 23, 2012, Holdings’ owners entered into a
membership interest purchase agreement (“Sale Agreement”) to sell all their ownership interests
in Holdings, including a controlling interest in Pla-Fit Franchise, LLC, to TSG PF Investment,
LLC. (“TSG”) Under the agreement, Holdings’ owners agreed to contribute their Holdings’
membership interests to Pla-Fit Holdings LLC (“Topco”), which was to be formed by Holdings’
owners, in exchange for the same classes and amounts of interests in Topco, and Topco agreed to
contribute all its Holdings’ membership interests to Planet Intermediate LLC (“Intermediate”),
which was also to be formed by Holdings’ owners and which was to be a wholly-owned
subsidiary of Topco. Under the Sale Agreement TSG agreed to purchase Holdings’ owners’
membership interests in Topco, after the Intermediate contribution and satisfaction of various
closing conditions. This transaction closed and became effective on November 8, 2012.
We may require you to conduct business with our affiliate Planet Fitness Equipment,
LLC, a New Hampshire limited liability company formed in May 2005 (“PF Equipment”) as it
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currently is an approved supplier of fitness equipment. See Item 8 for more information on
approved suppliers. As disclosed in Item 13, our affiliate PFIP, LLC, a New Hampshire limited
liability company formed in December 2000 (“PFIP”) owns the Marks and licenses them to us.
PF Equipment and PFIP all have the same principal business address as we have.
The Franchise
A PLANET FITNESS franchise offers fitness training facilities, including exercise
machines and free weights, fitness training services, tanning services, related services and
ancillary related merchandise as we may authorize periodically. The PLANET FITNESS
franchisee must provide these services on a 24 hour a day basis unless prohibited by law or
authorized by us in writing. You must offer for sale all services, products, and merchandise we
designate, unless you obtain our approval not to offer certain services, products, or merchandise.
You must sign the form of Nondisclosure & Non-Use Agreement attached as Exhibit “B”
before we engage in substantive discussions with you about the franchise opportunity. You will
sign our then-current form of franchise agreement (the “Franchise Agreement”) for each
PLANET FITNESS franchise you open regardless of whether you are opening a new facility or
converting an existing facility as noted in the following paragraph. Each Franchise Agreement
will grant you the right to own and operate a single PLANET FITNESS franchise at an agreedupon location. A copy of our current form of Franchise Agreement is attached to this Disclosure
Document as Exhibit “C”.
For an existing fitness training facility converting to a PLANET FITNESS franchise, we
may negotiate with the prospective franchisee to reach mutually acceptable terms of a franchise
agreement. Typically, the existing fitness training facility will have an established location and
may have equipment at the location that we determine to be acceptable to our system standards.
In this instance, the initial investment in an existing location may be less than for a new location
as the staff may require less training, and the costs for any required leasehold improvements or
equipment typically will be less due to the already existing location or existing equipment at the
location. In some cases, the existing fitness training facility will require significant investment to
satisfy our system standards, in which case your initial investment will increase. In some cases
the location of an existing fitness training facility seeking to convert to PLANET FITNESS may
never be approved based on certain factors such as parking or other limitations. Except where
otherwise noted, the disclosures in this Disclosure Document apply to conversion franchises as
well as initial franchises.
Periodically, we may sell and franchise one or more of our company-owned PLANET
FITNESS locations. In these transactions, we negotiate with the prospective franchisee to reach
mutually acceptable terms of a sale agreement and any lease or sublease of the real estate. If you
purchase a company-owned location, you must sign a Franchise Agreement though the terms
may vary from the standards terms of our Franchise Agreement attached to this Disclosure
Document. In addition, from time to time we may jointly own PLANET FITNESS locations
with third parties.
If you qualify, we may grant you area development rights according to the form of Area
Development Agreement included in this Disclosure Document as Exhibit “D” (“Area
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Development Agreement”). You and we may enter into an Area Development Agreement for
the development of a prescribed number of PLANET FITNESS facilities in a designated
geographic area called the “Development Area.” Under an Area Development Agreement, you
must develop multiple PLANET FITNESS facilities in the Development Area within a given
period of time, depending on population of the area, its market potential and other factors
described in Item 12. You must sign a separate, then-current Franchise Agreement for each
PLANET FITNESS facility you open under the Area Development Agreement and will sign the
Franchise Agreement for your first PLANET FITNESS facility at the time you sign the Area
Development Agreement. If (1) you or your affiliates are a party to a prior Franchise Agreement
or Area Development Agreement with us and (2) you want to sign a new Franchise Agreement
with us (not under an existing Area Development Agreement with us) or a new Area
Development Agreement with us, we may require you to sign a general release in the form
attached hereto as Exhibit “H”, releasing any claims arising from your prior agreements, as a
condition of granting new franchise rights or development rights.
The Market and Competition
The services and ancillary merchandise offered by a PLANET FITNESS franchise are
intended primarily for the general public. We have designed our services and ancillary
merchandise to appeal to a health conscious consumer who appreciates a low pressure fitness
environment. You will have to compete with other businesses offering similar products,
including other fitness facilities, gyms, health related establishments, and sports complexes.
Your competition may include other businesses that we or our affiliates may franchise or
operate, as noted in Item 12. The services and ancillary merchandise our franchises sell are well
recognized by consumers and widely available from other sources. The market for our
franchisees’ goods and services is well developed. Typically, our services and ancillary
merchandise are sold to individuals and selling is not seasonal.
The fitness industry is a highly competitive and developed market, which can be affected
significantly by many factors, including changes in local, regional or national economic
conditions, changes in consumer spending, and increases in the number of, and particular
locations of competing facilities. Various factors can adversely affect the fitness industry,
including inflation, increases in labor and energy costs, the availability and cost of suitable sites,
fluctuating interest and insurance rates, state and local regulations and licensing requirements
and the availability of an adequate number of hourly-paid employees. In addition, other fitness
chains with greater financial resources have similar concepts.
License and Permits
You should consider that certain aspects of the fitness industry are regulated by federal,
state and local laws, rules and ordinances. Some states limit the length and terms of your
membership contract, provide customers rights to terminate their contract and require you to
obtain a bond to protect pre-paid membership fees you collect. In some states, you may be
required to escrow or post a bond for any pre-opening membership fees you collect. In some
states, you may be required to post specific notices to your members regarding activities
conducted in your business, including but not limited to tanning. It is your sole responsibility to
investigate these laws, and we recommend that you do so before you sign a Franchise Agreement
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or Area Development Agreement with us. In addition, if you are constructing a new fitness
facility and rely on the proceeds of the membership to build and equip the facility, the offer and
sale of those memberships could be considered the sale of “securities” under those laws and
require registration. You will also need to comply with laws, regulations and ordinances
applicable to businesses generally, like the Americans with Disabilities Act, federal and state
wage and hour laws, and the Occupation, Health and Safety Act. It is your sole responsibility to
comply with all applicable laws and obtain and keep in force all necessary licenses and permits
required by public authorities.
ITEM 2
BUSINESS EXPERIENCE
Christopher J. Rondeau, President and Chief Executive Officer
Christopher Rondeau has served as our President and Chief Executive Officer since
January 2013. Prior to this, Mr. Rondeau served as our Chief Operating Officer since January
2003.
Dorvin Lively, Chief Financial Officer
Dorvin Lively has served as our Chief Financial Officer since July 2013. Mr. Lively
served as Chief Financial Officer, Chief Administrative Officer, and Executive Vice President of
RadioShack Corp. from August 2011 to July 2013 in Fort Worth, Texas. He also served as
Interim Chief Executive Officer of RadioShack Corp. from September 2012 to February 2013 in
Fort Worth, Texas. Mr. Lively served as the Chief Financial Officer and Senior Vice President of
Ace Hardware Corp. from March 2008 to July 2011 in Oak Brook, Illinois.
Richard Moore, Chief Administrative Officer, Secretary, and General Counsel
Richard Moore has served as Chief Administrative Officer, Secretary, and General
Counsel since January 2013. He joined us in July 2012 as General Counsel. From September
2007 to July 2012 Mr. Moore was a lawyer at the law firm of Ropes & Gray LLP, in Boston,
Massachusetts.
Brian Belmont, Executive Vice President of Operations and Development
Brian Belmont has served as our Executive Vice President of Operations and
Development since April 2013. From July 2012 to March 2013, Mr. Belmont was self-employed
as a consultant for various franchise companies in Denver, Colorado. From October 2009 to July
2012, he served as Chief Development Officer, Executive Vice President, and President of
Restaurant Realty at Quizno’s Sub in Denver, Colorado. From May 2009 to October 2009, he
served as the Chief Operating Officer of Triple Crown Investments, an affiliate of Quizno’s Sub,
in Denver Colorado. From June 2008 to May 2009, he served as Chief Operating Officer of
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Camp Bow Wow in Boulder, Colorado. Prior to that, from May 2000 to May 2008, he served in
number operations and development roles at Quizno’s Sub.
William Mulleady, Vice President of Franchising
William Mulleady has served as our Vice President of Franchising since September 2007.
From January 2006 to September 2007 he worked in franchise development for us.
Kevin Fitzgerald, Director of Real Estate and Construction
Kevin Fitzgerald has served as our Director of Real Estate and Construction since
November 2013. From April 2012 to November 2013, he served as a Senior Project Manager
with the international architectural firm of Stan-Tec in Phoenix, Arizona. Prior to Stan-Tec, he
was the Director of Development for McDonalds in Vancouver, British Columbia from October
2010 to March 2012, covering western Canada. From 2005 to September 2010 he served as Vice
President of Development for Quiznos in Denver, Colorado.
Bonnie Monahan, Corporate Treasurer
Bonnie Monahan has served as our Corporate Treasurer since April 2013. From
November 2011 to November 2012 Bonnie served as Chief Financial Officer at Margaritas
Mexican Restaurant Group in Portsmouth, New Hampshire. From November 2006 to November
2011 Bonnie served as the Corporate Treasurer at Dunkin’ Brands, Inc. in Canton,
Massachusetts.
Jamie Medeiros, Vice President of Marketing
Jamie Medeiros has served as our Vice President of Marketing since January 2013. From
January 2009 to May 2010 Jamie served as a Marketing Coordinator. From May 2010 to
January 2013 she served as a Marketing Director.
Dawn Sullivan, Director of Marketing
Dawn Sullivan has served as our Director of Marketing since May 2010. From January
2009 to May 2010 Dawn served as a Marketing Coordinator.
Connor Boyle, Legal Director, Franchise Support
Connor Boyle has served as our Legal Director, Franchise Support since January 2013.
From January 2010 to September 2011 and from September 2012 to December 2012 he was an
associate at the law firm of Ropes & Gray LLP, in Boston, Massachusetts. From September
2011 to September 2012 he clerked for the Honorable Steven J. McAuliffe, Federal District
Court for the District of New Hampshire. From September 2006 to May 2009 he was a law
student at Northeastern University School of Law, in Boston, Massachusetts.
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Lydia Fogarty, Manager of Franchise Finance
Lydia Fogarty has been our Manager of Franchise Finance since April 2012. From June
2010 through March 2012, Ms. Fogarty was our Human Resource Manager. From August 2005
through January 2010, Ms. Fogarty worked in the finance division at Direct Capital Corporation
in Portsmouth, New Hampshire.
Candace Couture, Franchise Sales Manager
Candace Couture has been our Franchise Sales Manager since June 2013. She joined
Planet Fitness in 1999. From June 2006 to June 2013, she was our Director of Franchise
Admissions.
Brian Kunkel, Manager, East
Brian Kunkel has served as our Manager for the East region since June 2013. He joined
Planet Fitness in 2009. From May 2009 to June 2013, he served as our Director of Real Estate.
From June 2008 through May 2009, Mr. Kunkel worked in Portsmouth, New Hampshire as an
Advisor with the national commercial real estate services firm Grubb & Ellis.
Mike Mullen, Brand Excellence Manager
Mike Mullen has served as our Brand Excellence Manager since May 2010. From
January 2009 to May 2010 he served as a club manager.
Chris Holmes, Northeast Regional Operations Manager
Chris Holmes has served as our Northeast Regional Operations Manager since
June 2013. From January 2009 to July 2011 Chris served as a club manager. From July 2011 to
June 2013 he served as a Regional Manager for Corporate Clubs.
Lisa Cote, West Operations Manager
Lisa Cote has served as our West Regional Operations Manager since June 2013.
From January 2009 to May 2009 she served as a club manager. From May 2009 to June 2013
she served as a Franchise Development Manager.
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ITEM 3
LITIGATION
Pending matters:
1. World Gym, Inc. et al. v. Pla-Fit Franchise, LLC et al., Civil Action No. 1:12-cv11620-DJC, United States District Court for the District of Massachusetts. On
August 30, 2012, Massachusetts-based franchisees, World Gym, Inc. and Patricko,
Inc. (“Plaintiffs”) filed a civil complaint against Pla-Fit Franchise, LLC and Twin
Oaks Software Development, Inc. (“Twin Oaks”), an unaffiliated software company
that processes billing files for health and fitness clubs. The Plaintiffs alleged claims
against Pla-Fit Franchise, LLC for intentional misrepresentation, negligent
misrepresentation, breach of contract, breach of the covenant of good faith and fair
dealing, conversion, and for unfair and deceptive practices under the Massachusetts’
consumer protection law (collectively, “Claims”). In July 2013, the federal court
dismissed the complaint and ordered that Plaintiffs bring separate arbitrations against
Pla-Fit Franchise for the claims they asserted in the lawsuit if they wished to further
pursue those claims. Plaintiffs sought reconsideration of the court’s decision, and in
December 2013 the federal court again ordered them to arbitrate. To date, Plaintiffs
have not filed an arbitration. This matter is related to the matter that follows as no. 2
below.
2. Pla-Fit Franchise, LLC v. World Gym, Inc. et al, Civil Action No. 1:13-cv-00489-PB,
United States District Court for the District of New Hampshire. In December 2013,
we terminated the franchise rights of World Gym, Inc. and Patricko, Inc. which
operated Planet Fitness facilities in Tewksbury and Somerville, Massachusetts. We
subsequently sought an injunction to enforce the post-termination provisions of the
franchise agreements and protect our trademarks.
The former franchisees
counterclaimed in January 2014, asserting the same claims they asserted in the
litigation they instituted in 2012 in Massachusetts (see disclosure no. 1 above), and an
additional claim for wrongful termination of their franchises. As of the date of this
Franchise Disclosure Document, our motion to compel the former franchisees to
arbitrate their counterclaim is pending before the court.
3. Conway v. Planet Fitness Holdings, LLC et al., Civil Action No. 2013-756, Superior
Court, Essex County, Massachusetts. On May 10, 2013, our former CFO, Jayne
Conway (“Conway”), filed a civil complaint for an unspecified sum against us and
our parent, Planet Fitness Holdings, LLC (collectively, “Planet Fitness”), and certain
owners and officers of Planet Fitness, including Michael Grondahl (individually, and
as a trustee of the Michael A. Grondahl Revocable Trust of 2006), Marc Grondahl
(individually, and as a trustee of the Marc Grondahl Revocable Trust of 2006),
Christopher Rondeau (individually, and as a trustee of the Christopher J. Rondeau
Revocable Trust of 2006), and Richard Moore (collectively, “Defendants”). In her
Complaint, Conway alleges that Defendants withheld information, and/or made
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misrepresentations to her, about the status and value of her ownership interests in
Planet Fitness in the course of negotiating and finalizing her separation and settlement
agreement with Planet Fitness. Conway seeks a declaration that she owned certain
stock interests at the time of the 2012 acquisition by TSG PF Investments, LLC, and
asks the court to impose a constructive trust over the unspecified sums she believes
she is owed. In addition, Conway asserts claims for fraud, violation of the New
Hampshire Uniform Securities Act, negligent misrepresentation, breach of fiduciary
duties and unjust enrichment. Defendants have filed a motion to dismiss. As of the
date of this Franchise Disclosure Document, Defendants’ motion to dismiss is
pending before the court. Defendants intend to vigorously defend this matter.
Concluded matters:
1.
In October 2008 and March 2009, the franchisor and various affiliated parties
were named respondents and defendants in the following two related litigation matters (the
“Related Litigation Matters”):
MAXR, LLC et al. v. Pla-Fit Franchise, LLC, et al., American Arbitration Association
(Case No. 11-114-Y-02112-08, Boston, MA, filed October 31, 2008) (the “MAXR
Arbitration”). On October 31, 2008, the plaintiffs and former Maryland-based franchisees of
ours, MAXR, LLC, and HD Fit, Inc., and their common owners Diana Hamilton-Dutt and Hans
Dutt (“Claimants”), filed a demand for arbitration (“Demand”) against Pla-Fit Franchise, LLC
and PFIP, LLC, seeking $10 million in compensatory damages, rescission of the Franchise
Agreements, dissolution of applicable non-competition agreements, and other unspecified
damages. In the Demand, Claimants alleged claims for fraudulent misrepresentation, negligent
misrepresentation, breach of contract, promissory estoppel, unjust enrichment, breach of the
covenant of good faith and fair dealing, unfair competition, violation of New Hampshire
consumer protection law, tortious interference with contractual relations and prospective
economic advantage, defamation, civil conspiracy, violation of the Sherman Act, and violation of
the Maryland and New Hampshire antitrust laws (“Claims”). We denied the Claims and
vigorously defended against them. In an effort to end the arbitration and without admitting any
wrongdoing, we reached a settlement with the plaintiffs in November 2009. The terms of the
settlement agreement related to the MAXR Arbitration are described below under “Global
Settlement Agreement.”
HD Fit, Inc. et al. v. Pla-Fit Franchise, LLC et al., Civil Action No. 13-C-09-76764,
Circuit Court for Howard County, Maryland (filed March 16, 2009) (the “HD Fit Litigation”).
On March 16, 2009, Maryland-based franchisees, HD-Fit, Inc., MAXR, LLC, and their common
owners Diana Hamilton-Dutt and Hans Dutt (“Plaintiffs”), filed a civil complaint (“Complaint”)
against Pla-Fit Franchise, LLC, PFIP, LLC, Pla-Fit Health, LLC, Christopher J. Rondeau,
Michael Grondahl, Ben Midgely, Joseph Freschi, and Candace Talon (“Franchisor Parties” or
“we”), as well as an existing Planet Fitness® franchisee, the franchisee’s affiliated entity and the
entities’ common owners (Brick Bodies, Inc., Brick Bodies Fitness Services, Inc., C. Victor
Brick and Lynne G. Brick, collectively “Brick Parties”). As to the Franchisor Parties, the
Plaintiffs alleged that we violated the Maryland Franchise Registration and Disclosure Law (the
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“Maryland Act”) for (1) allegedly offering a franchise to Plaintiffs prior to registering its
franchise with the Maryland Securities Commissioner, and (2) allegedly making untrue or
misleading statements to Plaintiffs concerning aspects of the parties’ contractual relationship,
including exclusive territories, expansion opportunities, enforcement of contractual noncompetition covenants and relocation rights (collectively “Claims”). Plaintiffs sought $10
million in compensatory damages, dissolution of the applicable non-competition agreements in
the Franchise Agreements, reasonable attorneys’ fees and other unspecified damages against the
Franchisor Parties. We denied the Claims and vigorously defended against them. In an effort to
end the arbitration and without admitting any wrongdoing, we reached a settlement with the
plaintiffs in November 2009. The terms of the settlement agreement related to the HD Fit
Litigation are described below under “Global Settlement Agreement.”
The Global Settlement Agreement: In November 2009, the parties to the MAXR
Arbitration and HD Fit Litigation reached a global settlement of all claims involved in the
Related Litigation Matters and executed a single settlement agreement (the “Global Settlement
Agreement”). Pursuant to the Global Settlement Agreement, and in addition to other nonmaterial terms, Pla-Fit Franchise, LLC agreed to: (1) pay $50,000 to the MAXR Arbitration
claimants (“MAXR Claimants”) and $50,000 to the HD Fit Litigation plaintiffs (“HD
Plaintiffs”); (2) claim no proprietary interest in the membership lists or members of the MAXR
Claimants or HD Plaintiffs; and (3) waive the right to enforce all post-termination non-compete
obligations and rights to purchase the former franchised locations as set forth in the applicable
franchise agreement. In exchange, the MAXR Claimants and HD Plaintiffs agreed to de-brand
their former PLANET FITNESS locations by February 28, 2010 and cease all use of the
PLANET FITNESS Marks and Confidential Information. The Global Settlement Agreement
further provided that the MAXR Claimants’ and HD Plaintiffs’ underlying franchise agreement
with Pla-Fit Franchise, LLC would be terminated immediately, with full mutual releases
exchanged between the MAXR Claimants and HD Plaintiffs (on the one hand) and the
Franchisor Parties on the other hand.
2.
From December 2011 through August 2012, Pla-Fit Franchise, LLC, its principals
Michael Grondahl, Marc Grondahl and Chris Rondeau and certain of its affiliates were involved
in multiple disputes with Jeffrey Innocenti, James Innocenti and Luigi LaVerghetta (referred to
as “PFNY claims”). The Grondahls and Rondeau, and the Innocentis and LaVerghetta, were
members of PFNY, LLC, the owner and operator through subsidiary entities of approximately 45
Planet Fitness franchises in the greater New York metropolitan area. The PFNY claims resulted
in the litigation and arbitration actions described below. In August 2012, as part of a
comprehensive settlement agreement among all parties, the PFNY claims were resolved and the
below-described actions ended. The specific actions were as follows:
Michael Grondahl, Marc Grondahl and Chris Rondeau v. Jeffrey Innocenti, Luigi
LaVerghetta and James Innocenti, United States District Court for the District of New
Hampshire, Case No. 11-cv-00591-SM. In this December 2011 action, the Grondahls and
Rondeau alleged that the Innocentis and LaVerghetta had breached duties owing to them as comembers of PFNY, LLC. In this action, the Innocentis and LaVerghetta filed a motion to
compel arbitration against the Grondahls and Rondeau, and Pla-Fit Health, LLC and Pla-Fit
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PLANET FITNESS®
Holdings, LLC. This action was dismissed with prejudice as part of the parties’ comprehensive
settlement agreement.
Jeffrey Innocenti, James Innocenti and Luigi LaVerghetta and Michael Grondahl, Marc
Grondahl and Chris Rondeau, American Arbitration Association, Case No. 11 180 00547 12. In
this March 2012 action, the Innocentis and LaVerghetta asserted that the claims that the
Grondahls and Rondeau had asserted in the litigation described in the preceding paragraph raised
questions under the PFNY, LLC operating agreement which were subject to mandatory
arbitration. This action was dismissed with prejudice as part of the parties’ comprehensive
settlement agreement.
Pla-Fit Franchise, LLC v. Pelham Bay Fitness Group, LLC, Superior Court, Case No.
218-20120CV-00453, Rockingham County, New Hampshire. In this April 2012 action, Pla-Fit
Franchise, LLC sued each franchise operated by the PFNY, LLC to enforce its rights to audit the
franchise’s operations. This action was dismissed with prejudice as part of the parties’
comprehensive settlement agreement.
The Comprehensive Settlement Agreement: On August 10, 2012, as part of a
comprehensive settlement agreement, the parties to these disputes, on their own behalf and on
behalf of certain of their affiliates, agreed in summary that PFNY, LLC would redeem the
Grondahls’ and Rondeau’s membership interests; that PFNY, LLC and the Innocentis and
LaVerghetta would pay the Grondahls and Rondeau $2,250,000 over two (2) years; that certain
Area Development Agreements between PFNY, LLC and Pla-Fit Franchise, LLC would be
cancelled; that approximately ten (10) Planet Fitness franchises owned by PFNY, LLC would be
transferred to the Grondahls and Rondeau or their designee; that franchise agreements for all
other Planet Fitness franchises owned by PFNY, LLC would be amended to provide, inter alia,
for higher royalty fees; and that the Innocentis and LaVerghetta would execute a new Area
Development Agreement for a smaller geographic area than covered by the cancelled Area
Development Agreements.
Other than these 8 actions, no litigation is required to be disclosed in this Item.
ITEM 4
BANKRUPTCY
No bankruptcy information is required to be disclosed in this Item.
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ITEM 5
INITIAL FEES
You will pay a lump-sum nonrefundable Initial Franchise Fee in the amount of $10,000
when you sign the Franchise Agreement. The Initial Franchise Fee is uniform and nonrefundable.
If you acquire rights under our Area Development Program, you will pay an Area
Development Fee equal to $10,000 per location to be developed under the Area Development
Agreement when you sign the Area Development Agreement. This Area Development Fee is in
addition to the then-current Initial Franchise Fee due for each location at the time the Franchise
Agreement for that location is executed. You must commit to opening multiple PLANET
FITNESS locations as a condition of acquiring area development rights, either yourself or
through one or more entities in which you own 51% or more interest.
The Area Development Fee is fully earned by us on receipt and is not refundable in
whole or in part. In 2013, we collected Area Development Fees that ranged from $10,000 to
$390,000.
We reserve the right to alter the Initial Franchise Fee and Area Development Fee
periodically as business circumstances warrant.
We may require you to reimburse us for our reasonable expenses, including the costs of
travel, lodging and food incurred in site evaluation for each visit we make at your request. We
estimate our reasonable expenses related to site selection will range from $1,000 to $3,000. If
we require you to pay these expenses, the amounts are nonrefundable.
We encourage you use our designated architect to prepare all architectural plans and
drawings (together with project management plans, the “Construction Development Plans”) for
your PLANET FITNESS location. You must submit all Construction Development Plans,
including design specifications, to us for our approval before starting to develop the Location. In
the event that you do not use our designated architect to prepare all architectural plans and
drawings for the location, you must pay us a $1,750 Construction Development Plan review fee
at the time that you submit the Construction Development Plans for our approval.
You currently must lease or purchase fitness equipment from our affiliate PF Equipment
prior to opening your business. We estimate the cost of a down payment to be 10 - 30% of the
total amount financed; the down payment typically ranges between $37,300 and $261,000. The
lease costs are non-refundable. We estimate the cost to purchase equipment prior to opening will
range from $373,200 to $870,000.
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PLANET FITNESS®
Periodically, we may sell or franchise one of our company-owned PLANET FITNESS
locations. In these transactions, we will negotiate with the prospective franchisee to reach
mutually acceptable terms of a sale agreement and any lease or sublease of the real estate.
Depending on the circumstances, the financial and other terms may vary from the standard terms
of our Franchise Agreement.
ITEM 6
OTHER FEES
Type of Fee
Royalty
(See Note 2)
Interest
Internet
Membership and
Balance Payment
Administration
Fee
Refresher
Training
Workshops
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Amount
5% of the total gross
monthly and annual
membership fees
payable to you via EFT
Dues Draft (as described
in Note 2)
Will vary under the
circumstances
Due Date
Remarks
(Note 1)
Paid monthly and
annually
When underlying
obligation is paid
(See Note 3)
Paid monthly
18% (annualized) or the highest
contract rate of interest permitted by
law, whichever is lower.
Paid to us for establishing customer
memberships and providing balance
payment options for your franchise
location through applications
submitted to the PLANET
FITNESS Internet web site.
Set according to our
Methods of Operation,
presently $5 per
membership application
or balance payment we
process for your
franchise location
$500 to $1,500. Will
As we and you agree Payable for any refresher training
vary under the
courses for previously trained
circumstances.
employees that we may require or
training for new employees as you
may request. The cost of refresher
training varies based on the number
of people trained and the length of
the training. Refresher training is
held at our headquarters or a
predetermined location. You are
responsible for your travel, food and
lodging expenses incurred in
connection with any refresher
training. See Item 11 for more
information on Training.
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PLANET FITNESS®
Type of Fee
Remarks
(Note 1)
Per Diem Fee
$100 to $1,000. Will
As we and you agree You must pay Per Diem Fees in
vary under the
connection with additional or special
circumstances.
training for your employees that you
request. The amount of the Per
Diem Fee varies based on the
number of people trained, and the
length and location of the training.
You are also responsible for travel,
food, and lodging expenses for our
personnel. See Item 11 for more
information on Training.
Re-Equip Costs
$250,000 to $ $760,000 As incurred
You must maintain your fitness
equipment according to our system
standards. This includes replacing
your cardio equipment every four
years, and replacing your non-cardio
equipment every six years. (See
Note 4)
Remodel Costs
$75,000 to $550,000
As incurred
You must maintain the franchise
premises according to our system
standards. This may include
substantial remodeling of your
premises as frequently as every four
years.
(See Note 5)
Fees to Evaluate Our reasonable costs and Upon receipt of our See Item 8 for more information on
and Approve
expenses, which
bill
approved suppliers.
Alternative
currently are expected to
Suppliers
range between $1,500
and $5,000, although
costs could greatly
exceed those amounts
depending on the
product
Insurance
Will vary under the
As incurred
If you fail to obtain the required
circumstances;
insurance coverage for the franchise,
estimated insurance
we may obtain coverage for you at
premiums for your first
your expense.
year is $10,000 to
$15,000
National
2% of the total gross
When the Royalty is See Item 11 for more information on
Advertising
monthly EFT Dues
paid
advertising.
Fund Fee
Draft.
Local Advertising Greater of $5,000 per
Expended monthly
Paid by you to advertisers. See Item
Fee
month or 7% of the total according to our
11 for more information on
gross monthly EFT Dues Methods of
advertising.
Draft
Operation as per your
advertising budget
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Amount
Due Date
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PLANET FITNESS®
Type of Fee
Amount
Due Date
Special Marketing Varies, maximum of 9% Upon demand
Programs
total gross monthly EFT
Dues Draft
Auditing Costs
Our actual costs, which After inspection or
may range from $3,000 audit
to $15,000
Franchise
Agreement
Transfer Fee
Relocation Fee
$25,000. If the transfer
is part of a larger
transaction involving or
affecting multiple
franchised locations,
then the greater of (a)
$25,000 or (b) $10,000
per franchise.
$5,000
Construction
$1,750
Development Plan
Review Fee
Successor
Franchise Fee
Indemnification
Our then-current initial
franchise fee; provided
that the fee will not
exceed $20,000.
Will vary under
circumstances
Prior to or
concurrently with
transfer
Prior to relocation.
Upon your
submission of your
Construction
Development Plans
for our approval.
Concurrently with
our granting a
successor franchise to
you
As incurred
Costs and
Attorney’s Fees
Actual costs
Reimbursement of
our actual costs
Inspection &
Compliance
Reimbursement
Actual costs
(approximately $1,200)
Upon demand
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Remarks
(Note 1)
Paid to us or third parties. The price
you pay for Special Marketing
Programs may be more than cost.
You must reimburse us for our
auditing costs if we have to audit
you because you fail timely to
provide us with required reports.
Paid to us in the event you want to
transfer the franchise. There is no
charge if a transfer does not involve
a change in control.
Paid to us in the event you want to
move the location of your franchise.
See Item 11 for additional
information on relocation
requirements.
Paid to us in the event that you do
not use our designated architect
during development of your
franchise. (See Note 6)
Upon expiration of the term of the
Franchise Agreement, we may grant
you a successor franchise subject to
certain conditions.
You must reimburse us if we are
held liable for claims arising out of
your franchise operations.
Payable if we prevail in any legal
dispute with you. You’ll reimburse
us for accounting, attorneys’,
arbitrators’ and related fees and costs
incurred by us.
You will reimburse us for our actual
costs if, after an inspection of your
facility, we determine (in our
business judgment) that additional
follow-up inspections or assessments
are required.
PLANET FITNESS®
Type of Fee
Amount
Due Date
Cure Period
Extension Fee
(Franchise
Agreement)
2% of the total gross
EFT Dues Draft
Paid monthly on the
day designated as
your Monthly
Membership Billing
Day, as defined in
our Franchise
Agreement
Extension Fee
(Area
Development
Agreement)
Variable
As arranged
Remarks
(Note 1)
Payable only if you fail to cure a
default within the applicable cure
period and we agree to extend your
cure period, which we may or may
not do in our business judgment.
The Extension Fee is in addition to
all regular ongoing fees you must
pay under the Franchise Agreement.
Payable only if you fail to open your
business in accordance with the
applicable Franchise
Agreement/Area Development
Agreement and we grant your
request for an extension. It is our
right, but not our obligation, to grant
you an extension. If we grant an
extension, you must pay estimated
daily Royalty and National
Marketing Fund Fees from the date
you were scheduled to open,
according to the Franchise
Agreement or Area Development
Agreement. The estimated Royalty
and National Marketing Fund Fees
will be based on the average daily
EFT Dues Draft of all franchised
businesses in the system during the
previous fiscal year, up to a
maximum of $375 per day.
Notes:
Note 1
Unless otherwise noted, all fees are uniformly imposed, are payable to us and are
not refundable. With the exception of the Re-Equip Costs and the Extension Fees,
all of the above fees are payable by automatic electronic funds withdrawal from
your designated bank account.
Note 2
Your Royalty payment is currently based on the total gross monthly and annual
membership fees for the PLANET FITNESS business that are due and payable
to you each month and annually, as applicable, from your members through
authorized EFT withdrawals (the “EFT Dues Draft”), regardless of the amount of
membership fees you actually collect. The term “total gross monthly and annual
membership fees” means the total amount of such fees due and payable to you from
your members, exclusive of any federal, state or local tax deductions or offsets.
Members generally will pay membership fees by automatic withdrawal from a
bank account, credit card or debit card, or other means of payment. We reserve
the right, on 60 days’ prior notice to you, to calculate the Royalty with reference
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PLANET FITNESS®
to the Total Net Membership Revenues of the Business. As more fully defined in
the Franchise Agreement, the term “Total Net Membership Revenues” means the
total receipts from all membership fees that you receive.
You will pay all state and local taxes, including, without limitation, taxes
denominated as income or franchise taxes, that may be imposed on us as a result
of our receipt or accrual of the Initial Franchise Fee, Area Development Fee,
advertising fees, Extension Fee, and other fees that are referenced in the Franchise
Agreement and Area Development Agreement, whether assessed against you
through withholding or other means or whether paid by us directly. In either case,
you will pay to us (and to the appropriate governmental authority) such additional
amounts as are necessary to provide us, after taking such taxes into account
(including any additional taxes imposed on such additional amounts), with the
same amounts that we would have received or accrued had such withholding or
other payment, whether by you or by us, not been required. However, if the state
where your PLANET FITNESS business is located imposes any such tax, we
will reimburse you for the amount of the tax paid by you the first year such tax
goes into effect.
Note 3
Interest begins from the date any payment is due.
Note 4
You must periodically re-equip your facilities pursuant to our plans and
specifications as we deem necessary upon inspection. At a minimum, you must
replace and update all cardio equipment every four (4) years, and all other
exercise equipment every six (6) years. We estimate the costs to re-equip your
facility will range from $250,000 to $760,000 every four to six years. This is only
an estimate. Your actual costs may be higher or lower depending on the size of
your PLANET FITNESS business, the volume and usage of your members, or
changes in the market. We will advise you six months prior to requiring any
substantial replacement of your cardio equipment or of your other exercise
equipment. If the general state of repair, appearance or cleanliness of your
franchise, or its fixtures, equipment, furniture, or signs does not meet our
standards and if, after notice, you fail or refuse to initiate or maintain a program to
complete the required maintenance, we have the right to enter the franchise
location and do the maintenance on your behalf and at your expense.
Note 5
You must periodically upgrade and/or remodel your physical premises as we
deem necessary upon inspection, or otherwise require. However, with the
exception of signage, we will not require substantial remodeling more often than
every four (4) years during the term of the franchise agreement. We estimate the
costs to upgrade and/or remodel your facility will range from $75,000 to $550,000
every four years. Your actual costs may be higher or lower depending on the size
and location of your PLANET FITNESS business. We will advise you six
months prior to requiring any substantial remodeling. If the general state of
repair, appearance or cleanliness of your franchise, or its fixtures, equipment,
furniture, or signs does not meet our standards and if, after notice, you fail or
refuse to initiate or maintain a program to complete the required maintenance, we
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PLANET FITNESS®
have the right to enter the franchise location and do the maintenance on your
behalf and at your expense.
Note 6
We reserve the right to require that you use our designated architect to prepare all
architectural plans and drawings (together with project management plans,
“Construction Development Plans”) for the PLANET FITNESS business. You
must submit all Construction Development Plans, including design specifications,
to us for our approval before starting to develop the Location. All final
Construction Development Plans are subject to our approval. In the event that you
do not use our designated architect to prepare all architectural plans and drawings
for the BUSINESS, you must pay a $1,750 Construction Development Plan
review fee.
ITEM 7
ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
Type of Expenditure
Amount
Initial Franchise Fee $10,000
(See Note 1)
Method of
Payment
Lump sum
Site Selection Costs
(See Note 2)
Leasehold
Improvements
(See Note 3)
Fitness Equipment
(See Note 4)
Non-Fitness
Equipment
(See Note 4)
Pre-Sale Marketing
(See Note 5)
$1,000 - $3,000
Lump sum
$450,000 $1,825,000
Varies
Exterior Signs
$15,000 - $30,000 Varies
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Varies
$6,600-$335,000
Varies
Varies
$30,000
Varies
As incurred
DD-17
To Whom Payment is
to be Made
Us
Us
Before commencing Approved suppliers or
operations
per specifications
$37,300-$870,000 Varies
Computer System,
$10,000 - $17,000 Varies
Point of Sale System,
and other Supplies
(See Note 6)
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When Due
When you sign the
Franchise
Agreement
As incurred
Your Lender; Approved
Suppliers; Our Affiliate
Your Lender; Approved
Suppliers; Our Affiliate
Paid to various media
companies and other
third parties to promote
the opening of your
business (See Note 5)
Before commencing Approved sign supplier
operations
Varies
Approved suppliers or
per specifications
PLANET FITNESS®
Method of
Type of Expenditure
Amount
Payment
Insurance
$10,000 -$15,000 Lump sum
payment of
first year
premium for
one location
Real Estate
$0- $57,000
Lump sum
Lease Deposits
(See Note 7)
Other Deposits
$700 - $11,000
Lump sum
(See Note 8)
When you engage
the service
Professional Fees
$2,000 - $25,000 Varies
Varies
Your Out-of-Pocket
Initial Training
Expenses
Licenses/Bonds
(See Note 9)
$1,500 - $6,500
Varies
Varies
$100 - $2,500
Lump sum on Prior to
application
commencing
operations
Varies
Varies
Operating Cash
$250,000 (Additional Funds
$488,000
Pre-Opening and first
six months)
(See Note 10)
Total
(See Note 11)
When Due
Prior to
commencing
operations
To Whom Payment is
to be Made
Insurance companies
When you sign your Landlord
lease
Utilities, banks/credit
card companies, leased
equipment vendors,
alarm company,
telephone company
Accountants, lawyers,
etc.
Airfare, ground
transportation, meals,
lodging, etc.
Government agencies
and bonding companies
Payroll, debt services,
ongoing pre-sale
marketing, and cash to
cover miscellaneous
day-to-day expenses
$824,200$3,725,000
Except as described in Note 10 (Operating Cash/Additional Funds), the expenses in this Item 7
chart are estimates of your initial investment in one location prior to commencing operations. We
cannot guarantee that you will not have additional expenses starting the business. Your costs will
depend on how closely you follow the PLANET FITNESS system standards, your management
skill, experience and business acumen, local economic conditions, the acceptance by local
consumers of our approved services, prevailing wage rates, real estate conditions, competition,
etc. The estimates for a conversion facility may vary from the estimates in the chart depending
on the modifications and equipment required to meet our system standards. Unless otherwise
noted, all fees payable to us or our affiliates are non-refundable.
Notes:
Note 1:
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See Item 5 for more information on the Initial Franchise Fee. If you sign an Area
Development Agreement, you must commit to opening multiple PLANET
FITNESS locations, and you will pay an Area Development Fee of $10,000 per
planned location at the time you sign the Area Development Agreement. This
Area Development Fee is in addition to the then-current Initial Franchise Fee for
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PLANET FITNESS®
each location that you pay at the time you sign each franchise agreement. See
Item 5 for more information on the Area Development Fee.
Note 2:
We may require you to reimburse us for our reasonable expenses, including the
costs of travel, lodging and food, incurred in site evaluation for each visit we
make at your request.
Note 3:
Your leasehold improvement costs may be significantly less if, for example, your
landlord provides you with a tenant improvement allowance. Depending on
location, desirability of the landlord to rent the property, and other factors, tenant
improvement allowances can range from $0 to $600,000. The estimated initial
investment does not include real estate beyond the initial lease deposit. We do
not require you to acquire real estate. PLANET FITNESS businesses typically
are located in strip centers, malls, and free standing locations. Although we do not
typically recommend building your own building in which to operate your
PLANET FITNESS franchise, in certain instances franchisees that are familiar
with the PLANET FITNESS model have decided to build their own building.
Building your own building may increase the cost significantly. For example, in
2013 an existing franchisee chose to build his own building and the total cost was
slightly over $2,000,000. The cost of purchasing or leasing and developing a site
for a PLANET FITNESS franchise will vary considerably depending the
location, size, local real estate market and other factors and will depend upon
whether you are converting an existing fitness facility to a franchise or are
opening a new location. Typically, you will need to lease a building of
approximately 15,000 to 24,000 square feet and pay the cost of site work and/or
leasehold improvements.
Note 4:
You must purchase or finance the fitness equipment and other non-fitness
equipment (such as televisions, tanning beds, trusses, lockers, interior signage,
flooring, fans, and the like) for your location through our approved
supplier. Typically, you will finance the equipment and you are responsible for
providing financing. We estimate that the cost to make down payments on
financed fitness equipment for a new location generally ranges between $37,300
and $261,000. If you choose to purchase rather than finance the required
equipment for your location, the cost to purchase the equipment will generally
range between $373,200 and $870,000. In addition, we estimate that your cost to
make down payments on non-fitness equipment generally ranges between $6,600
and $100,500 with the total estimated cost to purchase the non-fitness equipment
ranging between $66,000 and $335,000. The amount of your down payment on
equipment that you finance, as well as the purchase price of the equipment
(should you choose not to finance), may vary depending on the size of your
location and your financing terms. If you are converting an existing facility to a
PLANET FITNESS franchise, the cost of the equipment may be less depending
on whether the existing equipment (both fitness and non-fitness equipment) meets
our standards.
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PLANET FITNESS®
Note 5:
The stated amount is an estimate of the amount you will spend on pre-sale
marketing prior to commencing operations. The pre-sale marketing period
typically begins no less than 45 days immediately preceding the date that you
commence regular operations at your PLANET FITNESS location, and it may be
as long as 180 days thereafter (“Pre-Sale Marketing Period”). We will determine
the length and start date of the Pre-Sale Marketing Period based upon the location
of the BUSINESS, demographics and other factors. Presale marketing expenses
will include a variety of marketing, public relations programs, media and
advertising materials that we approve. You will conduct your pre-opening
marketing efforts from a temporary facility located at or near the site of your
future PLANET FITNESS location, as described in Operations Manual. We
must grant our acceptance of the proposed physical location of your pre-opening
marketing temporary facility. In addition to other standards that we specify in the
Operations Manual and as we otherwise may direct in writing, the temporary
facility must be clean and in good repair, provide you with good visibility to the
public, and display the marks in the form and manner we specify. Possible
temporary facilities include, among other things, small retail space or a trailer that
is used solely for presale marketing efforts and satisfies the above criteria. Your
temporary facility for pre-opening marketing cannot be your home or a residence
of any kind.
Note 6:
You must purchase or lease your Visionary Point of Sale (“POS”) software and
hardware (“Visionary Kit”) from Retail Control Systems (“RCS”), as described in
Item 11and/or other third-party vendors or us as we may require as set forth in the
Methods of Operations.
Note 7:
The cost of leasing a site for a PLANET FITNESS franchise will vary
considerably depending, among other things, upon the location, size, local real
estate market and other factors. As noted in Note 4 above, you will typically need
to lease a building of approximately 15,000 to 24,000 square feet. The amount of
your deposit is heavily dependent on your negotiations with your landlord.
Note 8:
This estimate is based on the deposits typically paid by our corporate locations.
We do not collect this information from our franchisees. Your costs may be
lower or higher depending on the size of your PLANET FITNESS location, local
market conditions, your business acumen, and various other factors.
Note 9:
The cost of the licenses and bonds you must acquire may vary significantly
depending on the laws that apply in your jurisdiction.
Note 10:
This estimate includes working capital prior to opening your PLANET FITNESS
location and for the first 6 months after you commence regular operations and is
calculated based on the operation of our corporate clubs. You will incur additional
expenses after the initial period. These figures are estimates based on our and our
affiliates’ experience, and your experience may vary depending on whether you
finance tenant improvements, your location, and other factors. You may need
additional operating capital, or you may need it for a longer period of time. We
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PLANET FITNESS®
cannot assure you that you will not have additional expenses in starting your
franchise location.
Note 11:
This is an estimate of your initial investment and is based on our estimate of
average costs and market conditions prevailing as of the date of this Disclosure
Document and is based on our and our affiliates’ experience. We do not permit
franchisees to borrow more than 80% of the initial investment for their PLANET
FITNESS business. You should review this amount carefully with a business
advisor before making any decision to purchase the franchise. You are cautioned
to allow for inflation, discretionary expenditures, fluctuating interest rates and
other costs of financing and the local market conditions, which can be highly
variable and can result in substantial, rapid and unpredictable increases in costs.
You must bear any deviation or escalation in costs from the estimates in this Item
7 or estimates we give you in any phase of the development process.
Except as otherwise noted, none of these payments are refundable. These payments are
only estimates and your costs may be higher, depending on your particular circumstances. You
should review these figures carefully with a business advisor, accountant or attorney before
making any decision to purchase a franchise. We do not offer any financing for your initial
investment or any other items. The availability and terms of financing with third-party lenders
will depend on the availability of financing generally, your credit-worthiness, policies of lending
institutions concerning the type of business to be operated and other similar factors. If you
purchase a company-owned PLANET FITNESS location, the financial and other terms may
vary from the standard terms of our Franchise Agreement.
Estimated Initial Investment for a Conversion or Company-Owned Location.
If you operate an existing fitness facility converting to a PLANET FITNESS franchise,
your initial investment typically will be less than the initial investment for a new location, as you
may not have to make significant leasehold improvements to your location and you may already
have fitness equipment that conforms to our system standards. In some cases, the existing fitness
training facility will require significant investment to satisfy our system standards, in which case
your initial investment will increase. In addition, if you purchase an existing company-owned
PLANET FITNESS location, you may have to make a greater or smaller investment than the
estimated initial investment shown above depending on the circumstances, including but not
limited to the condition of the facility. The price and terms of payment for these PLANET
FITNESS locations will be established by mutual agreement. Any mutual agreement will be
incorporated into the Franchise Agreement or other related purchase agreements for the
Location.
Estimated Initial Investment Under an Area Development Agreement.
If you sign an Area Development Agreement, you must commit to opening multiple
PLANET FITNESS locations in a Development Area. You will pay an Area Development Fee
equal to $10,000 per planned location. The Area Development Fee is in addition to the Initial
Franchise Fee for each location you open under the Area Development Agreement. The balance
of your initial investment requirements for your first PLANET FITNESS franchise is described
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PLANET FITNESS®
in the above table. You will incur additional costs and expenses during the term of the Area
Development Agreement as you open the remaining number of PLANET FITNESS franchises
required under the Area Development Agreement. Those additional costs of development may
increase over the term of the Area Development Agreement based on inflation and other
economic factors.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
To ensure that high and uniform standards of service and quality are maintained in all
PLANET FITNESS businesses, you must operate your PLANET FITNESS franchise in
conformity with our methods, standards and specifications and you must purchase services,
supplies, fixtures, equipment, merchandise, goods, and inventory only from suppliers we have
approved. Although you are not required to purchase or lease real estate from us or our
affiliates, we must approve your Location (See Item 11). If you lease the premises, the lease
must contain the Franchisor Lease Provisions, a copy of which is included as Appendix F to the
Franchise Agreement. You must improve and equip the Location in accordance with our thencurrent approved design, specifications and standards. In addition to meeting our design
specifications, it is your responsibility to comply with the American with Disabilities Act and all
other federal, state and local laws.
The Franchise Agreement authorizes you to use the Marks only in the operation of your
PLANET FITNESS business and only in connection with the products and services specified by
us in writing. The purpose of this requirement is to ensure that all franchisees adhere to the
uniformity and quality standards associated with PLANET FITNESS businesses.
The fitness equipment, displays, merchandise, uniforms and other products or supplies
for your facility must be purchased from us, our approved suppliers or according to our
specifications. Approved suppliers and specifications are set forth in our Operations Manual (as
described in Item 11) and can be accessed electronically through our franchise management
system (“Franchise Management”). Approved suppliers and specifications are determined based
on the current needs for operating the franchised business. We evaluate approved suppliers based
on price, service, quality, whether commissions are offered and other commercially reasonable
benchmarks. The identity of approved suppliers and these specifications may be updated
periodically in writing by modifying the appropriate pages of the Operations Manual or
otherwise communicating the modification to our franchisees in writing, email being sufficient.
In addition, if you purchase or lease real estate for your facility through certain brokers and/or
brokerage firms referred or recommended by us or an affiliate, we and our affiliates have the
right to receive payments or other consideration based upon a percentage of the broker’s
commission due as a result of your purchase or lease of the subject property. Typically, these
payments to us or our affiliates will equal up to 20% of the broker’s commission.
We reserve the right to limit the number of vendors and suppliers for products, goods,
supplies, fixtures and equipment. We also reserve the right to designate a single source of supply
for certain products and services. We or an affiliate may be that single source. As of the date of
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PLANET FITNESS®
this Disclosure Document, our affiliate PF Equipment is the sole supplier of the required fitness
equipment (currently, either Life Fitness or Cybex) for PLANET FITNESS franchises. In
addition, we, an affiliate or a third-party we designate may be the sole supplier of Special
Marketing Programs in which you must participate. For all products and services purchased
from us and our affiliates, you must pay the then-current price in effect which may be more than
cost. Other sole suppliers include: Spectrum Monthly, LLC (marketing materials); RCS
Software (computer system and software); and Fusion Group, LLC (retail merchandise). We may
update our list of sole suppliers and approved suppliers as we deem necessary or appropriate.
In most cases, we have sole or mandatory suppliers, but in unique circumstances, you
may request approval of an alternate supplier. We will have the right to approve or disapprove
any supplier, and we may approve or disapprove a supplier in our sole discretion. In evaluating
any supplier you propose, we will, subject to reasonable restrictions and conditions to protect our
trade secrets and confidential information, disclose to the proposed supplier applicable standards,
specifications, processes, and procedures for the item in sufficient detail to enable the proposed
supplier to demonstrate fully its capacity and capabilities to supply the items.
We may prescribe procedures for the submission of requests for approval and impose
obligations on approved suppliers, which will be incorporated in a written license agreement
with the supplier. We may obtain from you and/or the approved suppliers reimbursement of our
actual costs and expenses incurred in the approval process and on-going monitoring of the
supplier’s compliance with our requirements. We do not act as an agent, representative or in any
other intermediary or fiduciary capacity for you in our relationship with an alternative supplier
you propose and we approve. We have the right to monitor the quality of services provided by
approved suppliers in a manner we deem appropriate and may terminate any supplier who does
not meet our quality standards and specifications, as may be in effect periodically. Although we
cannot guarantee any specific arrangements, we attempt to negotiate purchase arrangements with
third-party suppliers (including price terms) for the benefit of PLANET FITNESS businesses.
We do not provide material benefits (for example renewal or additional franchises) to a
franchisee based on his or her use of designated or approved suppliers. When your franchise is
up for renewal or if you apply for an additional franchise, among the factors we consider are
your compliance with your Franchise Agreement and support of our programs and policies,
which would include compliance with the requirements described in this Item 8.
We and our affiliates reserve the right to receive commissions or other consideration
from suppliers in connection with your purchase of goods, products and services as described in
this Item 8. Most of these payments are calculated as an amount based on products sold. We
will retain and use such payments as we deem appropriate or as required by the vendor. We or
our affiliates also will derive revenue from items we sell directly to you by charging you more
than the cost. You can expect items purchased or leased in accordance with our specifications
will represent approximately 98% of total purchases you will make to begin operations of the
business and an estimated 19% to 33% of the ongoing costs to operate the business. We are not
aware of any purchasing or distribution cooperatives in the PLANET FITNESS system at this
time.
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In the year ending December 31, 2013, our affiliate, PF Equipment, had gross revenue
from health club equipment purchased or leased by franchise locations, and from marketing
credit/commission income PF Equipment received based on franchisee purchases from our other
approved suppliers, of approximately $107,800,000, which was approximately 98% of its total
2013 revenue of $110,300,000. In the year ending December 31, 2013, we derived
approximately $10,900,000 in marketing credit/commission income based on franchisee
purchases from our other approved suppliers, which was approximately 29% of our total 2013
revenue of $37,300,000. In the year ending December 31, 2013, the affiliates that operate our
company-owned locations received discounts from PF Equipment with a value of approximately
$490,000. For the year ending December 31, 2013, we and our affiliates derived revenue,
marketing credit, commission income, or discounts from franchisee purchases from all our
approved suppliers in amounts ranging from 4% to 31% of the purchase cost. This information
is from our and our affiliate’s internal accounting statements.
In addition, if you fail to make any payment when due to a designated supplier, or if we
(in our business judgment) determine that it is the most efficient method to remit payment to any
supplier, we have the right to act as a pass through by collecting payments (past due, current and
future) for the specific product or service and remitting those payments to the supplier, who
ultimately provides the product or the service to you. If we act in this pass through capacity, we
will collect your vendor payment on the date assigned as your Monthly Membership Billing Day,
as defined in the Franchise Agreement (or as we otherwise designate in writing) and remit such
payment to the supplier as arranged. Products and services for which we may act as a pass
through may include equipment, fixtures, goods, merchandise, inventory, marketing campaigns
or materials, lending services, computer hardware and software, supplies, uniforms and other
categories of products and services that you may purchase from designated suppliers. Although
we do not currently do so, we and our affiliates reserve the right to receive commissions or other
consideration for acting as a pass through between you and any supplier.
One of our officers owns an indirect interest in PF Equipment, an approved supplier of
fitness equipment.
Insurance
You must procure and maintain in force from an insurance company with an “A” or
better rating by AM Best and a Financial Size Rating of “IX” or better: (a) commercial general
liability (including completed/operations/product liability) insurance (without tanning
exclusion); (b) Special Form property insurance, including fire and extended coverage,
vandalism and malicious mischief insurance, for 100% of the replacement value of your
PLANET FITNESS franchise and its contents; and (c) any other insurance policies, like
business interruption insurance, professional liability insurance, abuse and molestation insurance,
tanning insurance, employment practices liability insurance, automobile insurance,
unemployment insurance, cyber liability insurance, excess umbrella insurance and worker’s
compensation insurance (with a broad form all-states endorsement) as we specify. For any
interruption in the operation of the PLANET FITNESS business due to a cyber event, whether
or not you have sufficient insurance coverage, you shall continue to pay us, during such period of
interruption, continuing royalty fees based on the average monthly royalty fees paid by you
during the twelve (12) months immediately preceding the period of interruption. For any
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PLANET FITNESS®
interruption in the operation of the PLANET FITNESS business for any other reason, you must
continue to pay us, during such period of interruption, continuing royalty fees based on the
average monthly royalty fees paid by you during the twelve (12) months immediately preceding
the period of interruption, if you have business interruption insurance. Your insurance must also
cover identity theft and theft of personal information, including the costs of notifying members
whose information has been compromised. All insurance policies must: (1) be issued on an
“admitted” basis by carriers approved by us; (2) contain the types and minimum amounts of
coverage, exclusions and maximum deductibles as we prescribe periodically; (3) name us and
our affiliates as additional insureds; (4) provide for 30 days’ prior written notice to us of any
material modification, cancellation or expiration of such policy; and (5) include such other
provisions as we may require periodically. Excess and Surplus Lines insurance is not permitted
for any of the types and amounts of coverages set forth below, as may be modified from time to
time. You must furnish us with a Certificate of Insurance annually, upon our request.
Set forth below are the types and minimum coverage amounts that we currently typically require
for each franchised PLANET FITNESS business per location. If your state requires greater
coverage amounts for the categories listed below, you must obtain and maintain coverage as
required by your state.
COMMERCIAL GENERAL LIABILITY:
Each Occurrence
General Aggregate Limit:
Products/Completed Operations Aggregate Limit:
Personal and Advertising Injury Limit:
Fire Damage Legal Liability Limit – any one fire
$1,000,000
$2,000,000
$2,000,000
$1,000,000
$1,000,000
PROPERTY INSURANCE
Business Personal Property
Value of personal property
Tenant Improvements and Betterments
Value of tenant improvements
Business Income Coverage
50% of Annual Gross Revenue
(2 or more Locations – Coverage written on a blanket basis)
CYBER COVERAGE
(Includes First Party Liability Coverage, Third Party
Liability Coverage, and Notification Expense Coverage)
1 to 5 Locations:
$1,000,000 each occurrence (minimum)
$1,000,000 aggregate (minimum)
6 to 10 Locations:
$2,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
11 or more Locations:
$3,000,000 each occurrence (minimum)
$3,000,000 aggregate (minimum)
AUTOMOBILE LIABILITY:
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Bodily Injury and Property Damage Combined Single Limit:
Hired and Non-Owned Liability Limit:
WORKERS’ COMPENSATION:
Workers’ Compensation:
Employer’s Liability:
$1,000,000
$1,000,000
STATUTORY (with All States Broad Form)
$500,000 per employee, bodily injury by disease;
$500,000 policy limit, bodily injury by disease;
$500,000 per employee, bodily injury by accident.
EMPLOYMENT PRACTICES LIABILITY
1 to 5 Locations:
$1,000,000 each occurrence (minimum)
$1,000,000 aggregate (minimum)
6 to 10 Locations:
$2,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
11 or more Locations:
$3,000,000 each occurrence (minimum)
$3,000,000 aggregate (minimum)
PROFESSIONAL LIABILITY
$1,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
ABUSE AND MOLESTATION
$1,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
TANNING
Policy either silent (no exclusionary language)
-Or$1,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
UMBRELLA LIABILITY
(in excess of all other insurance coverage)
1 to 2 Locations:
$2,000,000 each occurrence (minimum)
$2,000,000 aggregate (minimum)
3 to 10 Locations:
$5,000,000 each occurrence (minimum)
$5,000,000 aggregate (minimum)
11 to 24 Locations:
$10,000,000 each occurrence (minimum)
$10,000,000 aggregate (minimum)
25 Locations or more:
$15,000,000 each occurrence (minimum)
$15,000,000 aggregate (minimum)
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PLANET FITNESS®
ITEM 9
FRANCHISEE’S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements.
It will help you find more detailed information about your obligations in these agreements
and in other Items of this Disclosure Document.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
Article in Franchise
Obligation
Agreement
Site selection and acquisition/lease
4
Pre-opening purchases / leases
4
Site development and other pre4
opening requirements
Initial and ongoing training
6
Opening
4
Fees
3.1, 5.1, 5.2, 5.3, 5.4
5.5, 5.6, 5.7, 5.8, 6.2,
6.4.7, 6.6, 9.4, 9.6,
9.9, 10.1, 10.5, 10.6,
10.7, 12.3, 13.3.5,
13.6, 14.1, 16.11.6,
18.3, 19.9, 19.12
Compliance with standards and
6 and 9
policies / Operations Manual
Trademarks and proprietary
1,4, 3.2,6, 7, 8, 10, 16
information
Restrictions on products/services
4, 6, 7, 8, 9, 10
offered
Warranty and customer service
9 and 10.9
requirements
Territorial development and sales
Not Applicable
quotas
Ongoing product/service
4,5, 9, and 10
purchases
Maintenance, appearance and
3.1, 4, 9.3, 9.4
remodeling requirements
Insurance
4.4, 4.8, 9.1, 9.9
Advertising
4.10 and 10
Indemnification
2.3, 7.5, 15.4, 18.4,
18.5
Owner’s participation/
2.3, 2.4, 6, 9.1
management/staffing
Records/reports
4.4, 9.1, 11, 12.3,
15.3, 19.9, 20.1
Inspections/audits
4.4, 4.6, 5.9, 11.3, 12
Transfer
13
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Article in Area
Development
Agreement
5
Not Applicable.
1 and 2
Disclosure
Document Item
7 and 11
7 and 8
6, 7 and 11
4
2 and 7
6,7,10, 16,19.4
6 and 11
11
5 and 6
2, 10, and12
11
5 and 13.1.1
13 and 14
Not Applicable.
8 and 16
Not Applicable.
11
1, 2, and 9
12
Not Applicable.
8
Not Applicable.
6 and7
Not Applicable.
Not Applicable.
Not Applicable.
6, 7 and 8
6 and 11
6
Not Applicable.
11 and 15
Not Applicable.
6
Not Applicable.
15 and 16
6 and 11
17
PLANET FITNESS®
Obligation
u. Renewal
v. Post-termination obligations
w. Non-competition covenants
x. Dispute resolution
y. Other
Article in Franchise
Agreement
14.1
16
2.2, 16,5, 16.6, 16.7,
16.9, App. C
19
Not Applicable
Article in Area
Development
Agreement
Not Applicable.
10, 13.2, and 14
13
Disclosure
Document Item
17
17
17
19-21, and 23
Not Applicable
17
Not Applicable
ITEM 10
FINANCING
We do not offer, either directly or indirectly, any financing to you. We do not permit
franchisees to borrow more than 80% of the initial investment for their PLANET FITNESS
business without our prior written consent. We are unable to estimate whether you will be able
to obtain financing for any or all of your investment and, if so, the terms of such financing. We
do not have any present practice or intent to assign to a third party any instrument executed by
you. No contracts or investments contain a waiver of defenses or similar provisions. We do not
guarantee your notes, leases or other obligations.
We do not offer financing for the Initial Franchise Fee either directly or indirectly. We
may, however, refer you to potential sources of financing for various aspects of the Business,
including, but not limited to, costs related to build-out and equipment acquisition. Although we
do not currently do so, we and our affiliates reserve the right to receive consideration and other
payments in the future if you obtain financing from a lender to whom we referred you.
ITEM 11
FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND
TRAINING
Except as listed below, Pla-Fit Franchise, LLC is not required provide any
assistance to you.
If you purchase a company-owned location, we will incur similar obligations to you as
described in this Item 11. Unless specified otherwise, all references are references to articles or
sections of the Franchise Agreement.
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PLANET FITNESS®
Franchise Agreement
Pre-Opening Assistance
Before you open your PLANET FITNESS business, we will:
1.
Instruct you in Methods of Operation (Article 9);
2.
Approve your choice of a location (Article 4.1.). The factors we consider
regarding your choice of a location for your PLANET FITNESS franchise
include general location and neighborhood, demographics, zoning, traffic patterns,
parking, street visibility, overall interior and exterior size and shape, physical
characteristics of the existing or future building including neighboring or
surrounding co-tenants at a property, and lease terms;
3.
Review and approve certain provisions of your lease for your location (Article
4.2.);
4.
Provide you with specifications and layouts for your PLANET FITNESS
location (Article 4.4.);
5.
Provide you with an initial training program (Article 6.1.);
6.
Provide you with lists of start-up inventory, furniture, fixtures, software,
equipment and supplies (Article 4.7.);
7.
Provide you with a pre-sale marketing plan, pursuant to which you must expend
$20,000 per 30 days for up to 180 days to promote the Business. Your pre-sale
marketing period will begin at least 45 days before you commence regular
operations (Article 4.10.).
Ongoing Assistance:
During the operation of your business, we will:
1.
Provide you with refresher training (Article 6.2.);
2.
Provide you with general guidance on operating issues concerning the location,
system standards, marketing programs, etc. (Article 6.3.);
3.
Provide you with Internet and telephone consultation (Article 6.4.);
4.
Provide you with wholesaling services from time to time where we may ourselves
act as an approved or designated source for products, merchandise, accessories,
fixtures, furnishings, equipment, signs, etc. (Article 6.4.);
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PLANET FITNESS®
5.
Provide you with manufacturing services where we may manufacture, package
and ship products, merchandise, accessories, fixtures, furnishings, equipment,
signs, etc. to you (Article 6.4.);
6.
Provide you with ongoing marketing programs (Article 6.4.);
7.
Provide you with meetings, seminars or conventions where we may get together
with you and other PLANET FITNESS franchisees for business or social
purposes (Article 6.4.);
8.
Provide you with research and development regarding Methods of Operation
(Article 6.4.);
9.
At your request, we may furnish additional guidance and assistance and, in such a
case, may charge the per diem fees and charges we establish periodically. If you
request, or if we require, additional or special training for your employees, all of
the expenses that we incur in connection with this additional or special training,
including per diem charges and travel and living expenses for our personnel, will
be your responsibility (Article 6.4.).
Area Development Agreement
Pre-opening assistance (“Initial Services”). Before you begin your area development
business, we will identify the geographic area where you will develop PLANET FITNESS
BUSINESSES (ADA Article 1).
Ongoing Assistance. We do not provide any additional ongoing assistance to you under
the Area Development Agreement and have no further obligations to you under the Area
Development Agreement. Any ongoing assistance will be provided to you under the Franchise
Agreements you enter into for locations in your area.
Franchise Site Selection
You select the site for your PLANET FITNESS location. We will provide you with our
standard site selection criteria or an on-site evaluation of your proposed sites, as we deem
appropriate. You must verify to us that your site complies with our site selection criteria. If we
do not approve a site you propose, you may propose another site. We do not select or endorse
your site.
Before you lease or purchase any site for a PLANET FITNESS location, you must
submit a complete site information form to us. We will review each site information form and
determine whether we approve or object to the site you propose. Factors we deem appropriate
include the general location and neighborhood, demographic information, traffic patterns, access,
visibility, location of other competing facilities, size, configuration, appearance and other
physical characteristics of the site. If we approve the site, we will deliver to you a signed Site
Acceptance Form which will be valid for six (6) months, in which time a lease must be executed
or property purchased. We will use reasonable efforts to make a site acceptance decision within
30 days after we acknowledge receipt of a complete Site Acceptance Form and any other
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PLANET FITNESS®
materials we have requested. If you operate an existing fitness facility business, you will already
have a site for your PLANET FITNESS franchise location, subject to our approval before you
sign a Franchise Agreement with us.
Neither our approval of the site nor any information communicated to you regarding our
standard site selection criteria for PLANET FITNESS location will constitute a warranty or
representation of any kind, express or implied, as to the suitability of the site for a PLANET
FITNESS location. Our approval of the proposed site merely signifies that we are willing to
grant a franchise for a PLANET FITNESS location at the site. Your PLANET FITNESS
location may not be relocated unless you first obtain our written consent and pay a $5,000
relocation fee. We approve a site if it meets our then-current site selection criteria.
We estimate the time from the date you sign the Franchise Agreement to the date you
open your PLANET FITNESS location to be between six (6) and eleven (11) months. However,
this time estimate may vary depending on numerous factors including location, construction
schedules and financing. You must sign a lease for a location we approve within six months of
your signing the Franchise Agreement. If you and we can’t reasonably agree on a suitable
location for your franchise within 6 months of your signing the Franchise Agreement, we may
terminate the Franchise Agreement. For all franchise locations, your PLANET FITNESS
location must be open and operating within 330 days after you sign the Franchise Agreement or
we may terminate the Franchise Agreement and retain your Initial Franchise Fee, unless we have
agreed with you to extend the amount of time for you to open the franchise location.
Advertising
Local Advertising Funds
You agree to spend the greater of $5,000 per month or 7% of the total gross monthly EFT
Dues Draft of membership fees for your location per month for approved local advertising the
PLANET FITNESS business. These amounts spent on local advertising will be designated as
Local Advertising Funds (“LAF”). If, in our business judgment you are under-performing or not
using the LAF on appropriate media placement, we may collect the LAF from you and
administer it on your behalf. Additionally, if we determine, at some later date, that you have
spent less than the required amount during the then most recently completed four consecutive
calendar months for locally advertising and promoting your PLANET FITNESS business, we
may collect LAF contributions from you directly and administer the funds on your behalf. We
may collect the LAF from all franchisees and administer it on their behalf if, in our business
judgment, we determine such conduct is appropriate. We will provide you with at least 30 days’
notice if we change the amount or expenditure of the LAF you must spend. If we collect LAF
contributions directly from you, LAF contributions will be payable on the first business day
following the immediately preceding Reporting Period together with the Royalty Fees. The funds
may be electronically drafted. The LAF monies will be used to pay for the cost of implementing
local marketing plans developed by you and approved by us or, if we collect LAF contributions
from you, to reimburse you (up to an amount not to exceed the LAF contributions so collected)
for the costs you incur in implementing local marketing plans developed by you and approved by
us. For these purposes, advertising expenditures include: (a) amounts contributed to advertising
cooperatives; and (b) amounts spent by you for advertising media, such as television, radio,
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PLANET FITNESS®
Internet, newspaper, billboards, posters, direct mail, collateral and advertising on public vehicles
(transit and aerial) and, if not provided by us, cost of producing approved materials necessary to
participate in these media. Advertising expenditures do not include amounts spent for items
which we, in our reasonable judgment, deem inappropriate for meeting the minimum advertising
requirement, including permanent on-premises signs, lighting, personnel salaries or
administrative costs, transportation vehicles (even though such vehicles may display the Marks),
Yellow Pages advertising, discounts, free offers and employee incentive programs. We reserve
the right to modify the list of such advertising expenditures in the Operations Manual from time
to time.
Additional Advertising Costs
In addition to your contributions to the NAF and LAF, you must conduct a pre-sale
advertising and promotional program for your PLANET FITNESS business under a marketing
plan developed by us or developed by you and approved by us. The pre-sale marketing period
typically begins no less than 45 days immediately preceding the date that you commence regular
operations at your PLANET FITNESS location, and it may be as long as 180 days thereafter
(“Pre-Sale Marketing Period”). We will determine the length and start date of the Pre-Sale
Marketing Period based upon the location of the BUSINESS, demographics and other factors.
Specifically, you must spend on pre-sale advertising and promotions a minimum amount equal to
$20,000 per every 30 days during the Pre-Sale Marketing Period. We will determine the specific
length and start date of the Pre-Sale Marketing Period based upon the location of the PLANET
FITNESS business, demographics and other factors. You must use the types of advertising
media that we specify during your Pre-Sale Marketing Period. You must submit to us for our
prior approval, samples of all advertising and promotion materials not prepared or previously
approved by us and which vary from our standard advertising and promotional materials. You
may not use any advertising or promotional materials that we have disapproved.
You must participate in and contribute funds to special marketing programs and
campaigns that we develop and administer from time to time; provided that in no event will your
required contribution to the special marketing program equal more than the collective required
monthly NAF and LAF payments (currently, 9%). If we require you to pay the special
marketing program fee, you will not be required to pay a separate NAF or LAF for the
corresponding month.
National Advertising Fund
You are required to pay to our National Advertising Fund (“NAF”) an Ad Fee not to
exceed 2% of the total gross monthly EFT Dues Draft for your location payable monthly as
described in Item 6. The NAF creates and develops marketing, advertising and related programs
and materials, including electronic, print and internet media as well as the planning and
purchasing of national and/or regional network advertising or other marketing programs.
PLANET FITNESS businesses owned by us and our affiliates contribute to the NAF on the
same basis as similarly situated franchisees. We reserve the right to raise the NAF contribution
above 2% (as well as the Local Advertising Funds contributions described above) in the future
by gaining an approval vote by either (i) 66% of all then existing company-owned and
franchised PLANET FITNESS businesses, or (ii) 51% of all then existing franchised PLANET
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PLANET FITNESS®
FITNESS businesses. Voting will be accomplished through a system of one vote per eligible
PLANET FITNESS business. The NAF will not spend any money on advertising that is
principally a solicitation for the sale of new franchises although the NAF may generally expend
funds to promote the Planet Fitness brand in such ways and media as we may decide.
In our fiscal year ending December 31, 2013, NAF funds were expended as follows:
94% on production and media placement; and 6% on administrative expenses.
We will administer the NAF and have the sole right to determine all aspects of programs
financed by the NAF, including national or regional media, creative concepts, materials,
endorsements and agency relationships. We will generate ads in-house and may solicit outside
regional or national ad agencies for generating ads. Although the NAF is intended to maximize
general recognition and patronage of the Marks for the benefit of all PLANET FITNESS
businesses, we cannot assure you that any particular PLANET FITNESS business will benefit
directly or pro-rata from the placement of advertising. The NAF may be used to pay for the cost
of preparing and producing materials and programs we select, including video, audio, electronic
and written advertising materials. We may furnish you with marketing, advertising and
promotional materials at cost, plus any related administrative, shipping, handling and storage
charges.
The NAF is accounted for separately from our other funds. While our intent is to balance
the NAF on an annual basis, periodically the NAF may run at either a surplus or deficit. All
disbursements from the NAF are made first from income and then from contributions. We may
spend in any fiscal year an amount greater or less than the aggregate contributions of all
PLANET FITNESS businesses to the NAF in that year, and the NAF may borrow from us or
other lenders to cover deficits in the NAF or cause the NAF to invest any surplus for future use
by the NAF. Within 120 days after the close of our fiscal year, we will prepare an annual
unaudited statement of monies collected and costs incurred by the NAF. We will furnish you a
copy of the prior year’s statement upon your written request. Except as we otherwise expressly
provide in the Franchise Agreement, we assume no direct or indirect liability or obligation with
respect to the maintenance, direction or administration of the NAF. We do not act as a trustee or
in any other fiduciary capacity with respect to the NAF. The NAF will not be used for
advertising principally directed at the sale of franchises.
We may seek the advice of owners of PLANET FITNESS businesses by formal or
informal means with respect to the creative concepts and media used for programs financed by
the NAF. Although we do not currently have an advertising council composed of franchisees,
we have the right (but no obligation) to establish a Marketing Advisory Council (“MAC”). We
will appoint members of the MAC and the MAC will serve only in an advisory capacity. We will
have the final authority for all aspects of the MAC. We will have the right to change or dissolve
the MAC.
The NAF owns the rights to all creative concepts and marketing materials created or paid
for by the NAF. The NAF has the right to retain any commissions received from suppliers of
marketing materials or products.
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PLANET FITNESS®
Advertising Cooperatives
We have the right to establish local or regional advertising cooperatives for PLANET
FITNESS businesses in your local or regional area, covering the geographical areas we may
designate periodically. We have the right to form, change, dissolve or merge advertising
cooperatives.
If we have established an advertising cooperative in your market area, you must
participate in the advertising cooperative and its programs and abide by its by-laws. You must
contribute the amounts to the advertising cooperative(s) as they determine periodically in
accordance with their bylaws. Any PLANET FITNESS businesses we or any of our affiliates
own located in the designated local or regional area(s) will contribute to the cooperative(s) on the
same basis. Contributions to the local and regional advertising cooperatives are credited toward
the LAF advertising expenditures required by the Franchise Agreement; however, if we provide
you and your local or regional advertising cooperative 90 days’ notice of a special promotion,
including but not limited to any regional promotions, you must participate in the promotion and
pay us any special promotion advertising fees assessed in connection with the program,
beginning on the effective date of the notice and continuing until the special promotion is
concluded. Any special promotion advertising fees will be in addition to, and not credited
towards, the LAF advertising expenditure required by the Franchise Agreement.
The bylaws of your cooperative will be made available for you to review. We will
administer the advertising cooperatives and collect your cooperative advertising contributions by
automatic electronic withdrawal. The financial statements of the advertising cooperatives may be
audited and the reports will be made available to you. Each PLANET FITNESS business located
within the local or regional area of the advertising cooperative will be entitled to one vote.
Advertising conducted by the cooperatives may be in various media including television, radio,
internet, magazine, newspaper, billboards, transit and aerial advertising.
Computer Hardware and Software
You must record all transactions on a computer-based system that is fully compatible
with our computer system and that includes an information interface capability to communicate
electronically with our computer system. You must participate in our Internet Web Site and you
may not register a domain name or operate a website containing the Marks. We have the right to
determine the content and use of any website associated with the Marks. Your general conduct
on the Internet or other electronic media, including your use of the Marks or any advertising, is
subject to the terms and conditions of the Franchise Agreement or any other rules or
requirements that we may identify from time to time.
You must purchase or lease your computer system from our approved supplier, Retail
Control Systems (“RCS”), or another system approved by us. You are required to execute the
following licenses and agreements, each of which located in Exhibit I, for use of their software.
1.
Visionary Software License.
2.
NCR/Radiant Agreement Regarding Licensing of Radiant Software.
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PLANET FITNESS®
3.
RCS Purchase Order Terms and Conditions.
4.
Merchant agreements with our required payment gateway and payment processors
for ACH, debit card and credit card processing.
The Visionary POS system allows you to enter and view all member information, collect
customer membership fees, and conduct retail transactions. The system enables you to
communicate all information in real-time to centralized servers in a managed data center. The
cost to purchase or lease the Visionary POS system, Visionary Kit, and Visionary licenses is
approximately $10,000 to $17,000. You will pay us based on the number of transactions
processed per month and under the terms of the current Visionary license agreement. In our
discretion, we will provide certain support and updates for no additional charge. We make
monthly automatic withdrawals of the Royalty and advertising fees and may make withdrawals
of training fees, consultation fees, or any other fees or monies payable by you to us under any
agreement between you and us from the account you designate in accordance with the Franchise
Agreement.
The Visionary Kit includes at least two terminals, keyboards, mice, cash drawer, credit
card reader, check reader, retail/license scanner, and other items that we may require from time
to time. No item of equipment may be attached to or used by you as part of the Visionary POS
system which has not been specifically approved by us. Each terminal requires a Visionary
Software license that must be purchased by you. An additional Visionary license for the
Owner/Manager computer can be purchased separately if desired. We also require you to
purchase three line conditioners from RCS, one for each of your terminals and a third for your
Sonicwall Firewall. In addition, you should order a HP LaserJet Pro M425n printer and a
Logitech Webcam C270 camera, which are typically ordered from Staples. In order to run
Visionary you will need to purchase either (i) reliable high speed business-class internet service,
or (ii) MPLS private network services provided by Windstream through our preferred provider,
Abylity. If you choose to utilize business-class internet service, you must purchase a SonicWall
TZ 215 Firewall and monitoring services for the SonicWall from Cerdant. The SonicWall
Firewall, including support, configuration and shipping will cost approximately $1600 and
monitoring will cost $45 per month. A high speed business class internet line will cost
approximately $99 to $249 per month depending on your club location. If you choose to deploy
MPLS private network services, the cost will be approximately $550 per month (which includes
the MPLS service, 4G wireless backup, firewall, monitoring, and 5 voice lines. These costs may
vary depending on your club location. We may modify these requirements from time to time as
set forth in the Methods of Operations.
Neither we nor any of our affiliates is required to provide ongoing maintenance, repairs,
upgrades or updates to the Visionary POS system or Visionary Kit. You must obtain, at your
own expense, ongoing maintenance , support, and upgrades for the Visionary POS system under
your contract with RCS and NCR. You must also, at your own expense, maintain, upgrade or
replace other systems and equipment which you utilize to as part of your PLANET FITNESS
business including: financial and inventory data processing, communications systems (including
telecommunications voice and data services, Internet services and WiFi), club network and
cabling systems, firewall systems, WiFi systems, and gym equipment systems, whenever we
require it and we have no obligation to assist you in obtaining hardware, software, equipment or
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PLANET FITNESS®
related services. There are no contractual limits on the frequency or cost of your obligation to
obtain these upgrades. We do not currently have any required or optional maintenance, repair,
upgrade or update contracts for the computer system. We have the right, as often as we deem
appropriate, including on a daily basis, to access all your computer systems that you are required
to maintain in connection with the operation of the PLANET FITNESS franchise and to retrieve
all information relating to the PLANET FITNESS franchise’s operations.
Training
Before opening your PLANET FITNESS business, you and/or your Responsible
Owner or Approved Operator (described in Item 15), all salaried managers for your PLANET
FITNESS business who have not previously completed our initial training program must
successfully complete the initial training program.
You and/or your Responsible Owner or Approved Operator must complete both our
initial training program, which consists of both classroom and hands-on training covering all
facets of our operations, including equipment operation and maintenance, cost control, inventory
control and basic techniques of management. We will administer the initial training to you in
two specific phases: Owner Orientation and Operations Training. You must attend, and
complete to our satisfaction, both phases of initial training. Any on-premises training will be
conducted at a designated PLANET FITNESS business.
You must replace any individual who fails to successfully complete the appropriate
training program(s) or who otherwise is not qualified to manage or perform the required
functions at a PLANET FITNESS business. We will not charge any fees for attending the initial
training programs for you and up to two additional individuals. However, as described in Item 6,
you will be responsible for all compensation and expenses (including travel, meals and lodging)
incurred in connection with any training programs. Neither you nor your employees will receive
any compensation from us for services performed during training.
Our current training program consists of initial training at our principal place of
business and at an operating unit on the operation of a PLANET FITNESS business for you (or,
if you are a corporation or partnership, your Responsible Owner) or your Approved Operator,
and up to 2 additional owners or employees you elect to enroll in the training program.
Typically, our training program will be conducted at least once per month, but may occur more
or less frequently depending on our need to train franchisees. If you request, we will provide
you with additional training and you must pay us a Per Diem Fee which may range from $100 to
$1000, depending on the number of people trained, and the length and location of the training. If
you are an existing franchisee opening an additional location and you have completed our initial
training program, you will not attend the initial training again although any general managers
who have not previously successfully completed the training program must successfully
complete the initial training before your location opens.
You (or your Responsible Owner), your Approved Operator, and your employees are
required to complete the initial training to our satisfaction. You also are required to participate in
all other activities required to operate the PLANET FITNESS franchise. If we determine that
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PLANET FITNESS®
you (or your Responsible Owner) are unable to complete initial training to our satisfaction, we
have the right to terminate our agreement with you.
We may require your owners or your employees to attend additional training courses
during the term of the Franchise Agreement. We expect that the additional training we require
will not exceed two people attending more than two refresher training sessions of up to five days
per calendar year during the term of the Franchise Agreement but we may require you to attend
more training courses or franchise meetings when we reasonably consider them necessary. We
may charge you a reasonable fee for those courses or meetings and you may need to pay all
travel, accommodations, meal and other expenses you and your other personnel, run while
attending or completing these training courses or meetings. Typically, refresher training would
be conducted at our headquarters in New Hampshire or at your franchise location.
Training Program
Subject
Phase 1:
Owner Orientation (mandatory
for all first-time Franchise
Owners)
Philosophy and Vision
Hours of
Classroom
Training
Hours of On
the Job
Training
Location
2
0
The Planet Fitness Story
1
0
Pre-open
Site Selection and Construction
Construction
Legal and Regulatory Compliance
Insurance Requirements
Planet Fitness Requirements
Getting Ready to Open
Presale
Presale Location
Equipment and Supplies
Marketing
Training
Hire Staff
Train Staff
Open
6
0
1
0
Ongoing Operations
2
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Franchisor headquarters in
Newington, NH and an operating
unit we select.
Franchisor headquarters in
Newington, NH and an operating
unit we select.
Franchisor headquarters and an
operating unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
PLANET FITNESS®
Subject
Q&A
Hours of
Classroom
Training
2
Hours of On
the Job
Training
Location
0
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
0
Total Hours for Owners Orientation
14
Phase 2:
Operations Training (mandatory
for all first time Franchise
Owners)
Day-to-Day Operation
14
20
Staffing
3
0
Q&A
3
0
Total Hours for Operations
Training
20
20
16
0
8
0
8
0
76
20
Additional Workshops
Managers workshops (mandatory
twice per year for one
representative per club)
Regional Manager Workshops
(mandatory once per year for
franchisees with three or more
clubs)
PE and PF Workshops
(mandatory once per year for one
representative per club)
TOTAL
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select.
Franchisor
headquarters
in
Newington, NH and an operating
unit we select
Note 1: As noted in Item 1 and in the above chart, we currently maintain our headquarters in
Newington, New Hampshire. We typically will select a corporate-owned operating unit that is
located near our headquarters.
It is the nature of the PLANET FITNESS business that all subjects are integrated into the
training program, and that there are no clear delineations between the subjects being learned. If
you are converting an existing fitness facility into a franchise, then the required initial training
program may vary from the above estimate. Instructional materials include the Operations
Manual.
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PLANET FITNESS®
Our team of training instructors includes Brian Belmont, William Mulleady, Lisa Cote, Mike
Mullen, and Chris Holmes. Each instructor’s expertise is outlined in Item 2.
Operations Manual
We will provide you with a copy of our Operations Manual, or on-line access to a copy of
our Operations Manual, which is a collection of materials that describe our Methods of
Operation, pursuant to a specific timeline. As of the issuance date of this Disclosure Document,
our Operations Manual contains a total of 78 pages. In addition, our Operations Manual includes
alternative or supplemental means of communicating such information by other media which
specifically reference that they are to be considered part of the Operations Manual, including
bulletins, e-mails, videotapes, audio tapes, compact discs, computer diskettes, items posted on
Franchise Management, and or other electronic media. Our Operations Manual contains
proprietary information that you must keep confidential, as stated in Item 14 of this Disclosure
Document. The table of contents to the collection of materials that comprises the Operations
Manual is attached as Exhibit “J”.
ITEM 12
TERRITORY
The Franchise Agreement grants to you the right to own and operate a single PLANET
FITNESS business at a specific location. You may not conduct the business of your PLANET
FITNESS business at any site other than the approved premises, or relocate your PLANET
FITNESS business without our prior written consent. The Franchise Agreement does not
provide you with any options, rights of first refusal or similar rights to acquire additional
franchises, or any protected territory
You will not receive an exclusive territory unless you acquire rights under an Area
Development Agreement (described below). You may face competition from other franchisees,
from outlets that we own, or from other channels of distribution or competitive brands that we
control.
Except for rights expressly granted to you under the Franchise Agreement, we retain all
of our rights with respect to the Marks, the System and PLANET FITNESS businesses
anywhere in the world, including the right to, without compensation to you:
1.
operate, and grant others the right to operate, PLANET FITNESS businesses and
other marks, systems or businesses at locations and on terms and conditions we
deem appropriate;
2.
offer to sell, or sell and distribute, any products or services under any tradenames,
trademarks, service marks or trade dress, including the Marks, through any
distribution channels or methods, which may include retail stores, wholesale, and
the Internet (or any other existing or future form of electronic commerce);
3.
operate, and grant to others the right to operate, fitness facilities, gyms, health
related establishments and any other business(es) whatsoever identified by
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PLANET FITNESS®
trademarks, service marks or trade dress, other than the Marks, under terms and
conditions we deem appropriate which may include locations in close proximity
to your PLANET FITNESS location;
4.
develop or become associated with other concepts (including dual branding or
other franchise systems), whether or not using the PLANET FITNESS System,
Brand or the Marks, and award franchises under these other concepts for locations
anywhere; and
5.
acquire, be acquired by, merge, affiliate with or engage in any transaction with
other businesses (whether competitive or not), with units located anywhere or
business conducted anywhere. These transactions may include arrangements
involving competing businesses or outlets and dual branding or brand
conversions. These transactions are expressly permitted under the Franchise
Agreement, and you must participate at your expense in any conversions as
instructed by us.
Because you are not granted a territory, there are no restrictions on soliciting or accepting
orders outside any specific territory. You may use the Internet, telemarketing or other direct
marketing to solicit new members, but only as permitted by our approved marketing methods as
described in the Operations Manual and other System communications. You may not use the
Internet, catalog sales or other direct marketing for the sale of PLANET FITNESS branded
merchandise or any products or services other than memberships to your fitness facility. In
addition, you may not use, reference or promote the PLANET FITNESS Marks or System in
connection with any current or future form of social media networks or platforms, including,
without limitation, Facebook, Twitter, LinkedIn and so on.
If you are qualified and choose to acquire area development rights under an Area
Development Agreement, we may grant you the right to develop multiple facilities in a
Development Area. During the term of the Area Development Agreement, we, our parent and
our affiliates will not develop, operate or franchise a PLANET FITNESS facility in the
Development Area except for the circumstances noted below. Specifically, except for rights
expressly granted to you under the Area Development Agreement, we retain all of our rights with
respect to the Marks, the System and PLANET FITNESS businesses anywhere in the world,
including the right, without compensation to you, to do the following:
1.
operate, and grant to others the right to operate, PLANET FITNESS businesses
at such locations and on such terms as we deem appropriate outside of the
Development Area;
2.
offer to sell, or sell and distribute, inside and outside the Development Area, any
products or services associated with the PLANET FITNESS system (now or in
the future) or identified by the PLANET FITNESS Marks, or any other
tradenames, trademarks or service marks, through any distribution channels or
methods, which may include retail stores, wholesale, and the Internet (or any
other existing or future form of electronic commerce);
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PLANET FITNESS®
3.
operate, and grant to others the right to operate, fitness facilities, gyms, health
related establishments, and any other business(es) whatsoever identified by
tradenames, trademarks, service marks or trade dress, other than the Trademarks,
both inside and outside of the Development Area and pursuant to such terms and
conditions as we deem appropriate, which may include locations in close
proximity to your PLANET FITNESS location(s) and your Development Area;
4.
develop or become associated with other concepts (including dual branding or
other franchise systems), whether or not using the PLANET FITNESS System,
brand or Trademarks, and award franchises under these other concepts or
locations anywhere, including into the Development Area; and
5.
acquire, be acquired by, merge, affiliate with or engage in any transaction with
other businesses (whether competitive or not), with units located anywhere or
business conducted anywhere, including in the Development Area. These
transactions may include arrangements involving competing businesses or outlets
and dual branding or brand conversions. You must participate at your expense in
any conversion as instructed by us.
We require in our Franchise Agreement that, upon our written request, you lease or
sublease to us, an affiliate or our designee, at the then-current fair market value rate in your
geographic area for like-leased real estate, 10% or less of the total square footage of the franchise
location for us or our affiliate or designee to use in any way we deem appropriate.
We do not currently operate, or franchise the operation of any other business selling
under different trademarks any products or services similar to the products and services offered
by PLANET FITNESS businesses, and we presently do not have any plans to do so. As noted
in Item 1, we have affiliates who operate fitness facility locations under the PLANET FITNESS
trademark.
ITEM 13
TRADEMARKS
The Franchise Agreement licenses you to use the service mark PLANET FITNESS®, as
well as other trademarks, service marks, trade names and commercial symbols owned by our
affiliate, PFIP (collectively “Marks”). Listed below are the registered principal Marks that
franchisees are currently licensed to use. PFIP has filed or intends to file all required affidavits
and renewals for the Marks listed below.
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Trademark
PLANET FITNESS
U.S. Registration
Number
2438677
Registration Date
March 27, 2001
PLANET FITNESS
2698976
March 25, 2003
JUDGMENT FREE ZONE
2377662
August 15, 2000
JUDGEMENT FREE
4020552
August 30, 2011
DD-41
PLANET FITNESS®
Trademark
PF GYMS, NO DUMBELLS ALLOWED, plus design
U.S. Registration
Number
2370028
Registration Date
July 25, 2000
LUNK ALARM
2693142
March 4, 2003
LUNKHEAD
3986503
June 28, 2011
NO CRITICS
2654980
November 26,
2002
PLANET FITNESS THE JUDGMENT FREE ZONE, plus
design
3105988
June 20, 2006
PLANET FITNESS, plus design
3387627
February 26, 2008
PF PLANET FITNESS, plus design
3566625
January 27, 2009
PF PLANET FITNESS, plus design
3566626
January 27, 2009
PF logo
3566624
January 27, 2009
JFZ GYMS, plus design
3303904
October 2, 2007
YOU BELONG
3584434
March 3, 2009
BLACK
3389028
February 26, 2008
PF BLACK CARD
3569191
February 3, 2009
BLACK KEY CARD, plus design
4089813
January 24, 2012
LUNK
4006436
August 2, 2011
PF EXPRESS
3793766
May 25, 2012
PUPLE AND YELLOW for interior walls
3385516
February 19, 2008
PURPLE AND YELLOW for exercise equipment
3665723
August 11, 2009
Leave Egos Here
3584435
March 3, 2009
Pizza Night
3758327
March 9, 2010
Bagel Morning
3758325
March 9, 2010
PF Express 30 Minute Workout
3611493
April 28, 2009
I LIFT THINGS UP AND PUT THEM DOWN
4015427
August 23, 2011
I LIFT THINGS UP AND PUT THEM DOWN
4048177
November 1, 2011
NO GYMTIMIDATION
4358141
June 25, 2013
WE’RE NOT A GYM. WE’RE PLANET FITNESS
4492327
March 4, 2014
You must follow our operating procedures when you use the Marks. You cannot use the
Mark or any other of our or PFIP’s trademarks as part of your corporate name. You may not use
the Marks in the event you wish to advertise the sale of your franchise.
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PLANET FITNESS®
The Operation Manuals identify the Marks you are licensed to use. We have the right to
change the licensed Marks periodically. Your use of the Marks and any goodwill is to our and
our affiliate’s exclusive benefit and you retain no rights in the Marks. You also retain no rights
in the Marks upon termination or expiration of your Franchise Agreement. You are not
permitted to make any changes or substitutions to the Marks except as we direct in writing.
There are no currently effective material determinations of the Patent and Trademark
Office or Trademark Trial and Appeal Board. There are no pending infringements, oppositions
or cancellations concerning the principal trademarks. There is no pending material litigation
involving the principal trademarks.
Our affiliate, PFIP, owns the principal trademarks. We have a license with PFIP to use
the principal trademarks and to sublicense the principle trademarks to franchisees. We have no
actual knowledge of either superior prior rights or infringing uses that could materially affect
your use of the principal trademarks in the state where your PLANET FITNESS franchise may
be located. Except for the Settlement Agreement described below, which could impact you if
you open a location in certain parts of Florida, no agreements currently exist that significantly
limit our rights to use or license the principle Marks in a manner material to the franchise.
If it becomes advisable at any time for us and/or you to modify or discontinue use of any
Mark and/or use one or more additional or substitute trademarks, service marks or trade dress,
you must comply with our directions within a reasonable time after notice. You must bear all
costs and expenses applicable to your PLANET FITNESS business should we decide to modify
the Marks or adopt new marks. We will have no liability or obligation whatsoever with respect to
any required modification or discontinuance of any Mark or the promotion of a substitute
trademark, service mark or trade dress.
You must immediately notify us of any apparent infringement of or challenge to your use
of any Mark, or claim by any person of any rights to any Mark, and you must not communicate
with any person other than your legal counsel, us, and our respective legal counsel in connection
with any infringement, challenge or claim. We or our affiliate(s) will have the right to take any
action it deems appropriate and will have the right to control exclusively any litigation or PTO or
other administrative proceeding arising out of any infringement, challenge or claim or otherwise
relating to any Mark. You must sign any and all instruments and documents, provide assistance
and do all acts and things as, in the opinion of our legal counsel, may be necessary or advisable
to protect our or our affiliate(s)’ interests in any litigation or PTO or other administrative
proceeding or otherwise to protect its interests in the Marks.
We will indemnify you against, and reimburse you for, all damages for which you are
held liable in any proceeding arising out of your authorized use of any Mark under the Franchise
Agreement and, except as provided in the Franchise Agreement, for all costs you reasonably
incur in defending any claim brought against you or any proceeding in which you are named as a
party, if you have timely notified us of the claim or proceeding and you and your owners are in
compliance with the Franchise Agreement and all other agreements entered into with us and our
affiliates. Our Affiliate(s) will be entitled to prosecute, defend or settle any proceeding arising
out of your use of any Mark, and, if we or our Affiliate(s) decides to prosecute, defend or settle
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PLANET FITNESS®
any matter, we will have no obligation to indemnify or reimburse you for any fees or
disbursements of counsel you retain.
You may not use any Mark (or portion of any Mark) as part of your URL, e-mail address,
personal website unrelated to our business or System, or in selling any product or service that we
have not authorized (“Unauthorized Use”). Specifically, you may not use the words “Planet
Fitness,” nor may you use our initials “PF.” Similarly, except for the word “Fitness,” your use of
any Mark (or portion of any Mark as noted above) as part of your corporate, limited liability
company or partnership name will constitute Unauthorized Use. You must properly attribute
ownership of the Marks to us and our affiliate and use the notices of trademark and service mark
registrations that we specify. You also may be required to obtain fictitious or assumed name
registrations (also sometimes called “dba”) if required by local law.
ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION
There are no registered patents or copyrights or pending patent applications that are
material to the franchise, although we do claim copyright ownership and protection for our
PLANET FITNESS Franchise Agreement, Operations Manual and for various sales
promotional and other materials published periodically and we obtain copyright registration for
certain marketing materials. There are no pending patent applications that are material to the
franchised business.
There are no currently effective determinations of the Copyright Office (Library of
Congress), United States Patent and Trademark Office, Board of Patent Appeals and
Interferences, or any court, or any pending infringement, opposition or cancellation proceeding
or any pending material litigation involving any patents or copyrights. Except as noted below,
there are currently no agreements in effect that significantly limit our rights to use or license the
use of any patents or copyrights in any manner material to the franchise. There are no infringing
uses actually known to us that could materially affect your use of the patents or copyrights.
We are not obligated to protect you against infringement or unfair competition claims
arising out of your use of any patents or copyrights, or to participate in your defense or
indemnify you. We reserve the right to control any litigation related to any patents and
copyrights and we have the sole right to decide to pursue or settle any infringement actions
related to the patents or copyrights. You must notify us promptly of any infringement or
unauthorized use of the Marks of which you become aware.
You must keep confidential during and after the term of the Franchise Agreement all
proprietary information, including the Operations Manual. Upon termination of your Franchise
Agreement, you must return to us all proprietary information, including but not limited to the
Operations Manual and all other copyrighted material. You must notify us immediately if you
learn about an unauthorized use of proprietary information. We are not obligated to take any
action and we have the sole right to decide the appropriate response to any unauthorized use of
proprietary information. You must comply with all changes to the Operations Manual at your
cost.
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ITEM 15
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE
FRANCHISE BUSINESS
If you are, or at any time become, a business corporation, partnership, limited liability
company or other legal entity, you must designate in “Appendix A” to the Franchise Agreement
or Exhibit C to the Area Development Agreement a “Responsible Owner,” who is an individual
approved by us who: (a) has an ownership interest in you; (b) has the authority to bind you
regarding all operational decisions with respect to your PLANET FITNESS business; and (c)
has completed our training program to our satisfaction.
You may also request approval of an operator who has completed our training program to
whom you can delegate your obligation to develop and operate your business (an “Approved
Operator”). You must require that any Approved Operator sign a non-disclosure agreement and
non-competition agreement. All approvals are given in our sole discretion. We do not guarantee
that you will be allowed to delegate your responsibility.
Unless we approve an Approved Operator for your PLANET FITNESS business, you
(or your Responsible Owner) agree to personally manage and operate the franchise as your
primary occupation and will not, without our prior consent, delegate your (or one of your
owners) authority and responsibility with respect to management and operation. You (or your
Responsible Owner) agree that you will at all times faithfully, honestly and diligently perform
your obligations hereunder, continuously exert your best efforts to promote and enhance the
franchise and not engage in any other business or activity that conflicts with your obligations to
operate the franchise in compliance with this Agreement. Specifically, you (or one of your
owners): (a) must exert your best efforts to the development and operation of your PLANET
FITNESS business and all other PLANET FITNESS businesses you own; and (b) absent our
prior approval, may not engage in any other business or activity, directly or indirectly, that
requires substantial management responsibility or time commitments or otherwise may conflict
with your obligations under the Franchise Agreement. Your PLANET FITNESS business must,
at all times, be managed by you, one of your owners, an Approved Operator, or by a manager or
shift supervisor who has completed our training program to our satisfaction. Your manager need
not have an equity interest in the franchise.
As more fully described in the Franchise Agreement, you must implement all reasonable
procedures we periodically prescribe to prevent unauthorized use or disclosure of confidential
information. These procedures include the use of nondisclosure agreements with your owners,
Approved Operator, officers, directors, managers, and assistant managers. You, your owners, and
your Approved Operator must deliver these agreements to us. At the end of the term of a
Franchise Agreement, you must deliver to us all confidential information.
If you or one of your affiliates have entered into an Area Development Agreement with
us and are entering into a Franchise Agreement under that Area Development Agreement, and
you are a business corporation, partnership, limited liability company or other legal entity, you
must be at least 51% owned or controlled by a person or group of people that has at least a 51%
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PLANET FITNESS®
ownership interest in and voting control of the entity that signed the Area Development
Agreement, except as we approved in writing in our business judgment. We have the right to
approve in advance your ownership structure.
If you are a partnership, corporation, limited liability company or other legal entity, any
person who has a 5% or greater interest in you must undertake to be personally bound, jointly
and severally, by your obligations under the Franchise Agreement and Area Development
Agreement, and personally guarantee your performance. Copies of these guarantees are
contained in Appendix B of the Franchise Agreement and Exhibit B of the Area Development
Agreement, which are attached to this Disclosure Document. We do not currently require the
spouses of owners to sign a personal guarantee.
ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
Item 8 of this Disclosure Document describes our requirements for approved supplies and
suppliers. You may offer only the products and services we have approved in writing. You must
offer all services and products that we designate as required for franchisees. There are no limits
on our right to make modifications to the approved products and services periodically as set forth
in the Operations Manual. Any failure to comply with our Methods of Operation or Operations
Manual may result in termination of your Franchise Agreement (See Item 17).
You may use only marketing and promotional materials that we have approved.
You are not limited in the type of customers to whom you may sell approved products or
services.
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PLANET FITNESS®
ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
THE FRANCHISE RELATIONSHIP
This table lists certain important provisions of the franchise and related agreements.
You should read these provisions in the agreements attached to this Disclosure Document.
Provision
a. Length of the franchise term
b. Renewal or extension of the term
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
Article in
Franchise
Agreement
3.1
14
Summary
We offer franchises with 10 year terms.
A successor franchise may be granted if you
meet our requirements.
Requirements for franchisee to
14
To be granted a successor franchise you must:
renew or extend
(1) have substantially complied with the
franchise agreement during its term, (2) cure all
deficiencies we identify, (3) remodel the
leasehold as we require, (4) pay a successor
franchise fee equal to our then-current initial
franchise fee for new franchises, provided that
such fee will not exceed $20,000, and (5) sign a
general release. You may be required to sign a
new franchise agreement with materially
different terms than your original contract.
Termination by franchisee
15.1
You may terminate the agreement on any
grounds available by law.
Termination by franchisor without Not Applicable We will not terminate the Franchise Agreement
cause
without cause.
Termination by franchisor with
15.2, 15.3 Material, uncured breaches of the Franchise
cause
Agreement.
“Cause” defined – curable defaults
15.3
You may cure certain defaults in the operation of
your franchise upon notice.
“Cause” defined – non-curable
15.2
Certain defaults are inherently incurable and will
defaults
result in termination.
Franchisee’s obligations on
16
Pay us what you owe us, cease using the Marks,
termination/nonrenewal
and follow our termination procedures
Assignment of contract by
13.1
Fully transferable by us.
franchisor
“Transfer” by franchisee 1.4
A transfer includes the transfer of the Franchise
defined
Agreement, any interest in the Franchise
Agreement, any ownership or other interest in
you or the BUSINESS, and any arrangement
where you sell accounts receivable or EFT or
any other assets of the BUSINESS.
Franchisor’s approval of transfer
13.2, 13.3, All transfers require our approval.
by you
13.4, 13.5
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Provision
m. Conditions for franchisor approval
of transfer
n. Franchisor’s right of first refusal
to acquire franchisee’s business
o. Franchisor’s option to purchase
franchisee’s business
p. Death or disability of franchisee
q. Non-competition covenants during
the term of the franchise
r.
Non-competition covenants after
the franchise is terminated or
expires
Article in
Franchise
Agreement
13.3
13.8, 13.9
16.11
13.5
16.5
16.6
s. Modification of the agreement
t. Integration / merger clause
19.16
19.25
u. Dispute resolution by arbitration
or mediation
19.12
v. Choice of forum
19.14
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Summary
Transferee must meet our character
requirements, complete initial training, and sign
our then-current version of franchise agreement;
you must pay all amounts owed, pay a transfer
fee of the greater of (a) $25,000 or (b) $10,000
per franchise being transferred, sign a general
release, agree to be bound by the confidentiality
and non-competition covenants, and agree to
subordinate your security interest (if any) in the
business to our right to receive payment under
the Franchise Agreement.
For all third party bona fide offers.
60 day option upon termination or expiration of
the Franchise Agreement.
Treated as a transfer.
No direct or indirect involvement in the
operation of any men’s, women’s, children’s, or
co-ed fitness, exercise, athletic, or wellness
facility of any kind, including a health club,
gym, physical fitness club, personal training
studio, weight loss, weight training or resistance
training studio, or aerobics center (“Competitive
Business”) other than the business authorized in
the Franchise Agreement.
No direct or indirect involvement in the
operation of any Competitive Business for 2
years after termination, expiration, or transfer at
the Location, within 15 miles of the Location, or
within 15 miles of any other PLANET
FITNESS business.
Must be in writing signed by us and you.
Oral statements not binding. Franchise
Agreement is the entire agreement. Any
promises not contained in the Franchise
Agreement or this Disclosure Document may not
be enforceable.
All disputes resolved by mediation and
arbitration except for actions for declaratory or
equitable relief and actions in ejectment or for
possession of any interest in real or personal
property.
City closest to our then current headquarters
(currently, Newington, New Hampshire), unless
superseded by State law.
PLANET FITNESS®
Article in
Franchise
Agreement
19.13
Provision
w. Choice of law
Summary
New Hampshire (unless superseded by state
law), except for arbitration which is covered by
the Federal Arbitration Act.
If you purchase a company-owned location, you must sign the form of Franchise Agreement
contained in this Disclosure Document, which we may amend to incorporate any mutually
agreed terms that may vary from those identified in the table above.
AREA DEVELOPMENT AGREEMENT
This table lists certain important provisions of the Area Development Agreement. You
should read these provisions in the Area Development Agreement attached to this
Disclosure Document.
Provision
a. Length of the term of the
franchise
Section in
Agreement
3
b. Renewal or extension of the term
Not Applicable
c. Requirement for franchisee to
renew or extend
d. Termination by franchisee
e. Termination by franchisor
without cause
f. Termination by franchisor with
cause
Not Applicable
Not Applicable
Not Applicable
9
g. “Cause” defined – curable
defaults
9
h. “Cause” defined – non-curable
defaults
i. Franchisee obligations on
termination/non-renewal
j. Assignment of contract by
franchisor
9
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15
Summary
The ADA term expires on the earlier of (a) the
date the last PLANET FITNESS location must
be opened under the Development Schedule, or
(b) the date you open the last PLANET
FITNESS location required by the
Development Schedule.
You do not have the right to renew or extend
the ADA.
You do not have the right to renew or extend
the ADA.
Not Applicable.
We will not terminate the Area Development
Agreement without cause.
We can terminate the Area Development
Agreement if you default or fail to comply with
your obligations.
Where you fail to comply with the
Development Schedule for any location at any
time, or where you fail to comply with the other
terms of this Area Development Agreement, the
Area Development Agreement will terminate,
following our giving you thirty (30) days’
notice and opportunity to cure, without further
recourse to you.
Non-curable defaults include the termination of
a Franchise Agreement
All development rights revert to us.
No restriction on our right to assign.
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PLANET FITNESS®
Provision
k. “Transfer” by franchisee –
defined
l.
Franchisor approval of transfer
by you
m. Conditions for franchisor’s
approval of transfer
n. Franchisor’s right of first refusal
to acquire franchisee’s business
o. Franchisor’s option to purchase
franchisee’s business
p. Death or disability of franchisee
q. Non-competition covenants
during the term of the franchise
r.
Non-competition covenants after
the franchise is terminated or
expires
Section in
Agreement
16
Not Applicable
Summary
You may only transfer your rights and interests
under the Area Development Agreement if you
obtain our consent and transfer all rights under
all Franchise Agreements. You are also subject
to same restrictions on transfer as under the
Franchise Agreement.
You may only transfer your rights and interests
under the Area Development Agreement if you
obtain our consent and transfer all rights under
all Franchise Agreements.
You may only transfer your rights and interests
under the Area Development Agreement if you
obtain our consent and transfer all rights under
all Franchise Agreements; you will pay a
transfer fee of the greater of (a) $25,000 or (b)
$10,000 per franchise being transferred; and
you comply with other transfer conditions we
specify if you propose to sell for more than the
Development Fee paid by you.
Not Applicable.
Not Applicable
Not Applicable.
Not Applicable
13.1
Not Applicable.
No direct or indirect involvement in the
operation of any Competitive Business other
than the business authorized in the Area
Development Agreement.
No direct or indirect involvement in a
Competitive Business for 2 years (i) within the
Development Area, (ii) within 15 miles of any
PLANET FITNESS business developed by
your, or (iii) within 15 miles of any other
PLANET FITNESS franchised or companyowned business.
Any modification must be in writing and signed
by both parties
Only terms of the Area Development
Agreement are binding. Any promises not
contained in the Franchise Agreement or this
Disclosure Document may not be enforceable.
All disputes resolved by mediation and
arbitration except for actions for actions for
declaratory or equitable relief and actions in
ejectment or for possession of any interest in
real or personal property.
16
16
13.2
s. Modification of the Agreement
26
t.
25
Integration/merger clause
u. Dispute resolution by arbitration
or mediation
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PLANET FITNESS®
Provision
v. Choice of forum
w. Choice of law
Section in
Agreement
19, 21
20
Summary
City closest to our then current headquarters
(currently, Newington, New Hampshire), unless
superseded by State law.
New Hampshire (unless superseded by state
law), except for arbitration which is covered by
the Federal Arbitration Act.
ITEM 18
PUBLIC FIGURES
There are no public figures involved in the sale of this franchise.
ITEM 19
FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC’s Franchise Rule permits a franchisor to provide information about the actual or
potential financial performance of its franchised and/or franchisor-owned outlets, if there is a
reasonable basis for the information, and if the information is included in the Disclosure
Document. Financial performance information that differs from that included in Item 19 may be
given only if: (1) a franchisor provides the actual records of an existing outlet you are
considering buying; or (2) a franchisor supplements the information provided in this Item 19, for
example, by providing information about possible performance at a particular location or under
particular circumstances.
EFT REVENUE
The following chart shows Average Annual Gross EFT revenue for our corporate and
franchised clubs that have been open and operating for at least 12 months as of December 31,
2013. The clubs were segregated into three groups, or thirds, based on annual gross EFT
revenue (i.e., Bottom Third, Middle Third, and Upper Third). Gross EFT revenue is revenue on
recurring monthly and annual membership fees that are automatically collected from club
members. This does not include any prepaid membership fees, revenue from retail sales or other
sources of revenue and excludes returns.
BOTTOM
THIRD
MIDDLE
THIRD
UPPER
THIRD
Average Annual Gross EFT Revenue*
$862
$1,300
$1,978
Number of Clubs
200
200
200
CORPORATE & FRANCHISED
*In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013
Of the 200 locations in the Bottom Third, 111 (or 56%) exceeded the total Average Annual
Gross EFT Revenue of $862,000. Of the 200 locations in the Middle Third, 100 (or 50%)
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exceeded the total Average Annual Gross EFT Revenue of $1,300,000. Of the 200 locations in
the upper third, 73 (or 37%) exceeded the total Average Annual Gross EFT Revenue of
$1,978,000.
BOTTOM
THIRD
MIDDLE
THIRD
UPPER
THIRD
Average Annual Gross EFT Revenue*
$856
$1,290
$1,982
Number of Clubs
185
185
186
FRANCHISED ONLY
*In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013
Of the 185 locations in the Bottom Third, 102 (or 55%) exceeded the total Average Annual
Gross EFT Revenue of $856,000. Of the 185 locations in the Middle Third, 91 (or 49%)
exceeded the total Average Annual Gross EFT Revenue of $1,290,000. Of the 186 locations in
the Upper Third, 66 (or 35%) exceeded the total Average Annual Gross EFT Revenue of
$1,982,000.
CORPORATE ONLY
Average Annual Gross EFT Revenue*
Number of Clubs
BOTTOM
THIRD
MIDDLE
THIRD
UPPER
THIRD
$961
$1,415
$1,901
15
15
14
*In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013
Of the 15 locations in the Bottom Third, 8 (or 53%) exceeded the total Average Annual
Gross EFT Revenue of $961,000. Of the 15 locations in the Middle Third, 7 (or 47%) exceeded
the total Average Annual Gross EFT Revenue of $1,415,000. Of the 14 locations in the Upper
Third, 6 (or 43%) exceeded the total Average Annual Gross EFT Revenue of $1,901,000.
REVENUE AND OPERATIONS STATEMENT
At December 31, 2013, there were 44 corporate PLANET FITNESS locations operating
for at least 12 months. Each of these corporate locations is listed as a “Corporate Location” in
Exhibit F to the Disclosure Document. These clubs were ranked, by annual net revenue, in order
from lowest to highest, then segregated into three groups, or thirds. There are 15 clubs in the
Bottom Third, 15 clubs in the Middle Third, and 14 clubs in the Upper Third. The following
table provides the revenue and operations statement which represents the average results of the
clubs within each third in accordance with U.S generally accepted accounting principles
(“GAAP”).
We have not included any franchisee expense information in the following table because
we do not receive complete expense information from our franchisees. As noted in more detail
below, your results may differ.
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PLANET FITNESS®
BOTTOM
THIRD
Revenue
MIDDLE
THIRD
UPPER
THIRD
1
Membership Sales – EFT
$967,483
$1,424,783
$1,921,628
Other Membership Sales
Net Revenue
$81,084
$1,048,566
$95,107
$1,519,890
$106,685
$2,028,313
$70.53
$80.62
$106.22
$237,547
$257,748
$266,690
$100,224
$134,134
$170,738
$48,168
$70,626
$95,072
$59,164
$77,862
$102,953
$68,734
$89,146
$105,327
$89,988
$603,825
$123,020
$752,537
$154,399
$895,179
$444,741
$767,353
$1,133,135
42%
50%
56%
$29.92
$40.70
$59.34
Net Revenue $/Sq.Ft.
Operating Costs and Expenses
2
Payroll Related
3
Marketing Expenses
4
Royalty Expenses (for illustration only)
Utilities
5
Supplies and Maintenance
6
7
Miscellaneous
Total Operating Costs and Expenses, Excluding Rent
9
EBITDAR
EBITDAR % of Net Revenue
EBITDAR $/Sq.Ft.
Rent Expense
8
Total Operating Costs and Expenses
9
EBITDA
EBITDA % of Net Revenue
$205,351
$314,927
$370,817
$809,176
$1,067,464
$1,265,995
$239,390
$452,426
$762,318
23%
30%
38%
EBITDA $/Sq.Ft.
$16.10
$24.00
$39.92
Average of Sq.Ft.
14,867
18,853
19,096
Notes to Revenue and Operations Statement: The performance results included in the above
Revenue and Operations Statement are corporate locations only and do not include any
franchised locations. Please also keep in mind the following as you review the above table:
1.
Revenue – The principal source of revenue for a PLANET FITNESS club is
membership fees. Membership monthly and annual fees are usually paid through electronic
transfer of funds (EFT). Annual fees are billed to a member once per year, the time of which is
dependent on their join date and membership type, as detailed in their membership agreement. A
fitness facility will also earn additional revenue through enrollment fees, prepaid memberships,
beverage sales, tanning goggles and lotions, Planet Fitness apparel and headphones.
A $10 membership and a Black Card membership must be offered at all times.
Promotional packages are offered at different times during the year and a franchisee has the
ability to tailor the package to their club based on the benefits that come with the package. The
Black Card membership is $19.99/month with an annual fee of $39 and must have a 12 month
commitment, unless otherwise mandated by state or local law. Included with the Black Card is
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PLANET FITNESS®
free tanning, half priced beverages, free massage chair usage, access to any other Planet Fitness
club, and ability to bring a guest for free to your home club.
Your ability to sell monthly memberships will depend upon a variety of factors, including
but not limited to, factors related to your market, how much time and effort you spend on sales,
advertising, and your sales ability.
Membership fees billed by EFT are subject to returns and declines during the electronic
payment process. Your ability to collect monthly and annual membership fees by EFT will
depend upon a variety of factors, including, but not limited to, the accuracy of the billing
information provided by a member, the member’s credit worthiness, and the expiration or
cancellation of a member’s credit card. We have experienced monthly declines and returns
ranging from 3% to 14% of gross membership EFT at our corporate clubs in the past 12 months.
The returns and declines are included in “Other Membership Sales” in the above table.
The square footage of a club does not necessarily correlate to the revenue results.
Revenue results depend upon many independently variable factors including the location and
visibility of the club, local traffic patterns, the demographic composition and trends of the market
area served by the club, the competitive environment, the region and market area in which the
club is located, the length of time the club has been in operation, the quality of the management
and service at the center, the individual skills of the franchisee and other factors.
Of the 15 corporate locations in the Bottom Third: 8 (or 53%) exceeded average Net
Revenue $1,048,566; Of the 15 corporate locations in the Middle Third: 8 (or 53%) exceeded
average Net Revenue $1,519,890; and of the 14 corporate locations in the Upper Third: 6 (or
43%) exceeded average Net Revenue $2,028,313.
2.
Costs and Expenses – The expense information included in the Operations
Statement reflect the costs and expenses of the corporate locations included in the statement plus
an amount equal to the royalty the location would have paid if it were a franchised club. In
comparing the three columns above, some of the expenses are fixed and do not change with any
fluctuation in memberships. Others are not fixed and will increase as memberships increase. You
may incur other expenses. All expenses are based largely on factors within your control for
which you can obtain information through your own research. You should conduct an
independent investigation of the costs and expenses you will incur in operating your franchised
business. Franchisees or former franchisees listed in this Disclosure Document may be one
source of information.
3.
Marketing – The marketing expenses listed above reflect the average of actual
amounts these corporate locations spent on local advertising (LAF), contributions to National
Advertising Fund (NAF), as well as promotional items (i.e. T-Shirts, pens, stickers).
Franchisees must spend the greater of $5,000 per month or 7% of the monthly gross EFT
membership fees per month on approved local advertising. The amount a club spends on
advertising above the required minimum varies depending on the club. The advertising is
performed through a preferred corporate vendor.
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PLANET FITNESS®
The NAF creates and develops marketing, advertising and related programs and
materials, including electronic, print and internet media as well as the planning and purchasing of
national and/or regional network advertising. Franchisees must contribute 2% of the monthly
gross EFT membership fees to the NAF.
4.
Royalty Expenses – Our current royalty rate is 5% of the total gross monthly and
annual membership fees due and payable to you each month and annually, as applicable, through
EFT. However, corporate clubs pay a reduced fixed royalty to us. For illustration purposes only,
the expense category in the above table reflects the payment of a “Royalty” based on the 5% of
the total gross monthly and annual membership fees that a franchisee would pay, rather than the
actual amount paid (if any) by our corporate clubs.
5.
Utilities – Your utilities can vary significantly depending on the size and location
of your club. Certain markets have substantially higher utility costs than others and any
prospective franchisee is urged to investigate local market utility costs prior to making any
assumption about what their costs will be.
6.
Supplies and Maintenance – The Supplies and Maintenance amounts listed
above reflect the average of actual amounts these corporate locations spent on cleaning supplies,
club supplies and repairs & maintenance.
7.
Miscellaneous – Miscellaneous expense includes cost of goods sold, insurance,
billing charges, bank & credit card charges, equipment rental, office expense, sales and use tax,
and other miscellaneous expenses.
Insurance costs vary on a club-by-club basis. The insurance costs noted in the above
statement are based on bulk buy pricing for multiple clubs. Your rates may differ based on
various factors.
Bank and credit card charges will vary based on the banking institution used and type of
club membership draft. Drafting membership fees from credit cards will result in higher fees
than membership fees drafted from bank accounts.
Sales and use tax will vary based on the location of the club. Every state will have
different rules applying to sales and use tax.
Other miscellaneous expense includes pizza, bagels, filing fees, licenses, permits, gifts,
travel/meals, postage, online join expense and professional fees. Many of these costs can vary
significantly depending on your location and the time you spend looking for the best possible
cost on these items.
8.
Rent – Your rent can vary significantly depending on the size and location of
your club. Certain markets have substantially higher real estate costs than others and any
prospective franchisee is urged to investigate local market real estate costs prior to making any
assumption about what their costs will be.
FDD – 2014
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DD-55
PLANET FITNESS®
9.
EBITDAR & EBITDA – EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) does not include any provision for income taxes or for non-cash
expenses such as depreciation or amortization. It also does not include any expense assumption
related to the capital structure of the franchisee entity or any reserve for future capital
expenditures. The statement also does not factor in your initial franchise fee or other initial
investment expenses including expenses for a lease/purchase of equipment. We anticipate that
every franchisee will fund its initial investment differently, and we therefore cannot make any
assumptions on how you would account for these items. EBITDAR (Earnings Before Interest,
Taxes, Depreciation, Amortization and Rent) does not include rent expense. As noted in Note 4
above, the EBIDTA and EBITDAR calculations include payment of an illustrative “Royalty” of
5% of the total gross monthly and annual membership fees. This Royalty is based on what a
franchisee would pay, rather than the actual amount paid (if any) by our corporate clubs.
Of the 15 corporate locations in the Bottom Third: 9 (or 60%) exceeded average
EBITDAR $444,741; of the 15 corporate locations in the Middle Third: 7 (or 47%) exceeded
average EBITDAR $767,353; and of the 14 corporate locations in the Upper Third: 6 (or 43%)
exceeded average EBITDAR $1,133,135.
Of the 15 corporate locations in the Bottom Third: 7 (or 47%) exceeded average
EBITDA $239,390; of the 15 corporate locations in the Middle Third: 10 (or 67%) exceeded
average EBITDA $452,426; and of the 14 corporate locations in the Upper Third: 7 (or 50%)
exceeded average EBITDA $762,318.
General Notes to Item 19:
1. Some outlets have earned or sold these amounts. Your individual results may differ. There
is no assurance that you will earn and/or sell as much. The square footage of a club does not
necessarily correlate to revenue results. Certain markets have substantially higher labor costs
than others and you are urged to investigate local labor costs prior to making any
assumptions about what your costs will be. Sales, expenses, and operating revenue results
depend upon many independently variable factors including the location and visibility of the
club, local traffic patterns, the demographic composition and trends of the market area served
by the club, the competitive environment, the region and market area in which the club is
located, the length of time the club has been in operation, the quality of the management and
service at the center, the individual skills of the franchisee and other factors.
2. You have the sole responsibility for developing your own business plan for your proposed
center or territory, including capital budgets, pro forma financial statements, sales and
expense projections and other elements appropriate to the particular circumstances you
anticipate for your center. In developing the business plan, you are cautioned to make
necessary allowance for changes in financial results that may occur due to any of the factors
listed above, for any and all ranges of general economic conditions that may exist now or in
the future, or for any other circumstances that may impact the operation and performance of
the business.
FDD – 2014
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04/17/14
DD-56
PLANET FITNESS®
3. Other than the preceding financial performance representation, we do not make any financial
performance representations. We also do not authorize our employees or representatives to
make any such representations either orally or in writing. If you are purchasing an existing
outlet, however, we may provide you with the actual records of that outlet. If you receive
any other financial performance information or projections of your future income, you should
report it to the franchisor’s management by contacting Candace Couture, our Franchise Sales
Manager at 26 Fox Run Road, Newington, NH 03801 and (603) 750-0001, the Federal Trade
Commission, and the appropriate state regulatory agencies.
4. We recommend that you make your own independent investigation to determine whether the
franchise may be profitable to you. You should use the above information only as a
reference in conducting your analysis and preparing your own projected revenue statements
and cash flow statements. We suggest strongly that you consult your financial advisor or
personal accountant concerning financial projections and federal, state and local income
taxes and any other applicable taxes that you may incur in operating a PLANET FITNESS
business.
Written substantiation of all data presented in this Item 19 will be made available to you
on reasonable request.
FDD – 2014
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DD-57
PLANET FITNESS®
ITEM 20
OUTLETS AND FRANCHISEE INFORMATION
Table No. 1
System-wide Outlet Summary
For Years 2011 to 2013
Outlet Type
Franchised Outlets
Company-Owned
(Note 1)
Total Outlets
Year
2011
2012
2013
2011
2012
2013
2011
2012
2013
Outlets at the Start
of the Year
332
453
562
58
67
44
390
520
606
Outlets at the End
of the Year
453
562
704
67
44
45
520
606
749
Net Change
+121
+109
+142
+9
-23
+1
+130
+86
+143
*As of December 31, 2011, 2012 and 2013. Company-owned locations include locations operated by our
affiliates and partnership locations.
Note 1: In 2012, we sold our partial interest in certain company-owned locations to the franchisee who
owned the remaining interest in the locations. Following the sale, these locations have been categorized
as franchisee locations.
Table No. 2
Transfers of Outlets From Franchisees to New Owners
(Other than the Franchisor)
For Years 2011 to 2013*
State
Connecticut
Florida
Maine
Massachusetts
New Hampshire
FDD – 2014
14877235.8
04/17/14
Year
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013
DD-58
Number of Transfers
0
15
4
1
0
0
0
4
0
1
6
0
1
0
0
PLANET FITNESS®
State
Year
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013
New Mexico
Pennsylvania
South Carolina
Tennessee
Texas
Total
Number of Transfers
0
0
8
1
0
0
0
1
0
0
0
3
0
0
10
4
26
25
*As of December 31, 2011, 2012 and 2013. States not listed had no transfer activity to report.
Table No. 3
Status of Franchised Outlets
For Years 2011 to 2013*
State
Alabama
Alaska
Arizona
Arkansas
California
FDD – 2014
14877235.8
04/17/14
Reacquired
by
Franchisor
Ceased
Operations
Other
Reasons
Outlets at
End of the
Year
0
0
0
9
0
0
0
0
9
0
0
0
0
13
1
0
0
0
0
4
4
0
0
0
0
0
4
2013
4
0
0
0
0
0
4
2011
1
0
1
0
0
0
0
2012
0
6
0
0
0
0
6
2013
6
4
0
0
0
0
10
2011
2012
0
1
1
1
0
0
0
0
0
0
0
0
1
2
2013
2
1
0
0
0
0
3
2011
9
2
0
0
0
0
11
2012
11
3
0
0
0
0
14
2013
14
6
0
0
0
0
20
Year
Outlets at
Start of
Year
Outlets
Opened
2011
8
1
0
2012
9
0
2013
9
4
2011
3
2012
NonTerminations Renewals
DD-59
PLANET FITNESS®
Reacquired
by
Franchisor
Ceased
Operations
Other
Reasons
Outlets at
End of the
Year
State
Year
Outlets at
Start of
Year
Colorado
2011
1
1
0
0
0
0
2
2012
2
1
0
0
0
0
3
2013
3
1
0
0
0
0
4
2011
21
6
0
0
0
0
26
2012
26
1
0
0
0
0
27
2013
27
2
0
0
0
0
29
2011
2012
2
2
0
0
0
0
0
0
0
1
0
0
2
1
2013
1
0
0
0
0
0
1
2011
36
11
0
0
0
0
47
2012
47
2
0
0
0
0
49
2013
49
5
0
0
0
0
54
2011
3
2
0
0
0
0
5
2012
5
2
0
0
0
0
7
2013
7
5
0
0
0
0
12
2011
1
0
0
0
0
0
1
2012
1
1
0
0
0
0
2
2013
2
0
0
0
0
0
2
2011
2
9
0
0
0
0
11
2012
11
8
0
0
0
0
19
2013
11
10
0
0
0
0
29
2011
2012
2013
2011
2012
2013
2011
2
5
8
1
3
3
1
3
3
10
2
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5
8
18
3
3
5
1
2012
1
2
0
0
0
0
3
2013
3
1
0
0
0
0
4
2011
2012
0
1
1
2
0
0
0
0
0
0
0
0
1
3
2013
3
2
0
0
0
0
5
Louisiana
2011
2012
2013
1
3
4
2
1
3
0
0
0
0
0
0
0
0
0
0
0
0
3
4
7
Maine
2011
11
0
0
0
0
0
11
2012
11
0
0
0
0
0
11
2013
11
0
0
0
0
1
10
Connecticut
Delaware
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
FDD – 2014
14877235.8
04/17/14
Outlets
Opened
NonTerminations Renewals
DD-60
PLANET FITNESS®
Reacquired
by
Franchisor
Ceased
Operations
Other
Reasons
Outlets at
End of the
Year
State
Year
Outlets at
Start of
Year
Maryland
2011
12
3
0
0
0
0
15
2012
15
4
0
0
0
0
19
2013
19
3
0
0
0
0
22
2011
44
2
0
0
0
0
46
2012
46
3
0
0
0
0
49
2013
49
3
4
0
0
1
47
2011
14
9
0
0
0
0
23
2012
23
6
0
0
0
0
29
2013
29
6
0
0
0
0
35
2011
2012
2
2
0
1
0
0
0
0
0
0
0
0
2
3
2013
3
1
0
0
0
0
4
2011
2012
3
3
0
1
0
0
0
0
0
0
0
0
3
4
2013
4
0
0
0
0
0
4
2011
2012
0
2
2
2
0
0
0
0
0
0
0
0
2
4
2013
4
2
0
0
0
0
6
2011
1
3
0
0
0
0
4
2012
4
0
0
0
0
0
4
2013
4
1
0
0
0
0
5
2011
0
0
0
0
0
0
0
2012
0
2
0
0
0
0
2
2013
2
1
0
0
0
0
3
2011
2
0
0
0
0
0
2
2012
2
0
0
0
0
0
2
2013
2
0
0
0
0
0
2
2011
11
4
0
0
0
0
15
2012
15
2
0
0
0
0
17
2013
17
5
0
0
0
0
22
2011
5
3
0
0
0
0
8
2012
8
0
0
0
0
0
8
2013
8
1
0
0
0
0
9
2011
30
7
0
0
0
0
37
2012
37
30
0
0
0
0
67
2013
67
11
0
0
0
0
78
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nevada
Nebraska
New
Hampshire
New Jersey
New Mexico
New York
FDD – 2014
14877235.8
04/17/14
Outlets
Opened
NonTerminations Renewals
DD-61
PLANET FITNESS®
State
North
Carolina
(Note 1)
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South
Carolina
South Dakota
Tennessee
Texas
Utah
FDD – 2014
14877235.8
04/17/14
Reacquired
by
Franchisor
Ceased
Operations
Other
Reasons
Outlets at
End of the
Year
0
0
0
21
0
0
0
0
23
5
0
0
0
0
26
1
1
0
0
0
0
2
2012
2
0
0
0
0
0
2
2013
2
0
0
0
0
0
2
2011
7
6
0
0
0
0
13
2012
13
5
0
0
0
0
18
2013
18
11
0
0
0
0
29
2011
1
2
0
0
0
0
3
2012
3
2
0
0
0
0
5
2013
5
3
0
0
0
0
8
2011
0
0
0
0
0
0
0
2012
0
1
0
0
0
0
1
2013
1
2
0
0
0
0
3
2011
28
4
0
0
0
0
31
2012
31
0
0
0
1
0
30
2013
30
9
0
0
0
0
39
2011
6
0
0
0
0
0
6
2012
6
3
0
0
0
0
9
2013
9
1
0
0
0
0
10
2011
3
3
0
0
0
0
6
2012
6
1
0
0
0
0
7
2013
7
3
0
0
0
0
10
2011
2012
2013
2011
2012
1
1
1
0
2
0
0
0
2
4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
1
2
6
2013
6
4
0
0
0
0
10
2011
22
11
0
0
0
0
32
2012
32
3
1
0
0
0
35
2013
35
11
0
0
0
0
46
2011
4
4
0
0
0
0
8
2012
8
1
0
0
0
0
9
2013
9
1
0
0
0
0
10
Year
Outlets at
Start of
Year
Outlets
Opened
2011
18
3
0
2012
21
2
2013
21
2011
NonTerminations Renewals
DD-62
PLANET FITNESS®
State
Vermont
Virginia
Washington
W. Virginia
Wisconsin
Puerto Rico
Total
Reacquired
by
Franchisor
Ceased
Operations
Other
Reasons
Outlets at
End of the
Year
0
0
0
2
0
0
0
0
2
0
0
0
0
0
2
8
3
0
0
0
0
11
2012
11
2
0
0
0
0
13
2013
13
3
0
0
0
0
16
2011
2012
0
3
3
0
0
0
0
0
0
0
0
0
3
3
2013
3
0
0
0
0
0
3
2011
2012
0
1
1
1
0
0
0
0
0
0
0
0
1
2
2013
2
1
0
0
0
0
3
2011
4
6
0
0
0
0
10
2012
10
1
0
0
0
0
11
2013
11
4
0
0
0
0
15
2011
2012
0
1
1
1
0
0
0
0
0
0
0
0
1
2
2013
2
2
0
0
0
0
4
2011
332
125
3
0
1
0
453
2012
453
111
0
0
2
0
562
2013
562
148
4
0
0
2
704
Year
Outlets at
Start of
Year
Outlets
Opened
2011
2
0
0
2012
2
0
2013
2
2011
NonTerminations Renewals
*As of December 31, 2011, 2012, and 2013. If multiple events occurred affecting an outlet, this table shows the
event that occurred last in time. States not listed had no franchised activity to report.
Note 1: Immediate family members of individuals listed in Item 2 own and operate five locations in North Carolina.
See list of franchisees attached as Exhibit F.
Table No. 4
Status of Company-Owned Outlets For
Years 2011 to 2013*
State
California
Colorado
FDD – 2014
14877235.8
04/17/14
Year
2011
Outlets at
Start of
Year
0
Outlets
Opened
1
Reacquired from
Franchisees
0
Outlets
Closed
0
Outlets Sold to
Franchisees
0
Outlets at
End of the
Year
1
2012
1
0
0
0
0
1
2013
1
1
0
0
0
2
2011
1
0
0
0
0
1
2012
1
0
0
0
0
1
2013
1
0
0
0
0
1
DD-63
PLANET FITNESS®
State
Connecticut
Delaware
Massachusetts
New
Hampshire
New Jersey
New York
Pennsylvania
Rhode Island
Total
Year
2011
2012
2013
Outlets at
Start of
Year
5
0
0
Outlets
Opened
0
0
0
Reacquired from
Franchisees
0
0
0
Outlets
Closed
0
0
0
Outlets Sold to
Franchisees
5
0
0
Outlets at
End of the
Year
0
0
0
2011
2012
0
0
0
0
0
1
0
0
0
0
0
1
2013
1
0
0
0
0
1
2011
1
1
0
0
0
2
2012
2
0
0
0
0
2
2013
2
0
0
0
0
2
2011
14
0
0
0
0
14
2012
14
0
0
0
0
14
2013
14
0
0
0
0
14
2011
2
1
0
0
0
3
2012
3
0
0
0
0
3
2013
3
0
0
0
0
3
2011
23
9
0
0
0
32
2012
32
0
0
0
25
7
2013
7
0
0
0
0
7
2011
10
1
1
0
0
12
2012
12
1
3
0
0
15
2013
15
0
0
0
0
15
2011
2
0
0
0
0
2
2012
2
0
0
0
2
0
2013
0
0
0
0
0
0
2011
58
13
1
0
0
67
2012
67
13
4
0
27
44
2013
44
1
0
0
0
45
*As of December 31, 2011, 2012 and 2013. States not listed had no company-owned outlets to report. Our
affiliates or immediate family members of individuals listed in Item 2 own and operate these units. (See the list of
company-owned units attached as Exhibit F.)
FDD – 2014
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04/17/14
DD-64
PLANET FITNESS®
Table No. 5
Projected Openings as of December 31, 2013
State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
FDD – 2014
14877235.8
04/17/14
Franchised
Agreements Signed
But Not Opened
1
0
0
0
6
1
0
0
6
3
0
1
5
0
0
1
2
0
0
1
1
0
0
0
0
1
0
2
1
6
0
0
2
0
0
5
0
2
0
0
2
0
Projected New Franchised
Outlets in the Next Fiscal
Year
1
0
5
1
4
3
0
0
4
1
0
3
2
0
2
2
2
0
5
0
4
2
1
4
0
0
0
4
2
5
5
0
7
2
0
5
1
2
0
6
4
3
DD-65
Projected New CompanyOwned Outlets in the Next
Fiscal Year
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
PLANET FITNESS®
State
Virginia
Washington
West Virginia
Wisconsin
Puerto Rico
Total
Franchised
Agreements Signed
But Not Opened
1
2
0
1
0
53
Projected New Franchised
Outlets in the Next Fiscal
Year
3
0
1
3
0
99
Projected New CompanyOwned Outlets in the Next
Fiscal Year
0
0
0
0
0
4
Attached as Exhibit “F” to this Disclosure Document is a list of the PLANET FITNESS
franchisees as of December 31, 2013 and a list of franchisees who have been terminated, cancelled
or otherwise voluntarily ceased doing business under the Franchise Agreement during 2013 or who
have not communicated with us within 10 weeks of the date of this Disclosure Document. Also
listed in Exhibit “F” are our corporate locations. If you buy this franchise, your contact
information may by disclosed to other buyers when you leave the franchise system.
During the last three fiscal years, some franchisees have signed confidentiality clauses with
us. In some instances, current and former franchisees sign provisions restricting their ability to
speak openly about their experience with us. You may want to speak with current and former
franchisees, but be aware that not all such franchisees will be able to communicate with you.
We have created a Franchise Advisory Council which is endorsed by us. Please contact us
for more information.
ITEM 21
FINANCIAL STATEMENTS
Attached to this Disclosure Document as Exhibit “E” are the audited consolidated
balance sheets of Planet Fitness Holdings, LLC and its subsidiaries as of December 31, 2013 and
2012 (Successor) and the related consolidated statements of operations, comprehensive income,
cash flows, and changes in equity for the year ended December 31, 2013 (Successor), the period
from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to
November 7, 2012 (Predecessor), and the year ended December 31, 2011 (Predecessor).
Also attached to this Disclosure Document as Exhibit “E” is a guarantee of performance
by which Planet Fitness Holdings, LLC guarantees our obligations under the Franchise
Agreement.
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PLANET FITNESS®
ITEM 22
CONTRACTS
Attached to this Disclosure Document as Exhibit “B” is our form of Nondisclosure &
Non-Use Agreement.
Attached to this Disclosure Document as Exhibit “C” is our Franchise Agreement with
Appendices (A) Ownership Addendum, (B) Personal Guarantee, (C) Owner Personal Covenants,
(D) Silent Investors, (E) Assignment of Telephone Numbers, (F) Lease Provisions, and (G)
Location.
Attached to this Disclosure Document as Exhibit “D”: is our Area Development
Agreement with Exhibits (A) Map of Development Area, (B) Personal Guarantee, and (C)
Ownership Addendum.
Attached to this Disclosure Document as Exhibit “H” is our Form of Release Agreement.
Attached to this Disclosure Document as Exhibit “I” are the Visionary License
Agreement, Purchase Order for Visionary Products and Software, Radiant Software Agreement,
and Merchant Agreements.
ITEM 23
RECEIPTS
The Receipts to be signed by all prospective franchisees are attached in duplicate to this
Disclosure Document (identified as Exhibit “K”). You will sign and date one copy and give it to
us at the time we present it to you. Your copy of the receipt is attached at the end of this
Disclosure Document. This Disclosure Document summarizes certain provisions of the
Franchise Agreement and other information in plain language. Read this Disclosure Document
and all agreements carefully.
FDD – 2014
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PLANET FITNESS®
PLANET FITNESS
EXHIBIT “A”
TO THE DISCLOSURE DOCUMENT
LIST OF STATE AGENCIES AND AGENTS FOR SERVICE OF PROCESS
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PLANET FITNESS®
Exhibit A
LIST OF STATE ADMINISTRATORS AND
AGENTS FOR SERVICE OF PROCESS
STATE
CALIFORNIA
STATE ADMINISTRATOR
Department of Business Oversight
1515 K Street
Suite 200
Sacramento, CA 95814
(866) 275-2677
Business Registration Division
Department of Commerce and Consumer Affairs
335 Merchant Street
Honolulu, HI 96813
HAWAII
ILLINOIS
INDIANA
MARYLAND
MICHIGAN
MINNESOTA
NEW YORK
NORTH DAKOTA
RHODE ISLAND
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Office of the Attorney General
Franchise Division
500 South Second Street
Springfield, IL 62706
Secretary of State
Franchise Section
Indiana Securities Division
302 West Washington Street, Room E-111
Indianapolis, IN 46204
Office of the Attorney General
Securities Division
200 St. Paul Place
Baltimore, MD 21202
Michigan Department of Attorney General
Consumer Protection Division
Franchise Section
525 W. Ottawa Street
G. Mennen Williams Building, 1st Floor
Lansing, MI 48913
Minnesota Department of Commerce
85 7th Place East, Suite 500
St. Paul, MN 55101
Bureau of Investor Protection and Securities
New York State Department of Law
120 Broadway, 23rd Floor
New York, NY 10271
North Dakota Securities Department
600 East Boulevard Avenue
State Capitol – 5th Floor
Bismarck, ND 58505-0510
Securities Division
Department of Business Registration
John O. Pastore Center, Building 69-1
1511 Pontiac Avenue
Cranston, RI 02920
A-2
AGENT FOR
SERVICE OF PROCESS
Commissioner of Business Oversight
Department of Business Oversight
1515 K Street
Suite 200
Sacramento, CA 95814
(866) 275-2677
Commissioner of Securities
Business Registration Division
Department of Commerce & Consumer Affairs
335 Merchant Street
Honolulu, HI 96813
Illinois Attorney General
500 South Second Street
Springfield, IL 62706
Indiana Secretary of State
302 West Washington Street, Room E-111
Indianapolis, IN 46204
Maryland Securities Commissioner
200 St. Paul Place
Baltimore, Maryland 21202-2020
Michigan Department of Attorney General
Consumer Protection Division
Franchise Section
525 W. Ottawa Street
G. Mennen Williams Building, 1st Floor
Lansing, MI 48913
Minnesota Commissioner of Commerce
85 7th Place East, Suite 500
St. Paul, MN 55101
Secretary of State of New York
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231-0001
North Dakota Securities Commissioner
Securities Department
600 East Boulevard Avenue
State Capitol – 5th Floor
Bismarck, ND 58505-0510
Director of Department of Business Regulation
Department of Business Regulation
John O. Pastore Center, Building 69-1
1511 Pontiac Avenue
Cranston, RI 02920
PLANET FITNESS®
STATE
SOUTH DAKOTA
VIRGINIA
WASHINGTON
WISCONSIN
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STATE ADMINISTRATOR
Department of Labor and Regulation
Division of Securities
State of South Dakota
445 East Capitol Avenue
Pierre, SD 57501-3185
State Corporation Commission
Division of Securities and Retail Franchising
1300 E. Main Street, Ninth Floor
Richmond, VA 23219
Department of Financial Institutions
Securities Division
150 Israel Road SW
Tumwater, WA 98501
Division of Securities
Department of Financial Institutions
345 West Washington Ave., Suite 300
Madison, WI 53703
A-3
AGENT FOR
SERVICE OF PROCESS
Director of South Dakota Division of Securities
Department of Labor and Regulation
445 East Capitol Avenue
Pierre, SD 57501-3185
Clerk of the State Corporation Commission
1300 E. Main Street, 1st Floor
Richmond, VA 23219
Director, Department of Financial Institutions
Securities Division
150 Israel Road SW
Tumwater, WA 98501
Administrator
Division of Securities
Department of Financial Institutions
345 West Washington Ave.
Madison, WI 53703
PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “B”
TO THE DISCLOSURE DOCUMENT
NONDISCLOSURE & NON-USE AGREEMENT
FDD – 2014
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PLANET FITNESS®
Exhibit B
Pla-Fit Franchise, LLC
PFIP, LLC
NONDISCLOSURE & NON-USE AGREEMENT
This Nondisclosure Agreement is made and entered into as of _______________, 20__, (the
“Effective Date”) by and between Pla-Fit Franchise, LLC, and PFIP, LLC, New Hampshire limited
liability companies and their parent, subsidiaries and affiliates (collectively “Planet Fitness”) and the
individuals identified below and acknowledged by their signature (“Potential Franchisee”).
1.
Purpose. Potential Franchisee wishes to explore the possibility of franchising, opening
and operating one or more Planet Fitness health clubs in which Planet Fitness will
disclose to the Potential Franchisee certain technical information, methods of operations
and business information which Planet Fitness desires the Potential Franchisee treat as
confidential and agree not to use such information except in conjunction with its
operation of a Planet Fitness health club.
2. “Confidential Information” shall mean any information disclosed by or on behalf of
Planet Fitness, either directly or indirectly, in writing, orally or by inspection of tangible
objects (including, without limitation, research, product plans, products, services,
customers, markets, software, computer programs, know-how, ideas, inventions (whether
or not patentable), processes, designs, drawings, engineering, hardware configuration
information, marketing or finance documents and other technical, business, financial,
customer
and
product
development
plans,
forecasts,
strategies
and
information. Information communicated orally shall also be considered Confidential
Information. Confidential Information includes any analyses, compilations, studies or
other documents prepared by Potential Franchisee which reflect, are based on, or contain
the Confidential Information. Without limiting the foregoing, the term “Confidential
Information” shall also include the fact that the Parties are in discussions or negotiations
regarding a potential franchise agreement, the fact that Confidential Information has been
received and the terms and conditions of any proposal in connection with any such
potential business relationship. Notwithstanding the foregoing, Confidential Information
shall not include any information which (i) is or becomes generally available to the public
other than as a result of a breach of this Agreement by Potential Franchisee or any
Potential Franchisee representative, (ii) becomes available to Potential Franchisee on a
nonconfidential basis from a source (other than Fitness or one of Fitness Representatives)
which has represented to Potential Franchisee that such source is entitled to disclose it
without restriction or condition, or (iii) was known by Potential Franchisee on a
nonconfidential basis prior to its disclosure by Fitness, provided that such knowledge is
documented, or (iv) was independently developed by Potential Franchisee without use of
or reference to the Confidential Information and without violation hereof.
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PLANET FITNESS®
3.
Non-use and Non-disclosure.
Potential Franchisee acknowledges that any
discussions/negotiations are extremely sensitive and/or confidential and further agrees
not to use any Confidential Information or any other information Planet Fitness may
share related in any way to its operations or brand for any purpose except to evaluate and
engage in discussions concerning a potential business relationship with Planet Fitness;
Potential Franchisee specifically agrees not to use any Confidential Information or any
such other information for any purpose which is competitive with or detrimental to Planet
Fitness. Potential Franchisee agrees not to disclose any Confidential Information to third
parties or to employees, except to those employees, advisors or partners of Potential
Franchisee who are required to have the Confidential Information in order to evaluate or
engage in discussions concerning the contemplated business relationship with Planet
Fitness. Potential Franchisee shall be responsible for any breach of this agreement by
any person to whom it discloses Confidential Information.
4.
Maintenance of Confidentiality. Potential Franchisee agrees that it shall take all
reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use
of the Confidential Information. Without limiting the foregoing, Potential Franchisee
shall take at least those measures that it takes to protect its own most highly confidential
information and shall ensure that its employees, advisors and partners who have access to
Confidential Information of Planet Fitness have executed a written non-use and nondisclosure agreement in content similar to the provisions hereof, prior to any disclosure of
Confidential Information to such employees, advisors and partners. Potential Franchisee
shall not make any copies of the Confidential Information unless the same are previously
approved in writing by Planet Fitness.
5.
Non-Solicitation. Until the earlier of (i) two (2) years from the date of this agreement or
entry by the parties into a Franchise Agreement or Area Development Agreement,
Potential Franchisee agrees that: (x) it will not, directly or indirectly, initiate or maintain
contact (except for those contacts made in the ordinary course of business) with any
officer, director, employee, customer or supplier of Planet Fitness regarding its business,
operations, prospects or finances; and (y) it will not, directly or indirectly solicit or offer
to hire or hire any officer, director or employee of Planet Fitness or any of its
subsidiaries.
6.
Return of Materials. All documents and other tangible objects containing or
representing Confidential Information which have been disclosed and all copies thereof
which are in the possession of Potential Franchisee or its agents shall be and remain the
sole property of Planet Fitness and shall be promptly returned to Planet Fitness if
Potential Franchisee does not enter into a Franchise Agreement or Area Development
Agreement with Planet Fitness.
7.
No License. Nothing in this Agreement is intended to grant any rights to Potential
Franchisee under any patent, copyright, trade secret or other intellectual property right
nor shall this Agreement grant Potential Franchisee of any rights in or to Planet Fitness’
Confidential Information.
FDD – 2014
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PLANET FITNESS®
8.
Term. The obligations of Potential Franchisee shall survive until such time as all
Confidential Information disclosed hereunder becomes publicly known and made
generally available through no action or inaction of the receiving party, or until Potential
Franchisee enters into a Franchise Agreement or Area Development Agreement with
Planet Fitness.
9.
Remedies. Potential Franchisee agrees that its obligations hereunder are necessary and
reasonable in order to protect Planet Fitness and Planet Fitness’ business, and expressly
agrees that monetary damages would be inadequate to compensate Planet Fitness for any
breach by Potential Franchisee of any covenants and agreements set forth
herein. Accordingly, Potential Franchisee agrees and acknowledges that any such
violation or threatened violation will cause irreparable injury to the other party and that,
in addition to any other remedies that may be available, in law, in equity or otherwise,
Planet Fitness shall be entitled to obtain injunctive relief against the threatened breach of
this Agreement or the continuation of any such breach, without the necessity of proving
actual damages. Potential Franchisee further agrees that it will indemnify Planet Fitness
with respect to, and hold it harmless from and against, any and all losses, damages,
claims, costs and expenses that may be incurred as a result of or arising from any failure
by Potential Franchisee or any party to whom it discloses Confidential Information to
comply with the terms of this agreement.
10.
Miscellaneous. This Agreement shall bind and inure to the benefit of the parties hereto
and their successors and assigns. This Agreement shall be governed by the laws of the
State of New Hampshire, without reference to conflict of laws principles. This document
contains the entire agreement between the parties with respect to the subject matter
hereof, and neither party shall have any obligation, express or implied by law, with
respect to trade secret or proprietary information of the other party except as set forth
herein. Any failure to enforce any provision of this Agreement shall not constitute a
waiver thereof or of any other provision. This Agreement may not be amended, nor any
obligation waived, except by a writing signed by both parties hereto.
____________________________________
(Signature)
____________________________________
(Print Name)
FDD – 2014
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B-4
PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “C”
TO THE DISCLOSURE DOCUMENT
FRANCHISE AGREEMENT
FDD – 2014
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PLANET FITNESS®
PLANET FITNESS®
FRANCHISE AGREEMENT
14877234.6
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Table of Contents
Page
1.
PREAMBLES, ACKNOWLEDGMENTS AND REPRESENTATION. ...........................1
1.1
1.2
1.3
1.4
2.
YOUR ORGANIZATION AND MANAGEMENT. ..........................................................6
2.1
2.2
2.3
2.4
2.5
3.
4.8
4.9
4.10
4.11
5.8
INITIAL FRANCHISE FEE ..............................................................................14
ROYALTY............................................................................................................15
DESIGNATED ACCOUNT AND AUTHORIZED EFT .................................15
INTEREST ON LATE PAYMENTS .................................................................15
APPLICATION OF PAYMENTS......................................................................16
PREFERRED VENDOR PAYMENTS .............................................................16
INTERNET MEMBERSHIP AND BALANCE PAYMENT
ADMINISTRATION FEE ..................................................................................16
INSPECTION AND COMPLIANCE REIMBURSEMENT ...........................16
TRAINING, ASSISTANCE, AND METHODS OF OPERATION. ................................16
6.1
6.2
6.3
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LOCATION SELECTION AND APPROVAL...................................................9
PURCHASE OR LEASE OF THE LOCATION................................................9
RESERVED AREA OF THE LOCATION.......................................................10
LOCATION DEVELOPMENT .........................................................................11
YOUR OBLIGATIONS ......................................................................................12
FIXTURES, FURNISHINGS, EQUIPMENT AND SIGNS ............................13
START-UP INVENTORY, FURNITURE, FIXTURES, SOFTWARE,
EQUIPMENT AND SUPPLIES .........................................................................13
BUSINESS COMMENCEMENT.......................................................................13
COMMENCEMENT DEADLINE.....................................................................14
PRE-SALE MARKETING .................................................................................14
OPENING ASSISTANCE...................................................................................14
FEES. .................................................................................................................................14
5.1
5.2
5.3
5.4
5.5
5.6
5.7
6.
GRANT OF FRANCHISE ....................................................................................8
OUR RESERVATION OF RIGHTS ...................................................................8
LOCATION SELECTION, LEASE OR PURCHASE OF LOCATION AND
LOCATION DEVELOPMENT...........................................................................................9
4.1
4.2
4.3
4.4
4.5
4.6
4.7
5.
ORGANIZATIONAL DOCUMENTS.................................................................6
DISCLOSURE OF OWNERSHIP INTERESTS................................................6
RESPONSIBLE OWNER/MANAGEMENT OF BUSINESS...........................7
CONTROL GROUP..............................................................................................7
FACILITY ORGANIZATION.............................................................................8
GRANT OF RIGHTS. .........................................................................................................8
3.1
3.2
4.
PREAMBLES.........................................................................................................1
ACKNOWLEDGMENTS .....................................................................................1
REPRESENTATION ............................................................................................2
CERTAIN DEFINITIONS....................................................................................2
TRAINING ...........................................................................................................16
REFRESHER TRAINING..................................................................................17
GENERAL GUIDANCE .....................................................................................17
i
Table of Contents
Page
6.4
6.5
6.6
6.7
6.8
6.9
7.
MARKS. ............................................................................................................................20
7.1
7.2
7.3
7.4
7.5
8.
COMPLIANCE WITH METHODS OF OPERATION ..................................23
PROVISIONS OF THIS AGREEMENT ..........................................................25
MODIFICATION OF METHODS OF OPERATION ....................................25
CONDITION OF YOUR BUSINESS ................................................................25
UNIFORM IMAGE .............................................................................................26
PURCHASE OF OTHER PRODUCTS.............................................................26
COMPLIANCE WITH LAWS...........................................................................27
PERSONNEL .......................................................................................................27
INSURANCE........................................................................................................28
QUALITY CONTROL........................................................................................28
PRICING POLICIES ..........................................................................................29
MEMBER DUES POLICIES .............................................................................29
RECIPROCAL MEMBERSHIP........................................................................29
MEMBER TRANSFER POLICY ......................................................................29
FRANCHISE MANAGEMENT.........................................................................29
MARKETING....................................................................................................................29
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
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CONFIDENTIAL INFORMATION..................................................................21
FOR BUSINESS USE ONLY .............................................................................22
IDEAS, CONCEPTS, TECHNIQUES OR MATERIALS...............................23
PLANET FITNESS METHODS OF OPERATION. ........................................................23
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
9.12
9.13
9.14
9.15
10.
OWNERSHIP AND GOODWILL OF MARKS ..............................................20
LIMITATIONS ON YOUR USE OF MARKS .................................................20
NOTIFICATION OF INFRINGEMENTS AND CLAIMS.............................21
DISCONTINUANCE OF USE OF MARKS.....................................................21
INDEMNIFICATION OF FRANCHISEE .......................................................21
CONFIDENTIAL INFORMATION. ................................................................................21
8.1
8.2
8.3
9.
ON-SITE CONSULTATION AND ADDITIONAL GUIDANCE ..................17
OPERATIONS MANUAL ..................................................................................18
COMPLIANCE WITH METHODS OF OPERATION ..................................19
WORKS MADE-FOR-HIRE..............................................................................19
GENERAL CONDUCT.......................................................................................19
COMPLIANCE WITH DATA SECURITY GUIDELINES ...........................19
NATIONAL ADVERTISING.............................................................................29
ACCOUNTING....................................................................................................30
NO PROPORTIONALITY.................................................................................31
DEFERRALS OR REDUCTIONS.....................................................................31
LOCAL ADVERTISING ....................................................................................31
ADVERTISING COOPERATIVES ..................................................................32
SPECIAL MARKETING PROGRAMS ...........................................................34
PARTICIPATION IN INTERNET WEB SITE OR OTHER ON-LINE
COMMUNICATIONS ........................................................................................34
TRUTHFUL ADVERTISING, MARKETING AND PROMOTION ............35
ii
Table of Contents
Page
11.
RECORDS, REPORTS AND FINANCIAL STATEMENTS. .........................................35
11.1
11.2
11.3
12.
INSPECTIONS AND AUDITS.........................................................................................37
12.1
12.2
12.3
13.
BY YOU ................................................................................................................44
IMMEDIATE TERMINATION.........................................................................44
TERMINATION UPON NOTICE.....................................................................45
OUR RIGHT TO OPERATE THE BUSINESS ...............................................47
ALTERNATIVES TO TERMINATION...........................................................47
OUR AND YOUR RIGHTS AND OBLIGATIONS UPON TERMINATION OR
EXPIRATION OF THIS AGREEMENT..........................................................................48
16.1
16.2
16.3
16.4
16.5
16.6
16.7
16.8
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ACQUISITION OF A SUCCESSOR FRANCHISE ........................................42
GRANT OF A SUCCESSOR FRANCHISE .....................................................43
NO GRANT ..........................................................................................................43
90 DAY CURE......................................................................................................43
AGREEMENTS ...................................................................................................44
RELEASES...........................................................................................................44
TERMINATION OF AGREEMENT. ...............................................................................44
15.1
15.2
15.3
15.4
15.5
16.
BY US....................................................................................................................38
BY YOU ................................................................................................................38
CONDITIONS FOR APPROVAL OF TRANSFER ........................................38
TRANSFER TO A WHOLLY OWNED CORPORATION............................40
TRANSFER UPON YOUR DEATH OR DISABILITY ..................................40
OPERATION UPON YOUR DEATH OR DISABILITY ...............................41
BONA FIDE OFFERS.........................................................................................41
OUR RIGHT OF FIRST REFUSAL .................................................................42
NON-EXERCISE.................................................................................................42
EXPIRATION OF THIS AGREEMENT..........................................................................42
14.1
14.2
14.3
14.4
14.5
14.6
15.
OUR RIGHT TO INSPECT THE BUSINESS .................................................37
COOPERATION .................................................................................................37
OUR RIGHT TO AUDIT....................................................................................37
TRANSFER. ......................................................................................................................38
13.1
13.2
13.3
13.4
13.5
13.6
13.7
13.8
13.9
14.
RECORDS ............................................................................................................35
PERIODIC REPORTS........................................................................................36
VERIFICATION..................................................................................................36
PAYMENT OF AMOUNTS OWED TO US.....................................................48
MARKS.................................................................................................................48
DE-BRANDING...................................................................................................49
CONFIDENTIAL INFORMATION..................................................................50
IN-TERM COVENANT NOT TO COMPETE ................................................50
POST-TERM COVENANT NOT TO COMPETE ..........................................51
REASONABLE SCOPE OF COVENANTS .....................................................51
REDUCTION OF SCOPE OF COVENANTS .................................................52
iii
Table of Contents
Page
16.9
COVENANT NOT TO COMPETE UPON EXERCISE OF RIGHT OF
FIRST REFUSAL ................................................................................................52
16.10 COMMENCEMENT BY ORDER.....................................................................52
16.11 OUR RIGHT TO PURCHASE BUSINESS ......................................................52
16.12 CONTINUING OBLIGATIONS........................................................................54
17.
SECURITIES OFFERINGS. .............................................................................................54
17.1
18.
RELATIONSHIP OF THE PARTIES AND INDEMNIFICATION. ...............................54
18.1
18.2
18.3
18.4
18.5
19.
19.16
19.17
19.18
19.19
19.20
19.21
19.22
19.23
19.24
19.25
SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS ..........57
LESSER COVENANT ENFORCEABLE.........................................................57
GREATER NOTICE ...........................................................................................58
WAIVER OF OBLIGATIONS...........................................................................58
NON-WAIVER ....................................................................................................58
FORCE MAJEURE.............................................................................................59
EXTEND PERFORMANCE ..............................................................................59
OUT-OF-STOCK AND DISCONTINUED.......................................................59
COSTS AND ATTORNEYS’ FEES...................................................................59
YOU MAY NOT WITHHOLD PAYMENTS DUE TO US.............................59
RIGHTS OF PARTIES ARE CUMULATIVE.................................................60
DISPUTE RESOLUTION...................................................................................60
GOVERNING LAW............................................................................................64
CONSENT TO JURISDICTION .......................................................................64
WAIVER OF PUNITIVE DAMAGES, JURY TRIAL AND CLASS
ACTIONS .............................................................................................................64
BINDING EFFECT .............................................................................................65
LIMITATIONS OF CLAIMS ............................................................................65
CONSTRUCTION...............................................................................................65
WITHHOLD APPROVAL .................................................................................65
HEADINGS ..........................................................................................................65
JOINT AND SEVERAL OWNERS’ LIABILITY ...........................................65
ANTI-TERRORISM LAWS...............................................................................66
RIGHT TO INFORMATION.............................................................................66
MULTIPLE COPIES ..........................................................................................66
ENTIRE AGREEMENT BETWEEN THE PARTIES ....................................66
NOTICES AND PAYMENTS. .........................................................................................67
20.1
20.2
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INDEPENDENT CONTRACTORS ..................................................................54
NO LIABILITY FOR ACTS OF OTHER PARTY..........................................55
TAXES ..................................................................................................................56
INDEMNIFICATION .........................................................................................56
MITIGATION NOT REQUIRED .....................................................................57
ENFORCEMENT AND MISCELLANEOUS MATTERS. .............................................57
19.1
19.2
19.3
19.4
19.5
19.6
19.7
19.8
19.9
19.10
19.11
19.12
19.13
19.14
19.15
20.
SECURITIES OFFERINGS ...............................................................................54
NOTICES..............................................................................................................67
PAYMENTS .........................................................................................................67
iv
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
OWNERSHIP ADDENDUM
OWNERS’ PERSONAL GUARANTY OF FRANCHISEE’S
OBLIGATIONS
OWNER PERSONAL COVENANTS REGARDING CONFIDENTIALITY
AND NON-COMPETITION
SILENT INVESTORS
ASSIGNMENT OF TELEPHONE NUMBERS
ADDENDUM TO LEASE
LOCATION
ACKNOWLEDGEMENT ADDENDUM
14877234.6
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v
PLANET FITNESS®
FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (the “Agreement”) is made and entered into as of
the Effective Date (as defined herein) by and between Pla-Fit Franchise, LLC, a limited liability
company formed under New Hampshire law, with its principal business address at 26 Fox Run
Road, Newington, NH 03801 (referred to in this Agreement as “we,” “us” or “our”), and
_________________________________________________________, whose principal business
address
is
_______________________________________________________________,
(referred to in this Agreement as “you,” “your” or “owner”).
1.
PREAMBLES, ACKNOWLEDGMENTS AND REPRESENTATION.
1.1
PREAMBLES. This Agreement governs your ownership and operation of one
(1) PLANET FITNESS business offering fitness training facility services,
including exercise machines and free weights, fitness training services, tanning
services, and related services and ancillary merchandise as we may authorize from
time to time. These businesses operate under the PLANET FITNESS name and
under business formats, methods, procedures, designs, layouts, standards and
specifications, all of which we may improve, further develop or otherwise modify
from time to time. We use, promote and license certain trademarks, service marks
and other commercial symbols in the operation of PLANET FITNESS
businesses, including the PLANET FITNESS trademarks and service marks and
associated logos. We have a license to use the Marks and to sublicense the Marks
to franchisees. We grant franchises to persons who meet our qualifications and are
willing to undertake the investment and effort required to own and operate a
PLANET FITNESS business offering the products and services we authorize and
approve and utilizing our business formats, methods, procedures, signs, designs,
layouts, equipment, standards and specifications and the Marks. You have
indicated to us by your actions and statements that you desire a franchise to own
and operate a PLANET FITNESS business.
1.2
ACKNOWLEDGMENTS. You acknowledge that you have read this Agreement and
our Franchise Disclosure Document and understand and accept the terms, conditions and
covenants contained in this Agreement as being reasonably necessary to maintain our
high standards of quality and service and the uniformity of those standards at each
PLANET FITNESS business and thereby to protect and preserve the goodwill of the
Marks. You acknowledge that you have conducted an independent investigation of the
business venture contemplated by this Agreement and recognize that, like any other
business, the nature of the business conducted by a PLANET FITNESS business may
evolve and change over time, that an investment in a PLANET FITNESS business
involves business risks and that your business abilities and efforts are vital to the success
of the venture. You acknowledge and agree that we and you are and will be independent
contractors and that nothing in this Agreement is intended to make either you or us a
general or special agent, joint venturer, partner or employee of the other for any purpose.
You agree to always indicate your status as an independent contractor and franchisee on
any document or information released by you in connection with the BUSINESS.
Further, you will display the following notice in a prominent place at the BUSINESS:
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“This Planet Fitness is a franchise of Pla-Fit Franchise, LLC and is independently
owned and operated.” Any information you acquire from other PLANET FITNESS
franchisees relating to their sales, profits or cash flows does not constitute information
obtained from us, nor do we make any representation as to the accuracy of any such
information. You acknowledge that, in all of their dealings with you, our officers,
directors, employees and agents act only in a representative, and not in an individual,
capacity. All business dealings between you and such persons as a result of this
Agreement are solely between you and us. You further acknowledge that we have
advised you to seek franchise counsel to review and evaluate this Agreement.
1.3
REPRESENTATION. You represent to us, as an inducement to our entry into this
Agreement, that all statements you have made and all materials you have submitted to us
in connection with your purchase of the franchise are accurate and complete and that you
have made no misrepresentations or material omissions in obtaining the franchise. We
have approved of your purchasing a franchise in reliance upon all of your representations.
We reserve the right to terminate this Agreement if you made any material representation
to us that was false or there were any material omissions in information provided to us in
inducing us to enter into this Agreement with you.
1.4
CERTAIN DEFINITIONS. The terms listed below have the meanings which
follow them and include the plural as well as the singular. Other terms are defined
elsewhere in this Agreement in the context in which they arise.
“Annual Membership Accounting Period” - Each yearly period for each membership sold
during the term of this Agreement.
“Annual Membership Billing Day” – The day or days of the year that we designate that we
or our authorized designee are authorized by you to withdraw via electronic funds transfer
from your designated bank account all annual Royalty fees and other amounts then due to
us under the terms of this Agreement, as identified in Article 5.2.
“Ad Fee” - Defined in Article 10.1.
“Affiliate” - Any person or entity that directly or indirectly owns or controls the referenced
party, that is directly or indirectly owned or controlled by the referenced party, or that is
under common control with the referenced party. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction, of the management and
policies of an entity, whether through ownership of voting securities, by contract or
otherwise.
“Approved Supplier” - Any supplier, including us, an Affiliate of ours or an independent
third party, whom we authorize to act as an approved supplier of services or goods.
“Approved Operator” – Defined in Article 2.3
“BUSINESS” - The PLANET FITNESS business operated by you at the franchise location
under the terms of this Agreement.
“Competitive Business” - Any men’s, women’s, children’s, or co-ed fitness, exercise,
athletic, or wellness facility of any kind, including, but not limited to, a health club, gym,
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physical fitness club, personal training studio, weight loss, weight training or resistance
training studio, or aerobics center.
“Confidential Information” - Defined in Article 8.1.
“Construction Development Plan” – Defined in Article 4.4.
“Control Group” - Defined in Article 2.4.
“Corporation or Partnership” - The term “corporation or partnership” as used herein to
describe your business entity shall, if applicable, include reference to your formation as a
limited liability company, limited liability partnership, or any other type of limited liability
entity.
“EFT” – The term “EFT” means the electronic transfer of funds to us from a credit card,
debit card or bank account, as well as any other current or future form of pre-authorized
payment.
“EFT Dues Draft” - Defined in Article 5.2.
“Franchise Management” – Our online portal that provides information, resources, and
support to Planet Fitness franchisees and their PLANET FITNESS businesses.
“Immediate Family” - Spouse, parents (including step parents), siblings (including half
siblings), and children (including step children), whether natural or adopted.
“Initial Term” – Defined in Article 3.1.
“Internet” - All communications between computers and between computers and
television, telephone, facsimile and similar communications devices, including the World
Wide Web, proprietary online services, E-mail, news groups and electronic bulletin boards,
including but not limited to all forms of social media developed during the term of this
Agreement
“Internet Membership Administration Fee” – The fee you pay to us for establishing
customer memberships and providing balance payment options for your BUSINESS
through membership applications submitted to the PLANET FITNESS Internet web site.
“LAF” - Local Advertising Funds, as defined in Article 10.5.
“Location” - The franchise location identified in Article 3.1.
“MAC” - The Marketing Advisory Council, as defined in Article 10.1.
“Marks” - The current and future tradenames, trademarks, service marks and trade dress
used to identify the services and/or products offered by PLANET FITNESS businesses,
including the mark “PLANET FITNESS” and the distinctive building design and color
scheme of PLANET FITNESS businesses.
“Monthly Membership Billing Day” - The day each calendar month that we designate that
we or our authorized designee are authorized by you to withdraw via electronic funds
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transfer from your designated bank account all monthly Royalty fees and other amounts
then due to us under the terms of this Agreement, as identified in Article 5.2.
“Methods of Operation” - The Operations Manual we provide to you containing mandatory
and suggested specifications, standards, operating procedures and rules that we prescribe
from time to time for the operation of a PLANET FITNESS business and any other
information we provide to you during the term of the Agreement relating to your operation
of the franchise business or to any other of your obligations under this Agreement and
related agreements.
“Monthly Membership Accounting Period” - Each monthly period during the term of the
Agreement.
“NAF” - Our National Advertising Fund, as defined in Article 10.1.
“Operations Manual” – The term “Operations Manual” means the confidential PLANET
FITNESS Methods of Operation, which may include, without limitation, any information,
documents and materials that describe our mandatory and suggested standards,
specifications, marketing strategies and policies, and operating procedures relating to the
development and operation of PLANET FITNESS businesses and your obligations under
this Agreement, as well as all other written materials, documents or information that we
designate as a Method of Operation or specifically as part of the Operations Manual. The
term “Operations Manual” also includes (1) alternative or supplemental means of
communicating such information by other media which specifically reference that they are
to be considered part of the Operations Manual, including bulletins, e-mails, videotapes,
audio tapes, compact discs, computer diskettes, items posted on Franchise Management,
and CD Roms, and (2) any and all optional manuals that we may offer and you choose to
purchase. We recommend, but do not require, that you purchase optional manuals to aid in
the operation of your PLANET FITNESS business. If you choose to purchase any optional
manual, those optional manuals will be deemed part of the Operations Manual and
Methods of Operation for your PLANET FITNESS business. The Operations Manual (and
each component thereof) constitutes a confidential trade secret and will remain our
property.
“Owner” – Each person that has any direct or indirect legal or beneficial ownership interest
in you, if you are a business corporation, partnership, limited liability company or other
legal entity. Each Owner that has five percent (5%) or greater interest in you, if you are a
business corporation, partnership, limited liability company or other legal entity, must sign
Appendix B to this Agreement (Owners’ Personal Guaranty of Franchisee’s Obligations)
and Appendix C to this Agreement (Owner Personal Covenants Regarding Confidentiality
and Non-Competition). However, if we are entering into this Agreement totally or
partially based on the financial qualifications, experience, skills or managerial
qualifications of any person or entity who directly or indirectly owns 5% or less interest in
the franchisee, we have the right to designate that person as an Owner who must sign
Appendix B to this Agreement. In addition, if the franchisee is a partnership entity, then
each person or entity who, now or hereafter is or becomes a general partner is deemed an
Owner who must sign Appendix B and Appendix C, regardless of the percentage
ownership interest. If the franchisee is one or more individuals, each individual is an
Owner. Each franchisee must have at least one Owner. Your Owner(s) is/are identified on
Appendix A to this Agreement. Every time there is a change in the persons or entities who
are your Owners, you must, within seven (7) calendar days from the date of such change,
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notify us of the change and cooperate with us in updating Appendix A. As used in this
Agreement, any reference to Owner includes all Owners.
“Personnel” - All persons employed by you in connection with the development,
management or operation of your BUSINESS, including persons in general and district
management positions for your PLANET FITNESS BUSINESS, crew trainers, unit
general and assistant managers, shift supervisors, hourly employees and all other persons
who work in or for your BUSINESS.
“Preferred Vendor” - Any supplier of goods or services to your BUSINESS that we
designate under our Methods of Operation as a “Preferred Vendor.”
“Pre-Sale Marketing Expense” - Defined in Article 4.10.
“Pre-Sale Marketing Period” - Defined in Article 4.10.
“Relocation” – The moving of the Location for the BUSINESS and developing a new
PLANET FITNESS business in close proximity at a new location, approved by us, and
transferring all members from the BUSINESS to the new PLANET FITNESS business. A
Relocation may include a consolidation of two PLANET FITNESS businesses operated by
you for business reasons if approved by us in our sole discretion.
“Reserved Area” - Defined in Article 4.3.
“Responsible Owner” - The individual you so designate in Appendix A and any
replacement thereof approved by us. The Responsible Owner must be an Owner (or
Approved Operator) who has the authority to, and does in fact, actively direct your
business affairs related to the BUSINESS and has the authority to sign on your behalf on
all contracts and commercial documents.
“Royalty” - Defined in Article 5.2.
“Silent Investor” - All individuals and/or entities identified in Appendix D.
“System” - The business methods, designs and arrangements for developing and operating
PLANET FITNESS businesses, which include the Marks, building design and layouts,
equipment, training, and certain operating and business standards and policies, all of which
we may improve, further develop or otherwise modify from time to time.
“Total Net Membership Revenues” - The total receipts from all membership fees that are
received by you. Total Net Membership Revenues does not include the fair market value
of goods delivered and services rendered to you or others in consideration for activity,
goods or services delivered by Franchisee (and/or any affiliated party) nor does it include
sales taxes charged to customers.
“Transfer” - The voluntary, involuntary, direct or indirect sale, assignment, transfer,
license, sublicense, sublease, collateral assignment, grant of a security, collateral or
conditional interest, Inter-vivos transfer, testamentary disposition or other disposition of
this Agreement, any interest in or right under this Agreement, or any form of ownership
interest in you or the assets, revenues or income of your BUSINESS including: (1) any
transfer, redemption or issuance of a legal or beneficial ownership interest in the capital
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stock of, or a partnership interest in, you or of any interest convertible to or exchangeable
for capital stock of, or a partnership interest in, you; (2) any merger or consolidation
between you and another entity, whether or not you are the surviving corporation; (3) any
transfer in, or as a result of, a divorce, insolvency, corporate or partnership dissolution
proceeding or otherwise by operation of law; (4) any transfer upon your death or the death
of any of your Owners by will, declaration of or transfer in trust or under the laws of
interstate succession; or (5) any foreclosure upon your BUSINESS or the transfer,
surrender or loss by you of possession, control or management of your BUSINESS.
2.
YOUR ORGANIZATION AND MANAGEMENT.
2.1
2.2
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ORGANIZATIONAL DOCUMENTS. If you are, or at any time become a
corporation, limited liability company, partnership, or other legal entity, you and
each of your Owners agree and represent that:
(1)
you are duly organized and validly existing under the laws of the state of
your organization, and, if a foreign business corporation, partnership,
limited liability company or other legal entity, you are duly qualified to
transact business in the state in which your BUSINESS is located;
(2)
you have the authority to execute and deliver this Agreement and to
perform your obligations hereunder;
(3)
your activities are restricted to those necessary solely for the development,
ownership and operation of a PLANET FITNESS business in accordance
with this Agreement and in accordance with any other agreements entered
into with us or any of our Affiliates;
(4)
the articles or certificate of incorporation, partnership agreement or other
organizational documents recite that the issuance, transfer or pledge of any
direct or indirect legal or beneficial ownership interest is restricted by the
terms of this Agreement; and
(5)
all certificates representing direct or indirect legal or beneficial ownership
interests in you now or hereafter issued must bear a legend in conformity
with applicable law reciting or referring to such restrictions.
DISCLOSURE OF OWNERSHIP INTERESTS. You and each of your
Owners represents, warrants and agrees that attached Appendix A is current,
complete and accurate. You agree that updated copies of Appendix A will be
furnished promptly to us, so that Appendix A (as so revised and signed by you) is
at all times current, complete and accurate. Each person who is or becomes an
Owner must execute an agreement in the form we prescribe, undertaking to be
bound jointly and severally by the terms of this Agreement, the current form of
which is attached hereto as Appendix B. Each person who is or becomes an
Owner must execute an agreement in the form we prescribe, undertaking to be
bound by the confidentiality and non-competition covenants contained in the
Agreement, the current form of which is attached hereto as Appendix C. Each
6
Owner must be an individual acting in his individual capacity. In addition, if you
have one or more Silent Investors, you and each of your Owners must execute the
attached Appendix D.
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2.3
RESPONSIBLE OWNER/MANAGEMENT OF BUSINESS. If you are, or at
any time become, a business corporation, partnership, limited liability company or
other legal entity, you must designate in Appendix A as the “Responsible Owner”
an individual approved by us who must be an Owner and have the authority to
bind you regarding all operational decisions with respect to your PLANET
FITNESS BUSINESS; and have completed our training program to our
satisfaction. You (or your Responsible Owner) shall exert your best efforts to the
development and operation of your BUSINESS and all other PLANET FITNESS
businesses you own; and absent our prior approval may not engage in any other
business or activity, directly or indirectly, that requires substantial management
responsibility or time commitments or otherwise may conflict with your
obligations hereunder. You (or your Responsible Owner) may request our
approval of an operator that has completed our training program to our
satisfaction (an “Approved Operator”) to whom you may delegate your
obligations to develop and operate your BUSINESS. Such a request must be
made in writing, and you must cooperate with us to provide all information we
reasonably request to approve or reject the proposed individual. Such approval
shall be given in our sole discretion. If we approve an Approved Operator, you
must amend Appendix A to include that individual, and require that the Approved
Operator sign a confidentiality and non-compete agreement with us. We shall
have no responsibility, liability or obligation to any party to any such
arrangement, agreement or contract, or any amendments thereto, made under this
Article on account of our approval thereof or otherwise, and you agree to
indemnify and hold us harmless with respect thereto. You must notify us of any
proposed change of the Responsible Owner or Approved Operator and receive our
written approval prior to such change. If such change results from the death or
incapacitation of the Responsible Owner, you must submit a new proposed
Responsible Owner within thirty (30) days after such death or incapacitation.
Neither you nor your owners will, directly or indirectly, take any actions to avoid
or restrict the authority requirement for the Responsible Owner. Your BUSINESS
at all times must be managed by you (or your Responsible Owner or Approved
Operator) or by an on-site general or assistant manager or a shift supervisor who
has completed the appropriate training programs.
2.4
CONTROL GROUP. If you or one of your Affiliates have entered into an Area
Development Agreement with us and are entering into this Agreement pursuant
thereto, and you are a business corporation, partnership, limited liability company
or other legal entity, you acknowledge and agree that the Owner or group of
Owners described in Appendix A hereof that has, directly or indirectly, 51% or
more ownership interest in you and voting control over its ownership interests in
you (“Control Group”), has the same ownership interest in and voting control of
the entity that executed the Area Development Agreement. Furthermore, you
7
acknowledge and agree that we have the right to approve in advance your
ownership structure.
2.5
3.
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FACILITY ORGANIZATION. Your BUSINESS must be staffed by at least
one trained general manager and appropriate numbers of assistant managers, shift
supervisors, and personnel so that all shifts are staffed by at least one assistant
manager or shift supervisor, unless otherwise approved by us.
GRANT OF RIGHTS.
3.1
GRANT OF FRANCHISE. You desire a franchise to own and operate a
PLANET FITNESS business. Subject to the terms of and upon the conditions
contained in this Agreement, we hereby grant you a franchise (the “Franchise”) to
operate a PLANET FITNESS business solely at the location identified on
Appendix G (the “Location”), and a license to use the Marks and the System in
the operation thereof, for a term commencing on the Effective Date and expiring
on the tenth (10th) anniversary of that date (“Initial Term”) unless sooner
terminated in accordance with Article 15 hereof and provided you comply with
the requirements of Article 9.4.1 below. This Agreement grants to you a “site
only” Franchise for a single PLANET FITNESS business, which means that you
receive no protected, territorial or other rights beyond the physical premises of
your business location. We and our affiliates have the unlimited right to compete
with you and license others to compete with you. You may not operate the
BUSINESS from any site other than the Location without our prior written
consent. If we consent to the BUSINESS’s Relocation, we have the right to
charge you a Five Thousand ($5,000) Dollar relocation fee, payable prior to the
Relocation. You shall operate your BUSINESS throughout the Initial Term,
except as otherwise specifically provided for herein. Notwithstanding the
foregoing, if you sign an Area Development Agreement (“ADA”) with us, you
will receive limited protection from competition in a specified geographic area, as
outlined in the ADA.
3.2
OUR RESERVATION OF RIGHTS. Except as otherwise expressly provided
in this Agreement, we and all of our Affiliates (and our and their respective
successors and assigns, by purchase, merger, consolidation or otherwise) retain all
of our rights with respect to the Marks, the System and PLANET FITNESS
businesses anywhere in the world, and the right to engage in any business
whatsoever, including the right to:
(1)
operate, and grant to others the right to operate, PLANET FITNESS
businesses at such locations and on such terms and conditions as we deem
appropriate;
(2)
offer to sell, or sell and distribute, any products or services under any
tradenames, trademarks, service marks or trade dress, including the Marks,
through any distribution channels or methods, which may include, without
8
limitation, retail stores, wholesale, and the Internet (or any other existing
or future form of electronic commerce);
4.
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(3)
operate, and grant to others the right to operate, fitness facilities, gyms,
health related establishments, and any other business(es) whatsoever
identified by tradenames, trademarks, service marks or trade dress, other
than the Marks, pursuant to such terms and conditions as we deem
appropriate which may include locations in close proximity to your
PLANET FITNESS location;
(4)
develop or become associated with other concepts (including dual
branding or other franchise systems), whether or not using the PLANET
FITNESS System, brand or Marks, and award franchises under these
other concepts for locations anywhere; and
(5)
acquire, be acquired by, merge, affiliate with or engage in any transaction
with other businesses (whether competitive or not), with units located
anywhere or business conducted anywhere. These transactions may
include arrangements involving competing businesses or outlets and dual
branding or brand conversions. You must participate at your expense in
any conversion as instructed by us.
LOCATION SELECTION, LEASE OR PURCHASE OF LOCATION AND
LOCATION DEVELOPMENT.
4.1
LOCATION SELECTION AND APPROVAL. You acknowledge that,
following your signing this Agreement, you (with or without our assistance) will
find and submit to us for our approval a Location for your BUSINESS. You
acknowledge and agree that our recommendation or approval of the Location, and
any information regarding the Location communicated to you regarding our
standard site selection criteria for PLANET FITNESS businesses, do not
constitute a representation or warranty of any kind, express or implied, as to the
suitability of the Location for a PLANET FITNESS business or for any other
purpose. Our recommendation or approval of the Location indicates only that we
believe that the Location falls within the acceptable criteria for locations that we
have established as of the time of our recommendation or approval of the
Location. You acknowledge and agree that your selection of the Location is based
on your own independent investigation of the suitability of the Location. We
have the right to grant or withhold approval of any proposed Location in our
business judgment.
4.2
PURCHASE OR LEASE OF THE LOCATION. You must lease, sublease or
purchase the Location within six (6) months after signing this Agreement. Your
failure to sign a lease within this timeframe constitutes grounds for immediate
termination of this Agreement under Article 15.2 and the loss of your nonrefundable Initial Franchise Fee. We have the right, but not the obligation, to
review the business terms of any lease, sublease, lease renewal, or purchase
9
contract for the Location, and you agree to deliver a copy to us for our review
before you sign it. You agree that any lease, sublease, lease renewal, for the
Location must, in form and substance satisfactory to us, include all of the
provisions set forth on Appendix F attached hereto. You may not execute a lease,
sublease, lease renewal, purchase contract or any modification thereof without our
approval. Our approval of the lease, sublease, lease renewal, or purchase contract
does not constitute a warranty or representation of any kind, express or implied,
as to its fairness or suitability or as to your ability to comply with its terms. We do
not, by virtue of approving the lease, sublease, lease renewal, or purchase
contract, assume any liability or responsibility to you or to any third parties. Such
approval indicates only that we believe that the Location and certain terms of the
lease, sublease or purchase contract fall within the acceptable criteria we have
established as of the time of our approval. You further acknowledge that we have
advised you to seek legal counsel to review and evaluate the lease. You must
deliver a copy of the fully signed lease, sublease, lease renewal, or purchase
contract to us within five (5) days after its execution.
4.3
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RESERVED AREA OF THE LOCATION. You acknowledge and agree that,
at any time during the term of the Agreement and upon our reasonable written
request, you must lease or sublease to us, our Affiliate, or our designee, at the
then-current fair market rate in your geographic area for like-leased real estate
space, a portion of the total square footage of the Location that shall not exceed
ten (10%) percent of the total square footage of the Location (the “Reserved
Area”). You acknowledge and agree that we, our Affiliate, or our designee may
use the Reserved Area in any reasonable manner we deem to be appropriate,
provided however, that our, our Affiliate’s, or our designee’s use of the Reserved
Area shall not materially alter your fundamental rights under this Agreement.
Further, you acknowledge and agree that we or our Affiliate have the unrestricted
right to sublease the Reserved Area to a third party designee. You acknowledge
and agree that any lease or sublease for the Location must reference, in form and
substance satisfactory to us, our right to sublease the Reserved Area. If we and
you are unable reasonably to agree upon the then-current fair market rate in your
geographic area for like-leased real estate space, then the fair market rate will be
determined by three (3) independent appraisers who collectively will conduct one
(1) appraisal. We will appoint one appraiser, you will appoint one appraiser and
the two party appointed appraisers will appoint the third appraiser. You and we
agree to select our respective appraisers within fifteen (15) days after the date we
determine that we are unable to agree upon the fair market rate, and the two
appraisers so chosen are obligated to appoint the third appraiser within fifteen
(15) days after the date on which the last of the two party appointed appraisers
was appointed. You and we will bear the cost of our own appraisers and share
equally the reasonable fees and expenses of the third appraiser chosen by the two
party appointed appraisers. You and we will take reasonable actions to cause the
appraisers to complete their appraisal within thirty (30) days after the third
appraiser’s appointment. You acknowledge and agree that we or our designee
shall have unrestricted access to and use of the Reserved Area within thirty (30)
days after the fair market rate appraisal is completed.
10
4.4
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LOCATION DEVELOPMENT. You are solely responsible for developing the
BUSINESS, for all expenses associated with it and for compliance with the
requirements of any applicable federal, state or local law, code or regulation,
including those concerning the Americans with Disabilities Act (“ADA”) or
similar rules governing public accommodations for persons with disabilities. We
will furnish you with mandatory specifications and layouts for a PLANET
FITNESS business, including requirements for dimensions, design, image,
interior layout, decor, fixtures, equipment, signs, furnishings and color scheme
and other suggestions. The mandatory specifications and layouts we provide will
not contain the requirements of any federal, state or local laws, codes or
regulations. You are obligated to have prepared, at your expense, all required
construction plans and specifications to suit the shape and dimensions of the
Location and to ensure that such plans and specifications comply with all
applicable federal, state or local laws, codes, regulations, ordinances, building
codes and permit requirements and with lease requirements and restrictions. You
acknowledge that design quality is important to us. We reserve the right to
require that you use our (1) designated third party project management company
to prepare all project management plans for the BUSINESS, and (2) designated
architect to prepare all architectural plans and drawings (together with project
management plans, “Construction Development Plans”) for the BUSINESS. You
must submit all Construction Development Plans, including design specifications,
to us for our prior, written approval before starting to develop the Location. All
final Construction Development Plans are subject to our prior, written approval.
In the event that you do not use our designated architect to prepare all
architectural plans and drawings for the BUSINESS , you must pay us a
Construction Development Plan review fee of One Thousand Seven Hundred and
Fifty Dollars ($1,750) at the time you submit your initial set of architectural plans
or drawings to us. At our request, you must submit all revised or “as built” plans
and specifications. Our review and approval of your Construction Development
Plans is not designed to assess compliance with federal, state or local laws and
regulations, including the ADA, as compliance with such laws is your sole
responsibility. All development and any signage must be in accordance with the
Construction Development Plans and specifications we have approved and must
comply with all applicable laws, ordinances and local rules and regulations. We
will furnish such guidance to you in developing the Location as we deem
appropriate. We may periodically inspect the Location during its development.
We do not, by approving your Construction Development Plans or specifications
or inspecting the Location, assume any liability or responsibility to you or to any
third parties. Such approvals and inspections shall be solely for the purpose of
assuring compliance with our standards and shall not be construed as any express
or implied representation or warranty that your BUSINESS complies with any
applicable laws, codes or regulations (including the ADA or any other federal,
state, or local law or ordinance regulating standards for the access to, use of, or
modifications of buildings for any by persons whose disabilities are protected by
law) or that the construction thereof is sound or free from defects. All prototype
and modified Construction Development Plans and specifications for your
11
BUSINESS remain our sole and exclusive property, and you may claim no
interest therein. You must start construction of your BUSINESS within sixty (60)
days after you have leased, subleased or acquired the Location. You must employ
a general contractor acceptable to us. You must procure all applicable
construction insurance in amounts and coverages acceptable to us. You must
complete construction of your BUSINESS within ninety (90) days after the start
of construction. Notwithstanding the foregoing, if you demonstrate to us that
you are working in good faith toward completion of construction, we may grant
you an extension beyond the applicable timeframe described above, in our sole
discretion. Any extensions of time are subject to our approval, which we may
withhold for any reason. You must provide us with weekly progress reports
during construction in a format acceptable to us. We have the right to visit and
inspect, the site during the construction phase. Such visits shall be at our expense,
except for visits made upon your request, which shall be at your expense. The
requirement to complete construction of your BUSINESS includes obtaining all
required construction and occupancy licenses and permits, developing the
Location (including all outdoor features and landscaping of the Location, if
applicable), installing all required fixtures, furnishings, equipment and signs, and
doing all other things as may be required pursuant to this Agreement or by
practical necessity to have your Location ready to open for business. Your
BUSINESS may not be opened for business until we have notified you that your
BUSINESS meets our requirements for opening. Notwithstanding anything to the
contrary contained in this Article 4.4., you shall not be deemed to be in breach of
this Article 4.4. if your failure to start construction, finish construction or open
your BUSINESS as above provided results solely from windstorms, rains, floods,
earthquakes, typhoons, tornados, mudslides, fires or other natural disasters. Any
delay resulting from any of such causes shall extend performance accordingly, in
whole or in part, as may be reasonable, except that no such cause, alone or in
combination with other causes, shall extend performance more than ninety (90)
days without our prior written consent, which consent may be withheld.
4.5
YOUR OBLIGATIONS. You agree, at your own expense, to do the following
with respect to developing the BUSINESS at the Location:
(1)
secure all financing required to develop and operate the BUSINESS;
(2)
obtain all permits and licenses required to construct and operate the BUSINESS;
(3)
construct all required improvements to the Location and decorate the BUSINESS
in compliance with plans and specifications we have approved, and which
comply with all governmental requirements;
(4)
14877234.6
04/17/14
purchase or lease and install all required fixtures, furniture, equipment,
furnishings and signs required for the BUSINESS; and
12
(5)
4.6
FIXTURES, FURNISHINGS, EQUIPMENT AND SIGNS. You agree to use
in developing and operating the BUSINESS only those fixtures, furnishings,
equipment (including cash registers and/or point of sale (“POS”) systems,
telecopiers and computer hardware and software) and signs that we have
approved for PLANET FITNESS businesses as meeting our specifications and
standards for quality, design, appearance, function and performance. You agree to
place or display at the Location (interior and exterior) only such signs, emblems,
lettering, logos and display materials that we approve from time to time. You
agree to purchase or lease approved brands, types or models of fixtures,
furnishings, equipment and signs only from suppliers we have designated or
approved (which may include us and/or our Affiliates). You will pay the thencurrent price in effect for all such purchases you make from us and/or our
Affiliates. You agree, at your own expense, to upgrade all cash registers and/or
POS systems, computer hardware and software, as necessary, in order to bring the
BUSINESS into compliance with our Methods of Operation. You acknowledge
and agree that from time to time, we may modify the list of approved types,
brands, models and/or suppliers, and you may not, after receipt of notice of such
modification, reorder any type, brand or model from any supplier, which is no
longer approved. If you propose to purchase any fixtures, furniture, equipment,
signs or supplies of a type, brand or model, or propose to purchase from a supplier
that we have not previously approved, you must notify us and submit to us such
information as we may request. We may impose reasonable inspection and
supervision fees on Approved Suppliers to cover our costs.
4.7
START-UP INVENTORY, FURNITURE, FIXTURES, SOFTWARE,
EQUIPMENT AND SUPPLIES. Subsequent to your execution of this
Agreement and prior to your commencement of operations hereunder, we will
give you lists of the start-up inventory, furniture, fixtures, software, equipment
and supplies we require you otherwise to obtain prior to commencing operations
hereunder. You will establish independent commercial relationships with our
Approved Suppliers for specific items. You will establish independent
commercial relationships with other suppliers for the goods and services for
which we only provide specifications. Our list of Approved Suppliers and
specifications for goods and services will be set forth in the Operations Manual or
in other materials we give you from time to time.
4.8
BUSINESS COMMENCEMENT. You agree not to commence operation of the
BUSINESS until:
(6)
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purchase an initial inventory of authorized and approved products, materials and
supplies.
we approve the BUSINESS as developed in accordance with our
specifications and standards;
13
5.
preopening training has been completed by you, your Responsible Owner,
your Approved Operator, and/or your employees to our satisfaction as
provided in Article 6.1;
(8)
you have given us a copy of your lease, sublease or purchase contract for
the Location;
(9)
the Initial Franchise Fee and all other amounts then due to us have been
paid;
(10)
we have been furnished with copies of all insurance policies required by
this Agreement, or such other evidence of insurance coverage and
payment of premiums as we request or accept; and
(11)
you have obtained all required permits, licenses and certifications for
operating the BUSINESS, and the Location is in compliance with all laws,
rules and regulations.
4.9
COMMENCEMENT DEADLINE. You agree to commence BUSINESS
operations within three hundred and thirty (330) days after the execution of this
Agreement and within five (5) days after we notify you that the conditions set
forth in this Article have been satisfied.
4.10
PRE-SALE MARKETING. You agree to conduct pre-sale marketing for the
BUSINESS. The pre-sale marketing period begins no less than 45 days
immediately preceding the date that you commence regular operations at the
BUSINESS, and it may be as long as 180 days thereafter (“Pre-Sale Marketing
Period”). You must spend an amount equal to $20,000 per every 30 days during
the Pre-Sale Marketing Period on your pre-sale marketing obligations (the “PreSale Marketing Expense”). We will determine the length and start date of the
Pre-Sale Marketing Period based upon the location of the BUSINESS,
demographics and other factors. Such pre-sale marketing will utilize marketing
and public relations programs and media and advertising materials we have
approved.
4.11
OPENING ASSISTANCE. If you (or any of your affiliates) have not previously
owned or managed a PLANET FITNESS business, we may provide you with
such opening operational assistance as we deem appropriate to assist you in
starting your operations, including on-site opening assistance for not more than
five (5) days, as scheduled by us.
FEES.
5.1
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(7)
INITIAL FRANCHISE FEE. You agree to pay us a nonrecurring and
nonrefundable initial franchise fee in the amount of Ten Thousand Dollars
($10,000), that shall be due when you execute the Agreement (“Initial Franchise
Fee”). The Initial Franchise Fee is non-refundable.
14
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5.2
ROYALTY. You agree to pay us a nonrefundable royalty (“Royalty”) per
Monthly Membership Accounting Period and Annual Membership Accounting
Period via EFT. The Royalty currently is equal to five percent (5%) of the total
gross monthly and annual membership fees for the BUSINESS that are due and
payable to you each month and annually, as applicable, from your members
through authorized EFT withdrawals (the “EFT Dues Draft”), regardless of the
amount of membership fees you actually collect. We will collect the Royalty on
the Monthly Membership Billing Day and Annual Membership Billing Day,
pursuant to our Methods of Operation, via the EFT initiated by us or by a third
party authorized by us from the designated account identified in Article 5.3
below, or by such other means as we may authorize and approve. As used in this
Agreement, the term “total gross monthly and annual membership fees” means
the total amount of such fees and payments that are due and payable to you from
your members exclusive of any federal, state or local tax deductions or offsets.
Notwithstanding the foregoing, we reserve the right, on sixty (60) days’ prior
written notice to you, to calculate the Royalty with reference to the Total Net
Membership Revenues of the BUSINESS.
5.3
DESIGNATED ACCOUNT AND AUTHORIZED EFT. Prior to the opening
of the PLANET FITNESS BUSINESS, and as a condition thereof, you shall
establish a designated bank account from which we or our authorized designee
shall be authorized to withdraw in any manner which we prescribe, which may
include wire transfer, any amounts due to us, our Affiliates or any Preferred
Vendor from you under this Agreement, including, without limitation, Royalty
fees, LAF fees, Ad Fees, training fees, consultation fees, or any other fees or
monies payable by you pursuant to this Agreement. We have the right to review
your sales numbers on a daily basis. On the days designated as your Monthly
Membership Billing Day and Annual Membership Billing Day, we or our
authorized designee shall calculate the Royalty due for that Monthly Membership
Accounting Period and Annual Membership Accounting Period and withdraw
such amount, along with any other amounts then due and owing under this
Agreement, including, without limitation, LAF fees, Ad Fees, training fees,
consultation fees, or any other fees or monies, directly from the designated
account. You hereby authorize us to make such withdrawals by EFT withdrawal
or any other manner we prescribe, and shall execute such documents as we
require from time to time for such purpose. All costs and expenses of establishing
and maintaining such designated account, including transaction fees and wire
transfer fees, shall be paid by you. You agree to maintain at all times sufficient
funds in such designated bank accounts for such withdrawals.
5.4
INTEREST ON LATE PAYMENTS. All amounts which you owe us and do
not pay us when due will bear interest after their due date at the lesser of: (a) the
highest contract rate of interest permitted by law; or (b) eighteen (18%) percent
per annum. You acknowledge that this Article does not constitute our agreement
to accept any payments after they are due or our commitment to extend credit to,
or otherwise finance your operation of, the BUSINESS.
15
6.
5.5
APPLICATION OF PAYMENTS. Notwithstanding any designation you might
make, we have the right to apply any of your payments to any of your past due
indebtedness to us. You acknowledge and agree that we have the right to set off
any amounts you or your owners owe us against any amounts we might owe you
or your owners.
5.6
PREFERRED VENDOR PAYMENTS. You acknowledge and agree that in
order to insure quality and consistency at all PLANET FITNESS businesses, we
may require that you obtain goods or services from certain designated suppliers.
Pursuant to our Methods of Operation, we may identify certain suppliers, that may
include us, or any affiliate, as a Preferred Vendor. You hereby acknowledge and
agree that in the event we receive notice from any Preferred Vendor that you are
over sixty (60) days past due on any payment to such Preferred Vendor, and you
have not provided any notice to the Preferred Vendor disputing such overdue
amount prior to our receipt of notice from the Preferred Vendor concerning any
such past due amount, you hereby authorize us to make payment on your behalf
of any such overdue amount to the Preferred Vendor. You acknowledge and agree
we may pay any such overdue amount to any such Preferred Vendor from your
total EFT Dues Draft or by withdrawing from your designated bank account an
amount equal to the overdue amount owed to the Preferred Vendor.
5.7
INTERNET
MEMBERSHIP
AND
BALANCE
PAYMENT
ADMINISTRATION FEE. You agree to pay us an Internet membership and
balance payment administration fee (the “Internet Membership Administration
Fee”) for each customer online membership application and for each balance
payment for declined transactions that we process on your behalf that identifies
your Location as the principle location for the customer membership. The Internet
Membership Administration Fee shall be in an amount we shall specify to you
under our Methods of Operation, and that reasonably we may amend from time to
time during the term of the Agreement, in our business judgment. The Internet
Membership Administration Fee shall be payable monthly in the same manner as
the Royalty due hereunder and you authorize us to withdraw amounts due from
your total monthly EFT Dues Draft.
5.8
INSPECTION AND COMPLIANCE REIMBURSEMENT. You agree to
reimburse us for our actual costs if, after an inspection of your PLANET
FITNESS business, we determine (in our business judgment) that additional
follow up inspections or assessments are required. Our actual costs may include
(but are not necessarily limited to) travel, meal and hourly wage expenses.
TRAINING, ASSISTANCE, AND METHODS OF OPERATION.
6.1
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TRAINING. Before the BUSINESS begins operating, we will furnish initial
training on the operation of a PLANET FITNESS business to you (or, if you are
a corporation or partnership, your Responsible Owner), and up to two (2)
additional Owners or employees you elect to enroll in the training program, that
we approve. Initial training consists of a minimum of two (2) working days of
16
training for you (or your Responsible Owner), and your Owners or employees to
be furnished at our training location or at an operating PLANET FITNESS
business. You (or your Responsible Owner), and your Owners or employees are
required to complete the initial training to our satisfaction. If you are an existing
franchisee and you have previously completed our initial training program, you
will not be required to attend the initial training program, however, we may
require that certain of your employees and that any new general manager
complete the initial training program. You also are required to participate in all
other activities required to operate the BUSINESS. Although we will furnish
initial training to you (or your Responsible Owner), and up to two (2) additional
Owners or employees at no additional fee or other charge, you will be responsible
for all travel and living expenses and compensation which you (or your
Responsible Owner) and your Owners or employees incur in connection with
training. If we determine that you (or your Responsible Owner) are unable to
complete initial training to our satisfaction, we have the right to terminate this
Agreement pursuant to Article 15 hereof.
6.2
REFRESHER TRAINING. We may require you (or your Responsible Owner)
and/or previously trained and experienced employees to attend periodic refresher
training courses at such times and locations that we designate, and we may charge
reasonable fees for such courses. We also may require you to pay us fees for
training additional employees or your new employees hired after your BUSINESS
commences operations.
6.3
GENERAL GUIDANCE. We may advise you from time to time regarding
operating issues concerning the BUSINESS disclosed by reports you submit to us
or on-site inspections we make from time to time. Such guidance may be
furnished in our Operations Manual, bulletins or other written materials and/or
during telephone consultations and/or consultations at our office or the
BUSINESS. In addition, we may furnish guidance to you with respect to:
6.4
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(1)
standards, specifications and operating procedures and methods utilized by
the BUSINESS;
(2)
purchasing required fixtures, furnishings, equipment, signs, products,
materials and supplies;
(3)
advertising and marketing programs;
(4)
employee training;
(5)
administrative, bookkeeping and accounting procedures; and
(6)
use of authorized and approved computer systems.
ON-SITE CONSULTATION AND ADDITIONAL GUIDANCE. During the
term of this Agreement, additional guidance may be provided in any of the
following ways:
17
6.5
14877234.6
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(1)
Internet and telephone consultation during such times as are outlined in
the Operations Manual;
(2)
wholesaling services whereby we may ourselves act as an approved or
designated source for products, merchandise, accessories, fixtures,
furnishings, equipment, signs, etc.;
(3)
manufacturing services whereby we may manufacture, package and ship
products, merchandise, accessories, fixtures, furnishings, equipment,
signs, etc. to you;
(4)
ongoing marketing programs to fulfill our obligations in Article 10 of this
Agreement;
(5)
meetings, seminars or conventions whereby we may get together with you
and other PLANET FITNESS franchisees for business or social
purposes;
(6)
research and development regarding Methods of Operation; and/or
(7)
at your request, we may furnish additional guidance and assistance and, in
such a case, may charge the per diem fees and charges we establish from
time to time. If you request, or if we require, additional or special training
for your employees, all of the expenses that we incur in connection with
such training, including per diem charges and travel and living expenses
for our personnel, will be your responsibility.
OPERATIONS MANUAL. During the term of this Agreement, we will allow
you to use one (1) copy of our Operations Manual, consisting of such materials
(possibly including, but not limited to, audio tapes, videotapes, magnetic media,
computer software and written materials) that we furnish to franchisees from time
to time for use in operating a PLANET FITNESS business. The Operations
Manual contains mandatory and suggested specifications, standards, operating
procedures and rules that we prescribe from time to time for the operation of a
PLANET FITNESS business and information relating to your other obligations
under this Agreement and related agreements (“Methods of Operation”). The
Operations Manual may be modified from time to time to reflect changes in the
law, marketplace or Methods of Operation. You agree to keep your copy of the
Operations Manual current and in a secure location at the BUSINESS. In the
event of a dispute relating to its contents, the master copy of the Operations
Manual we maintain at our principal office will be controlling. You may not at
any time copy, duplicate, download, record or otherwise reproduce any part of the
Operations Manual. The Operations Manual and the Methods of Operation
communicated to you shall be deemed to be a part of this Agreement. You
acknowledge and agree that in the future, the Operations Manual and other system
communications may only be available on the Internet, our intranet system or
other online or computer data transfer communications. The Operations Manual
18
(and each component thereof) constitutes a confidential trade secret and will
remain our property. You agree that these requirements are reasonable and
necessary to preserve the identity, reputation, value and goodwill of the system.
The Operations Manual, as amended, is intended to further the purposes of this
Agreement and is specifically incorporated into this Agreement.
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6.6
COMPLIANCE WITH METHODS OF OPERATION. You acknowledge
and agree that your operation and maintenance of the BUSINESS in accordance
with our Methods of Operation is essential to preserve the goodwill of the Marks
and all PLANET FITNESS businesses. Therefore, at all times during the term of
this Agreement, you agree to operate and maintain the BUSINESS strictly in
accordance with our Methods of Operation, as we periodically modify and
supplement them during the term of this Agreement. Further, if you fail to cure
any default under this Agreement that relates (in whole or in part) to the Methods
of Operation, then without waiving any of our rights under Article 15 herein, we
may, in our business judgment, provide you with written notice that we have
temporarily elected not to terminate this Agreement and allow you additional time
to cure the default(s), provided that you pay to us, during the additional cure
period via the EFT Dues Draft, an additional two percent (2%) of the total gross
membership fees that are due and payable to you from your members. Our
collection of the two percent (2%) fee and temporary extension of the applicable
cure period does not waive our right to require your full compliance with this
Agreement.
6.7
WORKS MADE-FOR-HIRE. All ideas, concepts, procedures, techniques or
processes concerning the PLANET FITNESS BUSINESS, whether or not
protectable intellectual property and whether created by or for you or your owners
or employees, must be promptly disclosed to us and will be deemed to be our sole
and exclusive property, part of the System, and works made-for-hire for us. To
the extent any item does not qualify as a “work made-for-hire” for us, you will
assign ownership of that item, and all related rights to that item, to us and must
take whatever action (including signing an assignment agreement or other
documents) we request to show our ownership or to help us obtain intellectual
property rights in the item.
6.8
GENERAL CONDUCT. You will not, and will not allow your employees to,
engage in conduct that, in our sole determination, may result in or tends to (a)
degrade, offend, shock or insult the community, (b) ridicule public morals or
decency, or (c) prejudice us, our affiliates, the Trademarks or the System
generally. You will (and will ensure that your employees) conduct yourself with
due regard to public conventions and morals.
6.9
COMPLIANCE WITH DATA SECURITY GUIDELINES. You shall use
your best efforts to protect your customers against a cyber-event, identity theft or
theft of personal information. You shall at all times be compliant with: (a) the
Payment Card Industry Data Security Standards (“PCI DDS”),(b) the NACHA
ACH Security Framework, 3) Payment Rules (as defined below), (c) state and
19
federal laws and regulations relating to data privacy, data security and security
breaches and (d) our security policies and guidelines, all as may be amended from
time to time (collectively, “Data Security Safeguards”). For purposes of this
Article 6.9: “Payment Rules” means the operating rules and regulations of
Payment Processors and any applicable Payment Network, as in effect from time
to time; “Payment Processors” means all credit card, debit card and/or ACH
processors whose services We may require you to utilize, as well as payment
gateway service providers; and “Payment Network” means Visa, MasterCard, and
any credit or debit card network issuing credit or debit cards or their duly
authorized entities, agents, or affiliates, together with NACHA. You are expected
to obtain advice from appropriate legal and security consultants to ensure that you
operate your PLANET FITNESS business at all times in full compliance with
the Data Security Safeguards.
7.
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MARKS.
7.1
OWNERSHIP AND GOODWILL OF MARKS. Your right to use the Marks
is derived solely from this Agreement and limited to your operation of the
BUSINESS pursuant to and in compliance with this Agreement and Methods of
Operation, which we prescribe from time to time during its term. Your
unauthorized use of the Marks will be a breach of this Agreement and an
infringement of our rights in and to the Marks. You acknowledge and agree that
your usage of the Marks and any goodwill established by such use will be
exclusively for our and our Affiliates’ benefit and that this Agreement does not
confer any goodwill or other interests in the Marks upon you (other than the right
to operate the BUSINESS in compliance with this Agreement). All provisions of
this Agreement applicable to the Marks apply to any additional proprietary
trademarks and service marks and commercial symbols we authorize you to use.
You will not represent in any manner that you have any ownership in the Marks
or the right to use the Marks except as provided in the Agreement and in the
Operations Manual.
7.2
LIMITATIONS ON YOUR USE OF MARKS. You agree to use the Marks as
the sole identification of the BUSINESS, except that you agree to identify
yourself as the independent owner thereof in the manner we prescribe. You may
not use any Marks as part of any corporate or legal business name or as part of an
Internet domain name or Internet e-mail address or with any prefix, suffix or other
modifying words, terms, designs or symbols (other than logos licensed to you
hereunder), or in any modified form, nor may you use any Marks in connection
with the performance or sale of any unauthorized services or products or in any
other manner we have not expressly authorized in writing. No Marks may be used
in any advertising concerning the transfer, sale or other disposition of the
BUSINESS or an ownership interest in you. You agree to display the Marks in the
manner we prescribe at the BUSINESS, on supplies or materials we designate and
in connection with forms and advertising and marketing materials. You agree to
give such notices of trademark and service marks registrations; i.e., “®”, “™”, as
we specify and to obtain any fictitious or assumed name registrations required
20
under applicable law. You agree to withdraw any fictitious or assumed name
registrations immediately upon termination or expiration of this Franchise
Agreement.
8.
7.3
NOTIFICATION OF INFRINGEMENTS AND CLAIMS. You agree to
notify us immediately of any apparent infringement or challenge to your use of
any Marks, or of any claim by any person of any rights in any Marks, and agree
not to communicate with any person other than us, our attorneys and your
attorneys in connection with any such infringement, challenge or claim. We have
the right to take such action as we deem appropriate and the right to control
exclusively any litigation, United States Patent and Trademark Office (“USPTO”)
proceeding or any other administrative proceeding arising out of any such
infringement, challenge or claim or otherwise relating to any Marks. You agree to
sign any and all instruments and documents, render such assistance and do such
acts and things as, in the opinion of our attorneys, may be necessary or advisable
to protect and maintain our interests in any litigation or USPTO proceeding or
other proceeding or otherwise to protect and maintain our interests in the Marks.
7.4
DISCONTINUANCE OF USE OF MARKS. If it becomes advisable at any
time for us and/or you to modify or discontinue the use of any Marks and/or use
one or more additional or substitute trademarks or service marks, you agree to
comply with our directions within a reasonable time after receiving notice thereof.
We will not be obligated to reimburse you for any expenses or loss of revenue
attributable to any modified or discontinued Marks or for any expenditures you
make to promote a modified or substitute trademark or service mark.
7.5
INDEMNIFICATION OF FRANCHISEE. We agree to indemnify you
against, and to reimburse you for, all damages for which you are held liable in any
proceeding arising out of your authorized use of any Mark pursuant to and in
compliance with this Agreement and, except as provided herein, for all costs you
reasonably incur in defending any such claim brought against you, provided you
have timely notified us of such claim and provided further that you and your
owners and affiliates are in compliance with this Agreement and all other
agreements entered into with us or any of our Affiliates. We are entitled to
prosecute, defend and/or settle any proceeding arising out of your use of any
Mark pursuant to this Agreement, and, if we undertake to prosecute, defend
and/or settle any such matter, we have no obligation to indemnify or reimburse
you for any fees or disbursements of any legal counsel retained by you.
CONFIDENTIAL INFORMATION.
8.1
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CONFIDENTIAL INFORMATION. We possess (and will continue to develop
and acquire), and may disclose to you, certain confidential information (the
“Confidential Information”) relating to the development and operation of
PLANET FITNESS businesses, which may include (without limitation):
21
8.2
14877234.6
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(1)
location selection criteria and plans and specification for the development
of PLANET FITNESS businesses;
(2)
methods, formats, specifications, standards, systems, procedures, the
Operations Manual, any other proprietary materials, the sales and
marketing techniques used, and knowledge of and experience in
developing and operating PLANET FITNESS businesses;
(3)
sales, marketing and advertising programs and techniques for PLANET
FITNESS businesses;
(4)
knowledge of specifications for and suppliers of certain fixtures,
furnishings, equipment, products, materials and supplies;
(5)
knowledge of the operating results and financial performance of PLANET
FITNESS businesses other than the BUSINESS.
(6)
methods of training and management relating to PLANET FITNESS
businesses;
(7)
computer system and software programs used or useful in PLANET
FITNESS businesses; and
(8)
any and all other information related to the BUSINESS or PLANET
FITNESS businesses generally that is labeled proprietary or confidential.
This includes, without limitation, all customer and membership lists and
information for the BUSINESS and PLANET FITNESS businesses
generally.
FOR BUSINESS USE ONLY. We will disclose our Confidential Information to
you solely for your use in the operation of your BUSINESS. The Confidential
Information is proprietary and includes our trade secrets. During the Term and
thereafter: (a) you and your Owners may not use the Confidential Information in
any other business or capacity (you and your Owners acknowledge such use is an
unfair method of competition); (b) you and your Owners must exert your best
efforts to maintain the confidentiality of the Confidential Information; (c) you and
your Owners may not make unauthorized copies of any portion of the
Confidential Information disclosed in written, electronic or other form; and (d)
you and your Owners must implement all reasonable procedures we prescribe
from time to time to prevent unauthorized use or disclosure of the Confidential
Information, including the use of nondisclosure agreements with your Owners,
officers, directors, managers, assistant managers and shift supervisors, and you
and your Owners must deliver such agreements to us. At the end of the Term, you
and your Owners must deliver to us all such Confidential Information in your
possession. Your restrictions on disclosure and use of Confidential Information do
not apply to information or techniques which are or become generally known in
the fitness industry (other than through your own disclosure), provided you obtain
our prior written consent to such disclosure or use. You acknowledge and agree
22
that you will not acquire any interest in Confidential Information, other than the
right to utilize Confidential Information disclosed to you in operating the
BUSINESS during the term of this Agreement, and that the use or duplication of
any Confidential Information in any other business will constitute an unfair
method of competition and a violation of this Agreement.
8.3
9.
PLANET FITNESS METHODS OF OPERATION.
9.1
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IDEAS, CONCEPTS, TECHNIQUES OR MATERIALS. All processes,
ideas, concepts, methods, techniques or materials relating to a PLANET
FITNESS business, whether or not constituting protectable intellectual property,
and whether created by or on behalf of you or your Owners in connection with the
development or operation of your BUSINESS, will be promptly disclosed to us. If
we adopt any of them as part of the System, they will be deemed to be our sole
and exclusive property and part of the System and deemed to be works made for
hire for us. You and your Owners agree to sign whatever assignment or other
documents we may request from time to time to evidence our ownership or to
assist us in securing intellectual property rights in such processes, ideas, concepts,
methods, techniques or materials.
COMPLIANCE WITH METHODS OF OPERATION. You acknowledge
that each and every aspect of the interior and exterior appearance, layout, decor,
services and operation of your BUSINESS is important to protect our reputation
and goodwill and to maintain uniform operating standards under the Marks. Any
required standards exist to protect our interest in the PLANET FITNESS system
and the Marks, and are not for the purpose of establishing any control, or the duty
to take control, over those matters that are clearly reserved to you. You agree to
comply with all mandatory specifications, standards and operating procedures, as
modified from time to time (whether contained in the Operations Manual or any
other communication) relating to the appearance, function, cleanliness or
operation of a PLANET FITNESS business, including:
(1)
design, layout, decor, appearance and lighting; periodic maintenance,
cleaning, pest control and sanitation; periodic remodeling; replacement of
obsolete or worn out leasehold improvements, fixtures, furnishings,
equipment and signs; periodic painting; and use of interior and exterior
signs, emblems, lettering and logos and the illumination thereof;
(2)
types, models and brands of required fixtures, furnishings, equipment,
signs, materials and supplies;
(3)
required or authorized products and product categories;
(4)
designated or Approved Suppliers (which may be limited to or include us)
of fixtures, furnishings, equipment, signs, products, materials, supplies,
and services;
23
14877234.6
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(5)
terms and conditions of the sale and delivery of, and terms and methods of
payment for products, materials, supplies and services including direct
labor, that you obtain from us, our Affiliates or others;
(6)
sales, marketing, advertising and promotional programs and materials and
media used in such programs;
(7)
use and display of the Marks;
(8)
compliance with Company philosophy and mission including, without
limitation, compliance with the Judgment Free Zone™ philosophy and
unlimited free group fitness instruction;
(9)
staffing levels for the BUSINESS and matters relating to managing the
BUSINESS; communication to us of the identities of the BUSINESS’s
personnel; qualifications, training, dress and appearance for both
management and hourly employees; and sale procedures and customer
service;
(10)
days and hours of operation of the BUSINESS;
(11)
participation in market research and testing and product and service
development programs;
(12)
acceptance of credit cards, other payment systems and check verification
services;
(13)
bookkeeping, accounting, data processing and record keeping systems and
forms; methods, formats, content and frequency of reports to us of sales,
revenue, financial performance and condition; and furnishing tax returns
and other operating and financial information to us;
(14)
types, amounts, terms and conditions of insurance coverage required to be
carried for the BUSINESS and standards for underwriters of policies
providing required insurance coverage; our protection and rights under
such policies as an additional named insured; required or impermissible
insurance contract provisions; assignment of policy rights to us; periodic
verification of insurance coverage that must be furnished to us; our right to
obtain insurance coverage for the BUSINESS at your expense if you fail
to obtain required coverage; our right to defend claims; and similar
matters relating to insured and uninsured claims;
(15)
complying with applicable laws; obtaining required licenses and permits;
adhering to good business practices; observing high standards of honesty,
integrity, fair dealing and ethical business conduct in all dealings with
customers, suppliers and us; and notifying us if any action, suit or
proceeding is commenced against you or the BUSINESS; and
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(16)
9.2
PROVISIONS OF THIS AGREEMENT. You agree that the Methods of
Operation prescribed from time to time in the Operations Manual, or otherwise
communicated to you in writing or other tangible form, constitute provisions of
this Agreement as if fully set forth herein. All references to this Agreement
include all Methods of Operation as periodically modified.
9.3
MODIFICATION OF METHODS OF OPERATION. We may periodically
modify Methods of Operation, which may accommodate regional or local
variations as we determine, and any such modifications may obligate you to
invest additional capital in the BUSINESS (“Capital Modifications”) and/or incur
higher operating costs; provided, however, that such modifications will not alter
your fundamental status and rights under this Agreement. We will not obligate
you to make any Capital Modifications when such investment cannot, in our
reasonable judgment, be amortized during the remaining term of this Agreement,
unless we agree to extend the term of this Agreement so that such additional
investment, in our reasonable judgment, may be amortized, or unless such
investment is necessary in order to comply with applicable laws.
9.4
CONDITION OF YOUR BUSINESS. You must maintain your BUSINESS’s
condition and appearance so that it is attractive, clean and efficiently operated in
accordance with the Operations Manual. You agree to maintain your
BUSINESS’s condition and appearance and to make such modifications and
additions to its layout, decor, operations, and general theme as we require from
time to time, including replacement of worn-out or obsolete fixtures, equipment,
furniture, and signs, repair of the interior and exterior and appurtenant parking
areas, and periodic cleaning and redecorating. You may not make any material
modification to the BUSINESS premises, including but not limited to, expansions
or reductions in size, without our prior, written consent. If at any time the general
state of repair, appearance or cleanliness of your BUSINESS, or its fixtures,
equipment, furniture, or signs, does not meet our standards, we may notify you
and specify the action you must take to correct such deficiency. If, within ten (10)
days after receiving such notice, you fail or refuse to initiate and thereafter
continue in good faith and with due diligence a bona fide program to complete
such required maintenance, we have the right (in addition to our rights under
Article 13), but not the obligation, to enter the Location and do such maintenance
on your behalf and at your expense. You must promptly reimburse us for such
expenses.
(1)
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regulation of such other aspects of the operation and maintenance of the
BUSINESS, including but not limited to maximum and minimum prices
charged for products and services offered through the BUSINESS, that we
determine from time to time to be useful to preserve or enhance the
efficient operation, image or goodwill of the Marks and PLANET
FITNESS businesses.
We reserve the right to require you to replace and update at your
BUSINESS: (a) all cardio equipment every four (4) years during the Initial
25
Term hereof, and (b) all other exercise equipment every six (6) years
during the Initial Term hereof, as specified in the Operations Manual or
otherwise in writing from time to time. You must also periodically,
upgrade and/or remodel your BUSINESS premises pursuant to our plans
and specifications, provided, however, that, with the exception of signage,
we will not require substantial remodeling more often than every four (4)
years during the Initial Term. We will advise you six months prior to
requiring any substantial remodeling or replacement of your cardio or of
your other exercise equipment.
(2)
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If your BUSINESS is damaged or destroyed by fire or other casualty, you
must initiate within thirty (30) days (and continue until completion) all
repairs or reconstruction to restore your BUSINESS to its original
condition. If, in our reasonable judgment, the damage or destruction is of
such a nature that it is feasible, without incurring substantial additional
costs, to repair or reconstruct your BUSINESS in accordance with the
then-standard PLANET FITNESS layout and decor specifications, we
may require you to repair or reconstruct your BUSINESS in accordance
with those specifications. You may not make any alterations to your
BUSINESS, nor any replacements, relocations or alterations of fixtures,
equipment, furniture or signs, without our written approval. We have the
right at your expense to rectify any replacements, relocations or alterations
not previously approved by us.
9.5
UNIFORM IMAGE. You agree that your BUSINESS will offer for sale such
services, products, and merchandise related to the PLANET FITNESS concept
that we determine from time to time to be appropriate for your BUSINESS. You
further agree that your BUSINESS will not, without our written approval, offer
any services or products (including promotional items) not then authorized by us.
Your BUSINESS may not be used for any purpose, other than the operation of a
PLANET FITNESS business in compliance with this Agreement. You agree that
your BUSINESS will offer courteous and efficient service and a pleasant
ambiance, consistent with your acknowledgements in Article 1.2. hereof. You
may offer personal training only if permitted by our then-current personal training
policies or as we otherwise approve in writing.
9.6
PURCHASE OF OTHER PRODUCTS. You acknowledge and agree that the
reputation and goodwill of PLANET FITNESS businesses are based on, and can
be maintained only by, the sale of distinctive high quality services and ancillary
merchandise. Therefore, you agree that your BUSINESS will use and/or offer for
sale only such services, merchandise, uniforms, forms, labels and other supplies
that conform to our specifications and quality standards and/or are purchased
from suppliers approved by us (which may include us and/or any of our
Affiliates). You acknowledge that we or our affiliate are and may be the sole
supplier for fitness equipment or other products. We may modify the list of
approved brands and/or suppliers from time to time. After notice of such
modification, you may not re-order any brand or reorder from any supplier which
26
is no longer approved. If you propose to use any brand and/or supplier which is
not then approved by us, you must first notify us and submit sufficient
information, specifications and samples concerning such brand and/or supplier so
that we can decide whether such brand complies with our specifications and
standards and/or such supplier meets our Approved Supplier criteria. We have
the right to charge reasonable fees to cover our costs. We will notify you of our
decision within a reasonable period of time. We may prescribe procedures for the
submission of requests for approval and impose obligations on suppliers, which
we may require to be incorporated in a written agreement. We may impose limits
on the number of suppliers and/or brands for any of the foregoing items including
designating us or an affiliate as a sole supplier. You must maintain at all times an
inventory of approved merchandise related to the PLANET FITNESS concept
sufficient in quantity, quality and variety to realize your BUSINESS’s full
potential. We may conduct market research to determine consumer trends and
salability of new services and products. You agree to cooperate by participating in
our market research programs; by test marketing new services and merchandise in
your BUSINESS and providing us timely reports and other relevant information
regarding such market research. You must purchase a reasonable quantity of such
test products and make a reasonable effort to sell them.
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9.7
COMPLIANCE WITH LAWS. You must maintain in force in your name all
required license permits and certificates relating to the operation of your
BUSINESS. You must operate your BUSINESS in full compliance with all
applicable laws, ordinances and regulations. You must notify us in writing
immediately upon the commencement of any legal or administrative action, or the
issuance of an order of any court, agency or other governmental instrumentality,
which may adversely affect the development, occupancy or operation of your
BUSINESS or your financial condition; or the delivery of any notice of violation
or alleged violation of any law, ordinance or regulation, including those relating
to health or sanitation at your BUSINESS. All of your advertising and promotion
must be completely factual and must conform to the highest standards of ethical
advertising. In all dealings with us, as well as your customers, suppliers, lessors
and the public, you must adhere to the highest standards of honesty, integrity, fair
dealing and ethical conduct. You agree to refrain from any business or advertising
practice which may be injurious to our business, to the business of other
PLANET FITNESS businesses or to the goodwill associated with the Marks.
9.8
PERSONNEL. You are solely responsible for all employment decisions with
respect to your personnel, including hiring, firing, compensation, training,
supervision and discipline, and regardless whether you receive advice from us on
any of these subjects. You may not recruit or hire any person who is an employee
of ours or of any PLANET FITNESS business operated by us, our Affiliates or
another franchisee of ours without obtaining the employer’s consent, which
consent may be withheld for any reason. Likewise, we may not recruit or hire any
person who is an employee of yours or your affiliates without obtaining the
employer’s consent, which consent may be withheld for any reason.
27
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9.9
INSURANCE. You must procure and maintain in force from an insurance
company with an “A” or better rating by AM Best and a Financial Rating of “IX”
or better primary insurance coverage as follows: commercial general liability
insurance (including completed/operations/product liability, and coverage for any
consolidated claims against us and our Affiliates); Special Form property
insurance, including fire and extended coverage, vandalism and malicious
mischief insurance for 100% of the replacement value of your BUSINESS and its
contents; and such other insurance policies, such as business interruption
insurance, professional liability insurance, abuse and molestation insurance,
tanning insurance, employment practices liability insurance, automobile
insurance, unemployment insurance, cyber liability insurance, excess umbrella
insurance and workers’ compensation insurance (with a broad form all-states
endorsement) as we specify from time to time and as required by law. For any
interruption in the operation of the BUSINESS due to a security breach, whether
or not you have sufficient insurance coverage, you shall continue to pay us,
during such period of interruption, continuing Royalty fees based on the average
monthly Royalty fees paid by you during the twelve (12) months immediately
preceding the period of interruption. For any interruption in the operation of the
BUSINESS for any other reason, you shall continue to pay us, during such period
of interruption, continuing Royalty fees based on the average monthly Royalty
fees paid by you during the twelve (12) months immediately preceding the period
of interruption, if you have business interruption insurance. Your insurance must
also cover identity theft and theft of personal information, including the costs of
notifying members whose information has been compromised. All insurance
policies must be issued on an “admitted” basis by carriers approved by us (as set
forth in the Operations Manual or otherwise in writing); contain such types and
minimum amounts of coverage, exclusions and maximum deductibles as we
prescribe from time to time in our current Franchise Disclosure Document or
otherwise in writing from time to time; name us and our Affiliates, including but
not limited to Planet Fitness Equipment, LLC and PFIP, LLC, as additional
insureds; provide for thirty (30) days prior written notice to us of any material
modification, cancellation or expiration of such policy; and include such other
provisions as we may require from time to time. At our request, you must furnish
us with a Certificate of Insurance on an annual basis. Excess and Surplus Lines
insurance is specifically prohibited. If you fail or refuse to maintain any required
insurance coverage, or to furnish satisfactory evidence thereof, we, at our option
and in addition to our other rights and remedies hereunder, may obtain such
insurance coverage on your behalf. If we do so, you must fully cooperate with us
in our effort to obtain such insurance policies and pay us any costs and premiums
we incur. Your obligation to maintain insurance coverage is not diminished in any
manner by reason of any separate insurance we may choose to maintain, nor does
it relieve you of your indemnification obligations under this Agreement.
9.10
QUALITY CONTROL. We have the right to establish “quality control”
programs, such as a “secret shopper” program, a customer satisfaction
measurement program, and/or a “customer intercept” program, to ensure the
highest quality of service and products in all PLANET FITNESS businesses.
28
You shall participate in any such quality control programs, and bear your pro-rata
share, as determined by us, of the costs of any such program.
10.
9.11
PRICING POLICIES. We reserve the right to establish prices for the products
and services you sell, both minimum and maximum, subject to applicable law.
9.12
MEMBER DUES POLICIES. You shall require at least ninety percent (90%)
of your members to pay their membership dues on a monthly basis by EFT and
shall not permit more than ten percent (10%) of your members during any month
to be paid-in-full members. All Black Card memberships shall be paid on a
monthly basis and may never be paid-in-full. All rates, discounts, and promotions
are subject to our prior written approval.
9.13
RECIPROCAL MEMBERSHIP. You must participate fully in any reciprocal
access program (currently the Black Card program, as we may modify from time
to time) and/or customer loyalty program(s) we may establish (collectively,
“Reciprocal Membership”), in accordance with the policies and procedures set
forth in the Operations Manual, through communications from us and as modified
from time to time. You agree and acknowledge that any reciprocal usage by
Planet Fitness members of other franchisees and us or when a person redeems any
membership benefits or other customer loyalty program benefits at your
BUSINESS, you are not entitled to reimbursement for membership fees or the
cost of goods or services provided to the member as a reciprocal access member
or under any customer loyalty program. Currently, Black Card members of other
Planet Fitness franchise locations have access to your location up to ten (10) times
per month and your Black Card members will have access to other locations up to
ten (10) times per month.
9.14
MEMBER TRANSFER POLICY. You agree to comply with the member
transfer policy as we establish from time to time. Currently, members are allowed
to transfer to another location if they have been a member of their current location
for more than three (3) months and are current on their dues. You acknowledge
and agree that upon a transfer, the member’s ongoing monthly dues shall be
transferred to the new location unless such member is prepaid in which case you
agree to service the remaining prepaid term.
9.15
FRANCHISE MANAGEMENT. You agree to actively use and monitor
Franchise Management in connection with the development and operation of your
BUSINESS.
MARKETING.
10.1
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NATIONAL ADVERTISING. Recognizing the value of advertising and
marketing to the goodwill and public image of PLANET FITNESS businesses
and the PLANET FITNESS brand, we have established and administer a
National Advertising Fund (“NAF”) for the creation and development of
marketing, advertising and related programs and materials, including electronic,
29
print and Internet media as well as the planning and purchasing of national and/or
regional network advertising to promote and enhance the PLANET FITNESS
brand in such manner and media as we determine. You agree to contribute to the
NAF such amounts that we prescribe from time to time, not to exceed two (2%)
percent of the EFT Dues Draft (the “Ad Fee”), payable monthly in the same
manner as the Royalty due hereunder. We reserve the right to change the two
(2%) percent maximum limit on NAF contributions (as well as the maximum
limit on Local Advertising Funds contributions) in the future by gaining an
approval vote by either (i) sixty six (66%) percent of all then existing company
and franchised PLANET FITNESS businesses or (ii) fifty one (51%) percent of
all then existing franchised PLANET FITNESS businesses. Voting will be
accomplished through a system of one vote per eligible PLANET FITNESS
business. We will direct all programs financed by the NAF and retain the right to
determine the creative concepts materials and endorsements used therein and the
geographic market and media placement and allocation thereof. You agree that
the NAF may be used to pay the costs of preparing and producing video, audio
and written advertising materials; website design, development and updating;
electronic advertising efforts, including search engine optimization and social
media networks and related platforms; administering regional and multiregional
advertising programs, including, without limitation, purchasing direct mail and
other media advertising; administrative and other costs associated with all NAF
efforts; and employing advertising, promotion and marketing agencies to assist
therewith and supporting public relations, market research and other advertising
promotion and marketing activities and amounts expended pursuant to Article
10.2. below. The NAF will furnish you with samples of advertising, marketing
formats, promotional formats and other materials at no additional cost to you
when we deem appropriate. Multiple copies of such materials will be furnished to
you at our direct cost of producing them plus any related shipping handling and
storage charges. We will seek the advice of owners of PLANET FITNESS
businesses by formal or informal means with respect to the creative concepts and
media used for programs financed by the NAF. All marketing or other materials
the NAF creates itself or has created for its use shall be owned by the NAF. We
may establish a Marketing Advisory Council (“MAC”). Members of the MAC are
appointed by us, and the MAC serves only in an advisory capacity. We reserve
the right to establish an election process for the selection of MAC members. The
final authority on all programs financed by the NAF will rest with us, and we will
have sole decision making authority over all aspects of such programs, including
national or regional media, creative, concepts, materials, endorsements, agencies
and suppliers. We have the right to change or dissolve the MAC.
10.2
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ACCOUNTING. The NAF will be accounted for separately from our other
funds and will not be used to defray any of our general operating expenses, except
for such reasonable salaries, administrative costs, travel expenses and overhead as
we may incur in activities related to the administration of the NAF and its
programs including, without limitation, conducting market research, preparing
advertising promotion and marketing materials, and collecting and accounting for
contributions to the NAF. The NAF will have the right to negotiate and retain any
30
commissions or marketing payments received from suppliers of any marketing or
other materials or products. We may spend, on behalf of the NAF, in any fiscal
year, an amount that is greater or less than the aggregate contribution of all
PLANET FITNESS businesses to the NAF in that year and the NAF may borrow
from us or others to cover deficits or invest any surplus for future use. All interest
earned on monies contributed to the NAF will be used to pay advertising costs
before other assets of the NAF are expended. We will prepare an annual statement
of monies collected and costs incurred by the NAF within 120 days following the
close of the fiscal year, and furnish the statement for the prior fiscal year to you
upon written request. We have the right to cause the NAF to be incorporated or
operated through a separate entity at such time as we deem appropriate and such
successor entity will have all of the rights and duties specified herein.
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10.3
NO PROPORTIONALITY. You acknowledge that the NAF is intended to
maximize recognition of the Marks and patronage of PLANET FITNESS
businesses. Although we will endeavor to utilize the NAF to develop advertising
and marketing materials and programs and to place advertising that will benefit all
PLANET FITNESS businesses, we undertake no obligation to ensure that
expenditures by the NAF in or effecting any geographic area are proportionate or
equivalent to the contributions to the NAF by PLANET FITNESS businesses
operating in that geographic area. Nor are we under any obligation to ensure that
any PLANET FITNESS business will benefit directly or in proportion to its NAF
contributions paid to the NAF from the development of advertising and marketing
materials or the placement of advertising. Except as expressly provided in this
Article, we assume no direct or indirect liability or obligation to you with respect
to collecting amounts due to, or maintaining, directing or administering the NAF.
We do not act as trustee or in any other fiduciary capacity with respect to the
NAF.
10.4
DEFERRALS OR REDUCTIONS. We reserve the right to defer or reduce
contributions of a PLANET FITNESS business franchisee and, upon thirty (30)
days’ prior written notice to you, to reduce or suspend your payment of
contributions to the NAF and suspend operations of the NAF for one or more
periods of any length and to terminate (and if terminated to reinstate) the NAF. If
the NAF is terminated, all unspent monies on the date of termination will be
distributed to our franchisees in proportion to their respective contributions to the
NAF during the preceding three (3) month period, and amounts required to be
paid pursuant to Article 10.1. above shall be added to amounts required to be
expended pursuant to Article 10.5. below.
10.5
LOCAL ADVERTISING. In addition to the contributions you pay to the NAF
and the Pre-Sale Marketing Expense, you agree to spend the greater of $5,000 per
month or 7% of the total EFT Dues Draft of monthly and annual membership fees
for your BUSINESS for locally advertising and promoting your BUSINESS.
These amounts spent on local advertising and promotion will be designated as
Local Advertising Funds (“LAF”). At our request, you shall furnish us with
copies of invoices and other documentation evidencing your compliance with this
31
Article 10.5. If, in our business judgment we determine that you are underperforming or not spending the LAF on appropriate media placement, we may
collect the LAF from you and administer it on your behalf. Moreover, if we
determine, at some later date, that you have spent an amount less than two percent
(2%) of the EFT Dues Draft during the then most recently completed four (4)
consecutive fiscal months for locally advertising and promoting your BUSINESS,
we may collect LAF contributions from you directly. We may collect the LAF
from you and other franchisees if, in our business judgment, we determine such
conduct is appropriate. We shall provide you with not less than thirty (30) days
notice of any determination by us which changes the amount of the LAF you must
spend or the method of its expenditure. LAF contributions will be payable on the
first business day following the immediately preceding Accounting Period
together with the Royalty Fees due hereunder. Said funds may be electronically
drafted from the designated account referred to in Article 5.5. hereof. The LAF
monies will be used to pay for the cost of implementing local marketing plans
developed by you and approved by us or, if we collect LAF contributions from
you, to reimburse you (up to an amount not to exceed the LAF contributions so
collected) for the costs incurred by you in implementing local marketing plans
developed by you and approved by us. For these purposes, advertising
expenditures include: (a) amounts contributed to advertising cooperatives; and (b)
amounts spent by you for advertising media, such as television, radio, Internet,
newspaper, billboards, posters, direct mail, collateral and promotional items,
advertising on public vehicles (transit and aerial) and, if not provided by us, cost
of producing approved materials necessary to participate in these media.
Advertising expenditures do not include amounts spent for items which we, in our
reasonable judgment, deem inappropriate for meeting the minimum advertising
requirement, including permanent on-premises signs, lighting, personnel salaries
or administrative costs, transportation vehicles (even though such vehicles may
display the Marks), Yellow Pages advertising, discounts, free offers and employee
incentive programs. We reserve the right to modify the list of such advertising
expenditures in the Operations Manual from time to time. You must submit to us
for our prior approval, a marketing plan and samples of all advertising and
promotional materials not prepared or previously approved by us and which vary
from our standard advertising and promotional materials. You may not use any
advertising or promotional materials that we have not approved. If you elect to
work with an advertising agency, you must obtain our written approval of such
advertising agency before you sign any contracts or share any Confidential
Information with the advertising agency.
10.6
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ADVERTISING COOPERATIVES. We have the right to establish or approve
local and/or regional advertising cooperatives for PLANET FITNESS businesses
in your local or regional areas, covering such geographical areas as we may
designate from time to time. You must participate in any such cooperative and its
programs and abide by its by-laws. If your BUSINESS is within the territory of an
existing Cooperative at the time your BUSINESS opens for business, you agree to
immediately become a member of the Cooperative. If a Cooperative applicable to
your BUSINESS is established during the term of this Agreement, you agree to
32
become a member no later than thirty (30) days after the date approved by us for
the Cooperative to commence operation. The following provisions shall apply to
each Cooperative:
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(1)
Each Cooperative shall utilize a voting system of one vote per one eligible
PLANET FITNESS business.
(2)
Each Cooperative shall be organized and governed in a form and manner,
and shall commence operations on a date, approved in advance by us in
writing. No changes in the by-laws or other governing documents of a
Cooperative shall be made without our prior written consent.
(3)
Each Cooperative shall be organized for the exclusive purpose of
administering advertising programs and developing, subject to our
approval, promotional materials for use by the members in the
Cooperative.
(4)
No advertising or promotional plans or materials may be used by a
Cooperative or furnished to its members without prior approval by us
pursuant to Article 10.6.6. below.
(5)
You and each other member of the Cooperative shall contribute to the
Cooperative, using a collection structure selected and established by us,
the amount determined in accordance with the Cooperative’s by-laws. Any
PLANET FITNESS businesses owned by us or any of our Affiliates
located in such designated local or regional area(s) will contribute to the
Cooperative on the same basis. Contributions to such local and/or regional
advertising cooperatives are credited towards the advertising expenditures
required by Article 10.5; however, if we provide you and your
Cooperative ninety (90) days’ notice of a special promotion, including any
regional promotions, you must participate in such promotion and pay to us
any special promotion advertising fees assessed in connection therewith,
beginning on the effective date of such notice and continuing until such
special promotion is concluded. Any such special promotion advertising
fees shall be in addition to, and not credited towards, the other advertising
expenditures and commitments required of you by this Article 10.
(6)
All advertising and promotion by you and the Cooperatives shall be in
such media and of such type and format as we may approve, shall be
conducted in a dignified manner, and shall conform to such standards and
requirements as we may specify. You or the Cooperative shall submit
written samples of all proposed advertising and promotional plans and
materials to us for our approval (except with respect to prices to be
charged) at least thirty (30) days before their intended use, unless such
plans and materials were prepared by us or have been approved by us
within the previous twelve (12) months. Proposed advertising plans or
33
materials shall be deemed to have been approved if they have not been
disapproved by us within fifteen (15) days after their receipt by us.
(7)
At our request, you shall furnish us with copies of such information and
documentation evidencing your Cooperative contributions as we may
require in order to evidence your compliance with Article 10.6.
10.7
SPECIAL MARKETING PROGRAMS.
You must participate in and
contribute funds to special marketing programs and campaigns that we develop
and administer from time to time; provided that in no event will your required
contribution to the special marketing program equal more than the then-current
collective required monthly NAF and LAF payments (currently, 9%). If we
require you to pay the special marketing program fee, you will not be required to
pay a separate LAF or NAF for the corresponding month.
10.8
PARTICIPATION IN INTERNET WEB SITE OR OTHER ON-LINE
COMMUNICATIONS. You must have internet access and an e-mail address.
You will use an e-mail address to send and receive e-mail and attachments on the
Internet. You may be required to invest in and implement new technology
initiatives at your own expense, which may include, but will not be limited to, the
Black Card Program, acceptance of credit and debit cards, monitors, music,
Internet TV broadcast, software management applications, surveillance system, elearning, and software applications designed to better manage business functions
and control costs. We may designate the supplier you use for any goods and
services associated with these initiatives. Further, you must, at your expense,
participate in the PLANET FITNESS web site on the internet or other on-line
communications, including an intranet system we may develop in the future
unless we provide otherwise. You may not separately register any domain name
or operate any web site containing any of the Marks without our written approval.
We determine the content and use of the web site and have the sole right to
establish the rules under which franchisees may or must participate in the web site
or separately use the internet or other on-line communications. We retain all
rights relating to the PLANET FITNESS web site and may alter or terminate the
web site. Your general conduct on the web site or other authorized on-line
communications, and specifically your use of the Marks or any advertising on the
web site or other authorized on-line communications (including the domain name
and any other Marks we may develop as a result of participation in the web site or
other on-line communications), is subject to the provisions of this Agreement and
the related standards and restrictions we specify from time to time in the Methods
of Operation. You may not use, reference or otherwise promote the Marks or
System in connection with any current or future form of social media networks or
platforms, including, without limitation, Facebook, Twitter, LinkedIn, and so on.
You shall not use or download any software on your computer unless it has been
authorized by us in writing. In the event that you use or download any
unauthorized software, you shall be liable for all damages and problems caused
by the unauthorized software in addition to the other remedies provided under this
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34
Agreement. You acknowledge that certain information obtained through your
participation in the PLANET FITNESS web site may be considered Confidential
Information, including access codes and identification codes. Your right to
participate in the PLANET FITNESS web site or any intranet system we may
develop or otherwise use the Marks or System on the internet or other on-line
communicators terminates when this Agreement expires or terminates.
You shall pay us such amount as we require, for any identify theft or theft of
personal information of a customer due to any security breach by you, your
agents, or your employees. Such fees shall be used to offset our out-of-pocket
costs and expenses incurred in responding to and remedying any such security
breach.
10.9
11.
RECORDS, REPORTS AND FINANCIAL STATEMENTS.
11.1
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TRUTHFUL ADVERTISING, MARKETING AND PROMOTION. You
agree that any advertising, promotion and marketing you conduct will be
completely clear and factual and not misleading and conform to the highest
standards of ethical marketing and the promotion policies which we prescribe
from time to time. Samples of all advertising, promotional and marketing
materials which we have not prepared or previously approved must be submitted
to us for approval before you use them. If you do not receive written disapproval
within fifteen (15) days after our receipt of such materials, we will be deemed to
have given the required approval. You may not use any advertising or
promotional materials that we have disapproved. We own the copyrights to
anything so submitted, whether approved by us or not.
RECORDS. You agree to establish and maintain at your own expense a
bookkeeping, accounting and record keeping system conforming to the
requirements and formats we prescribe from time to time. You agree to prepare
and to maintain for three (3) years complete and accurate books, records
(including invoices and records relating to your advertising expenditures) and
accounts (using our then-current standard chart of accounts) for your BUSINESS,
copies of your sales tax returns and such portions of your state and federal income
tax returns as relate to your BUSINESS. All such books and records shall be kept
at your principal address indicated on the first page of this Agreement, unless we
otherwise approve. You must record all sales on computer-based cash registers
which are fully compatible with our computer system and which include an
information interface capability to communicate electronically with our computer
system. You agree to purchase or lease, at your expense, such computer hardware
and software, required dedicated telephone and power lines, modems, printers,
and other computer-related accessories and peripheral equipment as we may
specify, for the purpose of, among other functions, recording financial and
customer data and communicating with us. We may require you to use proprietary
software and any other computer systems which we may prescribe from time to
time and you agree to execute such agreements as we may require in connection
therewith. You must provide such assistance as may be required to connect your
35
computer system with our computer system. We have the right, without prior
notice to you, to retrieve such data and information from your computer system as
we deem necessary or desirable, including the right to obtain such information
from vendors (e.g., MicroSoft Dynamics), and you agree to fully cooperate with
such efforts. All data pertaining to your BUSINESS, and all data you create or
collect in connection with the System, or in connection with your operation of the
BUSINESS (including without limitation data pertaining to or otherwise
concerning your members) or otherwise provided by you (including, without
limitation, data uploaded to, or downloaded from your computer system) is and
will be owned exclusively by us, and we will have the right to use such data in
any manner that we deem appropriate without compensation to you. We hereby
license use of such data back to you for the term of this Agreement, at no
additional cost, solely for your use in connection with the BUSINESS conducted
under this Agreement. In view of the contemplated interconnection of computer
systems and the necessity that such systems be compatible with each other, you
agree that you will comply strictly with our standards and specifications for all
items associated with your computer systems. To ensure full operational
efficiency and optimum communication capability among computer systems, you
agree, at your expense, to keep your computer systems in good maintenance and
repair, and to promptly install such additions, changes, modifications,
substitutions or replacements to hardware, software, telephone and power lines,
and other computer-related facilities, as we direct.
11.2
11.3
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PERIODIC REPORTS. You must furnish us:
(1)
within thirty (30) days after the end of each fiscal quarter, a quarterly
balance sheet and income statement and statement of cash flow of your
BUSINESS for such quarter, reflecting any adjustments and accruals;
(2)
within ninety (90) days after the end of each fiscal year, a year-end
balance sheet and income statement and statement of cash flow of your
BUSINESS for such year, reflecting all year-end adjustments and
accruals; and
(3)
within thirty (30) days of our request, such other information as we may
require from time to time, including sales data and labor cost reports and
sales and income tax statements. All such reports shall use our thencurrent standard chart of accounts.
VERIFICATION. You agree to verify and sign each report and financial
statement in the manner we prescribe. We reserve the right to require that your
annual financial statements be audited, at your expense, by an independent
certified public accountant approved by us. We reserve the right to publish or
disclose information that we obtain under this Article in any data compilations,
collections, or aggregations that we deem appropriate so long as we do not
disclose information relating to performance of your individual BUSINESS,
unless such disclosure is required by law or order of a court. Moreover, we
36
reserve the right, as often as we deem appropriate, including on a daily basis, to
access the computer systems that you are required to maintain in connection with
the operation of the BUSINESS and to retrieve all information relating to the
BUSINESS’s operations.
12.
INSPECTIONS AND AUDITS.
12.1
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OUR RIGHT TO INSPECT THE BUSINESS. To determine whether you and
the BUSINESS are complying with this Agreement and Methods of Operation,
we and our designated agents have the right at any time during your regular
business hours, and without prior notice to you, to:
(1)
inspect the BUSINESS;
(2)
observe, photograph and videotape the operations of the BUSINESS for
such consecutive or intermittent periods as we deem necessary;
(3)
remove samples of any products, materials or supplies for testing and
analysis;
(4)
interview personnel and customers of the BUSINESS;
(5)
inspect and copy any books, records (whether electronic or hard copy) and
documents relating to your operation of the BUSINESS, including
member and membership information; and
(6)
retrieve such data and information from your computer system or
computer systems which are licensed by you, such as the dues processing
platform (currently, Visionary Software) or accounting platform
(currently, Microsoft Dynamics), including obtaining such information
from third parties or vendors.
12.2
COOPERATION. You agree to cooperate with us fully in connection with any
such inspections, observations, photographing, videotaping, product removal and
interviews. You agree to present to your customers such evaluation forms that we
periodically prescribe and to participate and/or request your customers to
participate in any surveys performed by us or on our behalf.
12.3
OUR RIGHT TO AUDIT. We have the right at any time during your business
hours, and without prior notice to you, to inspect and audit, or cause to be
inspected and audited, your (if you are a corporation or partnership) and the
BUSINESS’s business, bookkeeping and accounting records, sales and income
tax records and returns and other records. You agree to cooperate fully with our
representatives and independent accountants we hire to conduct any such
inspection or audit. In the event such inspection or audit is made necessary by
your failure to furnish reports, supporting records or other information as herein
required, or to furnish such items on a timely basis, you agree to reimburse us for
the reasonable cost of such inspection or audit, including, without limitation, the
37
charges of attorneys and independent accountants and the travel expenses, room
and board and compensation of our employees. In the event an inspection or audit
reveals that any payments have been understated in any report to us, then you
shall immediately pay to us the amount understated upon demand, in addition to
interest from the date such amount was due until paid, at the highest contract rate
of interest permitted by law. If an inspection or audit discloses an understatement
in any report of two (2%) percent or more, you shall, in addition to repayment of
monies owed with interest, reimburse us for any and all costs and expenses
connected with the inspection or audit, including, without limitation, the charges
of attorneys and independent accountants and the travel expenses, room and board
and compensation of our employees. The foregoing remedies are in addition to
our other remedies and rights under this Agreement and applicable law.
13.
TRANSFER.
13.1
BY US. We have the right to sell or assign, in whole or in part, our interests in
this Agreement, and any such sale or assignment will inure to the benefit of any
assignee or other legal successor to our interests herein.
13.2
BY YOU. You understand and acknowledge that the rights and duties created by
this Agreement are personal to you (or, if you are a corporation, partnership, or
other entity, to your Owners) and that we have granted the Franchise to you in
reliance upon our perceptions of your (or your Owners’) individual or collective
character, skill, aptitude, attitude, business ability, acumen and financial capacity.
Accordingly, neither this Agreement (or any interest therein) nor any ownership
or other interest in you or the BUSINESS, including any arrangement whereby
you sell or pledge accounts receivable, EFT, or any other assets of the
BUSINESS, may be transferred without our prior written approval. Any Transfer
without such approval constitutes a breach of this Agreement and is void and of
no effect.
13.3
CONDITIONS FOR APPROVAL OF TRANSFER. If you (and your Owners)
are in full compliance with this Agreement and the conditions of this Article 13.3
are met, we will not unreasonably withhold our consent to Transfer. The proposed
transferee and its direct and indirect owners must be individuals of good moral
character and otherwise meet our then applicable standards for PLANET
FITNESS business franchisees. A Transfer of ownership, possession or control of
the BUSINESS may be made only in conjunction with a Transfer of this
Agreement. If the Transfer is of this Agreement or a controlling interest in you, or
is one of a series of Transfers which in the aggregate constitute the Transfer of
this Agreement or a controlling interest in you, all of the following conditions
must be met prior to or concurrently with the effective date of the Transfer:
(1)
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the transferee has the moral character, aptitude, attitude, experience,
references, acumen and financial capacity to operate the BUSINESS, and
the proposed transferee may not be an entity, or be affiliated with an
38
entity, that is required to comply with reporting and information
requirements of the Securities Exchange Act of 1934, as amended;
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(2)
you have paid all Royalties, Ad Fees, amounts owed for purchases from us
and all other amounts owed to us or to third party creditors and have
submitted all required reports and statements;
(3)
the transferee (or its Responsible Owner) and its managers, shift
supervisors and personnel must have completed our initial training
program or must be currently certified by us to operate and/or manage a
PLANET FITNESS business to our satisfaction prior to closing;
(4)
the transferee has agreed to be bound by all of the terms and conditions of
this Agreement for the remainder of the Initial Term or, at our option,
must execute our then-current standard form of franchise agreement and
related documents being offered to new franchisees in the state in which
your BUSINESS is located (which may provide for different royalties,
advertising contributions and expenditures, duration and other rights and
obligations than those provided for in this Agreement);
(5)
for each proposed Transfer hereunder, including a proposed Transfer
among your Owners in which there is a change of a controlling interest in
you, you shall pay us a transfer fee equal to the greater of (a) Twenty Five
Thousand ($25,000) Dollars or (b) the mathematical product of Ten
Thousand Dollars ($10,000) multiplied by the number of PLANET
FITNESS businesses or Franchise Agreements affected by the transfer
(the “Transfer Fee”); provided, however, if the proposed Transfer is
among your Owners, and there is no change of a controlling interest in
you, the Transfer Fee will not apply, although you are required to
reimburse us for any reasonable legal and administrative costs we incur in
connection with the Transfer. For purposes of this Article 13.3.5, we will
make the determination as to what constitutes a change in control, which
may include any change in control of any entity owning a legal or
beneficial interest in you, as we shall reasonably determine;
(6)
you (and your transferring Owners) have executed a general release, in
form satisfactory to us, of any and all claims against us and our
shareholders, officers, directors, employees and agents;
(7)
we have approved the material terms and conditions of such Transfer and
determined that the price and terms of payment will not adversely affect
the transferee’s operation of the BUSINESS;
(8)
if you or your Owners finance any part of the sale price of the transferred
interest, you and/or your Owners have agreed that all of the transferee’s
obligations pursuant to any promissory notes, agreements or security
interests that you or your Owners have reserved in the BUSINESS are
39
subordinate to the transferee’s obligation to pay Royalties, NAF
contributions and other amounts due to us and otherwise to comply with
this Agreement; and
(9)
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you and/or any transferring Owner(s) have executed an agreement in favor
of us agreeing to remain bound by the restrictions contained in Articles
16.2, 16.3 and 16.4 hereof as if this Agreement had terminated. You agree
that the restrictions referenced in the immediately preceding sentence will
continue to apply regardless of whether you and/or any transferring
Owner(s) actually execute an agreement confirming the survival of these
restrictions. You and each of your Owners further agree that the
provisions of Article 19.13 and 19.14 survive the partial or full Transfer of
an Owner’s interest in you and that New Hampshire law and jurisdiction
will apply to any dispute that arises out of or relates to this Agreement.
This Article 13.3.9 applies equally to partial Transfers of interest by any
one or more Owners.
13.4
TRANSFER TO A WHOLLY OWNED CORPORATION. Notwithstanding
Article 13.3., if you are in full compliance with this Agreement, you may Transfer
this Agreement to a corporation, business trust, limited liability company or
similar entity, which conducts no business other than the BUSINESS and, if
applicable, other PLANET FITNESS businesses, in which you maintain
management control and of which you own and control one hundred (100%)
percent of the equity and voting power of all issued and outstanding capital stock,
and further provided that all assets of the BUSINESS are owned, and the entire
business of the BUSINESS is conducted, by a single corporation. Transfers of
shares in such corporation will be subject to the provisions of Article 13.3.
Notwithstanding anything to the contrary herein, you agree to remain personally
liable under this Agreement as if the Transfer to such corporation had not
occurred.
13.5
TRANSFER UPON YOUR DEATH OR DISABILITY. Upon your death or
permanent disability or, if you are a corporation or partnership, the death or
permanent disability of the Owner of a controlling interest in you, your or such
Owner’s executor, administrator, conservator, guardian or other personal
representative must Transfer your interest in this Agreement or such Owner’s
interest in you to a third party.*f Such disposition of this Agreement or the
interest in you (including, without limitation, Transfer by bequest or inheritance)
must be completed within a reasonable time, not to exceed six (6) months from
the date of death or permanent disability, and will be subject to all of the terms
and conditions applicable to Transfers contained in this Article. A failure to
Transfer your interest in this Agreement or the ownership interest in you within
this period of time constitutes a breach of this Agreement. For purposes hereof,
the term “permanent disability” means a mental or physical disability, impairment
or condition that is reasonably expected to prevent or actually does prevent you or
an Owner of a controlling interest in you from managing and operating the
40
BUSINESS for a period of three (3) months from the onset of such disability,
impairment or condition.
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13.6
OPERATION UPON YOUR DEATH OR DISABILITY. If, upon your death
or permanent disability or the death or permanent disability of the Owner of a
controlling interest in you, the BUSINESS is not being managed by a Responsible
Owner or Approved Operator, your or such Owner’s executor, administrator,
conservator, guardian or other personal representative must within a reasonable
time, not to exceed fifteen (15) days from the date of death or permanent
disability, appoint an Approved Operator to operate the BUSINESS. Such
manager will be required to successfully complete training at your expense within
sixty (60) days of being appointed to operate the BUSINESS. Pending the
appointment of an Approved Operator as provided above or if, in our judgment,
the BUSINESS is not being managed properly any time after your death or
permanent disability or after the death or permanent disability of the Owner of a
controlling interest in you, we have the right, but not the obligation, to appoint a
manager for the BUSINESS. All funds from the operation of the BUSINESS
during the management by our appointed manager will be kept in a separate
account, and all expenses of the BUSINESS, including compensation, other costs
and travel and living expenses of our manager, will be charged to this account.
We also have the right to charge a reasonable management fee (in addition to the
Royalty and NAF contributions payable under this Agreement) during the period
that our appointed manager manages the BUSINESS. Operation of the
BUSINESS during any such period will be on your behalf, provided that we only
have a duty to utilize reasonable efforts in doing so and will not be liable to you
or your Owners for any debts, losses or obligations incurred by the BUSINESS or
to any of your creditors for any products, materials, supplies or services the
BUSINESS purchases during any period it is managed by our appointed manager.
13.7
BONA FIDE OFFERS. If you (or any of your Owners) at any time determine to
sell, assign or Transfer for consideration an interest in this Agreement and the
BUSINESS or an ownership interest in you, you (or such Owner) agree to obtain
a bona fide, executed written offer and earnest money deposit (in the amount of
five (5%) percent or more of the offering price) and a complete franchise
application from a fully disclosed offeror including lists of the owners of record
and beneficially of any corporate or limited liability company offeror and all
general and limited partners of any partnership and immediately submit to us a
true and complete copy of such offer, which includes details of the payment terms
of the proposed sale. To be a valid, bona fide offer, the proposed purchase price
must be denominated in a dollar amount. The offer must apply only to an interest
in you or in this Agreement and the BUSINESS and may not include an offer to
purchase any of your (or your Owners’) other property or rights. However, if the
offeror proposes to buy any other property or rights from you (or your Owners)
under a separate, contemporaneous offer, such separate, contemporaneous offer
must be disclosed to us, and the price and terms of purchase offered to you (or
your Owners) for the interest in you or in this Agreement and the BUSINESS
must reflect the bona fide price offered therefor and not reflect any value for any
41
other property or rights. Any Transfer in violation of our right of first refusal is
null and void.
13.8
13.9
14.
(1)
we may substitute cash for any form of payment proposed in such offer;
(2)
our credit will be deemed equal to the credit of any proposed purchaser;
(3)
we will have not less than sixty (60) days after giving notice of our
election to purchase to prepare for closing; and
(4)
we are entitled to receive, and you and your Owners agree to make, all
customary representations and warranties given by the seller of the assets
of a business or the capital stock of an incorporated business, as
applicable, including, without limitation, representations and warranties as
to:
(a)
ownership and condition of and title to stock or other forms of
ownership interest and/or assets;
(b)
liens and encumbrances relating to the stock or other ownership
interest and/or assets; and
(c)
validity of contracts and the liabilities, contingent or otherwise, of
the corporation whose stock is being purchased.
NON-EXERCISE. If we do not exercise our right of first refusal, you or your
Owners may complete the sale to such purchaser pursuant to and on the exact
terms of such bona fide offer, subject to our approval of the Transfer as provided
in Articles 13.2, 13.3 and 13.4. If the sale to such purchaser is not completed
within one hundred twenty (120) days after delivery of such bona fide offer to us,
or if there is a material change in the terms of the sale (which you agree promptly
to communicate to us), the sale will be treated as a new sale subject to our right of
first refusal as provided in Article 13.8.
EXPIRATION OF THIS AGREEMENT.
14.1
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OUR RIGHT OF FIRST REFUSAL. We have the right, exercisable by written
notice delivered to you or your selling Owners within thirty (30) days from the
date of the delivery to us of both an exact copy of such bona fide offer and all
other information we request, to purchase such interest for the price and on the
terms and conditions contained in such bona fide offer, provided that:
ACQUISITION OF A SUCCESSOR FRANCHISE. Upon expiration of the
Initial Term of this Agreement, if you (and each of your Owners) are in full
compliance with this Agreement during its term, and provided that you maintain
possession of and agree to remodel and/or expand the BUSINESS, add or replace
improvements, equipment and signs and otherwise modify the BUSINESS as we
require to bring it into compliance with specifications and standards then
42
applicable for PLANET FITNESS businesses, or if you are unable to maintain
possession of the Location, or if in our judgment the BUSINESS should be
relocated, you secure substitute premises we approve, develop such premises in
compliance with specifications and standards then applicable for PLANET
FITNESS businesses and continue to operate the BUSINESS at the Location
until operations are transferred to the substitute premises, then, subject to the
terms and conditions set forth in this Article 14, you will have the right to acquire
a successor franchise to operate the BUSINESS as a PLANET FITNESS
business on the terms and conditions of the franchise agreement we are then
customarily offering in granting successor franchises for PLANET FITNESS
businesses. The successor franchise fee will be equal to the initial franchise fee
we are then currently customarily charging for new franchises; provided that such
amount shall not exceed $20,000.
14.2
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GRANT OF A SUCCESSOR FRANCHISE. You must give us written notice
of your desire to acquire a successor franchise not less than six (6) months nor
more than twelve (12) months prior to the expiration of this Agreement. We will
give you notice (“Our Notice”), not later than sixty (60) days after receipt of your
notice, of our decision, pursuant to Article 14.1:
(1)
to grant you one (1) successor franchise for the customary term we are
then offering to new franchisees;
(2)
to grant you a successor franchise on the condition that deficiencies of the
BUSINESS, or in your operation of the BUSINESS, are corrected; or
(3)
not to grant you a successor franchise based on our determination that you
and your Owners have not substantially complied with this Agreement
during its term.
14.3
NO GRANT. If we elect not to grant a successor franchise, Our Notice will
describe the reasons for our decision. Your right to acquire a successor franchise
is subject to your continued compliance with all of the terms and conditions of
this Agreement through the date of its expiration, in addition to your compliance
with the obligations described in Our Notice.
14.4
90 DAY CURE. If Our Notice states that you must cure certain deficiencies of
the BUSINESS or its operation as a condition to the grant of a successor
franchise, we will give you written notice of a decision not to grant a successor
franchise, based upon your failure to cure such deficiencies, not less than ninety
(90) days prior to the expiration of this Agreement, provided, however, that we
will not be required to give you such notice if we decide not to grant you a
successor franchise due to your breach of this Agreement during the one hundred
eighty (180) day period prior to its expiration. We may extend the term of this
Agreement for such period of time as is necessary in order to provide you with
either reasonable time to correct deficiencies or the ninety (90) day notice of our
43
refusal to grant a successor franchise required hereunder if we fail to give you the
following:
15.
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(1)
notice of deficiencies in the BUSINESS, or in your operation of the
BUSINESS, within ninety (90) days after we receive your timely election
to acquire a successor franchise; or
(2)
notice of our decision not to grant a successor franchise at least ninety (90)
days prior to the expiration of this Agreement.
14.5
AGREEMENTS. If you satisfy all of the other conditions to the grant of a
successor franchise, you and your Owners agree to execute the franchise
agreement and any ancillary agreements we are then customarily offering in
connection with the grant of successor franchises for PLANET FITNESS
businesses.
14.6
RELEASES. You and your Owners further agree to execute general releases, in
form satisfactory to us, of any and all claims against us and our shareholders,
officers, directors, employees, agents, successors and assigns. Failure by you or
your Owners to sign such agreements and releases and deliver them to us for
acceptance and execution within thirty (30) days after their delivery to you will be
deemed an election not to acquire a successor franchise.
TERMINATION OF AGREEMENT.
15.1
BY YOU. If you and your Owners are in compliance with this Agreement and
we materially fail to comply with this Agreement and do not correct such failure
within sixty (60) days after written notice of such material failure is delivered to
us, you may terminate this Agreement effective thirty (30) days after delivery to
us of written notice of termination. Your termination of this Agreement for any
other reason or without such notice will be deemed null and void.
15.2
IMMEDIATE TERMINATION. You are in material breach of this Agreement,
and this Agreement will automatically terminate without notice, if you:
(1)
become insolvent by reason of your inability to pay your debts as they
mature;
(2)
if you are adjudicated bankrupt or insolvent;
(3)
if you file a petition in bankruptcy, reorganization or similar proceeding
under the bankruptcy laws of the United States or have such a petition
filed against you which is not discharged within thirty (30) days;
(4)
if a receiver or other custodian, permanent or temporary, is appointed for
your business, assets or property;
44
15.3
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(5)
if you request the appointment of a receiver or make a general assignment
for the benefit of creditors;
(6)
if final judgment against you in the amount of Twenty Five Thousand
($25,000) Dollars or more remains unsatisfied of record for thirty (30)
days or longer;
(7)
if your bank accounts, property or accounts receivable are attached;
(8)
if execution is levied against your business or property;
(9)
if suit is filed to foreclose any lien or mortgage against any of your assets
and such suit is not dismissed within thirty (30) days;
(10)
if you voluntarily dissolve or liquidate or have a petition filed for
corporate or partnership dissolution and such petition is not dismissed
within thirty (30) days;
(11)
if you fail to meet any construction deadline set forth in Article 4 hereof
TERMINATION UPON NOTICE. In addition to our right to terminate
pursuant to other provisions of this Agreement and under applicable law, we have
the right to terminate this Agreement, effective upon delivery of notice of
termination to you, if you or any of your Owners or affiliates:
(1)
fail to open your BUSINESS and start business, in the time period
required under this Agreement;
(2)
abandon or fail to actively operate your BUSINESS for three (3)
consecutive days, except where such failure to actively operate results
solely from causes beyond your reasonable control;
(3)
surrender or transfer control of the operation of your BUSINESS without
our prior written consent;
(4)
have made any material misrepresentation or omission in connection with
your purchase of the Franchise;
(5)
suffer cancellation or termination of the lease or sublease for your
BUSINESS;
(6)
are convicted of, or plead no contest to, a felony or other crime or offense
that we reasonably believe may adversely affect the System or the
goodwill associated with the Marks;
(7)
make an unauthorized assignment of this Agreement or of an ownership
interest in you or the BUSINESS;
45
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(8)
make any unauthorized use or disclosure of any Confidential Information
or use, duplicate or disclose any portion of the Operations Manual in
violation of this Agreement;
(9)
fail or refuse to comply with any mandatory specification, standard, or
operating procedure prescribed by us relating to the cleanliness or
sanitation of your BUSINESS or violate any health, safety or sanitation
law, ordinance or regulation, that we reasonably believe may pose harm to
the public or to your or our reputation, and do not correct such failure,
refusal or violation within twenty four (24) hours after written notice
thereof is delivered to you;
(10)
fail to establish, maintain and/or have sufficient funds available in the
designated account as required by Article 5.3. of this Agreement or fail to
make payment of any amounts due us or any of our Affiliates, and do not
correct such failure within ten (10) days after written notice of such failure
is delivered to you;
(11)
fail to make a timely payment of any amount due to a supplier unaffiliated
with us (other than payments which are subject to bona fide dispute), and
do not correct such failure within thirty (30) days after we deliver to you
notice of such failure to comply;
(12)
fail to comply with any other provision of this Agreement or any other
agreement between you (or any of your Owners) and us or our affiliates,
and do not correct such failure within thirty (30) days after notice of such
failure to comply is delivered to you;
(13)
fail on three (3) or more separate occasions within any period of twelve
(12) consecutive months to submit when due reports or other data,
information or supporting records or to pay when due Royalties, NAF
contributions or other payments due us, any of our Affiliates or any
unaffiliated suppliers or otherwise fail to comply with this Agreement,
whether or not such failure is corrected after notice is delivered to you;
(14)
fail to pay when due any federal or state income, service, sales,
employment related or other taxes due on the operations of the
BUSINESS, unless you are, in good faith, legally contesting your liability
for such taxes;
(15)
fail to request approval of an Approved Operator and/or Responsible
Owner within fifteen (15) days after your death or permanent disability or
the death or permanent disability of the Owner of a controlling interest in
you or such Approved Operator and/or Responsible Owner fails to
complete our training within sixty (60) days after such request;
(16)
if you fail to lease, sublease or purchase the Location in accordance within
the timeframe set forth in Article 4.2;
46
(17)
violate Article 6.8 herein and do not cure within seven (7) days;
(18)
fail to comply with the requirements for the condition of your BUSINESS
under Article 9.4 hereof and do not correct such failure within thirty (30)
days; or
(19)
if you made any material misrepresentation to us that was false, or there
was any material omission in information you provided to us, as an
inducement to our entering into this Agreement.
We have no obligation whatsoever to refund any portion of the franchise fee upon any
termination of this Agreement.
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15.4
OUR RIGHT TO OPERATE THE BUSINESS. If we issue you a notice of
default and you fail to cure such default within any applicable time period, we
have the right, without the obligation, and without waiving our right to terminate
this Agreement as a result of such failure, to assume the operation of the
BUSINESS for such length of time as we determine in our business judgment.
You authorize us to operate the BUSINESS for so long as we deem necessary and
practical, and without waiver of any other rights or remedies we may have under
this Agreement. All monies from the operation of the BUSINESS during such
period of operation by us shall be accounted for separately and the expenses of the
business, including travel, food, lodging, and salaries of our representatives who
operate the BUSINESS, shall be charged to such account. You shall indemnify us
and our representatives from any and all claims arising from the acts and
omissions of us and our representatives pursuant to this Article 15.4.
15.5
ALTERNATIVES TO TERMINATION. In addition to our rights under
Article 15.4, if we issue you a notice of default and you fail to cure such default
within any applicable time period, we have the right in our business judgment,
without the obligation, and without waiving our right to terminate this Agreement
as a result of such failure, to temporarily or permanently limit, curtail, or remove
certain services or benefits provided or required to be provided to you hereunder,
including, but not limited to:
(1)
restricting your or any of your staff’s attendance at any training, meetings,
workshops, or conventions;
(2)
requiring you to pay, via EFT Dues Draft, an additional two percent (2%)
of the total gross monthly and annual membership fees that are due and
payable to you from your members;
(3)
replacing the Royalty in Article 5.2 of this Agreement and/or any other
Royalty section contained in any franchise agreement between you (or any
of your Owners) and us or our affiliates with the Royalty offered in our
then current franchise agreement;
(2)
refusing to sell or furnish to you any advertising or promotional materials;
47
(3)
refusing to provide you with ongoing advice about the operation of the
BUSINESS;
(4)
refusing any of your requests to approve a new supplier or the use of any
advertising or promotional materials; and
(5)
refusing to permit you to enter into a new franchise agreement for a Planet
Fitness business at any other location.
You shall hold us harmless with respect to any action we take pursuant to this Article
15.5; and you agree that we shall not be liable for any loss, expense, or damage you incur
because of any action we take pursuant to this Article 15.5. Nothing in this Article 15.5
constitutes a waiver of any of our rights or remedies under this Agreement or any other
agreement between us and you, including the right to terminate this Agreement. You
agree that our exercise of our rights pursuant to this Article 15.5 shall not be deemed a
constructive termination of this Agreement or of any other agreement between us and
you, and shall not be deemed a breach of any provision of this Agreement. We may, in
our business judgment, reinstate any services or benefits removed, curtailed, or limited
pursuant to this Article 15.5, and you agree to accept immediately any such reinstatement
of services or benefits so removed, curtailed, or limited. If we limit any services or
benefits under this Article 15.5, you shall continue to pay timely all fees and payments
required under this Agreement and any other agreement between us and you, including
any fees associated with services or benefits limited by us. You shall have no right to a
refund of any fees paid in advance for such services or benefits.
16.
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OUR AND YOUR RIGHTS AND OBLIGATIONS UPON TERMINATION OR
EXPIRATION OF THIS AGREEMENT.
16.1
PAYMENT OF AMOUNTS OWED TO US. You agree to pay us within
fifteen (15) days after the effective date of termination, for any reason, or
expiration of this Agreement, or on such later date that the amounts due to us are
determined, such Royalties, NAF contributions, amounts owed for purchases from
us, interest due on any of the foregoing and all other amounts owed to us which
are then unpaid.
16.2
MARKS. Upon the termination, for any reason, or expiration of this Agreement:
(1)
you may not directly or indirectly at any time or in any manner (except
with respect to other PLANET FITNESS businesses you own and
operate) identify yourself or any business as a current or former PLANET
FITNESS business, or as one of our licensees or franchisees, use any
Marks, any colorable imitation thereof or other indicia of a PLANET
FITNESS business in any manner or for any purpose or utilize for any
purpose any trade name, trademark or service mark or other commercial
symbol that indicates or suggests a connection or association with us;
(2)
you agree to take such action as may be required to cancel all fictitious or
assumed names or equivalent registrations relating to your use of any
Marks;
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16.3
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(3)
if we do not exercise our option to purchase the BUSINESS pursuant to
Article 16.11, you agree to deliver to us within thirty (30) days after the
Notification Date the Operations Manual, all signs, sign-faces, signcabinets, marketing materials, forms, packaging and other materials
containing any Marks or otherwise identifying or relating to a PLANET
FITNESS business and allow us, without liability to you or third parties,
to remove all such items from the BUSINESS;
(4)
if we do not exercise our option to purchase the BUSINESS pursuant to
Article 16.11, you agree that, after the Notification Date, you will
promptly and at your own expense make such alterations as we may
specify to distinguish the BUSINESS clearly from its former appearance
and from other PLANET FITNESS businesses so as to prevent confusion
therewith by the public;
(5)
if we do not exercise our option to purchase the BUSINESS pursuant to
Article 16.11, you agree that, after the Notification Date and in accordance
with the Assignment of Telephone Numbers attached as Appendix E to
this Agreement, you will notify the telephone company and all telephone
directory publishers of the termination or expiration of your right to use
any telephone, telecopy or other numbers and any regular, classified or
other telephone directory listings associated with any Marks, authorize the
transfer of such numbers and directory listings to us or at our direction
and/or instruct the telephone company to forward all calls made to your
telephone numbers to numbers we specify; and
(6)
you agree to furnish us, within thirty (30) days after the Notification Date,
with evidence satisfactory to us of your compliance with the foregoing
obligations.
DE-BRANDING. You agree that, upon termination of this Agreement, for any
reason, or expiration of this Agreement, you will immediately comply with our
then-current de-branding checklist, which shall require you to, among other
things:
(1)
Remove and destroy all interior and exterior signage, point of sale
materials, business forms, and stationery received from us;
(2)
Delete from all computer hard drives all materials, information,
communications, manuals, and marketing and promotion materials
received from us;
(3)
Remove all decals containing the PLANET FITNESS name, slogans, or
purple/yellow color scheme;
(4)
Repaint or remove all purple and yellow colors from all exercise
equipment, walls, doors, floors, and other surfaces;
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(5)
Immediately cease selling Black Card memberships;
(6)
Promptly instruct all third-party internet sites and telephone directories to
remove all listings identifying the location as a PLANET FITNESS;
(7)
Notify all existing members in a letter approved by us describing the
members’ rights and options;
(8)
Return all uniforms, sales materials, operations manuals, and other items
that contain any Confidential Information;
(9)
Cancel all fictitious or assumed names or equivalent registrations relating
to your use of any of the Marks;
(10)
Change your corporate or legal business name, if necessary, so that it does
not contain any of the Marks;
(11)
Return to us all signs, sign-faces, sign-cabinets, marketing materials,
forms, packaging, and other materials that contain any of the Marks; and
(12)
Remove all red light therapy booths.
16.4
CONFIDENTIAL INFORMATION. You agree that, upon termination of this
Agreement (including the full or partial transfer of rights by Franchisee or any
Owner), for any reason, or expiration of this Agreement, you will immediately
and forever cease to use any of our Confidential Information in any business or
otherwise and return to us all copies of the Operations Manual and any other
confidential materials, including, without limitation, computer software and any
mechanisms (electronic key) used to access the software, that we have allowed
you to use.
16.5
IN-TERM COVENANT NOT TO COMPETE. You specifically acknowledge
that, pursuant to this Agreement, you will receive valuable, specialized training,
Confidential Information (as defined in Article 8.1 hereof), and other proprietary
and specialized information and knowledge that provide a valuable, competitive
advantage in operating a men’s, women’s, children’s, or co-ed fitness, exercise,
athletic or wellness facility of any kind. You further acknowledge that we would
be unable to protect the Confidential Information against unauthorized use or
disclosure or to encourage the free exchange of ideas and information among our
franchisees if you were permitted to hold interests in or perform services for a
Competitive Business, and we have granted you the rights hereunder in
consideration of, and in reliance upon, your agreement to deal exclusively with
us. You therefore covenant that during the term of this Agreement (except as
otherwise approved in writing by us), you, your Owners, and you and their
Immediate Families shall not, either directly, indirectly or through, on behalf of,
or in conjunction with any person or legal entity:
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16.6
(1)
Divert or attempt to divert any present or prospective business or customer
of any PLANET FITNESS business to any non-PLANET FITNESS
competitor, by direct or indirect inducement or otherwise, or do or
perform, directly or indirectly, any other act injurious or prejudicial to the
goodwill associated with the Marks and the System;
(2)
Recruit, employ or seek to employ any person who is at that time, or has
been within the past six (6) months, employed by us or one of our
affiliates, or otherwise directly or indirectly induce such person to leave
his or her employment; or
(3)
Own, maintain, operate, engage in, be employed by, act as a consultant
for, perform services for, provide assistance to, or have any interest in (as
owner or otherwise) any Competitive Business.
POST-TERM COVENANT NOT TO COMPETE. You covenant that, except as
otherwise approved in writing by us, you and your Owners shall not, for a continuous,
uninterrupted period of two (2) years commencing upon the date of (a) a transfer
permitted under Article 13 of this Agreement, (b) expiration of this Agreement, (c)
termination or non-renewal of this Agreement (regardless of the cause for termination or
non-renewal), or (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a
court of competent jurisdiction (after all appeals have been taken) with respect to any of
the foregoing or with respect to enforcement of this Article 16.6, either directly or
indirectly, for yourself or your Immediate Family, or through, on behalf of, or in
conjunction with any person or legal entity, own, maintain, operate, engage in, be
employed by, act as a consultant for, perform services for, provide assistance to, or have
any interest in (as owner or otherwise) any Competitive Business that is, or is intended to
be, located (a) at the Location, (b) within fifteen (15) miles of the Location, or (c) fifteen
(15) miles of any PLANET FITNESS business in operation or under construction as of
the date that you are required to comply with this Article 16.6. You agree and
acknowledge that the two (2) year period of this restriction shall be tolled during any time
period in which you are in violation of this restriction.
The restrictions in Articles 16.5.3 and 16.6 do not apply to: (a) interests in or operation of
a PLANET FITNESS business under a written Franchise Agreement with us; or (b) the
ownership of shares of a class of securities that are listed on a public stock exchange or
traded on the over-the-counter market and that represent less than five percent (5%) of
that class of securities.
16.7
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REASONABLE SCOPE OF COVENANTS. You acknowledge that the scope
of the restrictions in Articles 16.5 and 16.6 are reasonable and necessary to
protect us, the Confidential Information, and the System, and that such restrictions
are designed solely to prevent you from taking information, materials, training,
and know-how that we provided to you and using them to compete with us. In
addition, your operation of a Competitive Business in violation of Article 16.5 or
16.6 would necessarily involve your use of Confidential Information that would
result in an unfair competitive advantage vis-à-vis other PLANET FITNESS
franchisees. You further acknowledge that you and your Owners possess skills
and abilities of a general nature and have other opportunities for exploiting these
51
skills. Consequently, our enforcement of the covenant in Article 16.6 will not
deprive you or your Owners of personal goodwill or the ability to engage in a
lawful trade or business and earn a living.
16.8
REDUCTION OF SCOPE OF COVENANTS.
You understand and
acknowledge that we shall have the right, in our business judgment, to reduce the
scope of any covenant set forth in Articles 16.5 and 16.6, or any portion thereof,
without your consent, effective immediately upon receipt by you of written notice
thereof; and you agree that you shall comply forthwith with any covenant as so
modified, which shall be fully enforceable.
16.9
COVENANT NOT TO COMPETE UPON EXERCISE OF RIGHT OF
FIRST REFUSAL. If we exercise our right of first refusal pursuant to Article
13.8. above, you and your selling Owner(s) agree that, for a period of two (2)
years commencing on the date of the closing, you and they will be bound by the
noncompetition covenant contained in Article 16.6 hereof.
16.10 COMMENCEMENT BY ORDER. If any person restricted by this Article
refuses voluntarily to comply with the foregoing obligations, the Restriction
Period will commence with the entry of an order of an arbitrator, or court if
necessary, enforcing this provision. You and your Owners expressly acknowledge
that you possess skills and abilities of a general nature and have other
opportunities for exploiting such skills. Consequently, enforcement of the
covenants made in this Article will not deprive you of your personal goodwill or
ability to earn a living.
16.11 OUR RIGHT TO PURCHASE BUSINESS.
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(1)
Exercise of Option. Upon termination or expiration of this Agreement in
accordance with its terms and conditions, we have the option, exercisable
by giving written notice thereof to you (by the later of (a) sixty (60) days
from the date of such termination or expiration or (b) seven (7) days after
determination of the purchase price), to purchase the BUSINESS from
you, including the leasehold rights to the Location, free and clear of all
liens, restrictions or encumbrances. (The date on which we notify you
whether or not we are exercising our option is referred to in this
Agreement as the “Notification Date.”) We have the unrestricted right to
assign this option to purchase the BUSINESS. We will be entitled to all
customary warranties and representations in connection with our asset
purchase, including, without limitation, representations and warranties as
to ownership and condition of and title to assets; liens and encumbrances
on assets; validity of contracts and agreements; and liabilities effecting the
assets, contingent or otherwise.
(2)
Leasehold Rights. You agree, at our election, to assign your leasehold
interest in the Location to us or, to enter into a sublease for the remainder
52
of the lease term on the same terms (including renewal options) as the
prime lease.
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(3)
Purchase Price. The purchase price for the BUSINESS will be its fair
market value, determined in a manner consistent with reasonable
depreciation of the BUSINESS’s equipment, signs, inventory, materials
and supplies, provided that the BUSINESS will be valued as an
independent business and its value will not include any value for the
Franchise or any rights granted by this Agreement, the Marks, or
participation in the network of PLANET FITNESS businesses.
(4)
Fair Market Value. The BUSINESS’s fair market value will include the
reasonable goodwill you developed since your commencement of
operations that exists independent of the goodwill of the Marks and the
System. The length of the remaining term of the lease for the Location will
also be considered in determining the BUSINESS’s fair market value.
(5)
Exclusions. We may exclude from the assets purchased hereunder cash or
its equivalent and any equipment, signs, inventory, materials and supplies
that are not reasonably necessary (in function or quality) to the
BUSINESS’s operation or that we have not approved as meeting standards
for PLANET FITNESS businesses, and the purchase price will reflect
such exclusions.
(6)
Appraisal. If we and you are unable to agree on the BUSINESS’s fair
market value, its fair market value will be determined by an appraiser
agreeable to both parties. If we and you are unable to agree on an
appraiser, then the BUSINESS’s fair market value will be determined by
three (3) independent appraisers who collectively will conduct one (1)
appraisal. We will appoint one appraiser, you will appoint one appraiser
and the two party appointed appraisers will appoint the third appraiser.
You and we agree to select our respective appraisers within fifteen (15)
days after the date we determine that we are unable to agree on the
BUSINESS’s fair market value, and the two appraisers so chosen are
obligated to appoint the third appraiser within fifteen (15) days after the
date on which the last of the two party appointed appraisers was
appointed. You and we will bear the cost of our own appraisers and share
equally the reasonable fees and expenses of the third appraiser chosen by
the two party appointed appraisers. You and we will take reasonable
actions to cause the appraisers to complete their appraisal within thirty
(30) days after the third appraiser’s appointment.
(7)
Closing. The purchase price will be paid at the closing of the purchase,
which will take place not later than ninety (90) days after determination of
the purchase price. We have the right to set off against the purchase price,
and thereby reduce the purchase price by, any and all amounts you or your
Owners owe to us.
53
(8)
Instruments. At the closing, you agree to deliver instruments transferring:
(a)
good and merchantable title to the assets purchased, free and clear
of all liens and encumbrances (other than liens and security
interests acceptable to us, if any), with all sales and other transfer
taxes paid by you; and
(b)
all licenses and permits of the BUSINESS which may be assigned
or transferred; and
(c)
the leasehold interest in the Location and improvements thereon.
(9)
Escrow. If you cannot deliver clear title to all of the purchased assets, or
if there are other unresolved issues, the closing of the sale will, at our
election, be accomplished through an escrow arrangement with an
independent escrow agent selected by us.
(10)
Releases. You and your owners agree to execute general releases, in form
satisfactory to us, of any and all claims against us and our shareholders,
officers, directors, employees, agents, successors and assigns.
16.12 CONTINUING OBLIGATIONS. All of our and your (and your owners’ and
affiliates’) obligations which expressly or by their nature survive the expiration or
termination of this Agreement will continue in full force and effect subsequent to
and notwithstanding its expiration or termination and until they are satisfied in
full or by their nature expire.
17.
SECURITIES OFFERINGS.
17.1
18.
RELATIONSHIP OF THE PARTIES AND INDEMNIFICATION.
18.1
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SECURITIES OFFERINGS. Neither you nor any of your owners may issue or
sell, or offer to issue or sell, any of your securities or any securities of any of your
affiliates, regardless of whether such sale or offer would be required to be
registered pursuant to the provisions of the Securities Act of 1933, as amended, or
the securities laws of any other jurisdiction, without obtaining our prior consent
and complying with all of our requirements and restrictions concerning use of
information about us and our Affiliates. Neither you nor any of your Owners may
issue or sell your securities or the securities of any of your affiliates if: (1) such
securities would be required to be registered pursuant to the Securities Act of
1933, as amended, or such securities would be owned by more than 35 persons; or
(2) after such issuance or sale, you or such affiliate would be required to comply
with the reporting and information requirements of the Securities Exchange Act
of 1934, as amended. Any proposed private placement of your or of your
affiliate’s securities must be approved by us.
INDEPENDENT CONTRACTORS. Neither this Agreement nor the dealings
of the parties pursuant to this Agreement shall create any fiduciary relationship or
54
any other relationship of trust or confidence between the parties hereto.
Franchisor and Franchisee, as between themselves, are and shall be independent
contractors. If applicable law shall imply a covenant of good faith and fair dealing
in this Agreement, the parties hereto agree that such covenant shall not imply any
rights or obligations that are inconsistent with a fair construction of the terms of
this Agreement. Additionally, if applicable law shall imply such covenant, we and
you acknowledge and agree that (a) this Agreement (and the relationship of the
parties which arises from this Agreement) grants us the right to make decisions,
take actions and/or refrain from taking actions not inconsistent with your explicit
rights and obligations hereunder that may affect favorably or adversely your
interests; (b) we will use our judgment in exercising such rights based on our
assessment of our own interests and balancing those interests against the interests
of the owners of PLANET FITNESS businesses generally (including ourselves,
and our Affiliates and other franchisees), and specifically without considering
your individual interests or the individual interests of any other particular
franchisee; (c) we will have no liability to you for the exercise of our rights in this
manner so long as such rights are not exercised in bad faith toward you; and (d) in
the absence of such bad faith, no trier of fact in any legal action or arbitration
proceeding shall substitute its judgment for our judgment so exercised. Nothing
contained in this Agreement, or arising from the conduct of the parties hereunder,
is intended to make either party a general or special agent, joint venturer, partner
or employee of the other for any purpose whatsoever. You must conspicuously
identify yourself in all dealings with customers, lessors, contractors, suppliers,
public officials, employees and others as the owner of your BUSINESS and must
place such other notices of independent ownership on such forms, business cards,
stationery, advertising and other materials as we may require from time to time.
You may not make any express or implied agreements, warranties, guarantees or
representations or incur any debt in our name or on our behalf or represent that
the relationship of the parties hereto is anything other than that of independent
contractors. We will not be obligated by or have any liability under any
agreements made by you with any third party or for any representations made by
you to any third party. We will not be obligated for any damages to any person or
property arising directly or indirectly out of the operation of your business
hereunder.
18.2
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NO LIABILITY FOR ACTS OF OTHER PARTY. You agree not to employ
any of the Marks in signing any contract or applying for any license or permit, or
in a manner that may result in our liability for any of your indebtedness or
obligations, and that you will not use the Marks in any way we have not expressly
authorized. Neither we nor you will make any express or implied agreements,
warranties, guarantees or representations or incur any debt in the name or on
behalf of the other, represent that our respective relationship is other than
franchisor and franchisee or be obligated by or have any liability under any
agreements or representations made by the other that are not expressly authorized
in writing. We will not be obligated for any damages of any nature whatsoever to
any person or property directly or indirectly arising out of the BUSINESS’s
operation or the business you conduct pursuant to this Agreement.
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18.3
TAXES. We will have no liability for any sales, use, service, occupation,
employment related, excise, gross receipts, income, property or other taxes,
whether levied upon you or the BUSINESS, in connection with the business you
conduct (except any taxes we are required by law to collect from you with respect
to purchases from us); provided, however, that if the state where your BUSINESS
is located imposes any such tax, we will reimburse you for for the amount of such
tax paid by you the first year such tax goes into effect. Payment of all such taxes
is your sole responsibility. Further, you will pay all state and local taxes,
including, without limitation, sales, use, service, occupation, employment related,
excise, gross receipts, income, property or other taxes, that may be imposed on us
as a result of our receipt or accrual of the Initial Franchise Fee, Royalty fees,
advertising fees, extension fees, and all other fees that are referenced in this
Agreement or in the Methods of Operation, whether assessed against you through
withholding or other means or whether paid by us directly, unless the tax is
credited against income tax otherwise payable by us. In such event, you will pay
to us (or to the appropriate governmental authority) such additional amounts as
are necessary to provide us, after taking such taxes into account (including any
additional taxes imposed on such additional amounts), with the same amounts that
we would have received or accrued had such withholding or other payment,
whether by you or by us, not been required. Notwithstanding anything to the
contrary in this Agreement, this provision does not apply to taxes imposed on us
by the state or municipality where we have our principal place of business.
18.4
INDEMNIFICATION. You, and each of the Guarantors identified in Appendix
B, agree that you shall, at all times, indemnify, exculpate, defend and hold
harmless, to the fullest extent permitted by law, us, our successor, assigns, and
Affiliates (including but not limited to Planet Fitness Equipment, LLC and PFIP,
LLC), and the respective officers, directors, shareholders, agents, representatives,
independent contractors, servants, and employees of each of them (the
“Indemnified Parties”) from all losses and expenses incurred in connection with
any action, suit, proceeding, claim, demand, investigation, or inquiry (formal or
informal), or any settlement thereof, which arises out of or is based upon any of
the following: the infringement, alleged infringement or any other violation by
you, your Guarantors or principals of any patent, mark, copyright, or other
proprietary right owned or controlled by third parties due to your unauthorized
use of all or any portion of the Marks and/or System; the violation, breach, or
asserted violation or breach by you, your Guarantors or principals of any federal,
state, or local law, regulation, ruling or industry standard; libel, slander, or any
other form of defamation by you or your Guarantors or principals; the violation or
breach by you or by your Guarantors or principals of any warranty,
representation, agreement, or obligation of this Agreement or in any other
agreement between you and us or our Affiliates; any cyber-event, identity theft, or
theft of personal information of a customer due to any security breach by you,
your agents, or your employees; acts, errors, omissions of you, any of your
affiliates, any of your principals, officers, directors, shareholders, agents,
representatives, independent contractors, and employees of you and your affiliates
in connection with the establishment and operation of the BUSINESS, including,
56
but not limited to, any acts, errors, or omissions of any of the foregoing in the
operation of any motor vehicle or in the establishment or implementation of
security for the BUSINESS; and any of the foregoing that are alleged to be caused
by an Indemnified Party’s negligence, unless (and then only to the extent that) the
claims, obligations, and damages are determined to be caused solely by the
Indemnified Party’s gross negligence or willful misconduct according to a final,
unappealable ruling issued by a court or arbitrator with competent jurisdiction.
For purposes of this indemnification, “claims” includes all obligations, damages
(actual, consequential or otherwise) and costs incurred in the defense of any claim
against any of the Indemnified Parties, including, without limitation, reasonable
accountants’, arbitrators’, attorneys’ and expert witness fees, costs of
investigation and proof of facts, court costs, other expenses of litigation,
arbitration or alternative dispute resolution and travel and living expenses. We
have the right to defend any such claim against us at your expense. This
indemnity will continue in full force and effect subsequent to and notwithstanding
the expiration or termination of this Agreement.
18.5
19.
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MITIGATION NOT REQUIRED. Under no circumstances will we or any
other Indemnified Party be required to seek recovery from any insurer or other
third party, or otherwise to mitigate our, their or your losses and expenses, in
order to maintain and recover fully a claim against you. You agree that a failure to
pursue such recovery or mitigate a loss will in no way reduce or alter the amounts
we or another Indemnified Party may recover from you.
ENFORCEMENT AND MISCELLANEOUS MATTERS.
19.1
SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS. Except
as expressly provided to the contrary herein, each provision of this Agreement,
and any portion thereof, will be considered severable, and if, for any reason, any
such provision is held to be invalid or contrary to or in conflict with any
applicable present or future law or regulation in a final, unappealable ruling
issued by any court, agency or tribunal with competent jurisdiction in a
proceeding to which we are a party, that ruling will not impair the operation of, or
have any other effect upon, such other portions of this Agreement as may remain
otherwise intelligible, which will continue to be given full force and effect and
bind the parties hereto, although any portion held to be invalid will be deemed not
to be a part of this Agreement from the date the time for appeal expires, if you are
a party thereto, otherwise upon your receipt from us of a notice of nonenforcement thereof.
19.2
LESSER COVENANT ENFORCEABLE. If any covenant herein which
restricts competitive activity is deemed unenforceable by virtue of its scope in
terms of area, business activity prohibited and/or length of time, but would be
enforceable by reducing any part or all thereof, you and we agree that such
covenant will be enforced to the fullest extent permissible under the laws and
public policies applied in the jurisdiction whose law is applicable to the validity
of such covenant.
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19.3
GREATER NOTICE. If any applicable and binding law or rule of any
jurisdiction requires a greater prior notice than is required hereunder of the
termination of this Agreement or of our refusal to enter into a successor franchise
agreement, or the taking of some other action not required hereunder, or if, under
any applicable and binding law or rule of any jurisdiction, any provision of this
Agreement or any part of Methods of Operation is invalid or unenforceable the
prior notice and/or other action required by such law or rule will be substituted for
the comparable provisions hereof, and we will have the right to modify such
invalid or unenforceable provision or unenforceable part of this Agreement or the
Operations Manual or any part of Methods of Operation to the extent required to
be valid and enforceable. You agree to be bound by any promise or covenant
imposing the maximum duty permitted by law which is subsumed within the
terms of any provision hereof as though it were separately articulated in and made
a part of this Agreement, that may result from striking from any of the provisions
hereof, or any part of Methods of Operation, any portion or portions which a court
or arbitrator may hold to be unenforceable in a final decision to which we are a
party, or from reducing the scope of any promise or covenant to the extent
required to comply with such a court order or arbitration award. Such
modifications to this Agreement will be effective only in such jurisdiction, unless
we elect to give them greater applicability, and will be enforced as originally
made and entered into in all other jurisdictions.
19.4
WAIVER OF OBLIGATIONS. We and you may by written instrument
unilaterally waive or reduce any obligation of or restriction upon the other under
this Agreement, effective upon delivery of written notice thereof to the other or
such other effective date stated in the notice of waiver. Any waiver we grant will
be without prejudice to any other rights we may have, will be subject to our
continuing review and may be revoked at any time and for any reason, effective
upon delivery to you of ten (10) days’ prior written notice.
19.5
NON-WAIVER. We and you will not be deemed to have waived or impaired
any right, power or option reserved by this Agreement (including without
limitation the right to demand exact compliance with every term, condition and
covenant herein or to declare any breach thereof to be a default and to terminate
this Agreement prior to the expiration of its term) by virtue of any custom or
practice at variance with the terms hereof; our or your failure refusal or neglect to
exercise any right under this Agreement or to insist upon exact compliance by the
other with our and your obligations hereunder including without limitation
Methods of Operation; our waiver, forbearance, delay, failure, or omission to
exercise any right, power or option whether of the same, similar or different
nature with respect to other PLANET FITNESS businesses; the existence of
other franchise agreements for PLANET FITNESS businesses which contain
different provisions from those contained herein; or our acceptance of any
payments due from you after any breach of this Agreement. No special or
restrictive legend or endorsement on any check or similar item given to us will
constitute a waiver, compromise, settlement or accord and satisfaction. We are
58
authorized to remove or obliterate any legend or endorsement, and such legend or
endorsement will have no effect.
19.6
FORCE MAJEURE. Neither we nor you will be liable for loss or damage or
deemed to be in breach of this Agreement if our or your failure to perform our or
your obligations is not our or your fault and results from:
(1)
transportation shortages, inadequate supply of equipment, products,
merchandise, supplies, labor, material or energy or the voluntary foregoing
of the right to acquire or use any of the foregoing in order to accommodate
or comply with the orders, requests, regulations, recommendations or
instructions of any federal, state or municipal government or any
department or agency thereof;
(2)
acts of nature;
(3)
fires, strikes, embargoes, war or riot;
(4)
failure to obtain land use or environmental approvals from the applicable
government body or agency, so long as you diligently pursue any such
required approvals; or
(5)
any other similar event or cause.
19.7
EXTEND PERFORMANCE. Any delay resulting from any of said causes will
extend performance accordingly or excuse performance, in whole or in part, as
may be reasonable, except that said causes will not excuse payments of amounts
owed at the time of such occurrence or payment of Royalties and Ad Fees due on
any sales thereafter.
19.8
OUT-OF-STOCK AND DISCONTINUED. We are not liable to you for any
loss or damage, or deemed to be in breach of this Agreement, if we cannot
deliver, or cause to be delivered, or if our Affiliates or designated sources or
Approved Suppliers cannot deliver, all of your orders for products, merchandise,
equipment, supplies, etc., where such things are out-of-stock or discontinued.
19.9
COSTS AND ATTORNEYS’ FEES. If we incur expenses in connection with
your failure to pay when due amounts owed to us or to submit when due any
reports, information or supporting records or otherwise to comply with this
Agreement, you agree to reimburse us for any of the costs and expenses which we
incur, including, without limitation, reasonable accounting, attorneys’, arbitrators’
and related fees.
19.10 YOU MAY NOT WITHHOLD PAYMENTS DUE TO US. You agree that
you will not withhold payment of any amounts owed to us on the grounds of our
alleged nonperformance of any of our obligations hereunder. You agree that all
such claims will, if not otherwise resolved by us, be submitted to arbitration as
provided in Article 19.12.
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19.11 RIGHTS OF PARTIES ARE CUMULATIVE. Our and your rights hereunder
are cumulative, and no exercise or enforcement by us or you of any right or
remedy hereunder will preclude our or your exercise or enforcement of any other
right or remedy hereunder which we or you are entitled by law to enforce.
19.12 DISPUTE RESOLUTION.
(1)
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Mediation. Except as provided in Article 19.12.3, prior to filing any
demand for arbitration, the parties agree to mediate any dispute,
controversy or claim between and among the parties and any of our or
your affiliates, officers, directors, shareholders, members, guarantors,
employees or owners arising under, out of, in connection with or in
relation to this Agreement, any lease or sublease for your Business, any
loan or other finance arrangement between us or our affiliates and you, the
parties’ relationship, your Business, or any System Standard in accordance
with the following procedures:
(a)
The party seeking mediation must commence mediation by
sending the other party, in accordance with Article 20, a written
notice of its request for mediation headed “Notification of
Dispute.” The Notification of Dispute will specify, to the fullest
extent possible, the party’s version of the facts surrounding the
dispute; the amount of damages and the nature of any injunctive or
other relief such party claims. The party (or parties as the case
may be) receiving a Notification of Dispute will respond within
twenty (20) days after receipt thereof, in accordance with Article
20, stating its version of the facts and, if applicable, its position as
to damages sought by the party initiating the dispute procedure;
provided, however, that if the dispute has been the subject of a
default notice given under Article 15 of this Agreement, the other
party will respond within ten (10) business days.
(b)
Upon receipt of a Notification of Dispute and response under
Article 19.12.1, the parties will endeavor, in good faith, to resolve
the dispute outlined in the Notification of Dispute and response. If
the parties have been unable to resolve a dispute outlined in a
Notification of Dispute or a response thereto within twenty (20)
days after receipt of the response, either party may initiate a
mediation procedure with the American Arbitration Association
(“AAA”), pursuant to its Commercial Mediation Procedures, and
unless otherwise agreed by the parties will take place in the city of
our then-current corporate headquarters. The parties must jointly
select and share equally in the payment of a mediator.
(c)
All mediation sessions will occur in New Hampshire at a mutuallyagreeable location and must be attended by your Responsible
Owner (and any other persons with authority to settle the dispute
60
on your behalf) and our representative(s) who is/are authorized to
settle the dispute. The parties may be represented by counsel at the
mediation. The parties agree to participate in the mediation
proceedings in good faith and with the intention of resolving the
dispute if at all possible within 30 days of the notice from the party
seeking to initiate the mediation procedures. If the dispute is not
resolved within 30 days, any party may initiate an arbitration
pursuant to Article 19.12.2. In addition, if the party receiving
notice of mediation has not responded within 5 days of delivery of
the notice or a party fails to participate in the mediation, this
Article 19.12.1 will no longer be applicable and the other party can
pursue arbitration. The parties agree that the costs of the mediator
will be split equally between the parties. Each party must pay its
own fees and expenses incurred in connection with the mediation.
The mediation proceeding and any negotiations and results thereof
will be treated as a compromise settlement negotiation and the
entire process is confidential. At least 5 days prior to the initial
mediation session, each party must deliver a written statement of
positions.
(2)
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Arbitration.
Except as provided in Article 19.12.3, any dispute,
controversy or claim between you and us and any of our or your affiliates,
officers, directors, shareholders, members, guarantors, employees or
owners arising under, out of, in connection with or in relation to this
Agreement, any lease or sublease for your Business, any loan or other
finance arrangement between us or our affiliates and you, the parties’
relationship, your Business, or any System Standard or the scope of
validity of the arbitration obligation under this Article not resolved by
mediation must be submitted to binding arbitration in accordance with the
Federal Arbitration Act. The arbitration will be administered by the AAA
pursuant to its Commercial Arbitration Rules then in effect by one
arbitrator.
(a)
In connection with any arbitration proceeding, each party will
submit or file any claim which would constitute a compulsory
counterclaim (as defined by the then-current Rule 13 of the Federal
Rules of Civil Procedure) within the same proceeding as the claim
to which it relates. Any such claim which is not submitted or filed
in such proceeding will be barred.
(b)
Any arbitration must be on an individual basis only as to a single
franchisee (and not as or through an association) and the parties
and the arbitrator will have no authority or power to proceed with
any claim on a class-wide basis or otherwise to join or consolidate
any claim with any claim or any other proceeding involving third
parties or any other franchisee. If a court or arbitrator determines
that this limitation on joinder of or class-wide claims is
61
unenforceable, then the agreement to arbitrate the dispute will be
null and void and the parties must submit all claims to the
jurisdiction of the courts, in accordance with Article 19.14.
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(c)
The arbitration must take place in the city closest to where our
headquarters is located at the time of the dispute.
(d)
The arbitrator must follow the law and not disregard the terms of
this Agreement. The arbitrator must be a former federal or state
court judge with at least five years of significant experience in
commercial law. The arbitrator may not consider any settlement
discussions or offers that might have been made by either you or
us. The arbitrator may not under any circumstance (a) stay the
effectiveness of any pending termination of this Agreement, (b)
assess punitive or exemplary damages, (c) certify a class or a
consolidated action, or (d) make any award which extends,
modifies or suspends any lawful term of this Agreement or any
reasonable standard of business performance that we set. The
arbitrator will have the right to make a determination as to any
procedural matters as would a court of competent jurisdiction be
permitted to make in the state in which our corporate headquarters
is then located. The arbitrator will also decide any factual,
procedural, or legal questions relating in any way to the dispute
between the parties, including, but not limited to: any decision as
to whether Article 19.14 is applicable and enforceable as against
the parties, subject matter, timeliness, scope, remedies,
unconscionability, and any alleged fraud in the inducement.
(e)
The arbitrator can issue summary orders disposing of all or part of
a claim and provide for temporary restraining orders, preliminary
injunctions, injunctions, attachments, claim and delivery
proceedings, temporary protective orders, receiverships, and other
equitable and/or interim/final relief. Each party consents to the
enforcement of such orders, injunctions, etc., by any court having
jurisdiction.
(f)
The arbitrator will have subpoena powers limited only by the laws
of the state in which our corporate headquarters is then located.
(g)
The parties to the dispute will have the same discovery rights as
are available in civil actions under the laws of the state in which
our corporate headquarters is then located.
(h)
All other procedural matters will be determined by applying the
statutory, common laws, and rules of procedure that control a court
of competent jurisdiction in which our corporate headquarters is
then located.
62
(3)
(4)
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(i)
Other than as may be required by law, the entire arbitration
proceedings (including, but not limited to, any rulings, decisions or
orders of the arbitrator), will remain confidential and will not be
disclosed to anyone other than the parties to this Agreement.
(j)
The judgment of the arbitrator on any preliminary or final
arbitration award will be final and binding and may be entered in
any court having jurisdiction.
(k)
We reserve the right, but have no obligation, to advance your share
of the costs of any arbitration proceeding in order for such
arbitration proceeding to take place and by doing so will not be
deemed to have waived or relinquished our right to seek recovery
of those costs in accordance with Article 19.9 or 19.12.4.
Exceptions to Arbitration. Notwithstanding Articles 19.12.1 and 19.12.2,
the parties agree that the following claims will not be subject to arbitration
or mediation:
(a)
any action for equitable relief, including, without limitation,
seeking preliminary or permanent injunctive relief, specific
performance, declaratory relief, other relief in the nature of equity
to enjoin any harm or threat of harm to such party’s tangible or
intangible property, brought at any time, including without
limitation, prior to or during the pendency of any arbitration
proceedings initiated hereunder;
(b)
any action in ejectment or for possession of any interest in real or
personal property;
(c)
any action which by applicable law cannot be arbitrated; or
(d)
our decision in the first instance to issue a notice of default and/or
notice of termination, or undertake any other conduct with respect
to the franchise relationship that might later result in a dispute or
controversy between us; and
(e)
the parties further agree that any application for judicial relief
pursuant to Article 19.12.3 and its subparts shall not constitute a
waiver of the moving party’s right to demand arbitration of any
dispute pursuant to Article 19.12.2 and its subparts.
Costs and Attorneys’ Fees. The prevailing party in any action or
proceeding arising under, out of, in connection with, or in relation to this
Agreement will be entitled to recover its reasonable costs and expenses
(including attorneys’ fees, arbitrator’s fees and expert witness fees, costs
of investigation and proof of facts, court costs, and other arbitration or
63
litigation expenses) incurred in connection with the claims on which it
prevailed.
(5)
Survival. The provisions of this Article 19.12 are intended to benefit and
bind certain third party non-signatories and will continue in full force and
effect subsequent to and notwithstanding the expiration or termination of
this Agreement.
(6)
Tolling of Statute of Limitations. All applicable statutes of limitation and
defenses based on the passage of time are tolled while the dispute
resolution procedures in this Article 19.12 are pending. The parties will
take such action, if any, required to effectuate such tolling.
(7)
Performance to Continue. Each party must continue to perform its
obligations under this Agreement pending final resolution of any dispute
pursuant to this Article 19.12, unless to do so would be impossible or
impracticable under the circumstances.
19.13 GOVERNING LAW. All matters relating to arbitration will be governed by the
Federal Arbitration Act (9 U.S.C. §§ 1 et. seq.). Except to the extent governed by
the Federal Arbitration Act as required hereby, the UNITED STATES
TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §§ 1051 et seq.) or
other federal law, this Agreement, the franchise and all claims arising from the
relationship between us and you will be governed by the laws of New Hampshire,
without regard to its conflict of laws principles, except that any law regulating the
sale of franchises or governing the relationship of a franchisor and its franchisee
will not apply unless jurisdictional requirements are met independently without
reference to this Article.
19.14 CONSENT TO JURISDICTION. Subject to Article 19.12., you and your
Owners agree that we may institute any action against you or your Owners in any
state or federal court of general jurisdiction in New Hampshire and you (and each
Owner) irrevocably submit to the jurisdiction of such courts and waive any
objection you (or he or she) may have to either the jurisdiction of or venue in such
courts.
19.15 WAIVER OF PUNITIVE DAMAGES, JURY TRIAL AND CLASS
ACTIONS. Except with respect to your obligation to indemnify us pursuant to
Article 18.4. and 18.5. and claims we bring against you for your unauthorized use
of the Marks or unauthorized use or disclosure of any Confidential Information,
we and you and your respective Owners waive to the fullest extent permitted by
law any right to or claim for any punitive or exemplary damages against the other
and agree that, in the event of a dispute between us, the party making a claim will
be limited to equitable relief and to recovery of any actual damages it sustains.
We and you irrevocably waive, to the fullest extent permitted by law, trial by jury
in any action, proceeding or counterclaim, whether at law or in equity, brought by
either of us. This waiver is effective even if a court of competent jurisdiction
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64
decides that the arbitration provision in this Article 19 is unenforceable. We each
waive to the fullest extent possible under the law our respective rights to bring
against the other or any affiliate or the other any claims denominated as a class
action, consolidated action, or joint action, whether or not permitted under
applicable court rules. Each party acknowledges that it has had a full opportunity
to consult with counsel concerning this waiver, and that this waiver is informed,
voluntary, intentional, and not the result of unequal bargaining power.
19.16 BINDING EFFECT. This agreement is binding upon us and you and our
respective executors, administrators, heirs, beneficiaries, assigns and successors in
interest and may not be modified except by written agreement signed by you and
us.
19.17 LIMITATIONS OF CLAIMS.
Except for claims arising from your
nonpayment or underpayment of amounts you owe us pursuant to this Agreement,
or claims related to your unauthorized use of the Marks, any and all claims arising
out of or relating to this Agreement or our relationship with you will be barred
unless a judicial proceeding is commenced within one (1) year from the date on
which the party asserting such claim knew or should have known of the facts
giving rise to such claims.
19.18 CONSTRUCTION. The preambles and exhibits are a part of this Agreement
which, together with the Operations Manual and our other written policies,
constitute our and your entire agreement except as provided below, and there are
no other oral or written understandings or agreements between us and you relating
to the subject matter of this Agreement, except that you acknowledge that we
justifiably have relied on your representations made prior to the execution of this
Agreement as set forth in Article 1 hereof. Except as contemplated by the
provisions of Article 19.12., nothing in this Agreement is intended, nor is deemed,
to confer any rights or remedies upon any person or legal entity not a party hereto.
19.19 WITHHOLD APPROVAL. Except where this Agreement expressly obligates
us reasonably to approve or not unreasonably to withhold our approval of any of
your actions or requests, we have the absolute right to refuse any request you
make or to withhold our approval of any of your proposed or effected actions that
require our approval.
19.20 HEADINGS. The headings of the several Articles hereof are for convenience
only and do not define, limit or construe the contents of such Articles.
19.21 JOINT AND SEVERAL OWNERS’ LIABILITY. If two or more persons are
at any time the owner of the BUSINESS hereunder, whether as partners or joint
venturers, their obligations and liabilities to us will be joint and several.
References to “owner” mean any person holding a direct or indirect, legal or
beneficial ownership interest or voting rights in you (or a transferee of this
Agreement and the BUSINESS or an interest in you), including, without
limitation, any person who has a direct or indirect interest in you (or a transferee),
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65
this Agreement, the Franchise or the BUSINESS and any person who has any
other legal or equitable interest, or the power to vest in himself any legal or
equitable interest, in the revenue, profits, rights or assets thereof. References to a
“controlling interest” in you mean thirty three and one-third (33.33%) percent or
more of your voting shares or other voting rights if you are a corporation, limited
liability company or partnership owned by three (3) or more persons; otherwise,
fifty (50%) percent or more of your voting shares or other voting rights will
constitute a “controlling interest.” “Person” means any natural person,
corporation, limited liability company, general or limited partnership,
unincorporated association, cooperative or other legal or functional entity.
19.22 ANTI-TERRORISM LAWS. You acknowledge that it is our intent to comply
with all anti-terrorism laws enacted by the U.S. Government, including but not
limited to the USA PATRIOT ACT or Executive Order 13324. You acknowledge
that you are not now, nor have you ever been, a suspected terrorist or otherwise
associated directly or indirectly with terrorist activity. At any time during the
term of this Agreement, if we are prohibited from doing business with you under
any anti-terrorism law enacted by the U.S Government, then this Agreement may
be terminated immediately.
19.23 RIGHT TO INFORMATION. You consent to us obtaining, using and
disclosing to third parties (including, without limitation, financial institutions,
legal and financial advisors, and prospective franchisees), for any purpose we
specify or as may be required by law, all financial and other information
(including, without limitation, membership data and customer lists) contained in
or resulting from information, data, materials, statements and reports related,
directly or indirectly, to the BUSINESS.
19.24 MULTIPLE COPIES. This Agreement may be executed in multiple copies,
each of which will be deemed an original, and all of which when taken together
shall constitute one and the same document.
19.25 ENTIRE AGREEMENT BETWEEN THE PARTIES. This Agreement
together with any exhibits, addenda and appendices hereto constitute the sole
agreement between you and us with respect to the entire subject matter of this
Agreement and embody all prior agreements and negotiations with respect to
your BUSINESS authorized hereunder.
There are no representations or
warranties of any kind, express or implied, except as contained herein or in the
Franchise Disclosure Document (“FDD”) provided to you in connection with this
Agreement. Except to the extent we have negotiated changes to this Agreement
that differ from the FDD, nothing in this Agreement is intended to disclaim
representations that were provided to you in the FDD.
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66
20.
NOTICES AND PAYMENTS.
20.1
20.2
NOTICES. All written notices and reports permitted or required to be delivered
by the provisions of this Agreement or the Operations Manual will be deemed so
delivered:
(1)
at the time delivered by hand;
(2)
one (1) business day after transmission by telecopy, facsimile or other
electronic system, provided there is evidence of delivery;
(3)
one (1) business day after being placed in the hands of a commercial
courier service for next business day delivery, provided there is evidence
of delivery; or
(4)
five (5) business days after placement in the United States Mail by
Registered or Certified Mail, Return Receipt Requested, postage prepaid;
and must be addressed to the party to be notified at its most current
principal business address of which the notifying party has been notified.
Any required payment or report which we do not actually receive during
regular business hours on the date due (or postmarked by postal authorities
at least two (2) days prior thereto) will be deemed delinquent.
PAYMENTS. All payments required to be delivered by the provisions of this
Agreement or the Operations Manual will be deemed so delivered as provided in
Article 20.1. above, and will be deemed delivered by EFT or bank-wire transfer
upon telephone or electronic confirmation with the receiving bank.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
Effective Date.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
Pla-Fit Franchise, LLC
By:__________________________________________
Title: ________________________________________
EFFECTIVE DATE: __________________________
EACH OF THE UNDERSIGNED PARTIES WARRANTS AND REPRESENTS THAT HE/SHE
HAS NOT RELIED UPON ANY GUARANTEES CONCERNING REVENUE, PROFIT OR THE
SUCCESS OF THIS FRANCHISE IN SO SIGNING.
[OWNER CORPORATION OR PARTNERSHIP]
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67
By:__________________________________________
Title: ________________________________________
Dated: _______________________________________
As Individuals:
____________________________________________
Dated: _______________________________________
____________________________________________
Dated: _______________________________________
____________________________________________
Dated: _______________________________________
____________________________________________
Dated: _______________________________________
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68
APPENDIX A
OWNERSHIP ADDENDUM
1.
RESPONSIBLE OWNER. The name, home address and social security number of the
Responsible Owner is as follows:
.
2.
APPROVED OPERATOR. The name, home address and social security number of the
Approved Operator is as follows:
3.
FORM OF ENTITY OF FRANCHISEE.
(a) CORPORATION OR LIMITED LIABILITY COMPANY. Franchisee was organized on
____________________________, under the laws of the State of
_____________________________________. Its Federal Identification Number is
_____________________. It has not conducted business under any name other than its corporate
or company name.
Name of Each Director/Officer/Managing Member
Position(s) Held
(b)
PARTNERSHIP. Franchisee is a [general] [limited] partnership formed on
________________, _____________ under the laws of the State of _______________. Its
Federal Identification Number is____________________. It has not conducted business under
any name other than its partnership name.
Appendix A-1
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Name of Each General Partner
4.
OWNERS.
(a)
Franchisee and each of its Owners represents and warrants that the following is a
complete and accurate list of all Owners of any interest whatsoever in Franchisee, including the
full name, mailing address and social security number of each Owner, and fully describes the
nature and extent of each Owner’s interest in Franchisee. Franchisee and each Owner as to his
ownership interest, represents and warrants that each Owner is the sole and exclusive legal and
beneficial owner of his ownership interest in Franchisee, free and clear of all liens, restrictions,
agreements and encumbrances of any kind or nature, other than those required or permitted by
this Agreement.
Owner’s Name, Address and
Social Security Number
Percentage and Nature of
Ownership Interest
(b)
Control Group. You represent and warrant that the following Owner or group of
Owners has, directly or indirectly, 51% or more ownership interest in you and voting control
over its ownership interests in you and constitutes your Control Group as described in Article 2.4
of the Franchise Agreement.
Appendix A-2
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Owner’s Name, Address and
Social Security Number
Percentage and Nature of
Ownership Interest
This Appendix A is deemed accepted and made a part of the Franchise Agreement as of the Franchise
Agreement’s Effective Date.
(Name of corporation,
limited liability company
or partnership)
By:
Print Name:
Title:
Date:
PLA-FIT FRANCHISE, LLC
A New Hampshire Limited Liability Company
By:
Print Name:
Title:
Date:
Owners:
(Signature)
__________________________________
(Date)
(Print Name)
(Signature)
__________________________________
(Date)
(Print Name)
(Signature)
__________________________________
(Date)
(Print Name)
Appendix A-3
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APPENDIX B
OWNERS’ PERSONAL GUARANTY OF
FRANCHISEE’S OBLIGATIONS (“Guaranty”)
In consideration of, and as an inducement to, the execution of the Pla-Fit Franchise, LLC
Franchise Agreement dated as of ______________________________________, (the
“Agreement”) by and between the Pla-Fit Franchise, LLC (“Franchisor”), and
______________________ (“Franchisee”) each of the undersigned Owners of five percent (5%)
or greater interest in Franchisee hereby personally and unconditionally: (1) guarantees to
Franchisor and its successors and assigns, for the term of the Agreement and thereafter as
provided in the Agreement, that Franchisee shall punctually pay and perform each and every
undertaking, agreement and covenant set forth in the Agreement (and any amendments) and that
each and every representation of Franchisee made in connection with the Agreement (and any
amendments) are true, correct and complete in all respects at and as of the time given; and (2)
agrees personally to be bound by, and personally liable for the breach of, each and every
provision in the Agreement (and any amendments), including, without limitation, the
confidentiality obligations and non-competition covenants in Articles 8 and 16 of the Agreement,
respectively.
Each of the undersigned waives: (a) acceptance and notice of acceptance by Franchisor of
the foregoing undertakings; (b) notice of demand for payment of any indebtedness or
nonperformance of any obligations hereby guaranteed; (c) protest and notice of default to any
party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
(d) any right he may have to require that an action be brought against Franchisee or any other
person as a condition of liability; (e) notice of any amendment to the agreement; and (f) any and
all other notices and legal or equitable defenses to which he may be entitled.
Each of the undersigned consents and agrees that: (i) his direct and immediate liability
under this guaranty shall be joint and several; (ii) he shall render any payment or performance
required under the Agreement upon demand if Franchisee fails or refuses to do so punctually;
(iii) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any
remedies against Franchisee or any other person; and (iv) such liability shall not be diminished,
relieved or otherwise effected by any extension of time, credit or other indulgence which the
Franchisor may from time to time grant to Franchisee or to any other person including, without
limitation, the acceptance of any partial payment or performance or the compromise or release of
any claims, none of which shall in any way modify or amend this guaranty, which shall be
continuing and irrevocable until satisfied in full.
It is further understood and agreed by the undersigned that the provisions, covenants and
conditions of the Guaranty will inure to the benefit of our successors and assigns.
This Guaranty shall be governed by the governing law provisions set forth in Article
19.13 of the Agreement and all disputes related to it shall be resolved in accordance with the
dispute resolution provisions set forth in Articles 19.12, 19.14, 19.15, and 19.17 of the
Agreement.
Appendix B-1
14877234.6
04/17/14
IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature,
under seal, as of the Effective Date of the Agreement.
PERCENTAGE OF OWNERSHIP
INTERESTS IN FRANCHISEE
GUARANTOR (S)
(Signature)
(Print Name)
(Signature)
(Print Name)
(Signature)
(Print Name)
DATE: ________________, ______________
Subscribed and sworn to before me this _______________ day of ____________, ________..
___________________________________________
Notary Public
My Commission expires:
Appendix B-2
14877234.6
04/17/14
APPENDIX C
OWNER PERSONAL COVENANTS REGARDING
CONFIDENTIALITY AND NON-COMPETITION
In conjunction with your investment in ________________(“Franchisee”) a __________________, you
(“Owner” or “you”), acknowledge and agree as follows:
1.
Franchisee owns and operates, or is developing, a PLANET FITNESS business located or to be
located at ____________________ pursuant to a franchise agreement (“Franchise
Agreement”) with Pla-Fit Franchise, LLC, which Franchise Agreement requires persons with
legal or beneficial ownership interests in Franchisee under certain circumstances to be personally
bound by the confidentiality and noncompetition covenants contained in the Franchise
Agreement. All capitalized terms contained herein shall have the same meaning set forth in the
Franchise Agreement.
2.
You own or intend to own a legal or beneficial ownership interest in Franchisee and acknowledge
and agree that your execution of this agreement (“Agreement”) is a condition to such ownership
interest and that you have received good and valuable consideration for executing this
Agreement. We may enforce this Agreement directly against you and Your Owners (as defined
below).
3.
If you are a corporation, partnership, limited liability company or other entity, all persons who
have a legal or beneficial interest in you (“Your Owners”) must also execute this Agreement.
4.
You and Your Owners, if any, may gain access to parts of our Confidential Information as a
result of investing in Franchisee. The Confidential Information is proprietary and includes our
trade secrets. You and Your Owners hereby agree that while you and they have a legal or
beneficial ownership interest in Franchisee and thereafter you and they: (a) will not use the
Confidential Information in any other business or capacity (such use being an unfair method of
competition); (b) will exert best efforts to maintain the confidentiality of the Confidential
Information; and (c) will not make unauthorized copies of any portion of the Confidential
Information disclosed in written, electronic or other form. If you or Your Owners cease to have
an interest in Franchisee, you and Your Owners, if any, must deliver to us any such Confidential
Information in your or their possession.
5.
You specifically acknowledge that you will receive valuable, specialized training, Confidential
Information (as defined in Article 8.1 of the Franchise Agreement), and other proprietary and
specialized information and knowledge that provide a valuable, competitive advantage in
operating a men’s, women’s, children’s, or co-ed fitness, exercise, athletic or wellness facility of
any kind. You further acknowledge that we would be unable to protect the Confidential
Information against unauthorized use or disclosure or to encourage the free exchange of ideas and
information among our franchisees if you were permitted to hold interests in or perform services
for a Competitive Business (as defined in Article 1.4 of the Franchise Agreement), and we have
granted you the Franchisee certain rights under the Franchise Agreement in consideration of, and
in reliance upon, your agreement to deal exclusively with us. You therefore covenant that during
the term of the Franchise Agreement (except as otherwise approved in writing by us), you, Your
Owners, and you and their Immediate Families shall not, either directly, indirectly or through, on
behalf of, or in conjunction with any person or legal entity:
Appendix C-1
14877234.6
04/17/14
(a)
Divert or attempt to divert any present or prospective business or customer of any
PLANET FITNESS business to any non-PLANET FITNESS competitor, by direct or indirect
inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with the Marks and the System;
(b)
Recruit, employ or seek to employ any person who is at that time, or has been
within the past six (6) months, employed by us or one of our affiliates, or otherwise directly or
indirectly induce such person to leave his or her employment; or
(c)
Own, maintain, operate, engage in, be employed by, act as a consultant for,
perform services for, provide assistance to, or have any interest in (as owner or otherwise) any
Competitive Business.
6.
You covenant that, except as otherwise approved in writing by us, you and Your Owners shall
not, for a continuous, uninterrupted period of two (2) years commencing upon the date of (a) a
transfer permitted under Article 13 of the Franchise Agreement, (b) expiration of the Franchise
Agreement, (c) termination or non-renewal of the Franchise Agreement (regardless of the cause
for termination or non-renewal), or (d) a final order of a duly authorized arbitrator, panel of
arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to
any of the foregoing or with respect to enforcement of this Paragraph, either directly or indirectly,
for yourself or your Immediate Family, or through, on behalf of, or in conjunction with any
person or legal entity, own, maintain, operate, engage in, be employed by, act as a consultant for,
perform services for, provide assistance to, or have any interest in (as owner or otherwise) any
Competitive Business that is, or is intended to be, located (a) at the location of the PLANET
FITNESS business, (b) within fifteen (15) miles of the location, or (c) fifteen (15) miles of any
PLANET FITNESS business in operation or under construction as of the date that you are
required to comply with this Paragraph 6. You agree and acknowledge that the two (2) year
period of this restriction shall be tolled during any time period in which you are in violation of
this restriction.
7.
You and each of Your Owners expressly acknowledge the possession of skills and abilities of a
general nature and the opportunity to exploit such skills in other ways, so that enforcement of the
covenants contained in Articles 5 and 6 will not deprive any of you of your personal goodwill or
ability to earn a living. If any covenant herein which restricts competitive activity is deemed
unenforceable by virtue of its scope or in terms of geographical area, type of business activity
prohibited and/or length of time, but could be rendered enforceable by reducing any part or all of
it, you and we agree that it will be enforced to the fullest extent permissible under applicable law
and public policy. We may obtain in any court of competent jurisdiction any injunctive relief,
including temporary restraining orders and preliminary injunctions, against conduct or threatened
conduct for which no adequate remedy at law may be available or which may cause it irreparable
harm. You and each of Your Owners acknowledges that any violation of Articles 4, 5 or 6 hereof
would result in irreparable injury for which no adequate remedy at law may be available. If we
file a claim to enforce this Agreement and prevails in such proceeding, you agree to reimburse us
for all its costs and expenses, including reasonable attorneys’ fees.
IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature,
under seal, as of the Effective Date of the Franchise Agreement.
Appendix C-2
14877234.6
04/17/14
OWNER
If an Individual:
If a corporation, partnership, limited
liability company or other legal entity:
(Signature)
(Print Name)
Limited liability company or other
Legal entity)
(Name of corporation, partnership,
By:
Print Name:
Title:
YOUR OWNERS:
If you are a corporation, partnership, limited
liability company or other legal entity.
By:
Print Name:
By:
Print Name:
By:
Print Name:
By:
Print Name:
Appendix C-3
14877234.6
04/17/14
APPENDIX D
SILENT INVESTORS
Franchisee owns and operates, or is developing, a PLANET FITNESS business located
or to be located at ____________________ (“Business”) pursuant to a franchise agreement
(“Franchise Agreement”) with Pla-Fit Franchise, LLC (“Franchisor”). Capitalized terms not
defined herein have the meanings set forth in the Franchise Agreement. Franchisee and its
Owners each acknowledge and agree as follows:
1.
Silent Investor. As used in the Franchise Agreement and herein, the term “Silent Investor” means
and refers to the following individuals and/or entities:
Silent Investor Name and Address
Percentage Ownership Interest
Silent Investor:_____________________________________
Address:__________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
Silent Investor:_____________________________________
Address:__________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
Silent Investor:_____________________________________
Address:__________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
As owned/controlled by: _____________________________
Address: __________________________________________
___________________%
Appendix D-1
14877234.6
04/17/14
2.
Additional Silent Investors/Franchisor Approval. The addition of Silent Investors, as well as the
equity interest of each such Silent Investor, is subject to the Franchisor’s prior written approval.
Specifically, Franchisee Parties may not add any new Silent Investor unless such person or entity,
and any other person or entity that directly or indirectly controls such person or entity, first
satisfies, to Franchisor’s satisfaction, Franchisor’s then-current character and financial
requirements applicable to all PLANET FITNESS franchisees at the time, including, without
limitation, the completion of a satisfactory background check and credit check conducted by (or
on behalf of) Franchisor. Franchisee and Responsible Owner (“Franchisee Parties”) must notify
Franchisor within seven (7) calendar days of the date that any Silent Investor ceases having an
ownership interest in Franchisee.
3.
Silent Investor Prohibitions. Franchisee Parties each agree that no Silent Investor will:
A.
Undertake or exercise an active role in the management or operation of the
Business;
B.
Have or otherwise acquire access to Confidential Information or other operating
information, including information set forth in the Operations Manual (and/or
any component thereof); or
C.
Disclose his/her/its ownership interest in the Business to any third party, except
for professional advisors that need to know or as required by law.
4.
Covenants of Franchisee Parties. Franchisee Parties each covenant that they will not give,
provide, disseminate, create access to, or otherwise release any or all of the following to any
Silent Investor: Confidential Information, operating information other than financial statements,
marketing techniques or materials that are similar to those used under or in connection with the
PLANET FITNESS Methods of Operations, member rate structures similar to those used under
or in connection with the PLANET FITNESS Methods of Operations, any of Franchisor’s
procedures or systems, and any other information that we designate as proprietary and
confidential. Franchisee Parties further acknowledge, understand and agree that if a Silent
Investor learns Confidential Information or other operating information at any time during or
after the term of the Franchise Agreement, Franchisee Parties will be presumed to have disclosed
such Confidential Information or other operating information to the Silent Investor(s).
5.
Representation and Warranty. Franchisee Parties expressly represent and warrant to Franchisor
that the individuals and/or entities identified in Article 1 above constitute all Silent Investors as of
the Effective Date, and that no different or additional Silent Investors will acquire or otherwise
obtain an interest in Franchisee absent compliance with the conditions described in Article 2
above.
6.
Liability for Damages. If any or all of the Franchisee Parties violate the confidentiality or noncompetition provisions of the Franchise Agreement and/or Article 4 (above), the Franchisee
Parties will be jointly and severally liable for any such breach, including, to the fullest extent
possible, all damages and costs resulting from Franchisor’s enforcement or attempted
Appendix D-2
14877234.6
04/17/14
enforcement against any or all Franchisee Parties of any provision of this Appendix or the
Franchise Agreement.
7.
Cross Default. For the avoidance of doubt, any breach or default under this Appendix D
(including, without limitation, Article 4 above) will be deemed an incurable default under the
Franchise Agreement. Franchisee Parties acknowledge that a violation of Articles 3 and/or 4 of
this Appendix would result in irreparable injury for which no adequate remedy at law may be
available. If Franchisor files a claim to enforce the terms of this Appendix and prevails in such
proceeding, Franchisee Parties agree to reimburse Franchisor for all its costs and expenses,
including reasonable attorneys’ fees.
IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as of the
Effective Date noted below.
(Name of corporation,
limited liability company
or partnership)
By:
Print Name:
Title:
PLA-FIT FRANCHISE, LLC
A New Hampshire Limited Liability Company
By:
Print Name:
Title:
EFFECTIVE DATE:
Owners:
(Signature)
____________________________________
(Date)
(Print Name)
(Signature)
____________________________________
(Date)
(Print Name)
(Signature)
____________________________________
(Date)
(Print Name)
Appendix D-3
14877234.6
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APPENDIX E
ASSIGNMENT OF TELEPHONE NUMBERS
Date: _______________
This assignment is effective as of the date of termination of the Franchise Agreement
entered into between Pla-Fit Franchise, LLC (“us”) and _______________ (“you”). You hereby
irrevocably assign to us or our designee the telephone number or numbers and listings issued to
you with respect to each and all of your PLANET FITNESS® businesses (“telephone
numbers”). This assignment is for collateral purposes only and we have no liability or obligation
of any kind whatsoever arising from this assignment, unless we desire to take possession and
control over the telephone numbers.
We hereby are authorized and empowered upon termination of the Franchise Agreement
and without any further notice to you to notify the telephone company, as well as any other
company that publishes telephone directories (“telephone companies”), to transfer the telephone
numbers to us or such other person or entity as we designate. You hereby grant to us an
irrevocable power of attorney and appoint us as your attorney-in-fact to take any necessary
actions to assign the telephone numbers, including but not limited to, executing any forms that
the telephone companies may require to effectuate the assignment. This assignment is also for
the benefit of the telephone companies, and the telephone companies may accept this assignment
and our instructions as conclusive evidence of our rights in the telephone numbers and our
authority to direct the amendment, termination or transfer of the telephone numbers, as if they
had originally been issued to us. In addition, Franchisee agrees to hold the telephone companies
harmless from any and all claims against them arising out of any actions or instructions by
Pla-Fit Franchise, LLC regarding the telephone numbers.
FRANCHISEE:
PLA-FIT FRANCHISE, LLC:
By
Its
Date___________________________
By
Its
Date___________________________
Notary for Franchisee’s Signature
Subscribed and sworn to before me
this ____ day of
, ____ .
Notary Public
My commission expires:
Appendix E-1
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04/17/14
APPENDIX F
LEASE PROVISIONS
1.
Landlord shall deliver to Franchisor a copy of any notice of default or termination
of the Lease at the same time such notice is delivered to Franchisee.
2.
Franchisee hereby assigns to Franchisor, with Landlord’s irrevocable and
unconditional consent, all of Franchisee’s rights, title and interest to and under the
Lease upon any termination or non-renewal of the Franchise Agreement, but no
such assignment shall be effective unless: (a) the Franchise Agreement is
terminated or expires without renewal; and (b) Franchisor notifies the Franchisee
and Landlord in writing that Franchisor assumes Franchisee’s obligations under
the Lease.
3.
Franchisor shall have the right, but not the obligation, upon giving written notice
of its election to Franchisee and Landlord, to cure any breach of the Lease and, if
so stated in the notice, to also succeed to Franchisee’s rights, title and interests
thereunder.
4.
The Lease may not be modified, amended, renewed, extended or assigned by
Franchisee without Franchisor’s prior written consent.
5.
Franchisee and Landlord acknowledge and agree that Franchisor shall have no
liability or obligation whatsoever under the Lease unless and until Franchisor
assumes the Lease in writing pursuant to Article 2 or 3 above.
6.
If Franchisor assumes the lease as provided for in Articles 2 or 3 above, Landlord
and Franchisee agree that (i) Franchisee will remain liable for the responsibilities
and obligations, including amounts owed to Landlord, prior to the date of
assignment and assumption, and (ii) Franchisor will have the right to sublease the
Premises to another franchisee, provided the franchisee agrees to operate the
Location as a PLANET FITNESS business pursuant to a Franchise Agreement
with Franchisor. Franchisor will be responsible for the lease obligations incurred
after the effective date of the assignment.
7.
Landlord and Franchisee hereby acknowledge that Franchisee has agreed under
the Franchise Agreement that Franchisor and its employees or agents shall have
the right to enter the Location for certain purposes. Landlord hereby agrees not to
interfere with or prevent such entry by Franchisor, its employees or agents.
Landlord and Franchisee hereby further acknowledge that in the event the
Franchise Agreement expires (without renewal) or is terminated, Franchisee is
obligated to take certain steps under the Franchise Agreement to de-identify the
location as a PLANET FITNESS business. Landlord agrees to permit Franchisor,
Appendix F-1
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04/17/14
its employees or agents, to enter the Location and remove signs, decor and
materials displaying any marks, designs or logos owned by Franchisor, provided
Franchisor shall bear the expense of repairing any damage to the Location as a
result thereof.
8.
Landlord agrees to allow Franchisee to remodel, equip, paint and decorate the
interior and exterior of the Location pursuant to the terms of the Franchise
Agreement and any successor Franchise Agreement under which Franchisee
may operate the Business at the Location.
9.
Landlord agrees to allow Franchisee to use ultraviolet tanning devices, massage
chairs and similar devices, operate twenty four (24) hours per day and seven (7)
days per week, serve food and beverages to its members, and use automatic teller
machines (ATM).
10.
Copies of any and all notices required or permitted hereby or by the Lease shall
also be sent to Franchisor at 26 Fox Run Road, Newington, New Hampshire
03801, Attn: Chief Legal Officer, or such other address as Franchisor shall
specify by written notice to Landlord.
11.
Under the Franchise Agreement, any lease for the location of a PLANET
FITNESS business is subject to Franchisor’s approval. Accordingly, the Lease is
contingent upon such approval.
12.
Franchisor is a third party beneficiary under this Addendum.
13.
References to the Lease and the Franchise Agreement include all amendments,
addenda, extensions and renewals to such documents.
14.
References to the Landlord, Franchisee and Franchisor include the successors and
assigns of each of the parties.
Appendix F-2
14877234.6
04/17/14
APPENDIX G
LOCATION
The approved location is:
.
If no location is approved at the time this Agreement is signed, this Appendix G will be updated when a
location has been designated by you and approved by us. The location must be designated and your lease
signed within 6 months of the Effective Date of this Agreement.
FRANCHISEE:
PLA-FIT FRANCHISE, LLC:
By
Its
By
Its
Appendix G-1
14877234.6
04/17/14
ACKNOWLEDGMENT ADDENDUM TO
THE PLANET FITNESS® FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the operation of a PLANET FITNESS®
franchise. The purpose of this Acknowledgment Addendum is to determine whether any statements or
promises were made to you that we have not authorized or that may be untrue, inaccurate or misleading, and
to be certain that you understand the limitations on claims that may be made by you by reason of the offer
and sale of the franchise and operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
Acknowledgments and Representations*.
1.
2.
3.
4.
5.
6.
7.
8.
Did you receive a copy of our Disclosure Document (and all exhibits and attachments) at least (a)
14 calendar days prior to signing the Franchise Agreement, or (b) if you are a resident of Iowa,
New York, Oklahoma or Rhode Island, at the earlier or the first personal meeting or 10 business
days before the execution of the franchise or other agreement or payment of any consideration, or
(c) if you are a resident of Michigan, Oregon, or Wisconsin, at the earlier of 10 business days
before the execution of any binding agreement or payment of any consideration? Check one: 
Yes.  No.
Have you studied and reviewed carefully our Disclosure Document and Franchise Agreement?
Check one:  Yes.  No.
Is the name, address and phone number of any broker and each of our employees or
representatives who was involved in offering you this franchise listed on the Disclosure
Document receipt you signed (or on any updated receipt we provided to you)? Check one: 
Yes.  No.
Do you understand that the Franchise Agreement contains the entire agreement between you and
us concerning the franchise, meaning that any prior oral or written statements not included in the
Franchise Agreement or our Disclosure Document will not be binding? Check one:  Yes. 
No.
Do you understand that the success or failure of your business will depend in large part on your
skills and experience, your business acumen, your location, the local market for products, interest
rates, the economy, inflation, the number of employees you hire and their compensation,
competition and other economic and business factors? Check one:  Yes.  No.
Do you understand that that, unless there exists a currently effective Area Development
Agreement between you and us, the franchise granted is for the right to operate a single PLANET
FITNESS® fitness facility at the authorized location only and includes no exclusive area or
protected territory, and that we and our affiliates have the right to issue franchises or operate
competing businesses for or at locations, as we determine, near your authorized location? Check
one:  Yes.  No.
Do you understand that you are bound by the non-compete covenants (both in-term and postterm) listed in Article 16.4 and that an injunction is an appropriate remedy to protect the interests
of the PLANET FITNESS® system if you violate the covenant(s)? Further, do you understand that
the term “you” for purposes of the non-compete covenants in defined broadly in Article 16.4,
such that any actions in violation of the covenants by those holding any interest in the franchisee
entity may result in an injunction, default and termination of the Franchise Agreement?
Do you understand that the current economic crisis and financial situation could have a negative
impact on the fitness industry, the PLANET FITNESS® franchise system and your business? Do
you also understand that the economic situation may worsen? Check one:  Yes.  No.
Ack. Addendum - 1
14877234.6
04/17/14
If you answered “No” to questions 1-8, please explain (attached additional sheets if necessary):
9.
10.
11.
12.
Was any oral, written or visual claim or representation made to you which contradicted the
disclosures in the Disclosure Document? Check one:  Yes.  No.
Except as stated in Item 19 of our Disclosure Document, was any oral, written or visual claim or
representation made to you which stated, suggested, predicated or projected your sales, income or
profit levels? Check one:  Yes.  No.
Except as stated in Item 19 of our Disclosure Document, did any employee or other person
speaking on our behalf make any statement or promise regarding the costs involved in operating a
franchise that is not contained in the Disclosure Document or that is contrary to or different from
the information in the Disclosure Document? Check one:  Yes.  No.
You further acknowledge that we have advised you to seek franchise counsel to review and
evaluate this Agreement.  Yes.  No.
If you answered “Yes” to questions 9-11, please explain in detail the claim, representation or statement
(attached additional sheets if necessary):
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL
RELY ON THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU
HAVE CONSIDERED EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE
ABOVE QUESTIONS. IF MORE SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A
SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY
COMPANY OR OTHER ENTITY, EACH OF ITS OWNERS MUST EXECUTE THIS
ACKNOWLEDGMENT.
Signed:
Signed:________________________________
Print Name:
Print Name:____________________________
Date:
Date:__________________________________
APPROVED ON BEHALF OF
PLA-FIT FRANCHISE, LLC
Signed:
Signed:________________________________
Print Name:
Title:__________________________________
Ack. Addendum - 2
14877234.6
04/17/14
Date:
Date:__________________________________
*Such representations are not intended to nor shall they act as a release, estoppel or waiver of any liability
incurred under the Illinois Franchise Disclosure Act or under the Maryland Franchise Registration and
Disclosure Law, to the extent applicable. In addition, except to the extent we have negotiated changes to the
Franchise Agreement and/or Area Development Agreement that differ from the FDD, nothing in this
Acknowledgement Addendum or in any related agreement is intended to disclaim representations made in
Pla-Fit Franchise, LLC’s current FDD that was provided to you.
Ack. Addendum - 3
14877234.6
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PLANET FITNESS®
EXHIBIT “D”
TO THE DISCLOSURE DOCUMENT
AREA DEVELOPMENT AGREEMENT
FDD – 2014
14877235.8
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D-1
PLANET FITNESS®
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT
14877232.4
4/17/14
Table of Contents
Page
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
Development Area ...............................................................................................................1
Grant of Development Rights ..............................................................................................1
Term.....................................................................................................................................2
Initial Services and Ongoing Obligations ............................................................................2
Our Reservation of Rights ...................................................................................................2
Area Development Fee ........................................................................................................3
Execution of Franchise Agreements ....................................................................................3
Ownership in Area Developer and Franchisees; Personal Guaranty ...................................3
Default and Termination ......................................................................................................4
Franchise Agreements May Not be Affected.......................................................................5
Future Development.............................................................................................................5
Compliance with Applicable Laws ......................................................................................5
Your Non-Competition Obligations ....................................................................................5
No Rights to Area Upon Termination..................................................................................6
Assignment by Us ................................................................................................................6
Assignment by You..............................................................................................................6
Severability ..........................................................................................................................7
Waivers ................................................................................................................................7
Dispute Resolution...............................................................................................................7
Governing Law ..................................................................................................................10
Consent to Jurisdiction.......................................................................................................10
Notices ...............................................................................................................................10
Waiver of Punitive Damages, Jury Trial and Class Actions..............................................10
Multiple Copies..................................................................................................................10
Entire Agreement ...............................................................................................................11
Modification.......................................................................................................................11
Other Franchisees/Area Developers ..................................................................................11
Binding Effect....................................................................................................................11
EXHIBIT A – MAP OF DEVELOPMENT AREA
EXHIBIT B – OWNERS’ PERSONAL GUARANTY OF AREA DEVELOPER’S
OBLIGATIONS
EXHIBIT C – OWNERS
14877232.4
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i
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT
Franchisor: Pla-Fit Franchise, LLC (referred to in this Area Development Agreement as “we,” “us” or
“our”), a New Hampshire limited liability company located at 26 Fox Run Road, Newington, NH 03801.
Area Developer: _________________________________________________________________
(referred to in this Area Development Agreement as “you” or “your”)
A ________________________ corporation/limited liability company/partnership/proprietorship with a
principal place of business located at
_________________________ .
and
You have provided us with any and all financial information about your shareholders, partners, officers,
directors, guarantors and other persons as we have requested; and
You desire to develop, own and operate, through yourself or an affiliate in which your Control Group (as
defined in Article 8 below) owns 51% or more interest, PLANET FITNESS fitness facilities (each, a
“Business”) in the “Area” defined below.
NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, do hereby mutually agree as follows:
1.
Development Area. The development area (the “Development Area”) is the geographical area
described as follows and shown on the map attached hereto as Exhibit A:
Political boundaries described above shall be considered fixed as of the date of this Agreement and shall
not change for the purpose hereof, notwithstanding a political reorganization or change to such boundaries
or regions. All street boundaries shall be deemed to end at the street center line unless otherwise specified
above. In case of inconsistency between the written description above and Exhibit A, the written
description of the Development Area controls.
2.
Grant of Development Rights. We grant you, subject to the terms and conditions of this
Agreement, the right and license to establish and operate for your own account or for an affiliated entity
under the ownership and control of your Control Group (as provided in Article 8 below), a specified
number of Businesses in compliance with our standards. This personal license granted to you is limited to
the right to operate the Businesses at locations only within the Development Area and may not be used
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elsewhere or in any other manner. You have no right to sublicense any of the rights granted to you herein.
During the term of this Agreement and provided that you are in compliance with the Development
Schedule set forth below, we will not operate, or license or franchise third parties to operate a PLANET
FITNESS Business physically located within the Development Area. You must have open and in
continuous operation in the Development Area, pursuant to Franchise Agreements, that cumulative
number of PLANET FITNESS Businesses set forth below as of each of the following dates
(“Development Schedule”):
Cumulative Number of PLANET FITNESS businesses
Date Facility to be Opened
You represent that you conducted your own independent investigation and analysis of the prospects for
the establishment of PLANET FITNESS gyms within the area, approve the Development Schedule as
being reasonable and viable, and recognize that failure to achieve the results described in the
Development Schedule will constitute material breach of this Agreement.
3.
Term. Unless sooner terminated in accordance with Article 9, the term of this Agreement and all
rights granted hereunder will expire on the earlier of: (a) the last date specified in the Development
Schedule above; or (b) the date when you have open and in operation all of the PLANET FITNESS
Businesses required by the Development Schedule.
4.
Initial Services and Ongoing Obligations. You acknowledge and agree that our initial service
under the Area Development Agreement is solely to identify the Development Area and that we have no
ongoing obligations such as training or operational assistance to you under this Agreement. All ongoing
and further obligations to you in opening your locations shall be provided pursuant to the Franchise
Agreement between you and us.
5.
Our Reservation of Rights. Although we, our parent company and our affiliates will not develop,
operate, or franchise a PLANET FITNESS Business physically located within the Development Area
while this Agreement is in effect, we, our parent and our affiliates (and our and their respective successors
and assigns, by purchase, merger, consolidation or otherwise) retain all rights with respect to the
Trademarks, the System and PLANET FITNESS businesses anywhere in the world, and the right to
engage in any business whatsoever, including the right to:
5.1
operate, and grant to others the right to operate, PLANET FITNESS businesses at such
locations and on such terms as we deem appropriate outside of the Development Area;
5.2
offer to sell, sell and distribute, inside and outside the Development Area, any products
or services associated with the PLANET FITNESS system (now or in the future) or identified by the
PLANET FITNESS Trademarks, or any other trademarks, service marks or trade names, through any
distribution channels or methods, without compensation to any franchisees or area developers. These
distribution channels or methods include, without limitation, retail stores, wholesale and the Internet (or
any other existing or future form of electronic commerce);
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5.3
operate, and grant to others the right to operate, fitness facilities, gyms, and health related
establishments identified by tradenames, trademarks, service marks or trade dress, other than the
Trademarks, outside of the Development Area and pursuant to such terms and conditions as we deem
appropriate, which may include locations in close proximity to your PLANET FITNESS location;
5.4
develop or become associated with other concepts (including dual branding or other
franchise systems), whether or not using the PLANET FITNESS System, brand or Trademarks, and
award franchises under these other concepts or locations anywhere, including into the Development
Area; and
5.5
acquire, be acquired by, merge, affiliate with or engage in any transaction with other
businesses (whether competitive or not), with units located anywhere or business conducted anywhere,
including in the Development Area. These transactions may include arrangements involving competing
businesses or outlets and dual branding or brand conversions. You must participate at your expense in
any conversion as instructed by us.
6.
Area Development Fee. For the rights we grant you under the terms of this Area Development
Agreement, you agree to pay us an Area Development Fee of ________________________________
($_______________) U.S. Dollars. Upon our receipt of the Area Development Fee, you will receive all of
the rights to develop, and will be obligated to develop, the number of locations set forth in the
Development Schedule. The Area Development Fee is fully earned on receipt and is not refundable for
any reason.
7.
Execution of Franchise Agreements. You (or an affiliate owned and controlled by your Control
Group, as described in Article 8 below) must execute a separate Franchise Agreement in our then-current
form (“Franchise Agreement”) for each Business to be established by you in the Development Area.
If you fail to provide us with an executed then-current form of Franchise Agreement (as modified
consistent with the preceding sentences) and pay the then-current initial franchise fee due thereunder at
least 60 days prior to the date scheduled as the opening date for a particular location, your failure will be
deemed a material breach of this Agreement and we will have the right to terminate this Agreement as
provided herein.
8.
Ownership; Control Group; Responsible Owner Personal Guaranty. Any person holding an
ownership interest in you is an “Owner” for purposes of this Agreement. You acknowledge and agree
that we have granted the rights in Article 1 above to you, (a) based on you, your Owner or the group of
Owners described in Exhibit C hereof that has, directly or indirectly, 51% or more ownership interest in
you and voting control over its ownership interests in you (“Control Group”) and (b) based on the same
ownership and voting control of such Control Group, in the same percentage as hereunder, in each
Franchisee that executes a Franchise Agreement hereunder. If you are a business corporation,
partnership, limited liability company or other legal entity, the same Control Group must own a minimum
of fifty-one percent (51%) in you and in any entity executing a Franchise Agreement as a Planet Fitness
franchisee (“Franchisee”) pursuant hereto. All such ownership interests of Owners in the Control Group
shall be in the same percentages in your entity under this Agreement and in any Franchisee entity
executing a Franchise Agreement. Furthermore, you acknowledge and agree that we have the right to
approve in advance the ownership structure of each Franchisee under a Franchise Agreement executed
pursuant hereto prior to execution thereof.
Each Owner that has five percent (5%) or greater interest in you, if you are a business
corporation, partnership, limited liability company or other legal entity, must sign Exhibit B to this
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Agreement (Owners’ Personal Guaranty of Franchisee’s Obligations). However, if we are entering into
this Agreement totally or partially based on the financial qualifications, experience, skills or managerial
qualifications of any person or entity who directly or indirectly owns less than 5% interest in you, we
have the right to designate that person as an Owner who must sign Exhibit B to this Agreement. In
addition, if you are a partnership entity, then each person or entity who, now or hereafter is or becomes a
general partner is deemed an Owner who must sign Exhibit B, regardless of the percentage ownership
interest.
You must designate one (1) individual, who shall be set forth in Exhibit C hereto, who has the
authority to, and does in fact, actively direct your business affairs related to your obligations under this
Agreement and has authority to sign on your behalf on all contracts and commercial documents
(“Responsible Owner”). You (or your Responsible Owner) shall exert your best efforts to the
development of your PLANET FITNESS Businesses; and absent our prior approval may not engage in
any other business or activity, directly or indirectly, that requires substantial management responsibility
or time commitments or otherwise may conflict with your obligations hereunder. You (or your
Responsible Owner) may request our approval of an operator that has completed our training program to
our satisfaction (an “Approved Operator”) to whom you may delegate your obligations to develop and
operate your PLANET FITNESS Businesses. Such a request must be made in writing, and you must
cooperate with us to provide all information we reasonably request to approve or reject the proposed
individual. Such approval shall be given in our sole discretion. If we approve an Approved Operator, you
must revise Exhibit C to include that individual, and require the Approved Operator to sign a
confidentiality and non-compete agreement with us which shall, at minimum, contain the non-competition
restrictions in Articles 13.1 and 13.2 of this Agreement. We shall have no responsibility, liability or
obligation to any party to any such arrangement, agreement or contract, or any amendments thereto, made
under this Article on account of our approval thereof or otherwise, and you agree to indemnify and hold
us harmless with respect thereto. You must notify us of any proposed change of the Responsible Owner
or Approved Operator and receive our written approval prior to such change. If such change results from
the death or incapacitation of the Responsible Owner, you must submit a new proposed Responsible
Owner within thirty (30) days after such death or incapacitation. Neither you nor your Owners will,
directly or indirectly, take any actions to avoid or restrict the authority requirement for the Responsible
Owner.
Your Responsible Owner, Approved Operator, and other Owners are identified in Exhibit C to
this Agreement. You represent, warrant and agree that the attached Exhibit C is current, complete and
accurate, and you agree that updated copies of Exhibit C will be furnished promptly to us, so that Exhibit
C (as so revised and signed by you) is at all times current, complete and accurate.
9.
Default and Termination. Where you fail to comply with the Development Schedule for any
location at any time, or where you fail to comply with the other terms of this Area Development
Agreement or any Franchise Agreement with us to which you or a related entity have an interest, this Area
Development Agreement shall terminate, following our giving you thirty (30) day’s notice and
opportunity to cure, without further recourse to you. Without waiving any rights afforded to us under this
Agreement or any Franchise Agreement in which you (or your affiliates) own or hold any interest, we
have the right, but no obligation, to refrain from exercising our termination right in favor of granting you
a written extension on the Development Schedule. Such an extension may, in our business judgment, be
conditioned on any or all of the following: (a) a reduction in the size of the Development Area; (b) a
modified Development Schedule (in terms of timing and/or number of units to be opened); (c) your
execution of our then-current form of general release; and/or (d) your execution of our then-current form
of Area Development Agreement, which shall replace this Agreement and which may contain materially
different terms and conditions. In addition, if we grant you a written extension, you must pay to us
estimated daily Royalty and national advertising fund fees from the date you were scheduled to open,
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according to the Development Schedule. The estimated Royalty and national advertising fund fees will be
based on the average daily EFT Dues Draft of all PLANET FITNESS franchised businesses in the
system during the preceding fiscal year, up to a maximum of $375 per day. Nothing obligates us to grant
you an initial or any subsequent extension on the Development Schedule. We reserve the right to
terminate this Agreement at any time if you fail to comply with its terms, including at the end of any
unfulfilled extension period. This Agreement shall automatically terminate at the earlier of (i) the
termination of any Franchise Agreement signed for a location developed pursuant to this Agreement,
(ii) as otherwise provided in this Agreement.
10.
Franchise Agreements May Not be Affected. Upon termination of this Agreement, (i) you will
continue to pay all required fees and operate the Businesses that you own in the Development Area
pursuant to the terms of the applicable Franchise Agreement that we executed prior to the termination of
this Agreement, and (ii) your and our rights and obligations with respect to your existing Businesses will
be governed by the terms of the applicable Franchise Agreements unless there also exists a basis to
terminate the applicable Franchise Agreement(s) for your Business(es).
11.
Future Development. You recognize and acknowledge that this Agreement requires you to open
PLANET FITNESS Businesses in the future pursuant to the Development Schedule. You further
acknowledge that the estimated expenses and investment requirements set forth in Items 6 and 7 of our
Franchise Disclosure Document are subject to increase over time, and that future Businesses likely will
involve greater initial investment and operating capital requirements than those stated in the Franchise
Disclosure Document provided to you prior to the execution of this Agreement. You must execute all
the Franchise Agreements and open all the Businesses by the dates set forth on the Development
Schedule, regardless of (i) the requirement of a greater investment, (ii) the financial condition or
performance of your prior Businesses, or (iii) any other circumstances, financial or otherwise. The
foregoing will not be interpreted as imposing any obligation upon us to execute the Franchise Agreements
under this Area Development Agreement if you have not complied with each and every condition
necessary to develop the Businesses, or if you do not meet our then-current requirements for franchisees
at the time you are scheduled to execute a Franchise Agreement.
12.
Compliance with Applicable Laws. You must, at your expense, comply with all federal, state,
city, municipal and local laws, ordinances, rules and regulations in the Development Area pertaining to
the operation of your PLANET FITNESS Businesses. You must, at your expense, be absolutely and
exclusively responsible for determining all licenses and permits required by law for your Businesses, for
qualifying for and obtaining all such licenses and permits, and maintaining all such licenses and permits in
full force and effect.
13.
Your Non-Competition Obligations.
13.1
During Term. You, your Approved Operator, any personal guarantors and each of your
Owners will not, during the term of this Agreement, directly, indirectly or through, on behalf of, or in
conjunction with any person or legal entity:
13.1.1 Divert or attempt to divert any present or prospective business or customer of any
PLANET FITNESS business to any non-PLANET FITNESS competitor, by direct or indirect
inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to
the goodwill associated with the Marks and the System;
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13.1.2 Recruit, employ or seek to employ any person who is at that time, or has been
within the past six (6) months, employed by us or one of our affiliates, or otherwise directly or indirectly
induce such person to leave his or her employment; or
13.1.3 Own, maintain, operate, engage in, be employed by, act as a consultant for,
perform services for, provide assistance to, or have any interest in (as owner or otherwise) any men’s,
women’s, children’s, or co-ed fitness, exercise, athletic, or wellness facility of any kind, including, but not
limited to, a health club, gym, physical fitness club, personal training studio, weight loss, weight training
or resistance training studio, or aerobics center (“Competitive Business”).
13.2 After Term. You covenant that, except as otherwise approved in writing by us, you, your
Approved Operator, and your Owners shall not, for a continuous, uninterrupted period of two (2) years
commencing upon the date of (a) a transfer permitted under Article 16 of this Agreement, (b) expiration
of this Agreement, (c) termination of this Agreement (regardless of the cause for termination), or (d) a
final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after
all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this
Article 13.2, either directly or indirectly, for yourself or your spouse, parent (including step parents),
sibling (including half siblings), or child (including step children), whether natural or adopted., or
through, on behalf of, or in conjunction with any person or legal entity, own, maintain, operate, engage in,
be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in
(as owner or otherwise) any Competitive Business that is, or is intended to be, located (a) within the
Development Area, (b) fifteen (15) miles of any PLANET FITNESS Business developed hereunder, or
(c) fifteen (15) miles of any PLANET FITNESS business in operation or under construction as of the
date that you are required to comply with this Article 13.2. You agree and acknowledge that the two (2)
year period of this restriction shall be tolled during any time period in which you are in violation of this
restriction.
13.3
Exception. The restrictions in Articles 13.1.3 and 13.2 do not apply to: (a) interests in or
operation of a PLANET FITNESS business under a written Franchise Agreement with us; or (b) the
ownership of shares of a class of securities that are listed on a public stock exchange or traded on the
over-the-counter market and that represent less than five percent (5%) of that class of securities.
13.4
Injunctive Relief. You agree that damages alone cannot adequately compensate us if
there is a violation of these noncompetitive covenants and that injunctive relief is essential for our
protection. You therefore agree that in case of any alleged breach or violation of this Article, we may
seek injunctive relief without posting any bond or security, in addition to all other remedies that may be
available to us at equity or law.
14.
No Rights to Development Area Upon Termination. After the termination or expiration of this
Agreement for any reason, any and all rights you had in and to the Development Area shall cease and we
will have the absolute and unrestricted right to develop the Development Area or to contract with other
franchisees for the future development of the Development Area.
15.
Assignment by Us. We have the right to sell or assign, in whole or in part, our interests in this
Agreement, and any such sale or assignment shall inure to the benefit of any assignee or other legal
successor to our interest.
16.
Assignment by You. You may only transfer your rights and interests under this Agreement if you
obtain our prior written consent and transfer all of your rights and interests under all Franchise
Agreements for the Business in the Development Area. Accordingly, the assignment terms and conditions
in the Franchise Agreements apply to any transfer of your rights and interests under this Agreement or any
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ownership in you, except that you cannot assign your rights and interests in this Agreement for an amount
of consideration greater than the Area Development Fee specified in Article 6 unless we otherwise agree
and you comply with all supplemental assignment conditions we specify in our business judgment,
including, without limitation, your payment of a supplemental transfer fee in the amount we specify.
17.
Severability. To the extent that this Agreement is judicially determined to be unenforceable by
virtue of its scope or in terms of area or length of time, but may be made enforceable by reductions of any
or all thereof, the same shall be enforced to the fullest extent permissible under the laws and public
policies applied in the jurisdiction where enforcement is sought.
18.
Waivers. Failure of either party to insist, in one or more instances, on performance by the other
in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or
relinquishment of any right granted hereunder or of the future performance of any such term or condition
or of any other term or condition of this Agreement, unless such waiver is in a writing signed by or on
behalf of both parties.
19.
Dispute Resolution.
19.1
Mediation. Except as provided in Article 19.3, prior to filing any demand for arbitration,
the parties agree to mediate any dispute, controversy or claim between and among the parties and any of
our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising
under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business,
any loan or other finance arrangement between us or our affiliates and you, the parties’ relationship, your
Business, or any System Standard in accordance with the following procedures:
19.1.1 The party seeking mediation must commence mediation by sending the other
party, in accordance with Article 22, a written notice of its request for mediation headed “Notification of
Dispute”. The Notification of Dispute will specify, to the fullest extent possible, the party’s version of
the facts surrounding the dispute; the amount of damages and the nature of any injunctive or other relief
such party claims. The party (or parties as the case may be) receiving a Notification of Dispute will
respond within twenty (20) days after receipt thereof, in accordance with Article 22, stating its version of
the facts and, if applicable, its position as to damages sought by the party initiating the dispute procedure;
provided, however, that if the dispute has been the subject of a default notice given under Article 9 of this
Agreement, the other party will respond within ten (10) business days.
19.1.2 Upon receipt of a Notification of Dispute and response under Article 19.1.1, the
parties will endeavor, in good faith, to resolve the dispute outlined in the Notification of Dispute and
response. If the parties have been unable to resolve a dispute outlined in a Notification of Dispute or a
response thereto within twenty (20) days after receipt of the response, either party may initiate a
mediation procedure with the American Arbitration Association (“AAA”), pursuant to its Commercial
Mediation Procedures, and unless otherwise agreed by the parties will take place in the city of our thencurrent corporate headquarters. The parties must select a mediator jointly.
19.1.3 All mediation sessions will occur in New Hampshire at a mutually-agreeable
location and must be attended by your Responsible Owner (and any other persons with authority to settle
the dispute on your behalf) and our representative(s) who is/are authorized to settle the dispute. The
parties may be represented by counsel at the mediation. The parties agree to participate in the mediation
proceedings in good faith and with the intention of resolving the dispute if at all possible within 30 days
of the notice from the party seeking to initiate the mediation procedures. If the dispute is not resolved
within 30 days, any party may initiate an arbitration pursuant to Article 19.2. In addition, if the party
receiving notice of mediation has not responded within 5 days of delivery of the notice or a party fails to
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participate in the mediation, this Article 19.1 will no longer be applicable and the other party can pursue
arbitration. The parties agree that the costs of the mediator will be split equally between the parties. Each
party must pay its owns fees and expenses incurred in connection with the mediation. The mediation
proceeding and any negotiations and results thereof will be treated as a compromise settlement
negotiation and the entire process is confidential. At least 5 days prior to the initial mediation session,
each party must deliver a written statement of positions.
19.2
Arbitration. Except as provided in Article 19.3, any dispute, controversy or claim
between you and us and any of our or your affiliates, officers, directors, shareholders, members,
guarantors, employees or owners arising under, out of, in connection with or in relation to this
Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or
our affiliates and you, the parties’ relationship, your Business, or any System Standard or the scope of
validity of the arbitration obligation under this Article not resolved by mediation must be submitted to
binding arbitration in accordance with the Federal Arbitration Act. The arbitration will be administered
by the AAA pursuant to its Commercial Arbitration Rules then in effect by one arbitrator.
19.2.1 In connection with any arbitration proceeding, each party will submit or file any
claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the
Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such
claim which is not submitted or filed in such proceeding will be barred.
19.2.2 Any arbitration must be on an individual basis only as to a single development
agreement (and not as or through an association) and the parties and the arbitrator will have no authority
or power to proceed with any claim on a class-wide basis or otherwise to join or consolidate any claim
with any claim or any other proceeding involving third parties. If a court or arbitrator determines that this
limitation on joinder of or class-wide claims is unenforceable, then the agreement to arbitrate the dispute
will be null and void and the parties must submit all claims to the jurisdiction of the courts, in accordance
with Article 21.
19.2.3 The arbitration must take place in the city closest to where our headquarters is
located at the time of the dispute.
19.2.4 The arbitrator must follow the law and not disregard the terms of this Agreement.
The arbitrator must be a former federal or state court judge with at least 5 years of significant experience
in commercial law. The arbitrator may not consider any settlement discussions or offers that might have
been made by either you or us. The arbitrator may not under any circumstance (a) stay the effectiveness
of any termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or
consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this
Agreement or any reasonable standard of business performance that we set. The arbitrator will have the
right to make a determination as to any procedural matters as would a court of competent jurisdiction be
permitted to make in the state in which the corporate headquarters of Franchisor is then located. The
arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute
between the parties, including, but not limited to: any decision as to whether Article 21 is applicable and
enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any
alleged fraud in the inducement.
19.2.5 The arbitrator can issue summary orders disposing of all or part of a claim and
provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and
delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final
relief. Each party consents to the enforcement of such orders, injunctions, etc., by any court having
jurisdiction.
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19.2.6 The arbitrator will have subpoena powers limited only by the laws of the state in
which our corporate headquarters is then located.
19.2.7 The parties to the dispute will have the same discovery rights as are available in
civil actions under the laws of the state in which our corporate headquarters is then located.
19.2.8 All other procedural matters will be determined by applying the statutory,
common laws, and rules of procedure that control a court of competent jurisdiction in which our corporate
headquarters is then located.
19.2.9 Other than as may be required by law, the entire arbitration proceedings
(including, but not limited to, any rulings, decisions or orders of the arbitrator), will remain confidential
and will not be disclosed to anyone other than the parties to this Agreement.
19.2.10 The judgment of the arbitrator on any preliminary or final arbitration award will
be final and binding and may be entered in any court having jurisdiction.
19.2.11 We reserve the right, but have no obligation, to advance your share of the costs
of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will
not be deemed to have waived or relinquished our right to seek recovery of those costs in accordance with
Article 19.4.
19.3
Exceptions to Arbitration. Notwithstanding Articles 19.1 and 19.2, the parties agree that
the following claims will not be subject to arbitration or mediation:
19.3.1 any action for equitable relief, including, without limitation, seeking preliminary
or permanent injunctive relief, specific performance, declaratory relief, other relief in the nature of equity
to enjoin any harm or threat of harm to such party’s tangible or intangible property, brought at any time,
including without limitation, prior to or during the pendency of any arbitration proceedings initiated
hereunder;
19.3.2 any action in ejectment or for possession of any interest in real or personal
property; or
19.3.3 any action which by applicable law cannot be arbitrated; and
19.3.4 our decision in the first instance to issue a notice of default and/or notice of
termination, or undertake any other conduct with respect to the franchise relationship that might later
result in a dispute or controversy between us.
19.4
Costs and Attorneys’ Fees. The prevailing party in any action or proceeding arising
under, out of, in connection with, or in relation to this Agreement will be entitled to recover its reasonable
costs and expenses (including attorneys’ fees, arbitrator’s fees and expert witness fees, costs of
investigation and proof of facts, court costs, and other arbitration or litigation expenses) incurred in
connection with the claims on which it prevailed.
19.5
Survival. The provisions of this Article 19 are intended to benefit and bind certain third
party non-signatories and will continue in full force and effect subsequent to and notwithstanding the
expiration or termination of this Agreement.
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19.6
Tolling of Statute of Limitations. All applicable statutes of limitation and defenses based
on the passage of time are tolled while the dispute resolution procedures in this Article 19 are pending.
The parties will take such action, if any, required to effectuate such tolling.
19.7
Performance to Continue. Each party must continue to perform its obligations under this
Agreement pending final resolution of any dispute pursuant to this Article 19, unless to do so would be
impossible or impracticable under the circumstances.
20.
Governing Law. All matters relating to arbitration will be governed by the Federal Arbitration
Act (9 U.S.C. §§ 1 et. seq.). Except to the extent governed by the Federal Arbitration Act as required
hereby, the UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §§ 1051 et
seq.) or other federal law, this Agreement, the franchise and all claims arising from the relationship
between us and you will be governed by the laws of New Hampshire, without regard to its conflict of laws
principles, except that any law regulating the sale of franchises or governing the relationship of a
franchisor and its franchisee will not apply unless jurisdictional requirements are met independently
without reference to this Article.
21.
Consent to Jurisdiction. Subject to Article 19 hereof, you and your Owners agree that we may
institute any action against you or your Owners in any state or federal court of general jurisdiction in New
Hampshire and you (and each Owner) irrevocably submit to the jurisdiction of such courts and waive any
objection you (or he or she) may have to either the jurisdiction of or venue in such courts.
22.
Notices. All written notices and reports permitted or required to be delivered by the provisions of
this Agreement will be deemed so delivered:
22.1
at the time delivered by hand;
22.2
one (1) business day after transmission by telecopy, facsimile or other electronic system,
provided there is evidence of delivery;
22.3
one (1) business day after being placed in the hands of a commercial courier service for
next business day delivery, provided there is evidence of delivery; or five (5) business days after
placement in the United States Mail by Registered or Certified Mail, Return Receipt Requested, postage
prepaid; and must be addressed to the party to be notified at its most current principal business address of
which the notifying party has been notified. Any required payment or report which we do not actually
receive during regular business hours on the date due (or postmarked by postal authorities at least two (2)
days prior thereto) will be deemed delinquent.
23.
Waiver of Punitive Damages, Jury Trial and Class Actions. Except with respect to any obligation
to indemnify us and claims we bring against you for your unauthorized use of the Marks or unauthorized
use or disclosure of any confidential information, we and you and your respective Owners waive to the
fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the
other and agree that, in the event of a dispute between us, the party making a claim will be limited to
equitable relief and to recovery of any actual damages it sustains. We and you irrevocably waive, to the
fullest extent permitted by law, trial by jury in any action, proceeding or counterclaim, whether at law or
in equity, brought by either of us. Each party acknowledges that it has had a full opportunity to consult
with counsel concerning this waiver, and that this waiver is informed, voluntary, intentional, and not the
result of unequal bargaining power.
24.
Multiple Copies. This Agreement may be executed in multiple copies, each of which will be
deemed an original, and all of which when taken together shall constitute one and the same document.
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PLANET FITNESS®
25.
Entire Agreement. This Agreement together with any exhibits, addenda and appendices hereto
constitute the sole agreement between you and us with respect to the entire subject matter of this Area
Development Agreement and embodies all prior agreements and negotiations with respect to your
Businesses authorized hereunder. There are no representations or warranties of any kind, express or
implied, except as contained herein or in the Franchise Disclosure Document provided to you in connection
with this Agreement.
26.
Modification. This Agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of the parties hereto.
27.
Other Franchisees/Area Developers. You acknowledge that other PLANET FITNESS
franchisees/area developers have or will be granted franchises or area development rights at different
times and in different situations, and further acknowledge that the provisions of such agreements may
vary substantially from those contained in this Agreement.
28.
Binding Effect. Except as otherwise provided herein to the contrary, this Agreement shall be
binding upon, and shall inure to the benefit of, you and us, and our respective heirs, executors, legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the Effective Date.
Franchisor:
PLA-FIT FRANCHISE, LLC
By:_______________________________________
Name Printed: ______________________________
Title: _____________________________________
EFFECTIVE DATE: _______________________
EACH OF THE UNDERSIGNED PARTIES WARRANTS AND REPRESENTS THAT
HE/SHE HAS NOT RELIED UPON ANY GUARANTEES CONCERNING REVENUE,
PROFIT OR THE SUCCESS OF THIS FRANCHISE IN SO SIGNING.
Franchisee:
[FRANCHISEE ENTITY]
By:_______________________________________
Name Printed: ______________________________
Title: _____________________________________
Date: _____________________________________
As Individuals:
__________________________________________
Name Printed: ______________________________
Date: _____________________________________
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PLANET FITNESS®
__________________________________________
Name Printed: ______________________________
Date: _____________________________________
FDD – 2014
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PLANET FITNESS®
EXHIBIT A
MAP OF DEVELOPMENT AREA
(attached)
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PLANET FITNESS®
EXHIBIT B
OWNERS’ PERSONAL GUARANTY OF AREA DEVELOPER’S OBLIGATIONS
(attached)
FDD – 2014
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ADA
PLANET FITNESS®
OWNERS’ PERSONAL GUARANTY OF
AREA DEVELOPER’S OBLIGATIONS (“Guaranty”)
In consideration of, and as an inducement to, the execution of the Pla-Fit Franchise, LLC Area
Development Agreement dated as of ______________________________________, (the “Agreement”)
by and between the Pla-Fit Franchise, LLC (“Franchisor”), and ______________________ (“Area
Developer”) each of the undersigned Owners of five percent (5%) or greater interest in Area Developer
hereby personally and unconditionally: (1) guarantees to Franchisor and its successors and assigns, for the
term of the Agreement and thereafter as provided in the Agreement, that Area Developer shall punctually
pay and perform each and every undertaking, agreement and covenant set forth in the Agreement (and
any amendments) and that each and every representation of Area Developer made in connection with the
Agreement (and any amendments) are true, correct and complete in all respects at and as of the time
given; and (2) agrees personally to be bound by, and personally liable for the breach of, each and every
provision in the Agreement (and any amendments), including, without limitation, the confidentiality and
non-competition provisions.
Each of the undersigned waives: (a) acceptance and notice of acceptance by Franchisor of the
foregoing undertakings; (b) notice of demand for payment of any indebtedness or nonperformance of any
obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the
indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he may have to
require that an action be brought against Area Developer or any other person as a condition of liability;
(e) notice of any amendment to the agreement; and (f) any and all other notices and legal or equitable
defenses to which he may be entitled.
Each of the undersigned consents and agrees that: (i) his direct and immediate liability under this
guaranty shall be joint and several; (ii) he shall render any payment or performance required under the
Agreement upon demand if Area Developer fails or refuses to do so punctually; (iii) such liability shall
not be contingent or conditioned upon pursuit by Franchisor of any remedies against Area Developer or
any other person; and (iv) such liability shall not be diminished, relieved or otherwise effected by any
extension of time, credit or other indulgence which the Franchisor may from time to time grant to Area
Developer or to any other person including, without limitation, the acceptance of any partial payment or
performance or the compromise or release of any claims, none of which shall in any way modify or
amend this guaranty, which shall be continuing and irrevocable until satisfied in full.
It is further understood and agreed by the undersigned that the provisions, covenants and
conditions of the Guaranty will inure to the benefit of our successors and assigns.
This Guaranty shall be governed by the governing law provisions set forth in Article 20 of the
Agreement and all disputes related to it shall be resolved in accordance with the dispute resolution
provisions set forth in Articles 19, 21, and 23 of the Agreement.
FDD – 2014
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ADA
PLANET FITNESS®
IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature, under
seal, as of the Effective Date of the Agreement.
PERCENTAGE OF OWNERSHIP
INTERESTS IN AREA DEVELOPER
OWNER(S)
(Signature)
(Print Name)
(Signature)
(Print Name)
(Signature)
(Print Name)
DATE: ________________, ______________
Subscribed and sworn to before me this _______________ day of ____________, ________..
___________________________________________
Notary Public
My Commission expires:
FDD – 2014
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ADA
PLANET FITNESS®
EXHIBIT C
OWNERSHIP ADDENDUM
1.
RESPONSIBLE OWNER. The name, home address and social security number of the
Responsible Owner is as follows:
2.
APPROVED OPERATOR. The name, home address and social security number of the
Approved Operator is as follows:
3.
FORM OF ENTITY OF AREA DEVELOPER.
(a) CORPORATION OR LIMITED LIABILITY COMPANY. Area Developer was
organized on ____________________________, under the laws of the State of
_____________________________________. Its Federal Identification Number is
_____________________. It has not conducted business under any name other than its corporate
or company name.
Name of Each Director/Officer/Managing Member
FDD – 2014
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ADA
Position(s) Held
PLANET FITNESS®
(b)
PARTNERSHIP. Area Developer is a [general] [limited] partnership formed on
________________, _____________ under the laws of the State of _______________. Its
Federal Identification Number is____________________. It has not conducted business under
any name other than its partnership name.
Name of Each General Partner
4.
OWNERS.
(a)
Area Developer and each of its Owners represents and warrants that the following is a
complete and accurate list of all owners of any interest whatsoever in Area Developer, including
the full name, mailing address and social security number of each Owner, and fully describes the
nature and extent of each Owner’s interest in Area Developer. Area Developer and each Owner,
as to his ownership interest, represents and warrants that each Owner is the sole and exclusive
legal and beneficial owner of his ownership interest in Area Developer, free and clear of all liens,
restrictions, agreements and encumbrances of any kind or nature, other than those required or
permitted by this Agreement.
Owner’s Name, Address and
Social Security Number
FDD – 2014
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Percentage and Nature of
Ownership Interest
ADA
PLANET FITNESS®
(b)
Control Group. You represent and warrant that the following Owner or group of
Owners has, directly or indirectly, 51% or more ownership interest in you and voting control over
its ownership interests in you and constitutes your Control Group as described in Article 8 of the
Area Development Agreement.
Owner’s Name, Address and
Social Security Number
Percentage and Nature of
Ownership Interest
This Exhibit C is deemed accepted and made a part of the Area Development Agreement as of
the Area Development Agreement’s Effective Date.
PLA-FIT FRANCHISE, LLC
A New Hampshire Limited Liability Company
(Name of corporation,
limited liability company
or partnership)
By:
Print Name:
Title:
Date:
By:
Print Name:
Title:
Date:
Owners:
__________________________________
(Date)
(Signature)
(Print Name)
__________________________________
(Date)
(Signature)
(Print Name)
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ADA
PLANET FITNESS®
__________________________________
(Date)
(Signature)
(Print Name)
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ADA
PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “E”
TO THE DISCLOSURE DOCUMENT
FINANCIAL STATEMENTS
FDD – 2014
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E-1
PLANET FITNESS®
PLANET FITNESS HOLDINGS, LLC
Consolidated Financial Statements
As of December 31, 2013 and 2012 (Successor)
and for the year ended December 31, 2013 (Successor),
the period from November 8, 2012 to December 31, 2012 (Successor),
the period from January 1, 2012 to November 7, 2012 (Predecessor)
and the year ended December 31, 2011 (Predecessor)
(With Independent AuditorsD Report Thereon)
PLANET FITNESS HOLDINGS, LLC
Table of Contents
Page(s)
Independent AuditorsD Report
1@2
Consolidated Financial Statements:
Consolidated Balance Sheets
3
Consolidated Statements of Operations
4
Consolidated Statements of Comprehensive Income
5
Consolidated Statements of Cash Flows
6
Consolidated Statements of Changes in Equity
7
Notes to Consolidated Financial Statements
Supplemental Consolidating Financial Information
8@34
35@40
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
Independent Auditors' Report
The Board of Directors
Planet Fitness Holdings, LLC:
We have audited the accompanying consolidated financial statements of Planet Fitness Holdings, LLC and
its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2013 and 2012
(Successor), and the related consolidated statements of operations, comprehensive income, cash flows and
changes in equity for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to
December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and
the year ended December 31, 2011 (Predecessor), and the related notes to the consolidated financial
statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with U.S. generally accepted accounting principles; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditorsD judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entityDs preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entityDs internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly in all material
respects, the financial position of Planet Fitness Holdings, LLC and its subsidiaries as of December 31,
2013 and 2012 (Successor), and the results of their operations and cash flows for the year ended
KPMG LLP is a Delaware limited liability partnership,
the U.S. member firm of KPMG International Cooperative
(“KPMG International”), a Swiss entity.
December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the
period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011
(Predecessor), in accordance with U.S. generally accepted accounting principles.
Other Matter
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements
as a whole. The supplemental consolidating financial information is presented for purposes of additional
analysis and is not a required part of the consolidated financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the consolidated financial statements. The information has been subjected to
the auditing procedures applied in the audits of the consolidated financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the consolidated financial statements or to the consolidated financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the information is fairly stated in all material
respects in relation to the consolidated financial statements as a whole.
Boston, Massachusetts
March 10, 2014
2
PLANET FITNESS HOLDINGS, LLC
Consolidated Balance Sheets
December 31, 2013 and 2012
(Amounts in thousands)
Assets
2013
2012
(Successor)
Current assets:
Cash and cash equivalents
Accounts receivable, net of allowance for bad debts of $352 and $296
at December 31, 2013 and 2012, respectively
Due from related parties, current
Inventory
Notes receivable, current
Restricted assets – NAF (note 6)
Other current assets
$
31,267
9,455
15,783
1,332
2,243
513
1,351
5,058
12,739
10
493
2,387
1,863
3,920
57,547
30,867
33,766
303,328
157,210
3,672
6,573
32,747
326,211
157,210
4,402
8,213
$
562,096
559,650
$
—
9,500
30,379
1,162
2,647
1,351
11,444
264
3,525
9,606
16,923
3,291
4,450
1,863
9,514
248
56,747
49,420
Long-term debt, net of current maturities
Obligations under capital leases, net of current portion
Deferred rent, net of current portion
Deferred revenue, net of current portion
Deferred tax liabilities – non current
Other liabilities
173,375
423
1,376
7,193
593
474
183,813
1,584
205
5,724
2,193
72
Total noncurrent liabilities
183,434
193,591
315,715
6,200
313,242
3,397
321,915
316,639
562,096
559,650
Total current assets
Property and equipment, net
Intangible assets, net
Goodwill
Notes receivable, net of current portion
Other assets, net
Total assets
Liabilities and Equity
Current liabilities:
Line of credit
Current maturities of long-term debt
Accounts payable and accrued expenses
Current maturities of obligations under capital leases
Equipment deposits
Restricted liabilities – NAF (note 6)
Deferred revenue, current
Other current liabilities
Total current liabilities
Commitments and contingencies (note 17)
Equity:
Members’ equity
Noncontrolling interests in variable interest entities
Total equity
Total liabilities and equity
$
See accompanying notes to consolidated financial statements.
3
PLANET FITNESS HOLDINGS, LLC
Consolidated Statements of Operations
(Amounts in thousands)
Period from
November 8,
Year ended
2012 through
December 31,
December 31,
2013
2012
(Successor)
Net revenues:
Membership fees
Equipment and assembly
Franchise revenue
$
Period from
January 1,
2012 through
Year ended
November 7,
December 31,
2012
2011
(Predecessor)
67,364
105,803
37,842
8,822
28,020
4,945
40,360
52,691
24,849
39,395
75,221
21,820
211,009
41,787
117,900
136,436
81,353
41,692
28,808
23,118
21,480
5,950
6,959
2,633
41,064
28,381
5,676
19,475
58,032
27,790
4,205
15,005
—
—
(1,921)
(234)
174,971
37,022
92,675
104,798
36,038
4,765
25,225
31,638
496
(9,408)
(694)
100
(2,530)
(125)
897
(2,249)
29
611
(2,502)
288
Total other expense, net
(9,606)
(2,555)
(1,323)
(1,603)
Income before taxes
26,432
2,210
23,902
30,035
633
56
656
747
25,799
2,154
23,246
29,288
361
32
1,015
2,350
25,438
2,122
22,231
26,938
Total net revenues
Operating costs and expenses:
Cost of revenue
Club operations
Depreciation and amortization
Selling, general and administrative
Gain on sale of subsidiaries and variable interest
entities (notes 4 and 5)
Total operating costs and expenses
Income from operations
Other income (expense), net:
Interest income
Interest expense
Other income (expense)
Provision for state income taxes
Net income
Less net income attributable to
noncontrolling interests (note 4)
Net income attributable to members
of Planet Fitness Holdings, LLC
$
4
PLANET FITNESS HOLDINGS, LLC
Consolidated Statements of Comprehensive Income
(Amounts in thousands)
Period from
November 8,
Year ended
2012 through
December 31,
December 31,
2013
2012
(Successor)
Net income including noncontrolling interests
Other comprehensive income, net:
Unrealized gains on interest rate swaps
$
Total comprehensive income including
noncontrolling interests
Total comprehensive income attributable to noncontrolling interests
Total comprehensive income attributable to
members of Planet Fitness Holdings, LLC
$
See accompanying notes to consolidated financial statements.
5
Period from
January 1,
2012 through
Year ended
November 7,
December 31,
2012
2011
(Predecessor)
25,799
2,154
23,246
29,288
92
—
—
—
25,891
2,154
23,246
29,288
361
32
1,015
2,350
25,530
2,122
22,231
26,938
PLANET FITNESS HOLDINGS, LLC
Consolidated Statements of Cash Flows
(Amounts in thousands)
Period from
November 8,
Year ended
2012 through
December 31,
December 31,
2013
2012
(Successor)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Amortization of deferred financing costs
Amortization of favorable leases
Deferred tax provision (benefit)
Provision for bad debts
Loss on disposal of property and equipment
Loss on uncollectable notes receivable
Gain on sale of subsidiaries and variable interest entities
Changes in operating assets and liabilities, excluding effects of acquisitions and dispositions:
State income taxes
Accounts receivable
Notes receivable and due from related parties
Inventory
Other assets and other current assets
Accounts payable and accrued expenses
Other liabilities and other current liabilities
Equipment deposits
Deferred revenue
Deferred rent
$
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of the Company, net of cash acquired
Additions to property and equipment
Acquisition of franchises
Cash outflow from sale of PF-CT
Proceeds from sale of property and equipment
Acquisition of intangibles
Net cash used in investing activities
Cash flows from financing activities:
Successor capital contribution, net of cash acquired
Proceeds from issuance of long-term debt
Principal payments on capital lease obligations
Repayment of long-term debt
Payment of deferred financing and other debt-related costs
Net (repayments) borrowings on line of credit
Re-payment of interim financing
Acquisition of PFPA noncontrolling interest
Contributions from members
Contributions from variable interest entities
Distributions to variable interest entities
Distributions to members
Net cash (used in) provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Period from
January 1,
2012 through
Year ended
November 7,
December 31,
2012
2011
(Predecessor)
25,799
2,154
23,246
29,288
28,808
1,582
246
(1,430)
57
(52)
—
—
6,959
75
34
(101)
24
(22)
—
—
5,676
283
—
(25)
129
(20)
—
(1,921)
4,205
352
—
96
394
142
216
(234)
(364)
(3,101)
1,281
(1,750)
(776)
13,456
421
(1,803)
3,398
1,171
—
(5,399)
5,025
(493)
1,093
3,142
182
(1,885)
1,488
205
—
4,458
(1,129)
188
(4,599)
(713)
104
3,350
880
670
313
(3,905)
(3,511)
206
(531)
7,079
434
1,966
940
504
66,943
12,481
30,577
37,954
—
(7,287)
—
—
150
—
(215,336)
(856)
—
—
36
—
—
(4,308)
(12,140)
—
39
(335)
—
(6,530)
—
(169)
—
—
(7,137)
(216,156)
(16,744)
(6,699)
—
—
(3,291)
(10,544)
(19)
(3,525)
—
—
—
3,402
(960)
(23,057)
215,336
190,000
(490)
(40,052)
(7,161)
3,525
(165,000)
—
—
22
—
(3,739)
—
8,500
(2,354)
(1,203)
(360)
14,500
—
(4,895)
4,792
—
(1,651)
(23,127)
—
200
(3,364)
(2,305)
—
—
—
—
—
25
(1,414)
(27,105)
(37,994)
192,441
(5,798)
(33,963)
21,812
(11,234)
8,035
(2,708)
9,455
20,689
12,986
15,694
Cash and cash equivalents, end of period
$
31,267
9,455
21,021
12,986
Supplemental cash flow information:
Net cash paid for income taxes
Cash paid for interest
$
1,826
7,638
285
2,021
1,194
2,056
712
2,460
Noncash investing activities:
Rollover equity investment by MMC
Interim financing in connection with the Acquisition
$
—
—
78,750
165,000
—
—
—
—
$
—
—
—
—
—
—
44,143
(5,396)
(38,747)
—
—
—
$
—
—
—
—
—
—
(1,531)
483
1,500
—
—
—
NY/NJ acquisition and consolidation of MMC Melville:
Fair value of assets contributed
Liabilities assumed
Equity contribution of net assets
Sale of subsidiary:
Assets sold in sale
Liabilities forgiven
Issuance of note receivable
See accompanying notes to consolidated financial statements.
6
PLANET FITNESS HOLDINGS, LLC
Consolidated Statements of Changes in Equity
(Amounts in thousands)
Members’
equity (deficit)
Predecessor
Noncontrolling
interests in
variable
interest
entities
Total equity
Balance at December 31, 2010
Net income
Contributions
Distributions
$
(6,308)
26,938
—
(27,105)
7,275
2,350
25
(1,414)
967
29,288
25
(28,519)
Balance at December 31, 2011
$
(6,475)
8,236
1,761
22,231
4,792
38,747
(5,287)
(118)
(23,127)
1,015
—
275
392
118
(1,651)
23,246
4,792
39,022
(4,895)
—
(24,778)
$
30,763
8,385
39,148
$
314,250
2,122
609
—
(3,739)
—
32
3,343
22
—
314,250
2,154
3,952
22
(3,739)
Balance at December 31, 2012
313,242
3,397
316,639
Net income
Other comprehensive income
Contributions
Distributions
25,438
92
—
(23,057)
361
—
3,402
(960)
25,799
92
3,402
(24,017)
315,715
6,200
321,915
Net income
Contributions
NY/NJ Transaction
Acquisition of PFPA
Acquisition of Colorado
Distributions
Balance at November 7, 2012
Successor
Successor capital contribution
Net income
Noncontrolling interests and eliminations
Contributions
Distributions
Balance at December 31, 2013
$
See accompanying notes to consolidated financial statements.
7
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(1)
Business Organization
Planet Fitness Holdings, LLC (Holdings) is a New Hampshire limited liability company that was
established on March 1, 2008 to serve as the reporting entity for three distinct lines of businesses serving
its customers through the following wholly owned subsidiaries:
#
The PLA-FIT Franchise Group (Franchise Group) consists of PLA-FIT Franchise, LLC (PLA-FIT
Franchise) and Planet Fitness Intellectual Property, LLC (PFIP). The Franchise Group was
established to license and sell franchises under the Planet Fitness trade name.
#
Pla-Fit Health, LLC and its subsidiaries (Pla-Fit Health) are principally organized to own and
operate health clubs under the Planet Fitness trade name.
#
Planet Fitness Equipment, LLC (Planet Fitness Equipment) sells and assembles fitness-related
equipment to franchisees and clubs owned by Pla-Fit Health.
The Planet Fitness brand was established in 1992 as a health and fitness club chain. Planet Fitness owned
and franchised health clubs now operate across the United States of America and Puerto Rico as a value
health club chain, offering various low cost memberships and benefits to attract members.
Prior to November 7, 2012, Holdings was wholly owned by three individuals (Michael Grondahl, Marc
Grondahl, and Christopher Rondeau, collectively known as MMC). On November 7, 2012, MMC
contributed their ownership interests in Holdings to a newly formed entity, Pla-Fit Holdings LLC (Topco)
and on November 8, 2012 Topco was acquired as part of a transaction between MMC and TSG PF
Investment LLC (TSG), for consideration totaling $479,250 (the Acquisition) (see note 3).
The Acquisition was accounted for using the purchase method of accounting which resulted in a new basis
for the assets acquired and liabilities assumed. Accordingly, although the Company continues with the
same core operations after the Acquisition, the accompanying consolidated financial statements reflect the
CompanyDs historical accounting basis for the periods prior to the Acquisition (the Predecessor) and the
new accounting basis for the period following the Acquisition (the Successor). Certain amounts as of and
for the period ending December 31, 2012 have been revised to reflect the finalization of purchase
accounting related to the Acquisition during 2013. See note 3 for further information.
(2)
Summary of Significant Accounting Policies
(a)
Basis of Presentation and Consolidation
The accompanying consolidated financial statements include the accounts of Holdings and
subsidiaries (the Company) and have been prepared in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP). All significant intercompany
balances and transactions have been eliminated in consolidation.
The Company also consolidates entities in which it has a controlling financial interest, the usual
condition of which is ownership of a majority voting interest. The Company also considers for
consolidation certain interests where the controlling financial interest may be achieved through
arrangements that do not involve voting interests. Such an entity, known as a variable interest entity
8
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(VIE), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is
considered to possess the power to direct the activities of the VIE that most significantly impacts its
economic performance and has the obligation to absorb losses or the rights to receive benefits from
the VIE that are significant to it. The principal entities in which the Company possesses a variable
interest include franchise entities and certain other entities. The Company is not deemed to be the
primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not
consolidated.
During 2012, certain changes occurred, including the Acquisition, which impacted the consolidation
status of certain VIEs. As such, the results of the Successor have been consolidated with Matthew
Michael Realty LLC (MMR) and PF Melville LLC (PF Melville) based on the determination that the
Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding
companies that derive a majority of their financial support from the Company.
The results of the Predecessor for all or a portion of the periods presented have been consolidated
with the following VIEs in which Holdings or one of its subsidiaries has been determined to be the
primary beneficiary (see note 4):
#
304 Maplewood, LLC (304 Maplewood); MMC Fox Run, LLC (MMC Fox Run); MMCT
Realty, LLC (MMCT); MMR, MMC Crosby Road LLC (MMC Crosby Road); and PF
Melville (collectively, the Real Estate Entities). These are all real estate holding companies
that previously had common ownership with the Company and derived a majority of their
financial support from the Company (see note 4).
#
PF-CT, LLC (PF-CT), PFPA, LLC (PFPA), Fitness 41, LLC (Planet Fitness OK), and Pla-Fit
Colorado, LLC (Colorado) operate Planet Fitness franchises in certain parts of Connecticut,
Pennsylvania, Oklahoma, and Colorado, respectively. The aforementioned entities previously
had common ownership with the Company and received financial support from the Company
in the form of guarantees and advances. PF-CT was sold on December 31, 2011 (see note 4).
The Company acquired the remaining ownership interest in PFPA on February 1, 2012 and
Colorado on September 30, 2012 (see note 5).
#
Planet Development, LLC (Development) provides various construction and maintenance
services to Pla-Fit Health. Development has common ownership with and derives a majority
of its financial support from the Company. As of December 31, 2011, and for all subsequent
periods presented, Development was dormant.
With the exception of the change in basis, the accounting principles utilized are the same for the
Predecessor and the Successor.
(b)
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Although these estimates are based on managementDs
knowledge of current events and actions it may undertake in the future, they may ultimately differ
9
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
from actual results. Significant areas where estimates and judgments are relied upon by management
in the preparation of the consolidated financial statements include revenue recognition, consolidation
of VIEs, valuation of assets and liabilities in connection with acquisitions, valuation of share based
compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets,
including intangible assets.
(c)
Concentration of Credit Risk
Cash and cash equivalents are financial instruments, which potentially subject the Company to a
concentration of credit risk. The Company invests its excess cash in several major financial
institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.
The Company maintains balances in excess of these limits, but does not believe that such deposits
with its banks are subject to any unusual risk.
The credit risk associated with trade receivables is mitigated due to the large number of customers
and their broad dispersion over many different geographic areas.
(d)
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of 90 days
or less to be cash equivalents. Cash held within the National Advertising Fund, LLC (NAF) is
recorded as a restricted asset (see note 6).
(e)
Revenue Recognition
Membership Fees
The following revenues are generated from health clubs owned and operated by the Company and its
consolidated VIEs.
Membership Fee Revenue
Customers are offered multiple membership choices varying in length and in most cases can be
canceled without penalty. Membership fees are earned and recognized over the membership term.
Enrollment Fee Revenue
Enrollment fees are charged to new members at the commencement of their membership. The
Company recognizes enrollment fees ratably over the estimated average membership life, which is
generally two years.
Annual Membership Fee Revenue
Annual Membership fees are annual fees charged to members in addition to and in order to maintain
low monthly membership fees. The Company recognizes annual membership fees ratably over the
12-month membership period.
10
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
Retail Sales
The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The
revenue for these items is recognized at the point of sale.
Equipment and Assembly
Equipment Revenue
The Company sells and delivers equipment purchased from third-party equipment manufacturers to
franchised health clubs. Equipment revenue is recognized upon the equipment being delivered to and
assembled at each club. The Company recognizes revenue on a gross basis in these transactions as
Planet Fitness Equipment bears the risk of loss of the equipment and management has determined the
Company to be the principal in the transaction. Customer equipment deposits are recognized as a
liability on the accompanying consolidated balance sheets until delivery, assembly, if required, and
acceptance by the customer. As of December 31, 2013 and 2012, deferred equipment deposits were
$2,647 and $4,450, respectively.
Freight and Assembly Revenue
The Company is responsible for delivery and assembly of the purchased equipment to its franchised
health clubs based on an approved equipment layout plan. Planet Fitness Equipment performs a
majority of the equipment assembly. Freight and assembly revenues are recognized upon completion
and acceptance of the assembly services at the franchise location. The Company charges its
customers for all freight costs incurred for the delivery of equipment. Freight revenue is recorded
within equipment and assembly revenue and freight costs are recorded within cost of revenue.
Franchise Revenue
Area Development Fees
Developers contractually enter into Area Development Agreements (ADAs) to secure the exclusive
right to open franchises within a defined geographical area. ADAs establish the timing and number
of clubs to be developed within the defined geographical area. Pursuant to an ADA, a franchisee is
generally required to pay an initial nonrefundable development fee for a minimum number of clubs
to be developed, as outlined in the respective ADA. ADA fees collected in advance are deferred until
the Company provides substantially all required obligations pursuant to the ADA. As the efforts and
total cost relating to initial services are affected significantly by the number of clubs opened in an
area, the respective ADA is treated as a divisible contract. As each new site is accepted under an
ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As
each club opened under an ADA typically has performance obligations associated with it, the
Company recognizes ADA revenue as each individual franchise location is developed in proportion
to the total number of clubs to be developed under the ADA. These obligations are typically
completed once the club is opened or the franchisee executes the individual property lease. As of
December 31, 2013 and 2012, the deferred revenue for ADAs was $7,867 and $6,629, respectively.
ADAs generally have an initial term equal to the number of years over which the franchisee is
required to open franchise clubs, which is typically 5 to 10 years. There is no right of return for an
11
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights
pursuant to an ADA, and all remaining deferred revenue is recognized at that time.
Franchise Fees and Performance Fees
For clubs opened without an ADA, the Company generally charges an initial upfront nonrefundable
franchise fee. Nonrefundable franchise fees are typically deferred until the franchisee executes a
lease and receives initial training for the location, which is the point at which the Company has
determined it has provided all of its material obligations required to recognize revenue. As of
December 31, 2013 and 2012, the Company has recorded deferred franchise fees of $206 and $119,
respectively, relating to clubs to be opened in future years. These amounts are included in deferred
revenue as of December 31, 2013 and 2012.
The individual franchise agreements typically have a 10-year initial term, but provide the franchisee
with an opportunity to enter into successive renewals subject to certain conditions.
Franchise agreements entered into prior to 2010 may include performance fees, which are fees
earned by the Company upon each franchise club reaching a predetermined amount of total monthly
membership billings. Performance fees are recognized when the related performance thresholds have
been met.
Royalties
Royalties, which represent recurring fees paid by franchisees based on the franchise clubsD monthly
membership billings, are recognized on a monthly basis over the term of the franchise agreement. As
specified under certain franchise agreements, the Company recognizes additional royalty fees as the
franchise clubs attain contractual monthly membership billing threshold amounts. Beginning in
2010, for all new franchise agreements entered into, the Company began charging a fixed royalty
percentage based upon gross membership billings.
Commissions
The Company recognizes commission revenue from its franchiseesD use of preferred vendor
arrangements. Commissions are earned and recognized when collectibility from the vendor is
reasonably assured. Commissions and rebates from equipment vendors where the Company has
recognized the related equipment revenue and costs are recorded as a reduction to the cost of
equipment and assembly revenues. Commission revenue from non@equipment vendors was
previously classified within equipment and assembly revenues. Such amounts have been reclassified
to franchise revenues in the consolidated statements of operations for all periods presented.
(f)
Deferred Revenue
Deferred revenue represents cash received from franchisees for ADAs and franchise fees for which
revenue recognition criteria has not yet been met and cash received from members for enrollment
membership, and annual membership fees for the portion not yet earned based on the membership
period.
12
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
ASC Topic 805, Business Combinations, required the Successor to recognize a liability related to
deferred revenue previously recorded by the Predecessor at its fair value on the acquisition date
rather than its historical book value. As such, the Successor did not record $8,038 of deferred
revenues that had been recorded by the Predecessor as of November 7, 2012. The $8,038 reduced the
value of goodwill as of November 8, 2012 and will not be recorded in future earnings.
(g)
Cost of Revenue
Cost of revenue consists of the cost of retail merchandise sold in company owned clubs, direct costs
associated with equipment and assembly sales, including freight costs, and direct costs related to the
&647)5?D9 .8)5+019- *13315/ )5, 67erating system.
(h)
Accounts and Notes Receivable
Accounts receivable is primarily comprised of amounts owed to the Company resulting from
equipment and assembly revenue and commissions revenue. Notes receivable arise primarily from
financing activities with franchisees. On a periodic basis, and at least annually, the Company
evaluates its accounts and notes receivables and may establish an allowance for doubtful accounts
based on collections and current credit conditions. Accounts are written off as uncollectible when it
is determined that further collection efforts will be unsuccessful. Notes receivable are generally
secured by all property, assets, and rights owned by the franchisee. Historically, the Company has
not had a significant amount of write-offs.
(i)
Leases and Asset Retirement Obligations
The Company recognizes rent expense related to leased office and operating space on a straight-line
basis over the term of the lease. The difference between rent expense and rent paid, if any, is the
result of escalation provisions and lease incentives, such as tenant improvements provided by lessors
and are recorded as deferred rent in the CompanyDs consolidated balance sheets.
In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company
establishes assets and liabilities for the present value of estimated future costs to return certain leased
facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease
period into operating expense, and the recorded liabilities are accreted to the future value of the
estimated restoration costs.
13
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(j)
Property and Equipment
Property and equipment is recorded at cost and depreciated using the straight-line method over its
related estimated useful life. Leasehold improvements are amortized over the shorter of the lease
term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement,
the asset cost and related accumulated depreciation are removed from the respective accounts, and
any related gain or loss is reflected in the consolidated statements of operations. Ordinary
maintenance and repair costs are expensed as incurred. In connection with the Acquisition, the
Company determined that the historical depreciated cost of its fixed assets approximated their fair
value. The estimated useful lives of the CompanyDs fixed assets by class of asset are as follows:
Years
Buildings and building improvements
Computers and equipment
Furniture and fixtures
Leasehold improvements
Fitness equipment
Vehicles
(k)
20 @ 40
3
5
Useful life or term of
lease whichever
is shorter
5@7
5
Advertising Expenses
The Company expenses advertising costs as incurred. Advertising expenses, net of amounts
reimbursed by franchisees, were $5,731, $481, $4,708 and $4,795 during the year ended
December 31, 2013 (Successor), and the period from November 8 through December 31, 2012
(Successor), the period from January 1 through November 7, 2012 (Predecessor), and the year ended
December 31, 2011 (Predecessor), respectively. See note 6 for discussion of the national advertising
fund established during 2011.
(l)
Goodwill, Long-Lived Assets, and Other Intangible Assets
Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with
ASC Topic 350, Intangibles ' Goodwill and Other. In accordance with this guidance, specifically
identified intangible assets must be recorded as a separate asset from goodwill if either of the
following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal
rights; and (2) the intangible asset is separable. Goodwill is the excess of the purchase price over the
estimated fair value of identifiable net assets acquired in a business combination.
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for
impairment or more frequently if impairment indicators arise. Separable intangible assets that are not
deemed to have an indefinite life are amortized over their estimated useful lives on either a
straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when
events or circumstances suggest that the assets may not be recoverable. The Company performs its
annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each
14
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
year. For goodwill, the first step of the impairment test is to determine whether the carrying amount
of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting
unit exceeds the reporting unitDs fair value, the Company would be required to perform a second step
of the impairment test as this is an indication that the reporting unitDs goodwill may be impaired. The
second step compares the implied fair value of the reporting unitDs goodwill with the carrying
amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess
of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is
also permitted to make a qualitative assessment of whether it is more likely than not that a reporting
unitDs fair value is less than its carrying amount before applying the two-step goodwill impairment
test. If an entity concludes it is not more likely than not that the fair value of a reporting unit is less
than its carrying amount, it need not perform the two-step impairment test. For indefinite lived
intangible assets, the impairment assessment consists of comparing the carrying value of the asset to
its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an
impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted
to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible
assetDs fair value is less than its carrying value prior to applying the quantitative assessment. If based
on the CompanyDs qualitative assessment it is not more likely than not that the carrying value of the
asset is less than its fair value, then a quantitative assessment is not required.
The Company determined that no impairment charges were required during any periods presented.
The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which
requires that long-lived assets and certain identifiable intangible assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment,
then assets are required to be grouped and evaluated at the lowest level for which there are
identifiable cash flows that are largely independent of the cash flows of other groups of assets.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of
an asset or asset group to the undiscounted future net cash flows expected to be generated by the
asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less
costs to sell. There were no events or changes in circumstances that required the Company to test for
impairment during any of the periods presented.
(m)
Income Taxes
Holdings and its wholly owned subsidiaries were formed as limited liability companies (LLCs) and
have elected to be taxed as partnerships for both federal and state purposes (pass-through entities).
For federal and certain state income tax purposes, the members of the Company include the net
income or loss from the pass-through entities in their individual income tax returns. Additionally,
other VIEs were formed as LLCs in their state of origin and have also elected to be taxed as
pass-through entities.
15
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
The Company accounts for income taxes using the asset and liability method. Deferred income taxes
are recognized for the expected future tax consequences attributable to temporary difference between
the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred
tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in
which temporary differences are expected to be recovered or settled. The principal items giving rise
to temporary differences are the use of accelerated depreciation and certain basis differences
resulting from acquisitions including the Acquisition by TSG. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be realized. The Company
does incur state income taxes in certain states, principally New Hampshire.
The Company recognizes the effect of income tax positions only if those positions are more likely
than not of being sustained. Recognized income tax positions are measured at the largest amount that
is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in
the period in which the change in judgment occurs (see note 14).
During 2013 the Company changed its position with respect to taxes due on interest and dividends to
the state of New Hampshire that had previously been paid by the members of the Predecessor. This
resulted in the Company making tax payments in 2013 totaling $4,392 for periods prior to
November 7, 2012. This amount is included within other income (expense) for the year ended
December 31, 2013 for the Successor and is fully offset by amounts received from the members of
the Predecessor as reimbursement for the taxes paid, also recorded within other income (expense) for
the year ended December 31, 2013 for the Successor. This position is not available for periods
subsequent to November 7, 2012 and therefore taxes on interest and dividends due and payable in the
Successor periods are paid by the members of the Successor.
(n)
Fair Value Measurements
Certain assets and liabilities recorded at fair value are categorized based on the inputs to the
valuation techniques as follows:
Level 1 @ Assets and liabilities whose values are based on unadjusted quoted prices for identical
assets or liabilities in an active market that the Company has the ability to access at the measurement
date.
Level 2 @ Assets and liabilities whose values are based on quoted prices in markets where trading
occurs infrequently or whose values are based on quoted prices of instruments with similar attributes
in active markets. Level 2 inputs include the following:
#
Quoted prices for identical or similar assets or liabilities in nonactive markets;
#
Inputs other than quoted prices that are observable for substantially the full term of the asset or
liability; and
#
Inputs that are derived principally from or corroborated by observable market data for
substantially the full term of the asset or liability.
16
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
Level 3 @ Assets and liabilities whose values are based on prices or valuation techniques that require
inputs that are both unobservable and significant to the overall fair value measurement. These inputs
reflect managementDs own assumptions about the assumptions a market participant would use in
pricing the asset or liability.
The CompanyDs interest rate swap is the only asset or liability in the consolidated balance sheet
measured at fair value as of December 31, 2013. See note 11 for further discussion. The Company
did not have any assets or liabilities measured at fair value in the consolidated balance sheet as of
December 31, 2012.
Assets and liabilities that are measured at fair value on a nonrecurring basis primarily include assets
acquired and liabilities assumed in business combination transactions and assets and liabilities
measured in the course of assessing goodwill and other long-lived assets for impairment. The fair
values used in these nonrecurring measurements are generally Level 3 measurements.
(o)
Financial Instruments
The carrying values of cash and cash equivalents, accounts receivable and accounts payable
approximate fair value because of the short-term nature of these instruments. The carrying value of
debt also approximates fair value as it is variable rate debt. The Company has determined that the
determination of the fair value of amounts due from related parties under long-term arrangements is
impracticable given the related-party nature of these arrangements. The carrying value of notes
receivable approximates fair value based on similar interest rates charged for these arrangements in
recent transactions.
(p)
Derivative Instruments and Hedging Activities
The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet
at their respective fair values. For derivatives designated in hedging relationships, changes in the fair
value are either offset through earnings against the change in fair value of the hedged item
attributable to the risk being hedged or recognized in accumulated other comprehensive income, to
the extent the derivative is effective at offsetting the changes in cash flows being hedged until the
hedged item affects earnings.
The Company only enters into derivative contracts that it intends to designate as a hedge of a
forecasted transaction or the variability of cash flows to be received or paid related to a recognized
asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents
the hedging relationship and its risk-management objective and strategy for undertaking the hedge,
the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging
instrumentDs effectiveness in offsetting the hedged risk will be assessed prospectively and
retrospectively, and a description of the method used to measure ineffectiveness. The Company also
formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether
the derivatives that are used in hedging relationships are highly effective in offsetting changes in
cash flows of hedged transactions. For derivative instruments that are designated and qualify as part
of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is
reported as a component of other comprehensive income and reclassified into earnings in the same
17
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
period or periods during which the hedged transaction affects earnings. Gains and losses on the
derivative representing either hedge ineffectiveness or hedge components excluded from the
assessment of effectiveness are recognized in current earnings.
The Company discontinues hedge accounting prospectively when it determines that the derivative is
no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is
sold, terminated, or exercised, the cash flow hedge is de-designated because a forecasted transaction
is not probable of occurring, or management determines to remove the designation of the cash flow
hedge.
In all situations in which hedge accounting is discontinued and the derivative remains outstanding,
the Company continues to carry the derivative at its fair value on the balance sheet and recognizes
any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction
will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings
gains and losses that were accumulated in other comprehensive income related to the hedging
relationship.
See note 11 to the consolidated financial statements.
(q)
Share-Based Compensation
The Company operates an equity-settled share-based compensation plan under which it receives
services from employees as consideration for equity instruments of Topco. The compensation
expense is determined based on the fair value of the award as of the grant date. Compensation
expense is recognized over the vesting period, which is the period over which all of the specified
vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is
recognized over its respective vesting period. No compensation expense has been recognized related
;6 ;0- &647)5?D9 90)8--based compensation plan as the exercisability is contingent upon a liquidity
event occurring. See note 16 for further information.
(r)
Guarantees
The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the
fair value of the obligation undertaken in issuing the guarantee. See note 17 for discussion of such
obligations guaranteed.
(3)
Acquisition
On November 8, 2012, Topco was acquired in a transaction with TSG for $479,250. The consideration
consisted of equity contributions totaling $314,250, including a rollover investment of $78,750 by MMC
and $165,000 of interim notes payable from TSG to MMC. The interim notes payable were repaid in
connection with the financing agreements entered into in December 2012 by the Successor (see note 10).
18
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
The following table summarizes the consideration and the fair values of the assets acquired and liabilities
assumed at the acquisition date based on the final valuation and purchase price allocation:
Total consideration transferred, net of cash acquired
Recognized amounts of identifiable assets acquired and liabilities assumed
at their fair values:
Accounts receivable
Property, plant and equipment
Other assets
Identifiable intangible assets
Accounts payable, accrued expenses and other liabilities assumed
Deferred revenues
Deferred income taxes
$
459,086
$
7,364
28,461
17,669
332,335
(68,265)
(13,751)
(1,937)
Total net assets acquired
301,876
Goodwill
157,210
Total
$
459,086
During 2013 the Company finalized its valuation of the assets acquired and liabilities assumed in
connection with the Acquisition. This resulted in a decrease to recorded intangible assets of $14,100, a
decrease to deferred tax liabilities of $483, an increase to accrued expenses of $270 and an increase to
goodwill of $13,887 as of November 8, 2012 and increases in amortization expense of $1,308, club
operations of $6 and a decrease in the provision for state income taxes of $16 for the period from
November 8, 2012 to December 31, 2012. These adjustments resulting from finalizing the valuation have
been reflected retrospectively as of December 31, 2012 and for period from November 8, 2012 through
December 31, 2012 in the accompanying consolidated financial statements.
The purchase price allocation to the identifiable intangible assets acquired is as follows:
Weighted
average
useful life
(in years)
Trade and brand names
Customer relationships
Noncompete agreements
Favorable leases
Order backlog
Indefinite
11
5
9
A
19
Fair
value
$
146,300
165,900
14,500
2,235
3,400
$
332,335
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
These acquired intangible assets are being amortized primarily on a straight-line basis, over their estimated
useful lives by the Successor. Order backlog is being amortized over the period in which the orders are
being fulfilled.
The estimated fair values of the intangible assets acquired were determined using the income approach
based on significant inputs that are not observable. The Company considers the fair value of each of the
acquired intangible assets to be Level 3 assets due to the significant estimates and assumptions used by
management in establishing the estimated fair values.
In connection with the Acquisition, the Predecessor incurred $6,638 of expenses that are included in the
consolidated statement of operations for the period ended November 7, 2012, of which $4,792 was funded
by equity contributions by MMC.
(4)
Variable Interest Entities
The Company classifies income attributable to noncontrolling interests as part of consolidated net income
and includes the accumulated amount of noncontrolling interests as a component of equity. Net income,
excluding the amount allocable to noncontrolling interests, is presented as BNet income attributable to the
members of Planet Fitness, LLC.C The presentation of changes in equity distinguishes between equity
amounts attributable to members and amounts attributable to the noncontrolling interests. Distributions to
noncontrolling interests are classified as financing cash flows. In addition, increases and decreases in the
CompanyDs controlling financial interests are reported within equity as long as such changes do not result
in a loss of control. If a change occurs that results in loss of control and deconsolidation, any retained
ownership interests are remeasured at fair value with the gain or loss reported in net income.
The carrying values of VIEs included in the consolidated financial statements as of December 31 are as
follows:
2013
Assets
Liabilities
(Successor)
PF Melville
MMR
Total
2012
Assets
Liabilities
(Successor)
$
3,446
2,754
A
A
3,698
3,169
3,455
15
$
6,200
A
6,867
3,470
In August 2012, MMC became the sole members of PF Melville and management determined that the
Company was the primary beneficiary of this VIE. Therefore, Holdings began consolidating PF Melville in
August 2012. During 2013 the ownership of this entity changed; however, this did not impact the
determination that the Company continues to be the primary beneficiary of this VIE.
During 2013, the ownership of MMR changed; however, the Company continues to be the primary
beneficiary of this VIE, therefore MMR remains a consolidated VIE.
20
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
The Acquisition and certain other transactions resulted in the deconsolidation of MMCT, 304 Maplewood,
MMC Fox Run, and MMC Crosby during 2012.
On September 30, 2012, the Company acquired the remaining interest in Colorado from the individual
members for one dollar (see note 5). This resulted in Colorado becoming a wholly owned subsidiary of
Holdings rather than a consolidated VIE.
On February 1, 2012, the Company purchased 100% interest in PFPA and an affiliated entity, which were
formerly 51% owned by the members of the Predecessor (see note 5). This resulted in PFPA becoming a
wholly owned subsidiary of Holdings rather than a consolidated VIE.
On December 31, 2011, the operations of Development were discontinued. During 2012, the remaining net
assets of Development were distributed to the individual members of the Predecessor, and the Company
recognized a $702 gain on the dissolution.
On September 30, 2012, one of the individual members of the Predecessor sold their interest in Planet
Fitness OK and the Company recognized a $767 gain on the sale. As a result of this transaction, Planet
Fitness OK is no longer a consolidated VIE.
The Company also has variable interests in other franchisees mainly through the guarantee of certain debt
and lease agreements as well as financing provided by the Company as well as by certain related parties;
however, the Company has determined it is not the primary beneficiary of these franchisees based on the
criteria described in note 2(a). The CompanyDs maximum obligation, as a result of its guarantees of leases
and debt, is approximately $3,902 as of December 31, 2013.
The amount of maximum obligation represents a loss that the Company could incur from the variability in
credit exposure without consideration of possible recoveries through insurance or other means. In addition,
the amount bears no relation to the ultimate settlement anticipated to be incurred from the CompanyDs
involvement with these entities, which is estimated at $0.
(5)
Business Acquisitions, Dispositions, and Noncontrolling Interests
On February 1, 2012, the Company purchased 100% interest in PFPA and an affiliated entity, which were
formerly 51% owned by the members of the Predecessor. The combined purchase included 11 fitness clubs
in Pennsylvania for an additional investment of approximately $5,000. The Company financed the
purchase through its revolving credit facility. In accordance with ASC Topic 810, Consolidation, because
PFPA was already a consolidated VIE, the Company recorded this purchase as an equity transaction,
reducing membersD equity by $5,287 and increasing noncontrolling interest in VIEs by $392.
On June 1, 2012, the Company sold certain assets related to two fitness clubs in Rhode Island to a third
party. In exchange for the assets sold, the Company received a note receivable of $1,500. The note bears
interest at 7% and calls for monthly payments of principal and interest with a lump-sum payment of $1,224
due upon maturity on July 1, 2015. The Company recorded a $452 gain on the sale.
21
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
On August 1, 2012, the Company purchased the assets of a franchise entity, including four fitness clubs in
Delaware and Pennsylvania, for a cash payment of $12,140. The Company financed the purchase through
its revolving credit facility and operating cash. The purchase price was allocated as follows:
Fixed assets
Reacquired franchise rights
Reacquired area development rights
Goodwill
Liabilities assumed, including deferred
revenues
Total
$
2,022
9,629
90
956
(557)
$
12,140
On August 10, 2012, the individual members of the Predecessor liquidated their ownership in a limited
liability company that was established in 2009. In conjunction with the liquidation, the Company forgave
$650 of indebtedness to the franchise entity and the members received and concurrently contributed to the
Company certain assets of the entity, including 10 fitness clubs in New York and New Jersey (the NY/NJ
acquisition). The Company has recorded this equity contribution at the fair value of the net assets
contributed, in accordance with ASC Topic 805, Business Combinations. The fair value of the contribution
was allocated based on a valuation as follows:
Fixed assets
Reacquired franchise rights
Reacquired area development rights
Goodwill
Other assets
Unfavorable leases, net
Forgiveness of note receivable
Deferred tax liabilities
Liabilities assumed
Total
$
5,667
14,900
600
22,488
488
(26)
(650)
(438)
(4,282)
$
38,747
In 2012 the amounts recorded with respect to this transaction were based on a provisional valuation of the
assets and liabilities contributed to the Company by MMC. There were no changes to such amounts based
on finalizing the valuation during 2013.
On September 30, 2012, the Company acquired the remaining interest in Colorado from the individual
members of the Predecessor for one dollar. In accordance with ASC Topic 810, Consolidation, because
Colorado was already a consolidated VIE, the Company recorded this purchase as an equity transfer of
$(118) from noncontrolling interest to membersD equity.
In September 2010, the CompanyDs 51% interest in PF-CT was transferred to the individual members of
the Predecessor, however PF-CT remained a consolidated variable interest entity. On December 31, 2011,
22
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
the individual members of the Predecessor sold their entire interest in PF-CT for one dollar, and the
Company recognized a gain of $234 on the sale and deconsolidation of PF-CT.
In all of the acquisitions above, the estimated fair values of the intangible assets acquired were determined
using the income approach based on significant inputs that are not observable. The Company considers the
fair value of each of the acquired intangible assets to be Level 3 assets due to the significant estimates and
assumptions used by management in establishing the estimated fair values.
(6)
National Advertising Fund
On July 26, 2011, the Company established Planet Fitness NAF, LLC (NAF) for the creation and
development of marketing, advertising, and related programs and materials for all Planet Fitness health
clubs. On behalf of the NAF, the Company collects 2% of gross monthly membership billings from
franchisees, in accordance with the provisions of the franchise agreements. The Company also contributes
2% of monthly membership billings from clubs owned by the Company to the NAF. The use of amounts
received by NAF is restricted to advertising, product development, public relations, merchandising, and
administrative expenses and programs to increase sales and further enhance the public reputation of the
Planet Fitness brand. The Company consolidates and reports all assets and liabilities held by NAF.
Amounts received by NAF are reported as restricted assets and restricted liabilities within current assets
and current liabilities on the consolidated balance sheets. The Company provides administrative services to
NAF and charges NAF a fee for providing those services. These services include accounting services,
information technology, data processing, product development, legal and administrative support, and other
operating expenses, which amounted to $865, $92, $534 and $188 for the year ended December 31, 2013
(Successor), the period from November 8 through December 31, 2012 (Successor), the period from
January 1 through November 7, 2012 (Predecessor), and the year ended December 31, 2011 (Predecessor),
respectively. The fees paid to the Company by NAF are included in the consolidated statements of
operations as a reduction in general and administrative expense, where the expense incurred by the
Company was initially recorded.
(7)
Notes Receivable
The Company has various notes receivable from franchisees to facilitate ongoing business. Notes
receivable consist of unpaid principal and accrued interest. These notes receivable range from $326 to
$2,008 as of December 31, 2013, with maturity dates ranging from October 1, 2014 to February 1, 2018.
The balance consists of the following current and noncurrent portions:
2013
2012
(Successor)
Current portion of notes receivable
Long-term portion of notes receivable
Total notes receivable
23
$
513
3,672
2,387
4,402
$
4,185
6,789
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(8)
Property and Equipment
Property and equipment as of December 31 consists of the following:
2013
2012
(Successor)
Land
Equipment
Leasehold improvements
Buildings and improvements
Vehicles
Other
$
Accumulated depreciation
Total
$
910
13,001
19,001
5,341
141
2,343
910
10,815
14,308
5,431
161
1,991
40,737
33,616
(6,971)
(869)
33,766
32,747
In connection with the Acquisition, the gross value of property and equipment was adjusted to its estimated
fair value and accumulated depreciation was reset to $0.
The Company recorded depreciation expense of $6,171, $869, $4,142, and $4,078 for the year ended
December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the
period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011
(Predecessor), respectively. Refer to note 17 for capital lease commitments.
(9)
Goodwill and Intangible Assets
A summary of goodwill and intangible assets at December 31 is as follows:
2013
2012
(Successor)
Trade and brand names
Customer relationships
Noncompete agreements
Favorable leases
Order backlog
Reacquired franchise rights
$
146,300
165,900
14,500
2,235
3,400
A
146,300
165,900
14,500
2,235
3,400
A
332,335
332,335
(29,007)
(6,124)
$
303,328
326,211
$
157,210
157,210
Less accumulated amortization
Total intangible assets, net
Goodwill
24
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
The changes in the carrying amount of goodwill are as follows:
Balance at December 31, 2011
$
1,396
Acquisition of the Company
$
157,210
Balance at December 31, 2012
Changes to Goodwill
$
157,210
A
Balance at December 31, 2013
$
157,210
Amortization expense related to the intangible assets totaled $22,883 for the year ended December 31,
2013 (Successor), $6,124 for the period from November 8, 2012 to December 31, 2012 (Successor),
$1,499 for the period from January 1, 2012 to November 7, 2012 (Predecessor) and $158 for the year
ended December 31, 2011 (Predecessor). Included within these total amortization expense amounts is $246
and $34 related to amortization of favorable leases for the year ended December 31, 2013 and the period
from November 8, 2012 to December 31, 2012, respectively. Amortization of favorable leases is recorded
within club operations in the consolidated statements of operations. The anticipated annual amortization
expense to be recognized in future years as of December 31, 2013 is as follows:
2014
2015
2016
2017
2018
Thereafter
Total
25
$
19,916
18,176
17,116
15,975
12,626
73,219
$
157,028
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(10) Long-Term Debt
2013
2012
(Successor)
Holdings:
Term loan (JP Morgan) requires quarterly installments
plus interest through the term of the loan, maturing
December 14, 2017. Outstanding borrowings bear
interest at LIBOR or base rate (as defined) plus a
margin at the election of the borrower (3.44%
at December 31, 2013)
Revolving credit line (JP Morgan), requires interest only
payments through the term of the loan, maturing
December 14, 2017. Outstanding borrowings bear
interest at LIBOR or base rate (as defined) plus a
margin at the election of the borrower
(2.42% at December 31, 2013)
$
PF Melville:
Mortgage note payable to two individuals, requires monthly
installments of principal and interest, bearing interest
at 7%, and scheduled to mature on June 1, 2018
Note repaid on April 1, 2013
Current portion of long-term debt and line of credit
Long-term debt, net of current portion
$
182,875
190,000
A
3,525
A
3,419
182,875
196,944
9,500
13,131
173,375
183,813
On December 12, 2012, Holdings entered into a five-year $230,000 credit facility with a consortium of
banks led by J.P. Morgan Chase Bank (JP Morgan) to refinance existing indebtedness, as well as to
provide for working capital, capital expenditures, loans to franchisees, acquisitions, and general corporate
purposes. The facility consists of a $190,000 Term Loan and $40,000 Revolving Credit Facility. The Term
Loan calls for quarterly principal installment payments of $2,375 in 2014, $3,563 in 2015 and 2016, and
$4,750 in 2017. Capitalized debt issuance costs associated with the financing totaled $7,161 and are
reflected in other long-term assets in the SuccessorDs consolidated balance sheet, net of accumulated
amortization of $1,657 as of December 31, 2013.
In conjunction with the Acquisition, TSG issued notes payable to MMC totaling $165,000. These notes
bore interest at 10% annually and were scheduled to mature on November 7, 2013. These interim notes
payable were repaid in full and terminated in connection with executing the JP Morgan Credit Facility.
On September 24, 2010, Holdings entered into a three-year $40,000 senior secured credit facility with
General Electric Capital Corporation (GE) to refinance existing indebtedness, as well as to provide for
working capital, capital expenditures, loans to franchisees, acquisitions, and general corporate purposes.
26
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
The facility consisted of a $20,000 Term Loan and $20,000 Revolving Credit Facility. In September 2012,
the GE credit facility was amended, increasing the Term Loan to $40,000 and maintaining the Revolving
Credit Facility at $20,000. The amended terms called for quarterly principal payments of $1,000 and a
maturity date of September 21, 2016. The GE credit facility was repaid in full and terminated upon the
commencement of the JP Morgan credit facility in December 2012.
The CompanyDs five-year $230,000 credit facility requires the Company to meet certain financial
covenants, which the Company was in compliance with as of December 31, 2013. The facility is secured
by all of the CompanyDs assets, excluding the assets attributable to the VIEs (see note 4).
Future annual principal payments of long-term debt as of December 31, 2013 are as follows:
2014
2015
2016
2017
Total
$
9,500
11,875
14,250
147,250
$
182,875
(11) Derivative Instruments and Hedging Activities
During 2013 the Company entered into interest-rate-related derivative instruments to manage its exposure
related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into
derivative instruments for any purpose other than cash flow hedging. The Company does not speculate
using derivative instruments.
By using derivative financial instruments to hedge exposures to changes in interest rates, the Company
exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under
the terms of the derivative contract. When the fair value of a derivative contract is an asset, the
counterparty owes the Company, which creates credit risk for the Company. When the fair value of a
derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not
exposed to the counterpartyDs credit risk in those circumstances. The Company minimizes counterparty
credit risk in derivative instruments by entering into transactions with high-quality counterparties whose
credit rating is higher than A1/A+ at the inception of the derivative transaction. The derivative instruments
entered into by the Company do not contain credit-risk-related contingent features.
Market risk is the adverse effect on the value of a derivative instrument that results from a change in
interest rates. The market risk associated with interest-rate contracts is managed by establishing and
monitoring parameters that limit the types and degree of market risk that may be undertaken.
The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate
exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities.
The Company monitors interest rate risk attributable to both the CompanyDs outstanding or forecasted debt
obligations as well as the CompanyDs offsetting hedge positions.
27
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
A component of the interest due on the CompanyDs long-term debt is based on the variable London
Interbank Offered Rate (LIBOR). The debt obligations expose the Company to variability in interest
payments due to changes in interest rates. Management believes that it is prudent to limit the variability of
a portion of its interest payments. To meet this objective, management entered into LIBOR based interest
rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark
interest rate of LIBOR. These swaps change the variable-rate cash flow exposure on a portion of its debt
obligations to fixed-rate cash flows. Under the terms of the interest rate swaps, the Company receives
LIBOR based variable interest rate payments and makes fixed interest rate payments, thereby creating the
equivalent of fixed-rate debt for the notional amount of its debt hedged. As of December 31, 2013 and
2012, the total notional amount of the CompanyDs outstanding interest-rate swap agreements that were
entered into to hedge outstanding or forecasted debt obligations were $90,630 and $0, respectively.
Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the
variability of cash flows associated with variable-rate, long-term debt obligations are reported in
accumulated other comprehensive income. These amounts subsequently are reclassified into interest
expense as a yield adjustment of the hedged interest payments in the same period in which the related
interest affects earnings.
There were no derivative instruments in place prior to 2013.
The Company has recorded deferred gains of $92 within other current assets related to its interest rate
swaps with a corresponding amount included within accumulated other comprehensive income as of
December 31, 2013. This amount has been measured at fair value and is considered to be a Level 2 fair
value measurement.
As of December 31, 2013, $92 of deferred gains on derivative instruments included in accumulated in
other comprehensive income are expected to be reclassified to earnings during the next 12 months.
Transactions and events expected to occur over the next twelve months that will necessitate reclassifying
these derivativesD gains to earnings include the re-pricing of variable-rate debt. There were no cash flow
hedges discontinued during 2013 or 2012.
28
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(12) Deferred Revenue
The summary set forth below represents the balances in deferred revenue as of December 31:
2013
2012
(Successor)
Prepaid membership fees
Enrollment fees
Annual membership fees
Area development and franchise fees
$
Long-term portion of deferred revenue
Current portion of deferred revenue
$
4,693
1,603
4,268
8,073
4,084
243
4,163
6,748
18,637
15,238
7,193
5,724
11,444
9,514
Equipment deposits received in advance of assembly and customer acceptance as of December 31, 2013
and 2012 were $2,647 and $4,450, respectively.
(13) Related-Party Transactions
The members of the Predecessor had an ownership interest in a limited liability company that was
established in 2009. As described in note 5, the members liquidated their investment in this limited liability
company effective August 10, 2012. Activity with this entity as well as other entities related through
common ownership of Topco is summarized below:
%++6<5;9 8-+-1=)*3- @ 8-3);-, -5;1;1-9
%++6<5;9 8-+-1=)*3- @ 4-4*-89
$
Due from related parties, current portion
Due from related parties, net of current portion
$
2013
(Successor)
2012
(Successor)
4
1,328
10
A
1,332
10
1,332
10
A
A
Amounts due from members as of December 31, 2013 relate to reimbursements for taxes paid by the
Successor for which the members have indemnified the Successor.
29
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
Period from
November 8,
2012 through
December 31,
December 31,
2013
2012
(Successor)
Franchise revenue
Equipment and assembly revenue
Total net revenue
from related parties
Period from
January 1,
2012 through
November 7,
December 31,
2012
2011
(Predecessor)
$
199
855
23
A
1,783
2,988
2,926
9,151
$
1,054
23
4,771
12,077
During the year ended December 31, 2013 (Successor), the period from November 8, 2012 to
December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and
the year ended December 31, 2011 (Predecessor), the Company earned interest income of $0, $0, $326,
and $343, respectively, on notes receivable from related parties. All funds advanced to these entities were
used to assist in financing of the respective operations. In addition, the Company guarantees certain
operating leases and debt agreements of these entities (see note 17).
The Successor paid management fees to TSG totaling $1,136 during the year ended December 31, 2013,
and $147 during the period from November 8, 2012 to December 31, 2012.
(14) Income Taxes
The provision (benefit) for state income taxes consists of the following:
Period from
November 8,
2012 through
December 31,
December 31,
2013
2012
(Successor)
Current
Deferred
Provision for state
income taxes
Period from
January 1,
2012 through
November 7,
December 31,
2012
2011
(Predecessor)
$
2,063
(1,430)
157
(101)
681
(25)
651
96
$
633
56
656
747
Net deferred tax liabilities of $406 and $1,836 as of December 31, 2013 and 2012, respectively, relate
primarily to the tax effects of temporary differences for acquired intangible assets. Net deferred tax assets
as of December 31, 2013 and 2012 are immaterial and included in other assets in the accompanying
consolidated balance sheets.
30
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
As of December 31, 2013 and 2012, the total liability related to uncertain tax positions is $300. The
Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in
income tax expense. Interest and penalties for the year ended December 31, 2013 and periods from
November 8, 2012 to December 31, 2012 and January 1, 2012 to November 7, 2012 and the year ended
December 31, 2011 were not material.
The CompanyDs open years for state income tax examination purposes are 2010 through 2013.
(15) Members' Equity
Each of the CompanyDs limited liability companies (LLCs) operates like a partnership, and therefore,
profits and losses are allocated on a basis defined in the LLC agreement. The LLCs make capital
distributions of cash available on the basis defined in the LLC agreement. Thereafter, distributions are
made according to each partnerDs or memberDs interests in the LLC. As of December 31, 2013, all of the
priority distribution payments, per the agreement of all of the partners of the LLC, have been made.
(16) Share-Based Compensation Plan
In 2013, Topco adopted the 2013 Equity Incentive Plan. Under this Plan, Topco granted awards in the form
of Class M Units to employees and directors of the Company. A maximum of 526.316 Class M Units may
be granted under the Plan and awards are granted on a discretionary basis and are subject to the approval of
(67+6D9 Board of Directors. The Class M Units receive distributions only upon a liquidity event, as
defined, that exceeds a threshold approximately equivalent to the fair value of the Company at the grant
date. Eighty percent of the awards vest over 5 years of continuous service while the other twenty percent
only vest in the event of an initial 7<*31+ 6..-815/ 6. ;0- &647)5?D9 +64465 9;6+2 68 ;0); 6. its parent or
one of its subsidiaries. All awards include a repurchase option at the election of Topco for the vested
portion upon termination of service, and have a 10 year contractual term. The Class M Units provide for
accelerated vesting if there is a Company sale (as defined in the Topco LLC agreement). These awards are
accounted for as equity at their fair value as of the grant date, however no expense has been recorded as the
exercisability is contingent upon a liquidity event.
The fair value of each award was estimated on the date of grant using a Monte Carlo simulation model.
The weighted average assumptions for the 2013 grants are provided in the following table. Since the
&647)5?D9 90)8-9 )8- 56; 7<*31+3? ;8),-,$ ->7-+;-, =63);131;? 19 -9;14);-, *)9-, 65 ;0- )=-8)/- 019;681+)3
volatility of similar entities with publicly traded shares. The term is based on the estimated time to a
liquidity event. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield
curve at the date of grant.
2013
Valuation assumptions:
Expected dividend yield
Expected volatility
Expected term (years)
Risk-free interest rate
0.0%
39.4%
3.7
0.8%
31
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
A total of 431.577 Class M Units were granted during 2013 and are outstanding as of December 31, 2013,
of which 24.421 were time vested (but not yet exercisable due to the fact that exercisability is contingent
on a liquity event at December 31, 2013). The weighted average grant-date fair value of the Class M Units
granted during 2013 was $10,046 per unit and $10,656 per units vested at December 31, 2013. No
distributions were paid under these awards in 2013 and no awards have been forfeited. At December 31,
2013, there was $4,336 of total unrecognized compensation cost related to all awards granted under the
Plan.
(17) Commitments and Contingencies
(a)
Capital Lease Commitments
The Company is obligated under a number of lease agreements for equipment. Certain of these
leases have been determined to be capital leases and the assets and liabilities have been recorded at
the lesser of the present value of the minimum lease payments or the fair value of the assets.
Depreciation of the assets held under capital leases is included in depreciation expense.
Following is the property and equipment under capital lease commitments by major class as of
December 31:
2013
2012
(Successor)
Property class:
Equipment
Leasehold improvements
Less accumulated depreciation
$
4,774
1,542
(2,161)
4,774
1,542
(314)
$
4,155
6,002
Approximate future annual minimum gross lease payments due under capital leases are as follows:
2014
2015
2016
$
Total gross lease payments
1,236
391
47
1,674
Less interest included in payments
(90)
Net future annual lease payments due under capital leases
1,584
Less current portion
1,162
Long-term portion
$
32
422
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(b)
Operating Lease Commitments
The Company rents equipment, office, and warehouse space at various locations in the United States
under noncancelable operating leases. Rental expense was approximately $13,830, $1,904, $7,848,
and $6,354 during the year ended December 31, 2013 (Successor), the period from November 8,
2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012
(Predecessor) and the year ended December 31, 2011 (Predecessor), respectively. Approximate
annual future commitments under noncancelable operating leases as of December 31, 2013 are as
follows:
2014
2015
2016
2017
2018
Thereafter
Total minimum lease
payments
(c)
$
9,743
10,082
10,324
10,093
9,395
52,302
$
101,939
Guarantees
On October 7, 2008, the Company entered into an agreement with Main Street Bank (MSB), a Texas
banking association, for all franchisees seeking financing to acquire equipment and other property.
This agreement provides financing to all qualified franchisees for up to $40,000 (as defined in the
agreement). The maximum length for any one loan is 72 months.
The Company earns a commission from MSB of up to 1.5% of the total funded leases provided to
the franchisees, including origination fees. The Company has not earned any fees or commissions
from MSB during any of the periods presented.
At inception, the Company was obligated to MSB in an initial aggregate amount of up to $4,000 for
leases subject to a subsequent default, which declines over the term of the agreement, as defined,
provided that there has been no breach by the Company of its material representations, warranties, or
covenants under the agreement. The CompanyDs maximum potential obligation as of December 31,
2013 was approximately $604. The Company has determined the fair value of these guarantees at
inception is not material and no accrual is recorded as of December 31, 2013 or 2012.
The Company has also guaranteed certain other leases and debt agreements of entities related
through common ownership. These guarantees relate to leases for operating space, equipment, and
other operating costs of franchises operated by the related entities. The CompanyDs maximum total
commitment under these agreements is approximately $3,300 and would only require payment upon
default by the primary obligor. The Company has determined the fair value of these guarantees at
inception is not material, and as of December 31, 2013 and 2012, no accrual has been recorded for
the CompanyDs potential obligation under its guaranty arrangement.
33
(Continued)
PLANET FITNESS HOLDINGS, LLC
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
(Amounts in thousands)
(d)
Legal Matters
From time to time, and in the ordinary course of business, the Company may be subject to various
claims, charges, and litigation. The Company is not currently aware of any legal proceedings or
claims that the Company believes will have, individually or in the aggregate, a material adverse
effect on the CompanyDs financial position or result of operations.
(e)
Advertising
As of December 31, 2013, the Company had advertising purchase commitments of approximately
$10,926 with its advertising agency, including commitments for the NAF.
(f)
Performance Incentive Plan
During 2013, Topco adopted the 2013 Performance Incentive Plan, which calls for pre-determined
bonus amounts totaling $461 to be paid to employees of the Company upon a future liquidation
event of the Company that exceeds a pre-determined threshold. Given the uncertainty of the
underlying event, no compensation expense has been recorded in 2013.
(18) Retirement Plan
The Company maintains a 401(k) deferred tax savings plan (the Plan) for eligible employees. The Plan
provides for the Company to make an employer matching contribution currently equal to 100% of
employee deferrals up to a maximum of 4% of each eligible participating employeesD wages. The employer
contribution vests over six years. In order to participate in the Plan, employees must have been employed
by the Company for at least one year. Total employer matching contributions expensed in the consolidated
statements of operations were approximately $214, $18, $73 and $72 for the year ended December 31,
2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from
January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor),
respectively.
(19) Subsequent Events
The Company has evaluated events that have occurred subsequent to December 31, 2013 through
March 10, 2014, the date these consolidated financial statements were available to be issued.
34
PLANET FITNESS HOLDINGS, LLC
Consolidating Balance Sheet
December 31, 2013
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Assets
Current assets:
Cash and cash equivalents
Accounts receivable, net
Due from related parties, current
Inventory
Notes receivable, current
Restricted funds – NAF
Other current assets
$
Variable
interest
entities
Eliminations
Total
31,007
15,783
1,332
2,243
513
1,351
5,058
260
—
—
—
—
—
—
—
—
—
—
—
—
—
31,267
15,783
1,332
2,243
513
1,351
5,058
57,287
260
—
57,547
29,651
303,328
157,210
3,672
6,573
5,940
—
—
—
—
(1,825)
—
—
—
—
33,766
303,328
157,210
3,672
6,573
$
557,721
6,200
(1,825)
562,096
$
—
9,500
30,379
1,328
2,647
1,351
11,444
264
—
—
—
—
—
—
—
—
—
—
—
(166)
—
—
—
—
—
9,500
30,379
1,162
2,647
1,351
11,444
264
56,913
—
(166)
56,747
Long-term debt, net of current maturities
Obligations under capital leases, net of current portion
Deferred rent, net of current portion
Deferred revenue, net of current portion
Deferred tax liabilities – non current
Other liabilities
173,375
2,703
1,376
7,193
593
474
—
—
—
—
—
—
—
(2,280)
—
—
—
—
173,375
423
1,376
7,193
593
474
Total noncurrent liabilities
185,714
—
(2,280)
183,434
315,094
—
—
6,200
621
—
315,715
6,200
315,094
6,200
621
321,915
557,721
6,200
(1,825)
562,096
Total current assets
Property and equipment, net
Intangible assets, net
Goodwill
Notes receivable, net of current portion
Other assets, net
Total assets
Liabilities and Equity
Current liabilities:
Line of credit
Current maturities of long-term debt
Accounts payable and accrued expenses
Current maturities of obligations under capital leases
Equipment deposits
Restricted liabilities – NAF
Deferred revenue, current
Other current liabilities
Total current liabilities
Equity:
Members’ equity
Noncontrolling interests in variable interest entities
Total equity
Total liabilities and equity
$
See accompanying independent auditors’ report.
35
PLANET FITNESS HOLDINGS, LLC
Consolidating Balance Sheet
December 31, 2012
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Assets
Current assets:
Cash and cash equivalents
Accounts receivable, net
Due from related parties, current
Inventory
Notes receivable, current
Restricted funds – NAF
Other current assets
$
Variable
interest
entities
Eliminations
Total
8,914
12,739
3
493
2,387
1,863
3,902
541
—
7
—
—
—
18
—
—
—
—
—
—
—
9,455
12,739
10
493
2,387
1,863
3,920
30,301
566
—
30,867
28,449
326,211
157,210
4,402
8,213
6,301
—
—
—
—
(2,003)
—
—
—
—
32,747
326,211
157,210
4,402
8,213
554,786
6,867
(2,003)
559,650
3,525
9,500
16,866
3,445
4,450
1,863
9,514
248
—
106
51
—
—
—
—
—
—
—
6
(154)
—
—
—
—
3,525
9,606
16,923
3,291
4,450
1,863
9,514
248
49,411
157
(148)
49,420
Long-term debt, net of current maturities
Obligations under capital leases, net of current portion
Deferred rent, net of current portion
Deferred revenue, net of current portion
Deferred tax liabilities – non current
Other liabilities
180,500
4,030
205
5,724
2,193
72
3,313
—
—
—
—
—
—
(2,446)
—
—
—
—
183,813
1,584
205
5,724
2,193
72
Total noncurrent liabilities
192,724
3,313
(2,446)
193,591
312,651
—
—
3,397
591
—
313,242
3,397
312,651
3,397
591
316,639
554,786
6,867
(2,003)
559,650
Total current assets
Property and equipment, net
Intangible assets, net
Goodwill
Notes receivable, net of current portion
Other assets, net
Total assets
$
Liabilities and Equity
Current liabilities:
Line of credit
Current maturities of long-term debt
Accounts payable and accrued expenses
Current maturities of obligations under capital leases
Equipment deposits
Restricted liabilities – NAF
Deferred revenue, current
Other current liabilities
$
Total current liabilities
Equity:
Members’ equity
Noncontrolling interests in variable interest entities
Total equity
Total liabilities and equity
$
See accompanying independent auditors’ report.
36
PLANET FITNESS HOLDINGS, LLC
Consolidating Statement of Operations
Year ended December 31, 2013
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Net revenues:
Membership fees
Equipment and assembly
Franchise revenue
$
Variable
interest
entities
Eliminations
Total
67,364
105,803
37,842
—
—
—
—
—
—
67,364
105,803
37,842
211,009
—
—
211,009
81,353
42,187
28,719
22,757
—
—
267
361
—
(495)
(178)
—
81,353
41,692
28,808
23,118
175,016
628
(673)
174,971
35,993
(628)
673
36,038
496
(9,386)
(1,062)
—
(22)
1,011
—
—
(643)
496
(9,408)
(694)
Total other expense, net
(9,952)
989
(643)
(9,606)
Income before taxes
26,041
361
30
26,432
633
—
—
633
25,408
361
30
25,799
—
361
—
361
25,408
—
30
25,438
Total net revenues
Operating costs and expenses:
Cost of revenue
Club operations
Depreciation and amortization
Selling, general and administrative
Total operating costs and expenses
Income from operations
Other income (expense), net:
Interest income
Interest expense
Other income (expense)
Provision for state income taxes
Net income
Less net income (loss) attributable to noncontrolling
interests
Net income attributable to members
of Planet Fitness Holdings, LLC
$
See accompanying independent auditors’ report.
37
PLANET FITNESS HOLDINGS, LLC
Consolidating Statement of Operations
Period from November 8, 2012 to December 31, 2012
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Net revenues:
Membership fees
Equipment and assembly
Franchise revenue
$
Total net revenues
Operating costs and expenses:
Cost of revenue
Club operations
Depreciation and amortization
Selling, general and administrative
Total operating costs and expenses
Income from operations
Other income (expense), net:
Interest income
Interest expense
Other income (expense)
Total other expense, net
Income before taxes
Provision for state income taxes
Net income
Less net income attributable to noncontrolling interests
Net income attributable to members
of Planet Fitness Holdings, LLC
$
See accompanying independent auditors’ report.
38
Variable
interest
entities
Eliminations
Total
8,822
28,020
4,945
—
—
—
—
—
—
8,822
28,020
4,945
41,787
—
—
41,787
21,480
6,030
6,944
2,609
—
—
44
24
—
(80)
(29)
—
21,480
5,950
6,959
2,633
37,063
68
(109)
37,022
4,724
(68)
109
4,765
100
(2,496)
(125)
—
(65)
158
—
31
(158)
100
(2,530)
(125)
(2,521)
93
(127)
(2,555)
2,203
25
(18)
2,210
63
(7)
—
2,140
32
(18)
—
32
2,140
—
56
2,154
32
(18)
2,122
PLANET FITNESS HOLDINGS, LLC
Consolidating Statement of Operations
Period from January 1, 2012 to November 7, 2012
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Net revenues:
Membership fees
Equipment and assembly
Franchise revenue
$
Variable
interest
entities
Eliminations
Total
37,918
52,691
24,883
2,442
—
—
—
—
(34)
40,360
52,691
24,849
115,492
2,442
(34)
117,900
41,019
26,639
5,266
19,717
45
2,030
558
276
—
(288)
(148)
(518)
41,064
28,381
5,676
19,475
(452)
(615)
(854)
(1,921)
Total operating costs and expenses
92,189
2,294
(1,808)
92,675
Income from operations
23,303
148
1,774
25,225
987
(2,293)
9
—
(205)
1,072
(90)
249
(1,052)
897
(2,249)
29
Total other expense, net
(1,297)
867
(893)
(1,323)
Income before taxes
22,006
1,015
881
23,902
656
—
—
656
21,350
1,015
881
23,246
—
1,015
—
1,015
21,350
—
881
22,231
Total revenues, net
Operating costs and expenses:
Cost of revenue
Club operations
Depreciation and amortization
Selling, general and administrative
Gain on sale of subsidiaries and variable
interest entities
Other income (expense), net:
Interest income
Interest expense
Other income (expense)
Provision for state income taxes
Net income
Less net income attributable to noncontrolling interests
Net income attributable to members
of Planet Fitness Holdings, LLC
$
See accompanying independent auditors’ report.
39
PLANET FITNESS HOLDINGS, LLC
Consolidating Statement of Operations
Year ended December 31, 2011
(Amounts in thousands)
Planet Fitness
Holdings and
Subsidiaries
Net revenues:
Membership fees
Equipment and assembly
Franchise revenue
$
Variable
interest
entities
Eliminations
Total
19,138
77,148
21,873
20,360
1,664
288
(103)
(3,591)
(341)
39,395
75,221
21,820
118,159
22,312
(4,035)
136,436
59,800
15,002
2,174
12,416
1,306
13,913
2,385
2,843
(3,074)
(1,125)
(354)
(254)
58,032
27,790
4,205
15,005
—
(234)
Total operating costs and expenses
89,392
20,213
(4,807)
104,798
Income from operations
28,767
2,099
772
31,638
792
(2,040)
11
1
(848)
1,088
(182)
386
(811)
611
(2,502)
288
Total other expense, net
(1,237)
241
(607)
(1,603)
Income before taxes
27,530
2,340
165
30,035
757
(10)
—
747
26,773
2,350
165
29,288
—
2,350
—
2,350
26,773
—
165
26,938
Total net revenues
Operating costs and expenses:
Cost of revenue
Club operations
Depreciation and amortization
Selling, general, and administrative
Gain on sale of subsidiaries and variable
interest entities
Other income (expense), net:
Interest income
Interest expense
Other income (expense)
Provision for state income taxes
Net income
Less net income attributable to noncontrolling interest
Net income attributable to members
of Planet Fitness Holdings, LLC
$
See accompanying independent auditors’ report.
40
—
(234)
PLANET FITNESS®
EXHIBIT “F”
TO THE DISCLOSURE DOCUMENT
FRANCHISE AND CORPORATE LOCATIONS
If you buy this franchise, your contact information may be disclosed to other buyers when
you leave the franchise system.
FDD – 2014
14877235.8
04/17/14
F-1
PLANET FITNESS®
FRANCHISE LOCATIONS
(as of December 31, 2013)
Alabama
Harry Dodich
Al Pearsall
28260 Highway 98
Daphne, AL 36526
251-621-7800
Steve Goguen
Harry Dodich
John Harvard
Lee Windham
900B Schillinger Road
Mobile, AL 36695
251-776-5600
Steve Goguen
John Havard
Lee Windham
Samuel Mitchell
1800 McFarland Blvd.
Tuscaloosa, AL 35404
205-752-7878
Lee Anderson
W. Lee Brumfield
3121 Ross Clark Circle #1
Dothan, AL 36303
334-792-1701
Mark Manion
809 Beltline Rd. SW, Ste. B
Decatur, AL 35601
256-724-0979
Alaska
Roger Bates
Pete Peterson
1920 W. Diamond Blvd.
Anchorage, AK 99515
907-341-5500
Steve Goguen
Sam Mitchell
Anita Mitchell
308 University Blvd. S.
Mobile, AL 36609
251-414-2700
Gerald Kennedy
1839 Montgomery Highway
Suite 40
Birmingham, AL 35244
205-444-2282
Harry Dodich
Steve Goguen
5363 Highway 90 W.
Mobile, AL 36619
251-660-1700
Steve Goguen
John Havard
Lee Windham
Samuel Mitchell
151 North Memorial Drive
Prattville, AL 36067
334-36509494
John Landry
9118 Parkway East
Birmingham, AL 35206
205-208-0414
John Landry
168 Inverness Plaza
Birmingham, AL 35242
205-408-0020
Roger Bates
Michael Joseph
702 East Benson Blvd.
Suite One
Anchorage, AK 99503
907-444-4400
Roger Bates
Michael Joseph
1255 Airport Way
Fairbanks, AK 99701
(907) 374-4441
Steve Goguen
3530 Eastdale Circle
Montgomery, AL 36117
334-271-1600
Mark Manion
8050 Highway 72 West
Madison, AL 35758
256-724-0990
Roger Bates
Michael Joseph
3101 Penland Parkway
Anchorage, AK 99508
907-868-7600
FDD – 2014
14877235.8
04/17/14
F-2
PLANET FITNESS®
Arizona
Steven W. Thomas
Las Palmillas Shopping Center
1232 Caste Dome Ave.
Yuma, AZ 85365
Tom Bock
Kevin Kelly
John Williams
320 East Bell Rd.
North Phoenix, AZ 85022
602-588-4200
Tom Bock
John Williams
Kevin Kelly
7333 W. Thomas Rd., Ste. 78
Phoenix, AZ 85033
623-344-0600
Steven Thomas
3003 W. Apache Trail #1
Apache Junction, AZ 85120
480-845-1021
Arkansas
Brandon Sebald
Buck Ortega
100 N. Dixieland Road
Rogers, AR 72756
479-636-1111
California
GY Maw Anaheim 02 LLC
Matt Bailey
Jeremy Butler
Robert Marchesi
Kenneth Woetzel
2280 E. Lincoln Ave.
Anaheim, CA 92806
714-635-5050
PF Daly LLC
Roger Bates
Pete Peterson
Michael Joseph
2945 Junipero Serra Blvd.
Daly City, CA 94014
650-994-9080
FDD – 2014
14877235.8
04/17/14
Tom Bock
Kevin Kelly
John Williams
1420 S. Arizona Ave.
Chandler, AZ 85286
480-963-4200
Tom Bock
Kevin Kelly
John Williams
2643 East Broadway Rd.
Mesa, AZ 85204
480-219-8484
Tom Bock
Kevin Kelly
John Williams
Eric Goodwin
10525 N. Oracle Road
Oro Valley, AZ 85737
520-544-4200
Tom Bock
Kevin Kelly
John Williams
3114B South McClintock Dr.
Tempe, AZ 85282
480-361-4200
Eric Goodwin
Tom Bock
Kevin Kelly
John Williams
4848 North Old Oracle Road
Tucson, AZ 85705
520-293-4200
Steven Thomas
1841 Arizona 69, Ste. 112
Prescott, AZ 86301
928-350-8832
Brandon Sebald
3300 Grove Drive
Fayetteville, AR 72704
479-935-4848
Brandon Sebald
4093 West Sunset Avenue
Springdale, AR 72762
479-419-5533
SS Minnow LLC
Roger Bates
Pete Peterson
214 B Southland Mall Dr.
Hayward, CA 94545
510-264-1800
SS Minnow LLC
Roger Bates
Pete Peterson
6599 Commerce Blvd.
Rohnert Park, CA 94928
707-585-8900
PF West LLC
Roger Bates
Pete Peterson
Michael Joseph
39161 Farwell Drive
Fremont, CA 94545
510-797-5000
Randy Stinchfield
Tina Stinchfield
1131 Creston Road, Ste. 97
Paso Robles, CA 93446
804-239-4023
F-3
PLANET FITNESS®
California (cont.)
Robert L. McLennan
350 Sansome Street
San Francisco, CA 94104
415-433-3033
Mike Peterson
1620 West Katella Ave.
Anaheim, CA 920
714.638.8181
Ben Heiderscheidt
2401 E. Orangeburg Avenue
Modesto, CA 95355
209-572-2921
Farrukh Zafa
2041 E. Highland Avenue
San Bernardino, CA 92404
589-490-7944
Shawn M. Bishop
Dexter Lanigan
Joseph N. Bernatowicz
1480 N. Azusa Ave., Ste. A
Covina, CA 91722
626-332-2190
Dennis Griffin
Stephen Griffin
Arrien Schiltkamp
4130 Oceanside Blvd.
Oceanside, CA 92056
760-941-4855
Ben Heiderscheidt
2045 W. Briggsmore Ave.,
Ste. B-14
Modesto, CA 95350
209-341-2500
John Mack
Robert Bocek
Aminderjit Gakhal
570 S. Mt. Vernon Ave.
San Bernardino, CA
909-885-8883
Jeffrey Majkrzak
Scott Majkrzak
Alex Mortensen
12625 Frederick Street
Moreno Valley, CA 92553
951-697-8445
Lawrence C. Luckwaldt
1717 N. Hacienda Blvd.
La Puente, CA 91744
626-917-0300
Lee J. Shamaley, Jr.
2516 Airport Road
Colorado Springs, CO 80910
719-632-2500
Adam Pullman
Michael Pullman
Evan Podob
2255 North Main St., Ste. 18
Longmont, CO 80501
303-776-6800
Ben Heiderscheidt
1175 West March Lane
Stockton, CA 95207
209-477-7800
Colorado
Clark Stevens
3265 S. Wadsworth Blvd.
Lakewood, CO 80227
303-984-0558
PF CalAlaska LLP
Roger Bates
Michael Joseph
7016 Sunrise Blvd
Citrus Heights, CA 95610
916.727.3300
Shawn M Bishop
Dexter Lanigan
Joseph N. Bernatowicz
500 East Manchester Blvd.
Inglewood, CA 90301
310-330-1190
Shawn Bishop
Dexter Lanigan
Joseph N. Bernatowicz
7010 Alameda Street
Huntington Park, CA 90255
323-581-2600
Lee J. Shamaley, Jr.
5849 Constitution Avenue
Colorado Springs, CO 80915
719-573-4300
FDD – 2014
14877235.8
04/17/14
F-4
PLANET FITNESS®
Connecticut
ECP-PF: CT Operations, Inc.
26 Pearl Street
Norwalk, CT 06850
203-846-4588
ECP-PF: CT Operations, Inc.
400 Boston Post Road
Orange, CT 06477
203-795-9848
Jerry Mastrangelo
Mike Katz, Sr.
469 East Main Street
Branford, CT 06010
203-488-8804
ECP-PF: CT Operations, Inc.
1186 New Haven Road
Naugatuck, CT 06770
203-723-4058
Steve Rondeau
John Tucker
10 East Street
East Granby, CT 06026
860-844-1235
ECP-PF: CT Operations, Inc.
160 Amity Road
New Haven, CT 06515
203-392-3558
Mike Katz
Jerry Mastrangelo
705 Boston Post Rd.
Guilford, CT 06437
203-458-8822
Mike Katz
Jerry Mastrangelo
150 Universal Dr
North Haven, CT 0643
203.789.1474
FDD – 2014
14877235.8
04/17/14
Craig Perkins
139 Hazard Avenue
Enfield, CT 06082
860-749-6443
ECP-PF: CT Operations, Inc.
25 Lindeman Ddrive
Trumbull, CT 06611
203-372-7995
Jerry Mastrangelo
Mike Katz, Sr.
35 Marne Street
Hamden, CT 06514
203-281-7213
Jerry Mastrangelo
Mike Katz
836 Foxon Road
East Haven, CT 06513
203-469-7763
ECP-PF: CT Operations, Inc.
85 Harborview Road
Stamford, CT 06902
203-921-1322
ECP-PF: CT Operations, Inc.
784 River Road
Shelton, CT 06484
203-944-9990
ECP-PF: CT Operations, Inc.
316 Courtland Avenue
Stamford, CT 06906
203-358-9099
ECP-PF: CT Operations, Inc.
179 Boston Post Road
Milford, CT 06460
203-301-0180
ECP-PF: CT Operations, Inc.
1001 Poquonnock Road
Groton, CT 06340
860-449-0011
ECP-PF: CT Operations, Inc.
760 Bridgeport Ave.
Shelton, CT 06484
203-225-7570
ECP-PF: CT Operations, Inc.
111 Black Rock Turnpike
Fairfield, CT 06825
203-337-6055
ECP-PF: CT Operations, Inc.
454 South Broad Street
Meridan, CT 06450
203.235.7300
ECP-PF: CT Operations, Inc.
3087 Berlin Turnpike
Newington, CT 06111
ECP-PF: CT Operations, Inc.
99 Farmington Avenue
Bristol, CT 06010
860-540-0081
860-667-1995
F-5
ECP-PF: CT Operations, Inc.
Waterfall Place
40 Boston Post Road
Waterford, CT 06385
860-447-2279
ECP-PF: CT Operations, Inc.
855 Lakewood Road
Waterbury, CT 06704
203-757-8032
PLANET FITNESS®
Connecticut (cont.)
ECP-PF: CT Operations, Inc.
691 Main Street
Torrington, CT 06790
860-201-0033
ECP-PF: CT Operations, Inc.
1135A Tolland Turnpike
Manchester, CT 06040
860-783-5980
ECP-PF: CT Operations, Inc.
42 Town Street
Norwich, CT 06360
860-859-1365
ECP-PF: CT Operations, Inc.
110 Federal Road
Danbury, CT 06811
203-300-5185
Ron Pepe
Joe Pepe
710 Hartford Turnpike
Dayville, CT 06241
860-341-2468
Delaware
Sean Knapp
143 Marrows Road
Newark, DE 19713
302-392-3558
Florida
Eric Dore
Shane McGuiness
280 South State Rd. #434
Altamonte Springs, FL 32714
407-786-7373
Glenn Dowler
10301 Southern Blvd.
Royal Palm Beach, FL 33411
561-333-3833
Eric Dore
Shane McGuiness
5130 South Conway Rd.
Orlando, FL 32812
407-982-3204
John Wash
204 Sausalito Blvd.
Casselberry, FL 32707
407-332-4496
Ryan Rondina
Mark Melancon
2650 Tamiami Trail E.
Naples, FL 34112
239-417-1010
Eric Dore
19 Alafaya Woods Blvd.
Oviedo, FL 32765
407-365-4927
Eric Dore
4020 13th Street
Saint Cloud, FL 34769
407-957-1846
Jim Page
Brian Pinga
1980 Wells Road
Jacksonville, FL 32073
904-272-2224
Eric Dore
1569 W Orange Blossom Trail
Apopka, FL 32712
407-410-0373
Dave Weber
Gary Bianucci
Kevin Gelnaw
910 South Atlantic Avenue
Ormond Beach, FL 32176
386-677-4000
FDD – 2014
14877235.8
04/17/14
F-6
Eric Dore
12471 South Orange Blossom
Trail
Orlando, FL 32837
407-240-9177
Eric Dore
3005 W. Lake Mary Blvd.
Suite 124
Lake Mary, FL 32746
407-992-9134
Steve Rondeau
John Tucker
Glen Dowler
9910 Alt A1A
Palm Bch. Gardens, FL 33410
561-776-8930
John Wash
345-B East New York Ave.
Deland, FL 32724
386-873-4911
Mike Walker and
Thomas Lelievre
1802 US Route 1
Rockledge Square
Rockledge, FL 32955
321-433-1331
PLANET FITNESS®
Florida (cont.)
Eric Dore
860 Saxon Blvd.
Orange City, FL 32763
386-228-2700
Mark Melancon
Ryan Rondina
15501 McGregor Blvd.
Fort Myers, FL 33908
239-433-1616
Eric Dore
3203 East Colonial Drive,
Unit E20
Orlando, FL 3203
407.982.3173
Eric Dore
505 S. Chicksaw Trail
Orlando, FL 32825
407-473-6084
Eric Dore
6201 North US Highway 1
Cocoa, FL 32927
321-806-1626
Eric Dore
8956 Turkey Rd., Ste. 1000
Orlando, FL 32819
407-956-2546
Bryan Pappas
Peter Fregeau
Mike Murray
2477 US Highway 1
St. Augustine, FL 32086
904.794.0559
Dave Dorr
Brian MacDonald
Casey Fisher
30701 US Highway 19N
Palm Harbor, FL 34684
727-786-1915
FDD – 2014
14877235.8
04/17/14
Mike Walker
Thomas Lelievre
1415 South Nova Rd.
Daytona Beach, FL 32114
386-253-4300
Bill Shorr
840 N. Appollo Blvd.
Melbourne, FL 32935
321-242-7900
Glenn Dowler
Scott Dowler
1295 US Highway 1, Ste. 3
Vero Beach, FL 32960
772-564-0234
Eric Dore
10908 West Colonial Drive
Ocoee, FL 34761
407-905-3370
Glenn Dowler
Scott Dowler
Heather Robinson
2210 SE Federal Highway
Stuart, FL 34994
772-287-8909
Eric Dore
5920 Metropolis Way
Orlando, FL 32811
407-473-6086
Glenn Dowler
Scott Dowler
Heather Robinson
6666-2 South Federal
Highway
Port Saint Lucie, FL 34952
772-460-4994
Eric Dore
3831 W. Vine St
Kissimmee, FL 34741
407.583.4035
Casey Fischer
Brian MacDonald
4802 Gunn Highway, Ste. 140
Tampa, FL 33624
813-986-0088
John Wash
6208 US Highway 98
North Lakeland, FL 33809
863.853.3322
Eric Dore
5998 Mobile Highway
Pensacola, FL 32526
850-665-2262
F-7
John Wash
3233 SE Maricamp Rd. #500
Ocala, FL 34471
352-624-7301
Bryan Pappas
Peter Fregeau
Mike Murray
2771 Monument Road
Jacksonville, FL 32225
904-997-2071
Steve Joanis
James Shovlin
6605 Manatee Avenue
Bradenton, FL 34209
941.896.8833
Brandon Sebald
Jonathan Norman
1630 NE 163rd Street
North Miami Beach, FL 33162
305.947.4100
Glenn Dowler
3225 SW Port St. Lucie Blvd.
Port St. Lucie, FL 34953
772-807-1290
PLANET FITNESS®
Florida (cont.)
Dave Bidwell
Scott Linsky
8350 W. Hialeah Gardens
Blvd.
Hialeah Gardens, FL 33018
305-704-3011
Brian Pinga
Jim Page
7628 103rd Street
Jacksonville, FL 32210
904-900-1651
Dave Bidwell
Scott Linsky
850 Ives Dairy Road
Miami, FL 33179
609-276-8635
David Bidwell
Scott Linsky
18620 NW 67th Avenue
Miami, FL 33015
305-621-0400
Bryan Pappas
Peter Fregeau
Mike Murray
8661 Old Kings Road South
Jacksonville, FL 32217
904-240-4032
Joe Anson
2210 NW 13th Street
Gainesville, FL 32609
352-505-6685
David Bidwell
Scott Linsky
15725 SW 72nd Street
Miami, FL 33193
305-752-5551
Bill Merckel
7310 W. Waters Avenue
Tampa, FL 33634
813-999-4980
Georgia
Matt and Laura Branyan
Busbee Dyer
1455 Pleasant Hill Drive
Suite 701
Lawrenceville, GA 30044
770-279-2257
Stanley DeMartinis, Jr.
2460 Wesley Chapel Crossing
Rd., Ste. 25C
Decatur, GA 30035
781-248-8076
Eric Dore
Shane McGuiness
245 Tom Hill Sr. Blvd.
Macon, GA 31210
FDD – 2014
14877235.8
04/17/14
Kathleen Killeavy
Eugene Killeavy
160 Malabar Road
Palm Bay, FL 32907
Eric Dore
6241 North Davis Highway,
Ste. B
Pensacola, FL 32504
850-389-4747
Bryan Pappas
Peter Fregeau
Mike Murray
14444 Beach Boulevard
Jacksonville, FL 32250
904-240-4032
Dave Bidwell
Scott Linsky
3300 Northeast 10th Court
Homestead, FL 33303
609-276-8635
Eric Sousa
Robert & Jeanne Stamant
9023 Little Road, Unit 105
New Port Richey, FL 34654
727-863-5292
Bryan Pappas
Peter Fregeau
Mike Murray
7 Old Kings Road North
Palm Coast, FL 32137
386-283-4973
Eric Dore
4526 South Orange Blossom
Trail
Orlando, FL 32839
407-956-2521
John Wash
3545 Peachtree Industrial Blvd
Duluth, GA 30096
770-622-7797
John Wash
3161 Cobb Parkway
Kennesaw, GA 30152
770-975-7179
Stanley DeMartinis, Jr.
3535 Chamblee Tucker Rd.
Atlanta, GA 30341
770-452-8373
Stanley DeMartinis, Jr.
7965 Tara Boulevard
Jonesboro, GA 30236
770-478-0050
Stanley DeMartinis, Jr.
5211-B Memorial Drive
Stone Mountain, GA 30083
404-299-2000
Stanley DeMartinis, Jr.
Guerino Ciampi
4166 Buford Highway at Plaza
Fiesta
Atlanta, GA 30345
404-315-7999
F-8
PLANET FITNESS®
Georgia (cont.)
John Craig
Jane Craig
Roger Amato
130 John W. Morrow Jr.
Parkway
Gainesville, GA 30501
678-971-5558
Idaho
Keith Larsen
6843 Strawberry Glen
Suite 2-150
Garden City (Boise), ID 83714
208-853-8200
Illinois
Richard Pease
Brian Mikol
Martin Baroff
Paul Alfano
Michael Sweeney
1163 E. Ogden Avenue
Naperville, IL 60563
630-416-7200
Anthony Rufo
7300 Dempster Street
Morton Grove, IL 60053
847-983-4022
William Whitmore
Steve Colucci
49-53 Ludwig Drive
Fairview Heights, IL 62208
618-213-7303
Anthony Rufo
2560 North Harlem Ave.
Elmwood Park, IL 60707
610-357-3863
FDD – 2014
14877235.8
04/17/14
John Wash
3315 South Cobb #1
Smyrna, GA 30080
678-305-0606
Eric Dore
816 Russell Parkway
Warner Robins, GA 31088
478-225-0187
Keith Larsen
5010 W. Overland Road
Boise, ID 83705
208-426-0102
Richard Pease
Brian Mikol
Martin Baroff
Paul Alfano
Michael Sweeney
1445 West Lake Street
Addison, IL 60101
630-953-4961
Scott Majkrzak
Alex Mortensen
3624 Avenue of the Cities
Moline, IL 61265
309-764-9500
Bryan Rishforth
1961 N. Mannheim Road
Melrose Park, IL 60160
708-344-6400
Bryan Rishforth
4905 W. North Avenue
Chicago, IL 60639
773-384-7100
Anthony Rufo
2300 South Cicero Ave.
Cicero, IL 60804
610-357-3863
Anthony Rufo
4327-4331 S. Pulaski
Chicago, IL 60632
F-9
Anthony Rufo
751 West Golf Road
Des Plaines, IL 60016
847-258-3466
Bryan Rishforth
9500 S. Western Avenue
Evergreen Park, IL 60805
708-425-9500
PLANET FITNESS®
Illinois (cont.)
Bryan Rishforth
3120 N. Pulaski Road
Chicago, IL 60641
773-685-4140
Timothy Lennon
Mike Dobrynio
2002 Glen Park Drive
Champaign, IL 61820
Anthony Rufo
2410 Main Street
Evanston, IL 60202
847-328-3333
Timothy Lennon
Michael Dobrynio
2420 S. Alpine Road
Rockford, IL 61108
815-708-6707
Michael Dobrynio
Timothy Lennon
105 N. Main Street
East Peoria, IL 61611
309-699-0081
Bryan Rishforth
8331 S. Holland Road
Chicago, IL 60620
773-488-8848
Anthony Rufo
9503 South Cicero Avenue
Oak Lawn, IL 60453
708-529-3237
Mike Horan
Brain Taggart
Mark Prasalowicz
2852 Plainfield Road
Joilet, IL 60435
815-577-2600
Michael Dobrynio
Jill Dobrynio
1280 N. Kennedy Drive
Kankakee, IL 60901
815-614-3937
Michael Dobrynio
Timothy Lennon
6333B N. Second St.
Loves Park, IL 61111
815-633-7202
Indiana
Michael Campagnolo
8811 Hardegan Street
Indianapolis, IN 46227
317.893.2775
Robert Baker
2302 W. 86th Street
Indianapolis, IN 46260
317-731-5926
Michael Campagnolo
10429 E. Washington St.
Indianapolis, IN 46229
317-890-9800
FDD – 2014
14877235.8
04/17/14
Anthony Rufo
3512-14 E. 118th Street
Chicago, IL 60617
773-359-2300
Chris Kouros
Peter Kouros
Stephen Leverett
Jim Lekatsos
1840 Douglas Road
Montgomery, IL 60538
Bryan Rishforth
5129 W. Belmont Avenue
Chicago, IL 60641
773-481-2101
Timothy Lennon
Michael Dobrynio
1756 Wabash Avenue
Springfield, IL 62704
217-546-4910
Anthony Rufo
2558 West Cermak Road
Chicago, IL 60608
773-523-2345
Bryan Rishforth
10808 South Doty Avenue
Chicago, IL 60628
773-568-1010
Luke Urban
152 S. Gary Ave., Ste. 101
Bloomingdale, IL 60108
630-582-7800
Robert Baker
2437 East Main Street, Suite
150
Plainfield, IN 46468
317.837.1629
Michael Campagnolo
5239 East Thompson Road
Indianapolis, IN 46237
317-780-0100
Rick Kueber
860 South Green River Rd.
Evansville, IN 47715
812-477-2199
F - 10
Rick Kueber
David Kueber
516 E. Lewis & Clark
Parkway
Clarksville, IN 47129
812-284-4000
Ron Huling
6360 West Jefferson Blvd.
Fort Wayne, IN 46804
260-267-9801
Michael Campagnolo
2121 Sagamore Parkway
Lafayette, IN 47905
765-446-6600
PLANET FITNESS®
Indiana (cont.)
Robert Baker
Alex Perchuk
5206 West 38th Street
Indianapolis, IN 46254
317-328-0301
Rick Kueber
3527 Grantline Road
New Albany, IN 47150
821-542-6492
Ron Huling
4530 Maplecrest Road
Fort Wayne, IN 46835
260-485-7979
Michael Campagnolo
2160 East Markland Avenue
Kokomo, IN 46901
765-868-5000
Rick Kueber
3477 West Third St.
Bloomington, IN 47404
812-333-7699
Ron Huling
424 W. McKinley Ave.
Mishawaka, IN 46545
574-255-9000
Rick and Kristine Raimondo
1010 US Highway 41
Schererville, IN 46375
219-629-9316
Robert Baker
Alex Perchuk
4366 S. Scatterfield Rd.
Anderson, IN 46013
765-462-4000
Chris Klebba
3253 Northview Drive
Elkhart, IN 46514
574-262-8222
Iowa
Scott Majkrzak
Alex Mortensen
3221 SE 14th St
Des Moines, IA 50320
515.528.2329
Scott Majkrzak
Alex Mortensen
2080 E. Ridgeway Ave.
Waterloo, IA 50702
319-232-2732
Scott Majkrzak
Alex Mortensen
902 West Kimberly Drive
Davenport, IA 52806
503-391-1080
Edward Alberts
1751 Madison Avenue
Council Bluffs, IA 51503
712-256-7300
Scott Majkrzak
Alex Mortensen
3771 86th Street
Urbandale, IA 50322
515-276-2225
Chris Sutherland
6592 E. Central Avenue
Wichita, KS 67206
316-719-3860
Chris Sutherland
2021 N. Amiden St., Ste. 1500
Wichita, KS 67203
316-440-4808
John Clancy
82 Carothers Road
Newport, KY 41071
859-291-7500
Rick Kueber
1111 North Dixie #17
Elizabethtown, KY 42701
270-506-2102
Kansas
Tammy Torres
Jerome Torres
11320 W. 135th Street
Overland Park, KS 66221
913-402-0999
Chris Sutherland
2350 N. Maize Road
Wichita, KS 67205
316-440-5520
Kentucky
Rick Kueber
David Kueber
7450 Jefferson Boulevard
Louisville, KY 40219
502-964-7555
FDD – 2014
14877235.8
04/17/14
F - 11
PLANET FITNESS®
Kentucky (cont.)
John Clancy
1650 Bryan Station Road
Lexington, KY 40505
859-368-7223
Louisiana
Kevin Windham
Dorothy Windham
3559B Ambassador Caffery
Pkwy
Lafayette, LA 70503
337.412.6972
Kevin Windham
Dorothy Windham
Mike Beaton
1800 NE Evangeline
Thruway, Ste. OJ-B
Lafayette, LA 70501
337-269-5193
Brandon Robinson
Jeff Babineaux
Collin Bercier
Brandon Hargrave
2255 South MacArthur Drive
Alexandria, LA 71301
Maine
Steve Collucci
William Whitmore
8 Thomas Drive
Westbrook, ME 04092
207-773-7774
Patrick Welch
Linda Monmacy
600 Turner Street
Auburn, ME 04210
207-330-3000
Steve Collucci
William Whitmore
265 Civic Center Dr., Ste. 2
Augusta, ME 04330
207-623-0023
Steve Collucci
William Whitmore
9 Amato Drive
Windham, ME 04062
207-892-7400
Rick Kueber
3560 South Hurstbourne
Parkway
Louisville, KY 40299
502-499-4995
Kevin Windham
Dorothy Windham
Mike Beaton
9620 Florida Boulevard
Baton Rouge, LA 70815
225-771-8809
Brandon Robinson
Jeff Babineaux
Collin Bercier
Brandon Hargrave
131 Gause Blvd. West
Slidell, LA 70460
985-288-5787
Brandon Robinson
Connie Hargrave
4068 Ryan Street
Lake Charles, LA 70605
337-564-6781
Patrick Welch
420 Alfred Road
Biddeford, ME 04005
207-284-9924
Dan Pullen
Carolyn Townsend
31 Gurnet Road
Brunswick, ME 04011
207-725-2944
Kris Glidden
635 Broadway
Bangor, ME 04401
207-262-5800
Steve Collucci
William Whitmore
145 Marginal Way
Portland, ME 04101
207-879-2200
Kris Glidden
60 JFK Plaza
190 Kennedy Memorial Dr.
Waterville, ME 04901
207-873-0040
Gary Sinopoli
Robert Siragusa
Michael Hurring
Westside Shopping Center
North, Ste. 230
Gretna, LA 70053
504-361-7597
Kris Glidden
1364 Main Street
Sanford, ME 04073
207-324-2100
Maryland
FDD – 2014
14877235.8
04/17/14
F - 12
PLANET FITNESS®
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
6836 Racetrack Road
Bowie, MD 20715
301-469-9119
Dharmesh Shah
597 E. Ordnance Rd. Store A
Glen Burnie, MD 21060
410-766-9340
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
1080 West Patrick Street
Frederick, MD 21703
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
1111 Maryland Avenue
Hagerstown, MD 21740
Dharmesh Shah
1405 Merritt Blvd.
Baltimore, MD 21222
410-282-4955
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
5425 Baltimore National Pike
Catonsville, MD 21229
410.975.4850
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
8821 Pulaski Hwy
Baltimore, MD 21237
410.800.4013
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
11989-A Reisterstown Road
Reisterstown, MD 21136
410-702-4321
Dharmesh Shah
3245 Plaza Way
Waldorf, MD 20603
301-932-4500
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
8509 Landover Rd
Hyattsville, MD 20785
301.246.2890
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
255 Muddy Branch Rd
Gaithersburg, MD
301.337.7701
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
143-153 Pulaski Highway
Elkton, MD 21921
301-698-8110
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
1449 Rock Spring Drive
Bel Air, MD 21014
443-360-0600
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
11130 New Hampshire Ave.
Silver Spring, MD 20904
240-670-4600
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
3442 Emmorton Road
Abingdon, MD 21009
410.809.2593
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
5644 Silver Hill Road
District Heights, MD 20747
301.278.8004
Dharmesh Shah
2659-B Annapolis Road
Fort Meade, MD 21076
410.519.9340
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
1776 E. Jefferson St., #103
Rockville, MD 20852
FDD – 2014
14877235.8
04/17/14
F - 13
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
13031 Wisteria Drive
Germantown, MD 20874
240-720-7444
C. Victor Brick
Lynne Brick
Charles Cavolo, IV
Glenn Norris
6100 Greenbelt Rd., Store 201
Greenbelt, MD 20770
240-542-9644
C. Victor Brick
9644 Fort Meade Road
Laurel, MD 20707
240-459-8000
PLANET FITNESS®
Maryland (cont.)
C.Victor Brick
125 West College Ave.
Salisbury, MD 21801
443-736-2381
Massachusetts
Steve Rondeau
John Tucker
90 Carando Drive
Springfield, MA 01104
413-788-0448
Joe Rizzo
Tom Furdon
108 Clematis Avenue
Waltham, MA 02453
781-891-6002
Dave Rossborough
Tommy Adams
101 Carver Road
Plymouth, MA 02360
508-732-8900
Steve Rondeau
John Tucker
1464 Riverdale Street
West Springfield, MA 01089
413-731-7555
Bob Hathaway
41 Pleasant Street
Norton, MA 02766
508-266-7400
Brian Kablik
Jonathan Epstein
Bill Whelan
100 Boston Turnpike Road
Shrewsbury, MA 01545
508-755-4110
Brian Kablik
Jonathan Epstein
Bill Whelan
235 Boston Post Rd. West
Marlborough, MA 01752
508-786-3000
FDD – 2014
14877235.8
04/17/14
Chad Fitton
975 Merriam Ave., Ste. 139
Leominster, MA 01453
978-537-0859
Stephen Doroff
69 Haverhill Road
Amesbury, MA 01913
978-388-4636
Dave Rossborough
Tommy Adams
944 Middle Street
Weymouth, MA 02188
781-331-3939
John Tucker
Steve Rondeau
335 Russell Street
Unit A-180
Hadley, MA 01035
413-582-9900
Joe Rizzo
Tom Furdon
17 Long Pond Drive
South Yarmouth, MA 02664
508-760-2300
Dave Rossborough
Tommy Adams
500 Neponset Avenue
Dorchester, MA 02122
617-287-8885
Steve Rondeau
John Tucker
1183 Memorial Drive
Chicopee, MA 01020
413-593-5566
William Cassotis
William Fidler
184 West Boylston Street
Unit 8
West Boylston, MA 01583
508-835-2551
Steve Rondeau
John Tucker
10 Turkey Hill Road
Belchertown, MA 01007
413-323-1003
Brian Kablik
Jonathan Epstein
Bill Whelan
418 Walpole Street
Norwood, MA 02062
781-762-3555
Joe Rizzo
146 South Main Street
Milford, MA 01757
508-473-5522
F - 14
Chad Fitton
140 Taunton Avenue
Seekonk, MA 02771
508-336-2266
Stanley DeMartinis, Sr.
Stanley DeMartinis, Jr.
Joseph Galante
175 McClellan Highway
East Boston, MA 02128
617-569-2020
Tim Kurtz
Jeannette Bowler
Seth Libert
40 Ray Avenue
Burlington, MA 01803
781-229-9999
PLANET FITNESS®
Massachusetts (cont.)
Steve Rondeau
John Tucker
690 Merrill Road
Pittsfield, MA 02101
413-445-5100
Richard Pease
Brian Mikol
Michael Sweeney
Paul Alfano
Martin Baroff
355 Middlesex Avenue
Wilmington, MA 01187
978-658-5645
Blake Road Corporation
90 River Street
Mattapan, MA 02126
617-298-0055
Brian Kablik
Bill Whelan
Jon Epstein
166 Grove Street
Franklin, MA 02038
508-541-6880
Michael Salzarulo
68 Main Line Drive
Westfield, MA 01085
413-568-0578
Tommy Adams
1778 Washington Street
Stoughton, MA 02072
781-341-4111
Blake Road Corporation
10 Micro Drive
Woburn, MA 01801
781-932-6200
Mike Clark
Loretta Sivret
45 Storey Avenue
Newburyport, MA 01950
978-462-2500
Bob Hathaway
Michael Tepper
Raymond Palatino
1 Washington Place
Taunton, MA 02780
508-821-3260
Kris Glidden
Wayne Ruesswick
710 S. Dartmouth St.
Dartmouth, MA 02748
508-991-2920
Mike Clark
40 Jackson St
Methuen, MA 01844
978.682.0005
Blake Road Corporation
1100 Revere Beach Parkway
Chelsea, MA 02150
617.884.3030
Brian Kablik
William Whelan
Jonathan Epstein
215 West Central Street
Natick, MA 01760
508.319.2000
Mike Clark
Loretta Sivret
480 Boston Road
Billerica, MA 01821
978-667-5900
FDD – 2014
14877235.8
04/17/14
F - 15
Melissa Janicke
Garrett Janicke
860 N. Main Street
West Bridgewater, MA 02379
508-584-4348
Blake Road Corporation
795 Eastern Avenue
Malden, MA 02148
781-322-3200
Mike Clark
Loretta Sivret
50 Pleasant Street
Dracut, MA 01826
778-710-4074
Steve Rondeau
John Tucker
80 Main Street
North Adams, MA 01247
413-664-7300
Brian Kablik
William Whelan
Jonathan Epstein
695 Providence Highway
Dedham, MA 02026
781-355-4000
David Rossborough
Tommy Adams
50 Adams Street
Quincy, MA 02169
617.471.3333
Kris Glidden
Wayne Ruesswich
657 Quarry Street
Fall River, MA 02723
774-888-0032
PLANET FITNESS®
Massachusetts (cont.)
David Rossborough
Tommy Adams
211 Lincoln Stret
Hingham, MA 02043
781-740-0404
Mike Clark
Loretta Sivret
209 N. Main Street
Andover, MA 01810
978-409-2363
Michigan
Ron Hurling
2020 Holiday Inn Drive
Jackson, MI 49202
517-784-5551
Denis Backos
James L. Matthew
33890 S. Gratiot Avenue
Clinton Township, MI 48035
586-792-6900
Bryan Rief
29475 W. 7 Mile Road
Livonia, MI 48152
248-427-0043
Bryan Rief
27640 Middlebelt Road
Farmington Hills, MI 48334
248-987-4800
Bryan Rief
WB Pete Hopkins
18450 Ford Road
Dearborn, MI 48228
313.982.0224
Chris Klebba
4190 E. Court Street
Burton, MI 48509
810-715-1950
FDD – 2014
14877235.8
04/17/14
Jonathan Epstein
Brian Kablik
Bill Whelan
68 Strafford Street
Worcester, MA 01603
508-793-7888
Mike Clark
Loretta Sivret
275 Salem Street
Reading, MA 01867
781-872-1412
Stanley DeMartinis
Guerino Ciampi
270 Charger Street
Revere, MA 02151
Chris Klebba
235 East Main Street
Northville, MI 48167
248-449-7634
Bryan Rief
288 John Road
Troy, MI 48083
248-588-0141
Chris Klebba
75142 Highland Road
Waterford, MI 48328
248-599-9795
Bryan Rief
34634 Warren Rd.
Westland, MI 48185
734-525-4800
Dennis Backos
Jim Matthew
13750 East Eleven Mile Road
Warren, MI 48089
586-774-6901
Chris Klebba
31124 Beck Rd
Novi, MI 48377
248.668.1100
Ron Hurling
2748 Washtenaw Ave.
Ypsilanti, MI 48197
734-390-0139
Chris Klebba
13591 Eureka Road
Southgate, MI 48195
734.281.7828
Dennis Backos
James L. Matthew
3150 Owen Road
Fenton, MI 48430
810-714-8000
F - 16
Bryan Rief
WB Pete Hopkins
40752 Ryan Road
Sterling Heights, MI 48310
586.274.2310
Dennis Backos
James L. Matthew
1007 E. Grand River Ave.
Brighton, MI 48116
810-844-5000
Chris Klebba
4408 Stadium Drive
Kalamazoo, MI 49008
269-488-8518
PLANET FITNESS®
Michigan (cont.)
Imad Farhat
701 Joe Mann Blvd.
Midland, MI 48642
989-832-7300
Chris Klebba
6463 Canton Center Road
Canton, MI 48187
734-737-0380
Bryan Rief
45501 Schoenherr Road
Utica, MI 48315
586-726-4840
Bryan Rief
29816 Southfield Road
Southfield, MI 48075
248-327-6131
Thomas Purther
5801 W. Saginaw Highway
Lansing, MI 48917
248-538-9898
Julian Monterosso
Patrick Schafer
12330 James Street
Holland, MI 49424
616-396-9696
Bryan Rief
11420 Telegraph Road
Taylor, MI 48180
734-947-9119
Imad Farhat
4572 State Street
Saginaw, MI 48503
989-799-1300
Bryan Rief
13255 15 Mile Road
Sterling Heights, MI 48312
586-825-2020
Chris Klebba
1345 Mall Drive
Benton Harbor, MI 49022
269-925-1070
Imad Farhat
4350 24th Avenue, Ste. 504
Fort Gratiot, MI 48059
810-385-7400
Thomas Purther
1982 Grand River
Okemos, MI 48864
517-381-8200
Julian Monterosso
Patrick Schafer
2500 Henry Street
Muskegon, MI 49441
631-747-6541
Bryan Rief
3681 28th Street SE
Grand Rapids, MI 49512
616-464-2000
Minnesota
Corie Koskie
10606 France Ave S.
Bloomington, MN 55431
952.948.1000
Corie Koskie
8026 Brooklyn Blvd
Brooklyn Park, MN 55445
763.424.4447
Daniel J. Hill
Daniel J. O’Shaughnessy
Kevin Murphy
1750 W. Highway 36
Roseville, MN 55113
651-200-3166
John G. Landry, Jr.
12273 Highway 49
Gulfport, MS 39503
228-832-3486
John G. Landry, Jr.
2200A Bienville Blvd.
Ocean Springs, MS 39564
228-818-7930
Imad Farhat
4101 East Wilder Road
Space B-219
Bay City, MI 48706
989-671-2100
Dennis Backos
James Matthew
2350 W. Stadium Blvd.
Ann Arbor, MI 48103
734-352-6900
Bryan Rief
3845 Rivertown Parkway
Grandville, MI 49418
616-259-7485
Daniel J. Hill
Daniel J. O’Shaughnessy
Kevin Murphy
1859 Adams Street
Mankato, MN 56001
507-540-0500
Mississippi
John Landry, Jr.
2390 Pass Road
Biloxi, MS 39535
228-388-7930
FDD – 2014
14877235.8
04/17/14
F - 17
PLANET FITNESS®
Mississippi (cont.)
Christopher Rains
Brian Hunt
772 Lake Harbor Village,
Ste.1
Ridgeland, MS 39157
601-427-5901
Missouri
Tom Carski
Kevin Carski
13924 Manchester Road
Ballwin, MO 63011
636-527-7277
Tom Carski
Kevin Carski
6155 South Grand Blvd.
St. Louis, MO 63111
314-351-7600
Nebraska
Edward Alberts
2502 S. 133rd Plaza
Omaha, NE 68144
402-933-9229
Nevada
John Macaluso
1531 W. Sunset Road
Henderson, NV 89014
702-458-3900
Michael Joseph
Roger Bates
630 N. McCarron Blvd.
Sparks, NV 89431
775-356-1000
New Hampshire
Slade Williams
Carly Levinson
288 North Broadway
Salem, NH 03079
603-898-5540
FDD – 2014
14877235.8
04/17/14
Greg Henson
8720 E. 63rd Street
Kansas City, MO 64133
816-353-7352
Greg Henson
601 SW US 40 Highway
Blue Springs, MO 64014
816-228-7327
Greg Henson
4545B South Noland Road
Independence, MO 64055
816-478-7095
Jonathan Lippincott
3239 Missouri Boulevard
Jefferson City, MO 65109
573-636-0470
Edward Alberts
5804 Ames Avenue
Omaha, NE 68104
402-933-3575
Edward Alberts
5035 South 36th Street
Omaha, NE 68107
402-932-3737
Jimmy Nafso
Tom Yaldo
3300 Flamingo Road
Las Vegas, NV 89121
702-547-1200
Sylvia Nafso
1570 N. Eastern Ave.
Las Vegas, NV 89101
702-826-4200
Jimmy Nafso
Tom Yaldo
2216 S. Nellis Blvd.
Las Vegas, NV 89104
702-43-4200
Stephen Doroff
95A Plaistow Road
Plaistow, NH 03865
603-382-0200
F - 18
PLANET FITNESS®
New Jersey
Anthony Falange
2956 Route 10 West
Morris Plains, NJ 07950
973-998-0989
William Cassotis
William Fidler
3105 Route 38
Mt. Laurel, NJ 08054
856-722-5950
Anthony Falange
275 Route 10
Succasunna, NJ 07876
862-244-4327
Russ Del Rosso
Mike Connell
Mike Castellano
Mike Rodricks
180 Route 35 South
Eatontown, NJ 07724
732.542.4040
Anthony Falange
1734 US Route 46
Woodland Park, NJ 07424
973-837-6139
William Cassotis
William Fidler
1560 North Olden Avenue
Ewing, NJ 08638
609-943-2548
William Cassotis
William Fidler
700 Crescent Ave.
Brooklawn, NJ 08030
856-349-7746
Craig Benson
1151 W. St. George Avenue
Linden, NJ 07036
908-925-1077
FDD – 2014
14877235.8
04/17/14
Rick Raimondo
2005 Rte. 70 East
Cherry Hill, NJ 08003
856-751-9111
Russ Del Rosso
Mike Connell
Mike Castellano
Mike Rodricks
325 Brick Boulevard
Brick, NJ 08723
732-477-0499
Anthony Falange
59 Wanaque Avenue
Pompton Lakes, NJ 07442
973-513-9241
Anthony Falange
831 Route 10 East
Whippany, NJ 07981
973.585.6703
Russ DelRosso
1 South Main St.
Toms River, NJ 08757
732-244-2066
Anthony Falange
Naomi Falange
600 Getty Avenue
Clifton, NJ 07011
973-478-3300
Craig Benson
8101 Tonnelle Avenue
North Bergen, NJ 07047
201-295-0000
F - 19
Russ Del Rosso
Mike Connell
Mike Castellano
Mike Rodricks
931 Fischer Blvd. Unit 16
Toms River, NJ 08753
732-270-6300
William Cassotis
William Fidler
1460 Blackwood Road
Clementon, NJ 08021
856-435-2210
William Cassotis
William Fidler
Washington Center
415 Egg Harbor Road
Ste. 2D
Sewell, NJ 08080
856-589-0808
William Cassotis
William Fidler
141-A Route 130 South
Cinnaminson, NJ 08077
856-499-2695
Randy Vey
39 Reaville Avenue
Flemington, NJ 08822
908-237-9911
Russ DelRosso
3499 Route 9, Ste. 1-B
Freehold, NJ 07728
732-845-4555
Russell DelRosso
3070 Route 35 South
Hazlet, NJ 07730
732-264-8300
PLANET FITNESS®
New Mexico
ECP-PF: NM Operations, Inc.
1518/1520 Eubank Blvd.
Albuquerque, NM 87112
505-559-9000
ECP-PF: NM Operations, Inc.
4665 Irving Blvd NW
Albuquerque, NM 87114
505.899.3707
ECP-PF: NM Operations, Inc.
3391 Southern Blvd. SE
Rio Ranchero, NM 87124
505-994-2424
ECP-PF: NM Operations, Inc.
3301 Coors Blvd.
Albuquerque, NM 87120
505-833-4444
ECP- PF: NM Operations, Inc.
3821 Menaul Blvd. NE #K-1
Albuquerque, NM 87110
505.872.0232
Joseph Bencomo
1300 El Paseo Boulevard
Las Cruces, NM 88001
575-524-7867
ECP-PF: NM Operations, Inc.
11200 Montgomery N.E.
Albuquerque, NM 87110
505-296-1300
ECP-PF: NM Operations, Inc.
4801 Almeda Blvd. NE
Albuquerque, NM 87113
505-797-8767
ECP-PF: NM Operations, Inc.
6211 4th Street NW
Albuquerque, NM 87107
505-341-9771
New York
Dave Leon
475 Albany Shaker Road
Loudenville, NY 12211
518-435-9999
Robert Morris
628 South Main Street
Syracuse, NY 13212
315-299-2583
Bob Viani
Sharon Lomasney
3675 Albany Post Road
Poughkeepsie, NY 12601
845-473-8000
Steve Joanis
Ron Emrick
3760 Dewey Avenue
Rochester, NY 14616
585-865-9691
John Mahoney
Nancy Kouris
250 W. Montauk Highway
Hampton Bays, NY 11946
631-723-3174
Bob Morris
4700 Vestal Parkway East
Vestal, NY 13850
607-644-9089
Dave Leon
1116 Altamont Avenue
Rotterdam, NY 12303
518-355-0023
Dave Leon
1532 Crescent Road
Clifton Park, NY 12065
518-688-3001
Alvin Batista
44 School Street
Glen Cove, NY 11542
516-656-0515
Sharon Lomasney
Bob Viani
1572 Route 9
Wappingers Falls, NY 12590
845-298-8100
Dave Leon
329 Glenmont Road
Glenmont, NY 12077
518-439-1200
Bob Viani
810 Miron Lane
Kingston, NY 12401
845-336-4500
Bob Viani
Sharon Lomasney
30 Gibbs Court
Middletown, NY 10940
845-343-9800
Dave Leon
300 Saratoga Road
Glenville, NY 12302
518-348-7770
Dave Leon
501 Columbia Turnpike
East Greenbush, NY 12144
518-477-5550
John Mahoney
116 Kriemer Avenue
Riverhead, NY 11901
631-369-6200
Robert Morris
7 New Hartford Shopping Ctr.
New Hartford, NY 13413
315-735-8589
Bob Morris
2318 West Genessee St.
Camillus, NY 13219
315-299-2391
FDD – 2014
14877235.8
04/17/14
F - 20
Bob Viani
Sharon Lomasney
39 North Plank Road
Mid Valley Mall Suite B
Newburgh, NY 12550
845-565-4500
Dave Leon
578 Aviation Road
Queensbury, NY 12804
518.761.6869
Bob Morris
5801 Bridge Street
Dewitt, NY 13057
315-399-5222
PLANET FITNESS®
New York (cont.)
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
320 Yonkers Avenue
Yonkers, NY 10701
Dave Leon
Bob Morris
3333 West Henrietta Rd.
Henrietta, NY 14623
585-272-0099
Robert Morris
40 Catherwood Road
Ithaca, NY 14850
607-319-0763
John Mahoney
295 Route 25A
Rocky Point, NY 11778
631.821.3400
Bob Viani
Sharon Lomasney
160 Fairview Avenue
Hudson, NY 12534
518-822-8200
Jane Craig
John Craig
3339 Chambers Road
Horseheads, NY 14845
607-846-3130
Bob Viani
Sharon Lomasney
22 Taconic Center Lane
Lagrange, NY 12540
845-592-4414
Dave Leon
660 Hoosick Stret
Troy, NY 12180
518-390-7268
FDD – 2014
14877235.8
04/17/14
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
82 West 225th Street
(West Kingsbridge Rd.)
Bronx, NY 10463
Steve Joanis
2002 Glenwood Avenue
Oneida, NY 13421
315-361-9100
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
33 Route 304
Nanuet, NY 10954
Steve Joanis
437 State Route 104E, St. 19
Oswego, NY 13126
315.343.9100
Dave Leon
Bob Morris
1850 East Ridge Rd
Irondequoit, NY 14622
585.544.9213
Dave Leon
Bob Morris
78 Spencerport Rd
Rochester, NY 14606
585-426-6989
Dave Leon
Bob Morris
7493 State Route 96
Victor, NY 14564
585-742-3111
Robert Morris
1222 Arsenal Street
Watertown, NY 13601
315-661-6366
Dave Leon
Bob Morris
3525 Seneca St
West Seneca, NY 14224
716.677.9310
Dave Leon
161 Washington Ave.
Extension
Albany, NY 12205
518-456-4980
Bob Viani
Sharon Lomasney
22 US Highway 6
Port Jervis, NY 12771
845-858-9800
Dave Leon
3065 Route 50
Saratoga Springs, NY 12866
518-886-8828
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
329 Wyckoff Avenue
Queens, NY 11385
718-650-6560
F - 21
Bob Morris
822 Black River Blvd.
Rome, NY 13340
315-338-0000
Bob Morris
217 Grant Avenue
Auburn, NY 13021
315-282-7119
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
3060-70 Westchester Ave.
Bronx, NY 10461
PLANET FITNESS®
New York (cont.)
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
1775 South Avenue
Staten Island, NY 10314
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
317 Lenox Avenue
New York, NY 10027
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
33 South Broadway
White Plains, NY 10601
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
177 Dyckman Street
New York, NY 10040
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
309 East Fordham Road
Bronx, NY 10458
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2480 Grand Concourse
Bronx, NY10458
FDD – 2014
14877235.8
04/17/14
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2228 Church Avenue
Brooklyn, NY 11226
718-439-3008
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
591-595 Forest Avenue
Staten Island, NY 10310
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
329 Rt. 59
Airmont, NY 10952
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
249 Duffield St
Brooklyn, NY 11201
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2914 3rd Avenue
Bronx, NY 10455
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
1780 E. Gun Hill Rd,
Bronx, NY10469
F - 22
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
777 Broadway
Brooklyn, NY 11206
718-650-6704
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
132-40 Metropolitan Ave.
Richmond Hill, NY 11418
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2241 Westchester Ave.
Bronx, NY 10462
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
30-33 Steinway
Astoria, NY 11103
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
1001 Central Park
Scarsdale, NY 10583
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
856 Remsen Avenue
Brooklyn, NY11236
PLANET FITNESS®
New York (cont.)
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2129-2139 White Plains Rd.
Bronx, NY 10462
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
158 W. 127th Street
Manhattan, NY 10001
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
208 W. 125th Street
Harlem, NY 10027
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
33 Lecount Place
New Rochelle, NY 10801
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
2040 Forest Avenue
Staten Island, NY10310
Dave Leon
Bob Morris
4090 Maple Road
Amherst, NY 14266
716-253-7676
PFNY, LLC
James Innocenti
Jeff Innocenti
Luigi LaVerghetta
423 West 55th Street
Manhattan, NY 10019
212-336-0750
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
1030 Southern Blvd.
Bronx, NY 10459
718-326-5839
Dave Leon
101 Towne Square
Amsterdam, NY 12010
518-842-2600
Steve Joanis
1900 Empire Blvd.
Webster, NY 14580
505-347-4875
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
3799 Broadway
New York, NY 10032
212-336-0830
Steve Joanis
5897 South Transit Rd.
Lockport, NY 14094
716-201-1753
North Carolina
Martin Sinozich
265 Eastchester Drive
Suite 135
High Point, NC 27262
336-885-8000
CJ Bouchard
Mark Berlaert
5563 Western Blvd. Unit 2
Raleigh, NC 27606
919-852-0008
FDD – 2014
14877235.8
04/17/14
PFNY, LLC
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
25 Broadway
New York, NY 10004
646-216-3131
John Mahoney
700-60 Patchogue Yaphank
Rd.
Medford, NY 11763
631-205-1100
PFNY, LLC
Gerald Kennedy
Nicky Kennedy
212 South New Hope Road
Gastonia, NC 28054
704-868-4050
Alex Choquette
Shelly Choquette
68A South Kerr Avenue
Wilmington, NC 28403
910-772-1331
Gerald Kennedy
Nicky Kennedy
2418 North Center Street
Hickory, NC 28601
828-322-2200
Denis Rondeau
2200 Coronation Blvd.
Charlotte, NC 28227
704-849-4050
F - 23
Jeffrey Innocenti
James Innocenti
Luigi LaVerghetta
245 Livingston St.
Brooklyn, NY 11217
718-650-5901
PLANET FITNESS®
North Carolina (cont.)
Joe Pepe
CJ Bouchard
2001 Widewaters Pkwy
Knightdale, NC 27545
919-217-2999
Alex Choquette
6400 Carolina Beach Rd., #2
Wilmington, NC 27545
919-792-7746
Gerald Kennedy
81 McAdenville Road
Belmont, NC 28054
704-461-8490
CJ Bouchard
1845 Aversboro Drive
Garner, NC 27529
919.773.4131
Gerald Kennedy
180 Concord Commons Place
SW
Concord, NC 28027
704-786-4050
CJ Bouchard
Joseph Pepe
Forestville Commons
3121 Leland Drive
Raleigh, NC 27616
919-266-0004
Gerald Kennedy
2672 Peters Creek Parkway
Winston-Salem, NC 27127
336-788-5777
North Dakota
Scott Majkrzak
Alex Mortensen
Robert Majkrzak
4325 13th Avenue
Fargo, ND 58103
701-478-3300
Ohio
David DiSabato
3614 Indianola Avenue
Columbus, OH 43214
614-262-6004
FDD – 2014
14877235.8
04/17/14
Denis Rondeau
2401 Whitehall Park Dr.
Suite 500
Charlotte, NC 28273
704-583-0555
CJ Bouchard
8201 Rowlock Way
Raleigh, NC 27613
919-792-9132
Denis Rondeau
7643 Pineville Matthews
Road, Suite 26
Charlotte, NC 28226
704.295.1476
Martin Sinozich
838-B South Main St.
Kernersville, NC 27824
336.996.9006
Denis Rondeau
10215-B University City Blvd.
Charlotte, NC 28213
704-548-2722
CJ Bouchard
4701 Atlantic Ave.
Raleigh, NC 27604
919-850-9440
David Hicks
2107 West Roosevelt Blvd.
Monroe, NC 28110
704-225-7000
Denis Rondeau
3301 Freedom Drive, Ste. 600
Charlotte, NC 28208
704-398-9228
Martin Sinozich
4640 West Market Street
Greensboro, NC 27407
336-856-1212
CJ Bouchard
1271 Cobb Corners Dr
Rocky Mount, NC 27804
252.442.5600
Gerald Kennedy
1659 East Dixon Blvd.
Shelby, NC 28152
704.600.6550
Gerald Kennedy
335 West Plaza Drive
Mooresville, NC 28117
704-230-0909
CJ Bouchard
Joseph Pepe
412 S. Main Street
Graham, NC 27253
336-350-8498
Scott Majkrzak
Alex Mortensen
715 S. Washington Street
Grand Forks, ND 58201
701-775-8820
David DiSabato
6550 Riverside Drive
Dublin, OH 43017
614-761-2300
F - 24
Matt Glance
Chad Fitton
465 Boardman Canfield Rd
Youngstown, OH 44512
330.758.1000
PLANET FITNESS®
Ohio (cont.)
John Cooley
4317 Whipple Avenue, NW
Canton, OH 44718
330.493.9855
Armando Sangermano
19332 Detroit Rd
Rocky River, OH 44116
440.799.4141
Chad Fitton
Matt Glance
1553 W. River Road N.
Elyria, OH 44035
440-324-1324
Matt Glance
Chad Fitton
6000 Youngstown Warren Rd.
Niles, OH 44446
330-349-4038
Randall J. Fenton
691 Richmond Road
Richmond Heights, OH 44143
440-461-6200
John Clancy
544 Patterson Drive
Fairfield, OH 45014
513.889.4004
Armando Sangermano
5755 Smith Road
Brook Park, OH 44142
216-400-7248
Sean Knapp
4892 Airway Road
Dayton, OH 45431
937-938-9430
John Clancy
4394 Eastgate Square Drive
Cincinnati, OH 45245
513.842.7553
John Clancy
8501 Winton Road
Cincinnati, OH 45231
513-407-8134
Bryan Rief
6758 W. Sylvania Ave.
Sylvania, OH 43560
419-517-9800
John Cooley
835 Graham Road
Stow, OH 44224
David DiSabato
5415 Roberts Road
Hilliard, OH 43026
614-771-8900
David DiSabato
1175 Hill Road North
Pickerington, OH 43147
614-863-9100
Bryan Rief
3426 Glendale Avenue
Toledo, OH 43614
419-380-9000
Thomas Purther
David Rubin
12604 Rockside Road
Garfield Heights, OH 44125
216-475-7500
Chad Fitton
Matt Glance
1503 N. Bechtle Avenue
Springfield, OH 45504
937-324-2314
Armando Sangermano III
8443 Day Drive
Parma, OH 44129
440-882-3000
Matt Glance
Chad Fitton
2155 Village Mall Drive
Mansfield, OH 44906
419-709-8194
Sean Knapp
705 Lyons Road
Centerville, OH 45459
937-640-3116
Mark Christie
Nick Mourgenos
1950 Tiffin Avenue
Findlay, OH 45840
419-422-3000
John Clancy
11755 Princeton Pike
Cincinnati, OH 45246
513-407-7135
Bryan Rief
WB Pete Hopkins
2630 W. Laskey Rd.
Toledo, OH 43613
419-472-0200
FDD – 2014
14877235.8
04/17/14
David DiSabato
104 Dillmont Drive
Columbus, OH 43235
614-844-6100
John Cooley
Brad Wentzel
505 South Avenue
Tallmadge, OH 44278
330-630-2666
John Clancy
1075 State Route 28
Milford, OH 45150
513-340-4451
F - 25
PLANET FITNESS®
Oklahoma
Christina & Jorge Roldan
Lee Fisher & Anthony Fisher
5050 South Memorial
Tulsa, OK 74145
918-621-1122
Jorge Roldan
Anthony Fisher
8401 East 91 Street South
Tulsa, OK 74133
918-505-5737
Jeff Majkrzak
Scott Majkrzak
Alex Mortensen
1101 Garth Brooks Blvd.
Yukon, OK 73099
405-350-3100
Oregon
Ben Heiderscheidt
Octavio Lubrano
Kalpana Lubrano
2330 SE 182nd Avenue
Portland, OR 97233
503-912-3572
Pennsylvania
Bob Kindler
Frank Kindler
Stephen Kindler
4850 Carlisle Pike
Mechanicsburg, PA 17050
717-761-1202
Randy & Bonnie Vey
1405 East Lincoln Highway
Levittown, PA 19056
215-959-2900
John Clancy
Antone Katbe
Anthony Oglesby
4646 Broadway Street
Allentown, PA 18104
610-366-1020
Anthony Rufo
825 Bethlehem Pike
Flourtown, PA 19031
215-948-3946
FDD – 2014
14877235.8
04/17/14
Christina & Jorge Roldan
Lee Fisher &Anthony Fisher
1808 North Elm St.
Broken Arrow, OK 74012
918.806.6688
Jeff Majkrzak
Scott Majkrzak
Alex Mortensen
9118 S. Western Ave., Ste. A
Oklahoma City, OK 73139
405-237-3709
Christina & Jorge Roldan
Lee Fisher & Anthony Fisher
6925 E. Admiral Place
Tulsa, OK 74145
918-933-5390
Trey Canard
Kari Canard
Kyle Tosh
4202 Northwest Expressway
Oklahoma City, OK 73116
405-242-4141
Brian Hooker
John Hooker
3801 NW Cache Road
Lawton, OK 73505
508-699-7600
Tanner Halton
14755 SW Teal Blvd.
Beaverton, OR 97007
503-430-8586
Tanner Halton
2787 Lancaster Dr. NE
Salem, OR 97305
503-990-8114
Frank Kindler
Bob Kindler
3460 Paxton Street
Harrisburg, PA 17111
717-558-9821
Steve Saunders
1319 Millersville Pike
Lancaster, PA 17603
717-397-8623
Frank Kindler
Bob Kindler
121 Gettysburg Pike
Mechanicsburg, PA 17055
717-591-2332
Frank Kindler
Bob Kindler
6041 Allentown Blvd.
Harrisburg, PA 17112
717-526-6932
Arthur Thomas
3240 Pleasant Valley Blvd.
Altoona, PA 16602
814-283-8899
Arthur Thomas
379 North Reading Road
Ephrata, PA 17522
717-733-5555
Toni Rufo
9950 E. Roosevelt Blvd.
Philadelphia, PA 19115
215-969-1190
F - 26
John Cooley
3050 North Fifth St. Highway
Reading, PA 19605
610-929-8000
PLANET FITNESS®
Pennsylvania (cont.)
Toni Rufo
Pete Ruggieri
Joe Rufo
23rd and Oregon Avenue
Philadelphia, PA 19145
215-551-9000
Frank Kindler
Bob Kindler
Julie Morrison
1020 Commerce Park Dr.
Suite 2A
Williamsport, PA 17701
570-567-7579
Steve Saunders
366 Carerra Drive
Lancaster, PA 17601
717-560-6560
Toni Rufo
1575 N. 52nd St
Philadelphia, PA 19131
215.878.4410
Toni Rufo
Richard Petrone
Keith Maguire
2641-63 E. York Street
Philadelphia, PA 19125
267.639.4851
Anthony Rufo
2920 Springfield Road
Broomall, PA 19008
484-420-4676
Anthony Rufo
830 North Lansdowne Avenue
Drexel Hill, PA 19026
484-461-1229
Anthony Rufo
6410 Frankford Avenue
Philadelphia, PA 19135
267-388-5647
FDD – 2014
14877235.8
04/17/14
Toni Rufo
Joseph Rufo
Pete Ruggieri
County Line Plaza
Rte. 113 & County Line Rd.
Souderton, PA 18964
215-799-1999
Daniel P. Horan
John P. Ringwald
271 Lancaster Avenue
Malvern, PA 19335
484-568-5100
Toni Rufo
Pete Ruggieri
Joe Rufo
1866 Brownsville Rd.
Trevose, PA 19053
215-322-4490
Frank Kindler
Robert P. Kindler
Stephen Kindler
Julie Morrison
1186 Walnut Bottom Road
Carlisle, PA 17015
717-701-8581
Toni Rufo
501 Adams Avenue
Philadelphia, PA 19120
215.342.4411
Frank Kindler
28 Shippensburg Shopping
Center
Shippensburg, PA 17257
717-530-1435
Toni Rufo
5210 West Baltimore Pike
Clifton Heights, PA 19018
610-626-1770
Anthony Rufo
1619 The Fairway
Jenkintown, PA 19046
215-277-1265
Chad Fitton
Matt Glance
2982 East State Street
Hermitage, PA 16148
724-308-6563
Frank Kindler
1695 Lincoln Way East
Chambersburg, PA 17201
717-261-9980
Anthony Rufo
5753 Wayne Avenue
Philadelphia, PA 19144
267-335-5331
Arthur Thomas
1786A Columbia Ave.
Columbia, PA 17512
717-342-2049
F - 27
Pete Ruggieri
Toni Rufo
Joe Rufo
Aston, PA 19014
610-485-0800
Toni Rufo
50 Greenfiled Ave
Ardmore, PA 19003
484.416.3017
Frank Kindler
30 Baldwin Blvd.
Shamokin Dam, PA 17876
570-884-3430
Bob Viani
Sharon Lomasney
609 Pittsburgh Road
Uniontown, PA 15401
724-439-3200
PLANET FITNESS®
Pennsylvania (cont.)
Anthony Rufo
751 Horsham Road
Lansdale, PA 19446
267-421-5443
Anthony Rufo
6219 Ridge Avenue
Philadelphia, PA 19128
267-428-5700
Chad Fitton
Matthew Glance
283 Beaver Valley Mall
Monaca, PA 15061
724-728-1100
Rhode Island
Tommy Adams
Dave Rossborough
1800 Mendon Road
Cumberland, RI 02864
401-334-5400
Steve Eddleston
105 Pace Boulevard
Warwick, RI 028286
401-828-9820
Chad Fitton
Matt Glance
295 Armistice Blvd.
Pawtucket, RI 02861
401-725-0055
Steve Eddleston
387 West Fountain Street
Providence, RI 02903
401-865-6300
June Siravo
Bob Siravo
1222 Warwick Avenue
Warwick, RI 02888
401-769-4600
Steve Eddleston
40 Frenchtown Road
North Kingstown, RI 02852
401-884-9500
Steve Eddleston
1493 Hartford Avenue
Johnston, RI 02919
401-351-5050
Steve Eddleston
445 Putnam Pike
Smithfield, RI 02917
401-231-2777
Ann Marie Lukin
Steve Lukin
2000 Diamond Hill Rd.
Woonsocket, RI 02888
401-432-7408
Bob Hathaway
7531B Garners Ferry Rd
Columbia, SC 29209
803.776.5820
David Hicks
2600-D David H. McLeod
Blvd.
Florence, SC 29501
Bob Hathaway
421 Bush River Road
Columbia, SC 29210
803-750-7515
Robert Siravo
101 Verdae Boulevard
Greenville, SC 29607
864-627-4008
David Hicks
1200 E. Main Street
Spartanburg, SC 29307
864-308-8181
Gerald Kennedy
825 Cross Road Plaza
Fort Mill, SC 29708
803-548-4545
Ann Marie Lukin
Steve Lukin
780 Washington Street
Coventry, RI 02816
401-828-4200
South Carolina
Alexander B. Choquette
Shelley A. Choquette
2070 Sam Rittenberg
Boulevard #776
Charleston, SC 29407
Alexander B. Choquette
Shelley A. Choquette
2150 Northwoods Blvd.
North Charleston, SC 29406
843-553-2991
Alexander B. Choquette
Shelley A. Choquette
1145 Seaboard Street
Myrtle Beach, SC 29577
834-444-4335
Alexander B. Choquette
Shelley A. Choquette
2300 Church Street
Conway, SC 29526
843-365-5550
FDD – 2014
14877235.8
04/17/14
F - 28
PLANET FITNESS®
South Dakota
Scott Majkrzak
Alex Mortenston
1509 West 41st St
Sioux Falls, SD 57105
605.330.9990
Tennessee
Pat Augustine
6231 Perimeter Dr., Ste. 217
Chattanooga, TN 37421
423-553-8900
Pat Augustine
5425 Highway 153, Bay #10
Hixon, TN 37343
423-870-6077
Victor Brick
Shadybrook Plaza
1910 Shady Brook Street
Columbia, TN 38401
931-398-5555
Taymax Group Acquisition,
LLC
5708 Charlotte Pike
Nashville, TN 37209
615-200-7100
Texas
Joseph Bencomo
11160 Rojas Drive
El Paso, TX 79935
915-590-7867
Robert Baker
7114 Winchester Road
Memphis, TN 38125
901-757-3300
Taymax Group Acquisition,
LLC
4880 Nolensville Pike Road
Nashville, TN 37211
615-333-2888
Victor Brick
57 Carriage House Dr., Ste. 10
Jackson, TN 38305
731-256-3000
Joseph Bencomo
5700 North Mesa
El Paso, TX 79912
915-585-7867
Joseph Bencomo
1505 N. Zaragoza
El Paso, TX 79936
915-856-7867
Scott Sanders
Jon Evans
13140 Louetta Road
Houston, TX 77429
281-888-1318
Greg Attwood
1100 W. Anderson Lane
Austin, TX 78757
512-206-0022
Greg Attwood
1807 Slaughter Lane
Austin, TX 78248
512-282-0003
FDD – 2014
14877235.8
04/17/14
F - 29
John Vicari
Keith Masden
9341 Kingston Pike
Knoxville, TN 37922
865-690-0123
Robert Baker
Alex Perchuk
5740 Stage Road
Bartlett, TN 38134
901-249-8674
Taymax Group Acquisition,
LLC
1140 Gallatin Pike South
Madison, TN 37115
615-612-4478
Mike Turner
Dean McMichael
Milton Millman
4400 Fredericksburg Rd.
San Antonio, TX 78201
210-736-3536
Tim Kurtz
Jason Wong
Eric Spitz
Seth Libert
5301 Alpha Road
Dallas, TX 75240
972-392-7700
Jon Evans
Scott Sanders
10701 Jones Road
Houston, TX 77065
281-890-2727
PLANET FITNESS®
Texas (cont.)
Kyle Nagel
25 NE Loop 410
San Antonio, TX 78216
210-451-9236
Taymax Group Acquisition,
LLC
6700 Huebner Road
San Antonio, TX 78238
210-888-5545
Taymax Group Acquisition,
LLC
1739 SW Loop 410, Ste. 814
San Antonio, TX 78227
210-592-8727
Greg Attwood
200 W. Palm Valley Blvd
Austin, TX 78664
512.671.8884
Tim Kurtz
Joe Rizzo
Thomas Furdon
6545 Duck Creek Drive
Garland, TX 75043
972.240.7686
Taymax Group Acquisition,
LLC
207 N. General McMullen
San Antonio, TX 78237
210.447.7047
Joseph Bencomo
3000 Joe Battle Blvd
El Paso, TX 79938
915.855.7867
Scott Sanders
John Evans
14485 Bellaire Blvd
Houston, TX 77083
281.988.7600
Scott Sanders
Jon Evans
11187 Fondren Road
Houston, TX 77096
855-655-8657
Trey Owen
4900 Twin City Highway
Groves, TX 77619
409-960-6000
Taymax Group Acquisition,
LLC
5858 S. Padre Island Drive
Corpus Christi, TX 78412
361-993-4444
Tim Kurtz
Joe Rizzo
Thomas Furdon
1402 West Walnut St.
Dallas, TX 75042
972-487-5930
Trey Owen
3249 50th Street
Lubbock, TX 79413
806-791-2000
Greg Attwood
7100 W. US Highway 290,
Suite A
Austin, TX 78736
512.282.0003
Taymax Group Acquisition,
LLC
1671 1H-35 South, Suite 401
New Braunfels, TX 78130
830.609.9241
Greg Attwood
Scott Attwood
Mike Turner
4109 E. Lancaster Avenue
Fort Worth, TX 76103
888-237-9005
Taymax Group Acquisition,
LLC
13932 Nacogdoches Road
San Antonio, TX 78217
210-251-3346
Joseph Bencomo
725 North Resler
El Paso, TX 79912
915-833-7867
Taymax Group Acquisition,
LLC
11227 Potranco Road
San Antonio, TX 78214
210-255-1120
FDD – 2014
14877235.8
04/17/14
Jon Evans
Scott Sanders
10116 Hammerly Blvd.
Houston, TX 77080
713-893-0865
John Hooker
Brian Hooker
3915 Kell Blvd.
Wichita Falls, TX 76308
940-244-4000
F - 30
Taymax Group Acquisition,
LLC
1131 SE Military Drive
San Antonio, TX 78214
210.255.1120
Trey Owen
3801 Olsen Blvd. #1
Amarillo, TX 79109
806.358.8000
Trey Owen
2540 Barrow Street
Abilene, TX 79605
325-692-2000
PLANET FITNESS®
Texas (cont.)
Greg Attwood
1819 Pleasant Valley Rd.
Austin, TX 78741
512-282-0003
Greg Attwood
3200 Falls Drive
Dallas, TX 75211
888-237-9005
Greg Attwood
Mike Turner
1950 Ephriham Ave., Ste. 230
Fort Worth, TX 76164
888-237-9005
Scott Sanders
Jon Evans
310 Cypress Creek Parkway
Houston, TX 77090
855-665-8657
Joseph Bencomo
10861 Gateway South
El Paso, TX 79934
915-822-1002
Trey Owen
1000 N. Midkiff Rd., Ste. 13
Midland, TX 79701
432-689-4600
Brian Hooker
John Hooker
1165 South Stemmons
Freeway
Lewisville, TX 75067
469-645-8261
Greg Attwood
300 N. Valley Mills Drive
Waco, TX 76710
888-237-9005
Greg Attwood
2700 W. Pecan
Pflugerville, TX 78660
512-282-0003
Utah
Keith Larsen
640 S. 80 E.
Suite 120
Logan, UT 84321
435-753-7501
Keith Larsen
113 N. Harrisville Road
Ogden, UT 84404
801.334.0500
Keith Larsen
3175 E. 3300 South
Salt Lake City, UT 84109
801-467-6711
Taymax Group Acquisition,
LLC
1705 Pat Booker Road, Ste.
216
Universal City, TX 78148
210-566-0400
Tim Kurtz
Joe Rizzo
Thomas Furdon
3200 Camp Wisdom Road
Dallas, TX
972-296-0802
Taymax Group Acquisition,
LLC
14610 Huebner Road
San Antonio, TX 78230
210-492-2024
Greg Attwood
2740 Valwood Parkway, Ste.
147
Farmers Branch, TX 75234
888-237-9005
Keith Larsen
2334 E. Fort Union Blvd.
Salt Lake City, UT 84121
801-943-5111
Keith Larsen
324 S. State Street
Salt Lake City, UT 84111
801-431-9400
Keith Larsen
157 N. State Street
Orem, UT 84057
801-225-4222
Paul Zane Pilzer
Lisa Dang Pilzer
1836 W. 5400 South
Salt Lake City, UT 84118
801-963-8787
Keith Larsen
1946 W. 5600 S
Roy, UT 84067
801-773-3944
John Moran
Mark Henderson
42 South River Road
St. George, UT 84790
435-673-3788
Keith Larsen
155 West 500 South #3
Bountiful, UT 84010
801-298-1999
FDD – 2014
14877235.8
04/17/14
F - 31
PLANET FITNESS®
Vermont
Jim Dricker
Jessie Dricker
30 Community Dr., Unit #7
Burlington, VT 05403
802-863-8910
Jim Dricker
Jessie Dricker
57 River Rd.
Essex Junction, VT 05452
802-879-5100
Virginia
Dave Weber
Gary Bianucci
6763-R Wilson Blvd.
Falls Church, VA 22044
703-241-2255
Ken Ryder
3877 Holland Rd.
Virginia Beach, VA 23452
757-275-8315
Kevin Fagan
7680 Stream Walk Lane
Manassas, VA 20109
703-530-0123
Ken Ryder
301B Oyster Point Road
Newport News, VA 23602
757-269-0401
Ken Ryder
5815 West Norfolk Road
Portsmouth, VA 23703
757.759.0924
Kevin Fagan
4620 Kenmore Ave.
Alexandria, VA 22304
703-212-0123
Kevin Fagan
14431 Jefferson Davis
Highway
Woodbridge, VA 22191
703-491-0123
Ken Ryder
4245 E. Little Creek Rd.
Norfolk, VA 23518
757-644-6926
Ken Ryder
1060 West Mercury Blvd.
Hampton, VA 23666
757-825-8040
William Asbell, III
William Asbell, Jr.
1257 Jefferson Davis Highway
Fredericksburg, VA 22401
540-322-5652
William Asbell, III
Julian Malcolm
William Asbell, Jr.
Towers Shopping Center
672Brandon Ave. SW
Roanoke, VA 24015
540-904-6288
William Asbell, III
Julian Malcolm
William Asbell, Jr.
10040 Robious Rd
Richmond, VA 23235
804.323.4348
William Asbell, III
Julian Malcolm
William Asbell, Jr.
3405 Candlers Mountain Rd.
Lynchburg, VA 24502
434-237-0287
William Asbell, III
Julian Malcolm
William Asbell, Jr.
1790-74 E. Market St.
Harrisonburg, VA 22801
540-246-0309
Geoff Starr
Riverside Centre
3360 Riverside Drive
Danville, VA 24541
434-792-1723
Ken Ryder
415 North Military Highway,
Ste. 23
Norfolk, VA 23502
757-995-7914
Washington
Kalpana Lubrano
8024 East Mill Plain Blvd.
Vancouver, WA 98664
360-448-2277
FDD – 2014
14877235.8
04/17/14
Roger Bates
Michael Joseph
17171 Bothell Wayne
Lake Forest Park, WA 98155
206-467-1366
F - 32
Milton Odum
4613 NE Sunset Blvd.
Renton, WA 98056
425-255-5522
PLANET FITNESS®
West Virginia
Bob Viani
Sharon Lomasney
104 Gihon Village
Parkersburg, WV 26101
304-893-9800
Bob Viani
Sharon Lomasney
2399 Meadowbrook Mall Rd.
Bridgeport, WV 26330
304-842-8456
Dharmesh Shah
1220 North Queen Street
Martinsburg, WV 25404
304-260-0005
Wisconsin
Mike Dobrynio
Tim Lennon
3375 West College Ave.
Appleton, WI 54914
920-733-3554
Mike Dobrynio
Tim Lennon
2641 West Mason Street
Green Bay, WI 54303
920.544.8190
Mike Dobrynio
Tim Lennon
101 W. Wisconsin Ave.
Milwaukee, WI 53203
414-223-3380
Mike Dobrynio
Tim Lennon
549 S. Taylor Drive
Sheboygan, WI 53081
920-803-8888
Timothy Lennon
Mike Dobrynio
1083 East Johnson Street
Fond du Lac, WI 54935
920-922-0833
Mike Dobrynio
Tim Lennon
1850 Jackson Street
Oshkosh, WI 54901
920-231-5336
Mike Dobrynio
Tim Lennon
1831 Main Street
Green Bay, WI
920-544-8191
Mike Dobrynio
Tim Lennon
3333 S. 27th
Milwaukee, WI 53215
414-382-1900
Tim Lennon
Mike Dobrynio
2305 West Broadway
Monona, WI 53713
608-223-9075
Timothy Lennon
Mike Dobrynio
7475 Mineral Point Road
Madison, WI 53717
920-213-3897
Mike Dobrynio
Tim Lennon
3415 Custer Street
Manitowoc, WI 54220
920.652.9800
Mike Dobrynio
Tim Lennon
6529 S 27th Street
Franklin, WI 53132
414-988-9269
Mike Dobrynio
Tim Lennon
230 N. 18th Avenue
West Bend, WI 53095
262-365-0850
Mike Dobrynio
Tim Lennon
1800 Milton Ave., Ste. 150
Janesville, WI 53545
608-756-3294
Mike Dobrynio
Tim Lennon
N89 W16899 Appleton Ave.
Menomonee Falls, WI 53051
262-251-8000
Rick Sciacca
Kim Sciacca
1511 Ponce De Leon, Ste. 1
San Juan, PR 00909
787-919-0220
Rick Sciacca
Kim Sciacca
Carr #2, McKleeney St.
Manati, PR 00674
787-921-7001
Puerto Rico
Rick Sciacca
Kim Sciacca
5725 Boulevard Media Luna
Carolina, PR 00987
787-710-7373
Rick Sciacca
Kim Sciacca
Carr #2 km 14.7 Hato Tejas
Bayamon, PR 00959
787-315-8888
FDD – 2014
14877235.8
04/17/14
F - 33
PLANET FITNESS®
AREA DEVELOPERS
(as of December 31, 2013)
Alabama
John Landry
426 LeBlanc Cove
Biloxi, MS 39531
228-257-9051
Arizona
Thomas Bock
Kevin Kelly
John Williams
Eric Goodwin
1725 Wrightstown Road
Newton, PA 18940
215-565-6574
Arkansas
Rafael Ortega, Jr.
Brandon Sebald
8188 W. Miller Road
Springdale, AR 72762
305-720-6785
California
Steven W. Thomas
85 Sunset Circle
Sedona, AZ 86336
928-274-8116
Michael Rivera
Ryan Turner
7663 N. Charles Avenue
Fresno, CA 93711
559-435-1709
Colorado
Michael Pullman
20 West 64th St., Apt. #26A
New York, NY 10023
248-514-4599
Mark Manion
9600 Milestone Way, Apt.
3014
College Park, MD 20740
757-615-1422
Thomas Bock
Kevin Kelly
John Williams
1725 Wrightstown Road
Newton, PA 18940
215-565-6574
Steven W. Thomas
85 Sunset Circle
Sedona, AZ 86336
928-274-8116
Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270-505-1921
Stephen Griffin
Dennis Griffin
Arrien Schiltkamp
6531 Banner Lake Circle Apt.
16306
Orlando, FL 32821
603-748-0543
Josiah & Kathy Garlan
7725 Golden Peak Ct.
Las Vegas, NV 89113
Ben Heiderscheidt
21 Caverno Drive
Lee, NH 03824
603-988-8128
Lee J. Shamaley, Jr.
4921 Meadow Lark Drive
El Paso, TX 79922
915-276-5194
Jason Jost
Richard Jost
Jonathan Jost
3191 West Clyde Place
Denver, CO 80211
315-391-9678
William Fidler
39 Overton Road
Windham, NH 03087
603-327-7303
Brett McGlothin
5675 Amber Ridge Drive
Castle Pines, CO 81018
FDD – 2014
14877235.8
04/17/14
F - 34
PLANET FITNESS®
Connecticut
ECP-PF: CT Operations, Inc.
35 Old Tavern Road
Suite 101
Orange, CT 06477
Florida
Eric Dore
1507 Park Center Dr., Unit 1H
Orlando, FL 32835
407-290-8883
James Page
668 Dutchess Turnpike
Poughkeepsie, NY 12603
518-225-3823
Georgia
John Wash
204 Sausalito Blvd.
Casselberry, FL 32707
407-332-4496
David Bidwell
Scott Linsky
718 Old Shore Road
Forked River, NJ 08731
609-276-8635
Bryan Pappas
Peter Fregeau
Mike Murray
69 Haverhill Road
Amesbury, MA 01913
978-388-4636
Bonita Mancia
2200 Lakeside Drive
Harveys Lake, PA 18618
Stanley DeMartinis
Guerino Ciampi
175 McClellan Highway
East Boston, MA 02128
781-248-8076
Jane & John Craig
Debra & Roger Amato
5 Great Works Drive
South Berwick, ME 03908
603-534-7494
Mike Horan
Mark Prasalowicz
Brian Taggart
1243 Marlborough Street
Philadelphia, PA 19124
609-352-9938
Timothy Lennon
Michael Dobrynio
415 S. Olde Oneida St.
Appleton, WI 54911
646-515-4756
Luke Urban
242 S. 13th Street, Unit G
Philadelphia, PA 19107
Chris Kouros
465 Hillside Avenue
Glen Ellyn, IL 60137
630-205-1775
Jamie Mason
4914 Kingston Pike
Knoxville, TN 37934
Idaho
Keith Larsen
1655 North 20 East
N. Logan, UT 84341
435-753-7501
Illinois
Bryan Rishforth
Anthony Rufo
1100 Ashbridge Road
Bryn Mawr, PA 19010
610-357-3863
Scott Majkrzak
3521 Polk Street
South Fargo, ND 58014
701-261-4251
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215-603-0885
F - 35
PLANET FITNESS®
Indiana
Robert Baker
5 Old Stable Way
Colts Neck, NY 07722
732-740-5674
Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270-505-1921
Chris Klebba
5457 River Ridge Drive
Brighton, MI 48116
248-808-4365
Iowa
Edward Alberts
1428 Riverbend Drive
Baldwinsville, NY 13027
315-592-8900
Kansas
Christopher L. Sutherland, Jr.
Matthew S. Sutherland
Spencer D. Sutherland
Andrew K. Sutherland
3008 West Main Street
Jenks, OK 74037
918-640-6404
Ronald Huling
4527 Kibby Road
Jackson, MI
517-750-4607
Kristine & Rick Raimondo
8 Lassen Park Drive
Medford, NJ 08055
609-760-3434
Scott Majkrzak
Alex Mortensen
Jeffrey Majkrzak
3521 Polk Street
South Fargo, ND 58014
701-261-4251
Greg Henson
2513 SW Still Meadows Lane
Blue Springs, MO 64015
816-289-8608
Kentucky
Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270.505.1921
John Clancy
Robert Slingsby
161 Barrett Hill Road
Mahopac, NY 10541
914-329-9809
Louisiana
Kevin Windham
Dorothy Windham
Michael Beaton
P.O. Box 249
Centreville, MS 39631
601-645-5034
Gary J. Sinopoli, Jr.
Robert J. Siragusa
Michael D. Hurring
769 McLane Lane
Biloxi, MS 39532
228-424-8972
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Michael Campagnolo
1326 Central Avenue
Indianapolis, IN 46202
617-905-9005
Chad Fitton
Matthew Glance
50 Nashua Rd., Suite 203
Londonderry, NH 03053
603-432-6055
F - 36
Christopher L. Sutherland, Jr.
Matthew S. Sutherland
Spencer D. Sutherland
Andrew K. Sutherland
3008 West Main Street
Jenks, OK 74037
918-640-6404
PLANET FITNESS®
Louisiana (cont.)
Brandon Robinson
1130 S. Fieldspan
Rd.
Duson, LA 70529
337.356.6465
Maryland
Victor Brick
201 Old Padonia Rd.
Cockeysville, MD 21030
410-252-8058
Daniel P. Horan
401 Germantown Pike
Lafayette Hill, PA 19444
484-342-0469
Massachusetts
Brian Kablik
15 Jacob Drive
Mansfield, MA 02048
508-579-8267
Michael Clark
45 Storey Avenue
Newburyport, MA 01950
978-462-2500
Michigan
Bryan Rief
WB Pete Hopkins
29475 West 7 Mile Road
Livonia, MI 48152
248-427-0043
Ronald Huling
4527 Kibby Road
Jackson, MI
517-750-4607
Dennis W. Backos
James L. Matthew
11 Mile Road
Warren, MI 48089
586-792-6900
Julian Monterosso
Lisa Monterosso
Patrick Schafer
935 Scott Court
Northville, MI 48167
248-277-8543
Imad Farhat
48687 Stoneridge Drive
Northville, MI 48168
313-333-0307
Minnesota
Kevin P. Murphy
Daniel J. O’Shaughnessy
Daniel J. Hill
602 Andover Road
Newton Square, PA 19073
610-420-7648
Mississippi
John Landry
426 LeBlanc Cove
Biloxi, MS 39531
228-257-9051
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Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270-505-1921
F - 37
PLANET FITNESS®
Missouri
Brandon Sebald
Jonathan Norman
Gerald Norman
Eric Kuhn
1241 Strassner Dr., Unit 1508
Brentwood, MO 63144
914-384-1998
Rafael Ortega, Jr.
Brandon Sebald
8188 W. Miller Road
Springdale, AR 72762
305-720-6785
Greg Henson
Brad Henson
Deborah Brenner
4251 NE Port Drive
Lee’s Summit, MO 64064
816-289-8608
Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270-505-1921
John P. Clancy
Sampson Glassman
129 Viera Drive
Palm Beach Gardens, FL
33418
914-329-9809
Nebraska
Edward Alberts
1428 Riverbend Drive
Baldwinsville, NY 13027
315-592-8900
New Jersey
William Cassotis
184 West Boylston Street
Unit 8
West Boylston, MA 01583
508-835-2551
Anthony Falange
Naomi Falange
2956 Route 10 West
Morris Plains, NJ 07950
973-998-0989
Russell Del Rosso
Michael Connell
Michael Castellano
Michael Rodricks
931 Fisher Blvd.
Toms River, NJ 08753
732-270-6300
Craig Benson
1662 Elm Street, Ste. 2
Manchester, NH 03101
603-669-6194
New Mexico
ECP-PF: NM Operations, Inc.
35 Old Tavern Road
Suite 101
Orange, CT 06477
Joseph Bencomo
11160 Rojas Drive
El Paso, TX 79935
915-590-7867
New York
Bob Viani
3675 Albany Post Road
Poughkeepsie, NY 12601
845-473-8000
Jeff Innocenti
1720 Hutchinson River Pkwy.
Bronx, NY 10461
718-828-9404
Dave Leon
Bob Morris
7 New Hartford Shopping Ctr.
New Hartford, NY 13413
315-735-8589
Robert Morris
7 New Hartford Shopping Ctr.
New Hartford, NY 13413
315-735-8589
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PLANET FITNESS®
Nevada
Jimmy Nafso
Sylvia Nafso
21165 Bridle Run
Northville, MI 48167
248-514-6006
North Carolina
C. J. Bouchard
Joe Pepe
4701 Atlantic Avenue
Raleigh, NC 27604
919-850-9440
Jamie Mason
4914 Kingston Pike
Knoxville, TN 37934
Ohio
David A. DiSabato
7507 Bridlespur Lane
Delaware, OH 43015
614-262-6004
John Clancy
Robert Slingsby
161 Barrett Hill Road
Mahopac, NY 10541
914-329-9809
Thomas E. Purther
Randall J. Fenton
David Rubin
3001 W. Big Beaver, Ste. 324
Troy, MI 48084
248-538-9898
Oklahoma
Anthony Fisher
5627 South Madison Place
Tulsa, OK 74105
918-621-1122
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Alexander B. Choquette
Shelley A. Choquette
68A South Kerr Avenue
Wilmington, NC 28403
910-772-1331
Gerald Kennedy
Trampus Kennedy
908 Carole Summey Drive
Dallas, NC 28034
704-718-8700
Denis Rondeau
114 Exeter Road
Hampton Falls, NH 03844
603-772-1415
Bryan Rief
WB Pete Hopkins
29475 West 7 Mile Road
Livonia, MI 48152
248-427-0043
John Cooley
426 Windy Hill Road
Gilbertsville, PA 19525
610-639-2400
Armando T. Sangermano, III
Earl B. Hawkes
15 Rolling Meadow Lane
Haverhill, MA 01832
Mark Christie
2114 Normandy
Findlay, OH 45840
603-512-1400
D. Michael Hicks
418 Ewing Drive
Belmont, NC 28012
704-825-1381
Chad Fitton
Matthew Glance
50 Nashua Rd., Suite 203
Londonderry, NH 03053
603-432-6055
Robert Baker
5 Old Stable Way
Colts Neck, NY 07722
Jeffrey Majkrzak
Scott Majkrzak
Alex Mortensen
3521 Polk Street South
Fargo, ND 58104
701-261-4251
F - 39
PLANET FITNESS®
Oregon
Tanner Halton
420 NW 11th Ave.
Unit 714
Portland, OR 97209
508-709-1122
Pennsylvania
Frank Kindler
Robert Kindler
107 Saint Johns Church Rd.
Camphill, PA 17011
717-763-8904
James Wade
Michael Wade
624 Bellflower Blvd.
Warrington, PA 18976
215-430-1252
Milan Dalsania
6608 Carmel Drive
Macungie, PA 18062
Toni Rufo
Peter Ruggieri
Anthony Rufo
4952 Pennell Road
Aston, PA 19014
610-485-0800
Mark S. Rhodes
420 St David’s Road
Wayne, PA 19087
610-687-3233
Chad Fitton
Matthew Glance
50 Nashua Rd., Suite 203
Londonderry, NH 03053
603-432-6055
Jane & John Craig
5 Great Works Drive
South Berwick, ME 03908
603-534-7494
D. Michael Hicks
418 Ewing Drive
Belmont, NC 28012
704-825-1381
Jamie Mason
4914 Kingston Pike
Knoxville, TN 37934
Pat Augustine
6000 Fairview Rd. Suite 1212
Charlotte, NC 28210
704.552.4008
Robert Viani
Sharon Lomasney
4 Jefferson Plaza, Ste. 501
Poughkeepsie, NY 12601
845-473-1190
Rhode Island
Steven R. Eddleston
387 West Fountain Street
Providence, RI 02903
401-865-6300
South Carolina
Alexander B. Choquette
Shelley A. Choquette
68A South Kerr Avenue
Wilmington, NC 28403
910-772-1331
Gerald Kennedy
Trampus Kennedy
908 Carole Summey Drive
Dallas, NC 28034
704-718-8700
Tennessee
Victor Brick
201 Old Padonia Rd.
Cockeysville, MD 21030
410-252-8058
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F - 40
PLANET FITNESS®
Tennessee (cont.)
Richard Kueber
222 E. Witherspoon, Unit
1005
Louisville, KY 40202
270-505-1921
Texas
Joseph Bencomo
11160 Rojas Drive
El Paso, TX 79935
915-590-7867
Ray Owen, III
9108 Zyle Road
Austin, TX 78737
512-694-0799
Brian Hooker
John Hooker
4410 Nassau Drive
Wichita Falls, TX 76308
940-781-7175
Utah
Keith Larsen
1655 North 20 East
N. Logan, UT 84341
435-753-7501
Virginia
Kevin Fagan
7680 Stream Walk Lane
Manassas, VA 07901
908-377-7097
PF Taymax HQ, LLC
100 Bayview Circle
Suite 5000
Newport Beach, CA 92660
Scott Sanders
Jon Evans
2620D South Shepard Dr.#558
Houston, TX 77098
713-521-1431
Timothy Kurtz
Jason Wong
Joseph Rizzo
Tom Furdon
40 Ray Avenue
Burlington, MA 01803
781-229-9999
Robert Segler
2204 Louisiana St., 2nd Floor
Houston, TX 77002
Greg Attwood
1100 W. Anderson Lane
Austin, TX 78757
512-205-0022
PF Taymax HQ, LLC
100 Bayview Circle
Suite 5000
Newport Beach, CA 92660
Paul Zane Pilzer
Lisa Dang Pilzer
1371 Aerie Drive
Park City, UT 84060
435-640-8118
Ken W. Ryder
Sharree Ryder
4324 Holland Road
Virginia Beach, VA 23452
703-447-9972
William Asbell, Jr.
William Asbell, III
Julian B. Malcolm
1906 Cambridge Ave., SW
Roanoke, VA 24015
603-781-7082
Jamie Mason
4914 Kingston Pike
Knoxville, TN 37934
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PLANET FITNESS®
Washington
Milton Odum
Christopher Odum
2003 Split Branch Court
Houston, TX 77077
281-558-5458
West Virginia
Bob Viani
Sharon Lomasney
3675 Albany Post Road
Poughkeepsie, NY 12601
845-473-8000
Wisconsin
Timothy Lennon
Michael Dobrynio
Anthony Jentil
Eric Najork
415 S. Olde Oneida St.
Appleton, WI 54911
646-515-4756
Chad Fitton
Matthew Glance
50 Nashua Rd., Suite 203
Londonderry, NH 03053
603-432-6055
Mike Murray
Michael Dobrynio
17 Thaxter Rd.
Portsmouth, NH 03801
603-475-1479
Puerto Rico
Richard J. Sciacca, Jr.
Kimberly A. Sciacca
555 Monserrate St.
San Juan, PR 00907
617-750-9560
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PLANET FITNESS®
Corporate Locations
(as of December 31, 2013)
California
PF Vallejo, LLC
PFCA, LLC
3505 Sonoma Blvd.
Vallejo, CA 94590
4925 MacDonald Ave.
Richmond, CA 94805
Colorado
Pla-Fit Colorado, LLC
9120 Wadsworth Parkway
Westminster, CO 80021
Delaware
PFPA, LLC
900 S. Justison St
Wilmington, DE 1901
302.691.7844
Massachusetts
JFZ, LLC
Pla-Fit Health LLC
20 Arch Meadow Drive
Danvers, MA 01923
29 Traders Way
Salem, MA 01970
New Hampshire
Pla-Fit Health, LLC
JFZ, LLC
PF Derry, LLC
898 Central Avenue
Dover, NH 03820
736 Huse Street
Manchester, NH 03103
55 Crystal Avenue. Ste. 403
Derry, NH 03038
775 Lafayette Road
Portsmouth, NH 03801
99 Eddy Road
Manchester, NH 03102
89 Fort Eddy Road
Concord, NH 03301
15-17 Freetown Road
Raymond, NH 03077
306 N. Main Street
Rochester, NH 03867
96
Daniel
Webster
Highway
Belmont, NH 038220
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PLANET FITNESS®
20 Portsmouth Avenue
Stratham, NH 03885
54 Calef Highway
Lee, NH 03861
18 Northwest Blvd.
Nashua, NH 03063
150 Coliseum Ave
Nashua, NH 03063
553 S. Mast Road
Suite B-113
Goffstown, NH 03045
New Jersey
Pla-Fit Health NJNY, LLC
Pla-Fit Health NJNY, LLC
Pla-Fit Health NJNY, LLC
561 Rte. 1
Edison, NJ 08817
175 Avenue A
Bayonne, NJ 07002
601 Washington Street
Hoboken, NJ 07030
New York
Pla-Fit Health NJNY, LLC
Pla-Fit Health NJNY, LLC
Pla-Fit Health NJNY, LLC
81 Middle Country Road
Centereach, NY 11720
Pla-Fit Health NJNY, LLC
894A Sunrise Highway
Bayshore, NY 11706
Pla-Fit Health NJNY, LLC
179 Westbury Avenue
Carle Place, NY 11514
Pla-Fit Health NJNY, LLC
25 Ruland Road
Melville, NY 11747
Pla-Fit Health NJNY, LLC
1040 South Broadway
Hicksville, NY 11801
`
1839 E. Main Street
Peekskill, NY 10566
PFPA, LLC
PFPA, LLC
Gateway Shopping Ctr.
South Wyoming Ave.
Unit 21B
Edwardsville, PA 18704
1540 Main Street
Peckville, PA 18452
3025 Hempstead Tpke
Levittown, NY 11756
Pennsylvania
PFPA, LLC
150 East Pennsylvania Ave.
Suite 100
Downingtown, PA 19335
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PLANET FITNESS®
PFPA, LLC
PFPA, LLC
PFPA, LLC
1400 North Charlotte Street
Pottstown, PA 19464
PFPA, LLC
1600-1624 Nay Aug Ave.
Scranton, PA 18509
PFPA, LLC
1302 Hanover Ave.
Allentown, PA 18109
PFPA, LLC
860 West Street Road
Warminster, PA 18974
PFPA, LLC
1850 South Township Blvd
Pittston, PA 16840
PFPA, LLC
3505 Mountain View Drive
West Mifflin, PA 15122
PFPA, LLC
1635 S. Braddock Ave
Pittsburgh, PA 15218
5280 Route 30
Greensburg, PA 15601
1950 Rotunda Drive
Erie, PA 16509
PFPA, LLC
PFPA, LLC
PFPA, LLC
1248 Greensprings Drive
York, PA 17402
717-751-2370
2130 White Street
York, PA 17404
717-747-1481
801 Baltimore Street
Hanover, PA 17331
717-633-1001
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PLANET FITNESS®
Immediate Family*
Denis Rondeau
Michael Forcillo
2401 Whitehall Park Dr.
Suite 500
Charlotte, NC 28273
Denis Rondeau
10215-B University City Blvd.
Charlotte, NC 28213
Denis Rondeau
2200 Coronation Blvd.
Charlotte, NC 28227
Denis Rondeau
Michael Forcillo
7643 Pineville Matthews
Road, Suite 26
Charlotte, NC 28226
Denis Rondeau
3301 Freedom Drive, Ste. 600
Charlotte, NC 28208
* These locations are owned by an immediate family member of a person listed in Item 2.
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PLANET FITNESS®
LIST OF FRANCHISEES THAT LEFT THE SYSTEM
(as of December 31, 2013)
During the fiscal year, four (4) Planet Fitness franchisees left the system.
Two (2) Planet Fitness franchise owners voluntarily ceased to conduct business:

Bruce Erickson, Boston, MA; Current business telephone number: (617) 248-8611

Todd Michalik, Boston, MA; Current business telephone number: (617) 248-8611
Two (2) Planet Fitness franchise owners had their franchise agreements
terminated and thereby ceased to conduct business:

Patrick Catino, Saugus, MA; Current business telephone number (617) 628-4272

Kevin LaVelle, Winchester, MA; Current business telephone number (978) 863-8990
If you buy this franchise, your contact information may be disclosed to other buyers when you leave
the franchise system.
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PLANET FITNESS®
LIST OF AREA DEVELOPMENT AGREEMENTS TERMINATED
(as of December 31, 2013)
New Jersey
Arthur Thomas
379 North Reading
Ephrata, PA 17522
717-733-5555
Nevada
John Macaluso
1240 5th Street
Manhattan Beach, CA 90266
310-908-2621
North Carolina
Marc R. Gowdy
James T. Ball
321 Little River Road
Berwick, ME 03901
603-534-9567
Pennsylvania
Arthur Thomas
379 North Reading
Ephrata, PA 17522
717-733-5555
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PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “G”
TO THE DISCLOSURE DOCUMENT
STATE ADDENDA
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G-1
PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF CALIFORNIA
The following information applies to franchises and franchisees subject to the California
Franchise Investment Act. Item numbers correspond to those in the main body:
THE CALIFORNIA INVESTMENT LAW REQUIRES THAT A COPY OF ALL
PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE
DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS. ANY COMPLAINTS CONCERNING
THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA
DEPARTMENT OF CORPORATIONS AT www.corp.ca.gov.
SECTION 31125 OF THE CALIFORNIA INVESTMENT LAW REQUIRES US TO
GIVE YOU A DISCLOSURE DOCUMENT APPROVED BY THE COMMISSIONER OF
CORPORATIONS BEFORE WE ASK YOU TO CONSIDER A MATERIAL
MODIFICATION OF YOUR FRANCHISE AGREEMENT.
Item 3.
Item 3 is amended to provide that neither we nor any other person identified in Item 2 is
subject to any currently effective order of any national securities association or national
securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq.,
suspending or expelling such persons from membership in such association.
Item 17.
1.
California Business & Professions Code Sections 20000 through 20043 provide
rights to you concerning termination or nonrenewal of a franchise. If the Franchise Agreement
contains a provision that is inconsistent with the law, the law will control.
2.
Termination of the Franchise Agreement by us because of your insolvency or
bankruptcy may not be enforceable under applicable federal law (11 U.S.C.A. 101 et seq.).
3.
The Franchise Agreement contains a covenant not to compete which extends
beyond the termination of the franchise. This provision may not be enforceable under California
law.
4.
You must sign a general release if you are granted a successor franchise or
transfer your franchise. These provisions may be unenforceable under California law.
California Corporations Code 31512 voids a waiver of your rights under the Franchise
Investment Law (California Corporations Code 31000 through 31516). Business and Professions
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G-2
PLANET FITNESS®
Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and
Professions Code 20000 through 20043).
5.
The Franchise Agreement requires the application of the laws of New Hampshire.
This provision may not be enforceable under California law.
6.
The Franchise Agreement requires binding arbitration. The arbitration will occur
in the office of JAMS that is nearest to our principal business address (that JAMS office is
currently Boston, Massachusetts) with the costs being borne as determined by the arbitrator.
Prospective franchisees are encouraged to consult private legal counsel to determine the
applicability of California and federal laws (such as Business and Professions Code Section
20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any
provisions of a franchise agreement restricting venue to a forum outside the State of California.
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G-3
PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF CALIFORNIA
This Amendment pertains to franchises sold in the State of California and is for the
purpose of complying with California statutes and regulations. Notwithstanding anything which
may be contained in the body of the Franchise Agreement to the contrary, the Agreement is
amended to include the following:
1.
Articles 16.4. and 16.5. of the Franchise Agreement contain a covenant not to
compete which extends beyond the term of the franchise. This provision may not be enforceable
under California law.
2.
Article 19.13. of the Franchise Agreement requires the application of the laws of
New Hampshire. This provision may not be enforceable under California law.
3.
In all other respects, the Franchise Agreement will be construed and enforced
according to its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT FOR THE
STATE OF CALIFORNIA
This Amendment pertains to franchises sold in the State of California and is for the
purpose of complying with California statutes and regulations. Notwithstanding anything which
may be contained in the body of the Area Development Agreement to the contrary, the
Agreement is amended to include the following:
1.
Article 13 of the Area Development Agreement contains a covenant not to
compete which may extend beyond the term of the franchise. This provision may not be
enforceable under California law.
2.
Article 20 of the Area Development Agreement requires the application of the
laws of New Hampshire. This provision may not be enforceable under California law
3.
In all other respects, the Area Development Agreement will be construed and
enforced according to its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF HAWAII
This Amendment pertains to franchises sold in the State of Hawaii and is for the purpose
of complying with Hawaii statutes and regulations. Notwithstanding anything which may be
contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to
include the following:
1.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are
met independently without reference to this Amendment.
2.
Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
TO BE SIGNED IN DUPLICATE
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT FOR THE
STATE OF HAWAII
This Amendment pertains to franchises sold in the State of Hawaii and is for the purpose
of complying with Hawaii statutes and regulations. Notwithstanding anything which may be
contained in the body of the Area Development Agreement to the contrary, the Agreement is
amended to include the following:
1.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are
met independently without reference to this Amendment.
2.
Except as amended herein, the Area Development Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
TO BE SIGNED IN DUPLICATE
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF MICHIGAN
NOTICE REQUIRED
BY
STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS
THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS.
IF ANY OF THE
FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE
PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents
relating to a franchise:
(a)
A prohibition on the right of a franchisee to join an association of franchisees.
(b)
A requirement that a franchisee assent to a release, assignment, novation, waiver, or
estoppel which deprives a franchisee of rights and protections provided in this act. This shall not
preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
(c)
A provision that permits a franchisor to terminate a franchise prior to the expiration
of its term except for good cause. Good cause shall include the failure of the franchisee to comply
with any lawful provision of the franchise agreement and to cure such failure after being given
written notice thereof and a reasonable opportunity, which in no event need be more than 30 days,
to cure such failure.
(d)
A provision that permits a franchisor to refuse to renew a franchise without fairly
compensating the franchisee by repurchase or other means for the fair market value at the time of
expiration of the franchisee’s inventory, supplies, equipment, fixtures, and furnishings.
Personalized materials which have no value to the franchisor and inventory, supplies, equipment,
fixtures, and furnishings not reasonably required in the conduct of the franchise business are not
subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5
years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to
conduct substantially the same business under another trademark, service mark, trade name,
logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of
the franchise or the franchisee does not receive at least 6 months advance notice of franchisor’s
intent not to renew the franchise.
(e)
A provision that permits the franchisor to refuse to renew a franchise on terms
generally available to other franchisees of the same class or type under similar circumstances. This
section does not require a renewal provision.
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PLANET FITNESS®
(f)
A provision requiring that arbitration or litigation be conducted outside this state.
This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to
conduct arbitration at a location outside this state.
(g)
A provision which permits a franchisor to refuse to permit a transfer of ownership
of a franchise, except for good cause. This subdivision does not prevent a franchisor from
exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not
limited to:
(i)
The failure of the proposed transferee to meet the franchisor’s then-current
reasonable qualifications or standards.
(ii)
The fact that the proposed transferee is a competitor of the franchisor or
subfranchisor.
(iii)
The unwillingness of the proposed transferee to agree in writing to comply with all
lawful obligations.
(iv)
The failure of the franchisee or proposed transferee to pay any sums owing to the
franchisor or to cure any default in the franchise agreement existing at the time of the
proposed transfer.
(h)
A provision that requires the franchisee to resell to the franchisor items that are not
uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants
to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and
conditions as a bona fide third party willing and able to purchase those assets, nor does this
subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a
franchise for the market or appraised value of such assets if the franchisee has breached the lawful
provisions of the franchise agreement and has failed to cure the breach in the manner provided in
subdivision (c).
(i)
A provision which permits the franchisor to directly or indirectly convey, assign, or
otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision
has been made for providing the required contractual services.
The fact that there is a notice of this offering on file with the attorney general does not
constitute approval, recommendation, or endorsement by the attorney general.
Any questions regarding this notice should be directed to the Department of Attorney
General, State of Michigan, 670 Williams Building, Lansing, Michigan 48913, telephone (517)
373-7117.
THE MICHIGAN NOTICE APPLIES ONLY TO FRANCHISEES WHO ARE
RESIDENTS OF MICHIGAN OR LOCATE THEIR FRANCHISES IN MICHIGAN.
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF MINNESOTA
The following applies to franchises and franchisees subject to Minnesota statutes and
regulations. Item numbers correspond to those in the main body.
Item 13.
We will undertake the defense of any third party claim of infringement involving the
PLANET FITNESS® mark. You must cooperate with the defense in any reasonable manner
we prescribe with any direct cost of such cooperation to be borne by us.
Item 17.
1.
Minnesota law provides you with certain termination and nonrenewal rights. As
of the date of this Disclosure Document, Minn. Stat. Sec. 80C.14, Subd. 3, 4 and 5 require,
except in certain specified cases, that you be given 90 days’ notice of termination (with 60 days
to cure) and 180 days’ notice for nonrenewal of the Franchise Agreement.
2.
Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring
litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the
franchisee to consent to liquidated damages, termination penalties or judgment notes. In
addition, nothing in the Disclosure Document or Franchise Agreement can abrogate or reduce
any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any
procedure, forum, or remedies provided for by the laws of the jurisdiction.
3.
In the event you breach or threaten to breach any of the terms of this Agreement,
we will be entitled to seek an injunction restraining such breach and/or to a decree of specific
performance, without showing or proving any actual damage, together with recovery of
reasonable attorneys’ fees and other costs incurred in obtaining said equitable relief, until such
time as the arbitrators make a final and binding determination.
4.
Pursuant to Minnesota Rule 2860-4400D, the general release required as a
condition to renewal or transfer will not apply to liability under the Minnesota Franchise Act;
provided this part shall not ban the voluntary settlement of disputes.
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF MINNESOTA
This Amendment pertains to franchises sold in the State of Minnesota and is for the
purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which
may be contained in the body of the Franchise Agreement to the contrary, the Agreement is
amended as follows:
1.
We will undertake the defense of any claim of infringement by third parties
involving the PLANET FITNESS® mark, and you will cooperate with the defense in any
reasonable manner prescribed by us with any direct cost of such cooperation to be borne by us.
2.
Article 15 (Termination of Agreement) of the Franchise Agreement is revised to
include the following language: Franchisor will comply with Minn. Stat. Sec. 80C.14 which
requires, except in certain specified cases, that Franchisor gives you 90 days’ notice of
termination with 60 days to cure.
3.
Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring
litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the
franchisee to consent to liquidated damages, termination penalties or judgment notes. In
addition, nothing in the Disclosure Document or Franchise Agreement can abrogate or reduce
any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any
procedure, forum, or remedies provided for by the laws of the jurisdiction.
4.
entirety.
Article 19.17 (Waiver of Punitive Damages and Jury Trial) is hereby deleted in its
5.
No Article providing for a general release as a condition to renewal or transfer
will act as a release or waiver of any liability incurred under the Minnesota Franchise Act;
provided that this part shall not ban the voluntary settlement of disputes.
6.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of Minnesota Statutes Sections 80C.01 to
80C.22 are met independently without reference to this Amendment.
7.
Except as amended herein, the Franchise Agreement will be construed and enforced
in accordance with its terms.
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PLANET FITNESS®
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT
FOR THE
STATE OF MINNESOTA
This Amendment pertains to franchises sold in the State of Minnesota and is for the
purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which
may be contained in the body of the Area Development Agreement to the contrary, the
Agreement is amended as follows:
1.
Article 9 (Default and Termination) of the Area Development Agreement is
revised to include the following language: Franchisor will comply with Minn. Stat. Sec. 80C.14
which requires, except in certain specified cases, that Franchisor gives you 90 days’ notice of
termination with 60 days to cure.
2.
No release language set forth in the Area Development Agreement will relieve
Franchisor or any other person, directly or indirectly from liability imposed by the laws
concerning franchising of the State of Minnesota, provided that this paragraph will not be for the
voluntary settlement of disputes.
3.
Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring
litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the
franchisee to consent to liquidated damages, termination penalties or judgment notes.
Accordingly, Article 20.16 (Consent to Jurisdiction) is deleted from the Area Development
Agreement. In addition, nothing in the Disclosure Document or Area Development Agreement
can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or
your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
4.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of Minnesota Statutes Sections 80C.01 to
80C.22 are met independently without reference to this Amendment.
5.
Except as amended herein, the Area Development Agreement will be construed
and enforced according to its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF NEW YORK
The following information applies to franchises and franchisees subject to New York
statutes and regulations. Item numbers correspond to those in the main body.
Item 3.
Neither we, our affiliates nor any person identified in Item 2 of this Disclosure
Document:
A.
Has an administrative, criminal or civil action pending against that person
alleging: a felony; a violation of a franchise, antitrust or securities law; fraud,
embezzlement, fraudulent conversion, misappropriation of property; unfair or deceptive
practices or comparable civil or misdemeanor allegations, including pending actions,
other than routine litigation incidental to the business, which are significant in the context
of the number of franchisees and the size, nature or financial condition of the franchise
system or its business operations.
B.
Has been convicted of a felony or pleaded nolo contendere to a felony
charge or, within the ten-year period immediately preceding the application for
registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge
or has been the subject of a civil action alleging: violation of a franchise, antifraud or
securities law; fraud, embezzlement, fraudulent conversion or misappropriation of
property, or unfair or deceptive practices or comparable allegations.
C.
Is subject to a currently effective injunctive or restrictive order or decree
relating to the franchise, or under a federal, State or Canadian franchise, securities,
antitrust, trade regulation or trade practice law, resulting from a concluded or pending
action or proceeding brought by a public agency; or is subject to any currently effective
order of any national securities association or national securities exchange, as defined in
the Securities and Exchange Act of 1934, suspending or expelling such person from
membership in such association or exchange; or is subject to a currently effective
injunctive or restrictive order relating to any other business activity as a result of an
action brought by a public agency or department, including, without limitation, actions
affecting a license as a real estate broker or sales agent.
Item 4.
Neither we nor any of our predecessors, officers or general partners has during the 10
year period immediately preceding the date of the Disclosure Document been adjudged bankrupt
or reorganized due to insolvency or was a principal officers of any company or a general partner
in any partnership that was adjudged bankrupt or reorganized due to insolvency during or within
1 year after the period that such officer or general partner of us held such position in such
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PLANET FITNESS®
company or partnership, or whether any such bankruptcy or reorganization proceeding has been
commenced.
Item 17(j)
The Franchise Agreement is fully assignable by us, however, no assignment will be made
except to an assignee who in the good faith judgment of the franchisor is willing and able to
assume the franchisor’s obligations.
Item 17(w).
The foregoing choice of law should not be considered a waiver of any right conferred
upon the franchisor or franchisee by the General Business law of the State of New York, Article
33.
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF NORTH DAKOTA
The following applies to franchises and franchisees subject to North Dakota statutes and
regulations. Item numbers correspond to those in the main body:
Item 17.
1.
Covenants not to compete such as those mentioned in Item 17 may be subject to
Section 9-08-06 of the North Dakota Century Code and unenforceable in the State of North Dakota
if contrary to Section 9-08-06.
2.
Notwithstanding anything contained in Section 20 of the Franchise Agreement and
Section 17 of the Area Development Agreement, any arbitration proceeding will take place in the
city nearest to your BUSINESS in which JAMS maintains an office and facility for arbitration, or
at such other location as may be mutually agreed upon by the parties.
3.
Any claims under the North Dakota Franchise Investment Law may be brought in
the State of North Dakota.
4.
The North Dakota Securities Commissioner has held that requiring franchisees to
consent to the jurisdiction of courts outside of North Dakota or requiring the franchisee to consent
to a limitation of claims are unfair, unjust and inequitable within the intent of Section 51-19-09 of
the North Dakota Franchise Investment Law.
5.
The North Dakota Securities Commissioner has held that franchise agreements,
which specify that they are to be governed by the laws of a state other than North Dakota, are
unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise
Investment Law. Therefore, the Franchise Agreement and Area Development Agreement will be
governed by North Dakota law.
6.
You will not be required to sign a general release if you renew your franchise since
such requirement is unenforceable under Section 51-19-09 of the North Dakota Franchise
Investment Law.
7.
The North Dakota Securities Commissioner has held that a waiver of trial by jury is
unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise
Investment Law. Therefore, any such waiver in the Franchise Agreement and Area Development
Agreement is unenforceable.
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF NORTH DAKOTA
This Amendment pertains to franchises sold in the State of North Dakota and is for the
purpose of complying with North Dakota statutes and regulations. Notwithstanding anything
which may be contained in the body of the Franchise Agreement to the contrary, the Agreement
is amended to include the following:
1.
Pursuant to Section 51-19-09 of the North Dakota Franchise Investment Law, a
franchisee may not be required to sign a general release as a condition of renewal under Article
4.B(vii) of the Franchise Agreement. Accordingly, Article 14.5 of the Franchise Agreement is
amended and restated in its entirety as follows
14.5 AGREEMENTS. If you satisfy all of the other conditions to the grant of a
successor franchise, you and your Owners agree to execute the form of franchise
agreement and any ancillary agreements we are then customarily using in
connection with the grant of successor franchises for PLANET FITNESS
businesses. Failure by you or your Owners to sign such agreements and deliver
them to us for acceptance and execution within thirty (30) days after their delivery
to you will be deemed an election not to acquire a successor franchise.
2.
Notwithstanding anything contained in Article 19.12 of the Franchise Agreement,
any arbitration proceeding must take place in the city nearest to the your BUSINESS in which
JAMS maintains an office and facility for arbitration, or at such other location as may be mutually
agreed upon by the parties.
3.
Article 19.13 of the Franchise Agreement is revised by replacing “New Hampshire”
with “North Dakota.”
4.
Covenants not to compete such as those mentioned in Article 16 of the Franchise
Agreement may be subject to Section 9-08-06 of the North Dakota Century Code and
unenforceable in the State of North Dakota if contrary to Section 9-08-06.
5.
The North Dakota Securities Commissioner has held that requiring franchisees to
consent to the jurisdiction of courts outside of North Dakota is unfair, unjust and inequitable within
the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Accordingly,
Article 19.14 of the Franchise Agreement is amended and restated in its entirety as follows:
19.14 CONSENT TO JURISDICTION. Subject to Article 19.12. hereof, you
and your Owners agree that we may institute any action against you or your
Owners in any state or federal court of general jurisdiction in North Dakota and
you (and each Owner) irrevocably submit to the jurisdiction of such courts and
waive any objection you (or he or she) may have to either the jurisdiction of or
venue in such courts.
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PLANET FITNESS®
6.
Article 19.15 (Waiver of Punitive Damages, Jury Trial and Class Actions) is
hereby deleted from the Franchise Agreement.
7.
Agreement.
Article 19.17 (Limitations of Claims) is hereby deleted from the Franchise
8.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the North Dakota Franchise Investment
Law are met independently without reference to this Amendment.
9.
Except as amended herein, the Franchise Agreement will be construed and enforced
in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT FOR THE
STATE OF NORTH DAKOTA
This Amendment pertains to franchises sold in the State of North Dakota and is for the
purpose of complying with North Dakota statutes and regulations. Notwithstanding anything
which may be contained in the body of the Area Development Agreement to the contrary, the
Agreement is amended to include the following:
1.
Covenants not to compete such as those mentioned in Article 13 of the Area
Development Agreement may be subject to Section 9-08-06 of the North Dakota Century Code
and unenforceable in the State of North Dakota if contrary to Section 9-08-06.
2.
Notwithstanding anything contained in Article 19 of the Area Development
Agreement, any arbitration proceeding must take place in the city nearest to the your BUSINESS
in which JAMS maintains an office and facility for arbitration, or at such other location as may be
mutually agreed upon by the parties.
3.
Article 20 of the Area Development Agreement is revised by replacing “New
Hampshire” with “North Dakota.”
4.
The North Dakota Securities Commissioner has held that requiring franchisees to
consent to the jurisdiction of courts outside of North Dakota is unfair, unjust or inequitable within
the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Accordingly,
Article 21 of the Area Development is amended and restated in its entirety as follows:
21.
Consent to Jurisdiction. Subject to Article 19 hereof, you and your
Owners agree that we may institute any action against you or your Owners in any
state or federal court of general jurisdiction in North Dakota and you (and each
Owner) irrevocably submit to the jurisdiction of such courts and waive any
objection you (or he or she) may have to either the jurisdiction of or venue in
such courts.
5.
Article 23 (Waiver of Punitive Damages, Jury Trial and Class Actions) is hereby
deleted from the Area Development Agreement.
6.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the North Dakota Franchise Investment
Law are met independently without reference to this Amendment.
7.
Except as amended herein, the Area Development Agreement will be construed and
enforced in accordance with its terms.
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PLANET FITNESS®
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF RHODE ISLAND
The following applies to franchises and franchisees subject to Rhode Island statutes and
regulations. Item numbers correspond to those in the main body of the Disclosure Document:
Item 17.
Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that “A
provision in a franchise agreement restricting jurisdiction or venue to a forum outside this State
or requiring the application of the laws of another state is void with respect to a claim otherwise
enforceable under this Act.”
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF RHODE ISLAND
This Amendment pertains to franchises sold in the State of Rhode Island and is for the
purpose of complying with Rhode Island statutes and regulations. Notwithstanding anything
which may be contained in the body of the Franchise Agreement to the contrary, the Agreement
is amended to include the following:
1. Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that “A
provision in a franchise agreement restricting jurisdiction or venue to a forum outside
this state or requiring the application of the laws of another state is void with respect
to a claim otherwise enforceable under this Act.”
2. Except as amended herein, the Franchise Agreement will be construed and enforced in
accordance with its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its _________________________
_____________________
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF VIRGINIA
Item 17.
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising
Act, the Franchise Disclosure Document for Pla-Fit Franchise, LLC for use in the
Commonwealth of Virginia shall be amended as follows:
“Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a
franchisor to cancel a franchise without reasonable cause. If any ground for default or
termination stated in the franchise agreement does not constitute “reasonable cause,” as that term
may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may
not be enforceable.”
“The cross default provisions in Section 16 of the Franchise Agreement entitled “Breach of
Other Agreements,” Section 8 of the Area Development Agreement entitled “Default and
Termination,” and their corresponding disclosures in Item 17 of the Disclosure Document are
hereby deleted in their entirety.”
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PLANET FITNESS®
ADDENDUM TO
PLANET FITNESS®
DISCLOSURE DOCUMENT FOR THE
STATE OF WASHINGTON
1.
Item 17 of the Franchise Disclosure Document is hereby amended by the addition
of the following language:
Washington law RCW 19.100.180(2)(i) and (j) provides certain rights and remedies to
franchisees in connection with termination or renewal of a franchise. More specifically,
Washington law provides that it is unlawful for a franchisor to:
(i)
Refuse to renew a franchise without fairly compensating the franchisee for the fair
market value, at the time of expiration of the franchise, of the franchisee’s inventory, supplies,
equipment, and furnishings purchased from the franchisor, and goodwill, exclusive of
personalized materials which have no value to the franchisor, and inventory, supplies, equipment
and furnishings not reasonably required in the conduct of the franchised business; provided, that
compensation need not be made to the franchisee for goodwill if (i) the franchisee has been given
one year’s notice of nonrenewal, and (ii) the franchisor agreed in writing not to enforce any
covenant which restrains the franchisee from competing with the franchisor; provided further,
that the franchisor may offset against amounts owed to the franchisee under this subsection any
amounts owed by the franchisee to the franchisor.
(j)
Terminate the franchise prior to the expiration of its term except for good cause.
Good cause shall include, without limitation, the failure of the franchisee to comply with lawful
and material provisions of the franchise or other agreement between the franchisor and the
franchisee, and to cure such default after being given written notice thereof and a reasonable
opportunity, which in no event need be more than 30 days to cure such default, or if such default
cannot reasonably be cured within 30 days, the failure of the franchisee to initiate within 30 days
substantial and continuing action to cure such default; provided, that after three willful and
material breaches of the same term of the franchise occurring within a 12-month period, for
which the franchisee has been given notice and an opportunity to cure as provided in this
subsection, the franchisor may terminate the agreement upon any subsequent willful and material
breach of the same term within the 12-month period without providing notice or opportunity to
cure; provided further, that the franchisor may terminate the franchise without giving prior notice
or opportunity to cure a default if the franchisee: (i) is adjudicated bankrupt or insolvent; (ii)
makes an assignment for the benefit of creditors; (iii) voluntarily abandons the franchise
business; (iv) or is convicted of or pleads guilty or no contest to a charge of violating any law
relating to the franchise business. Upon termination for good cause, the franchisor shall
purchase from the franchisee at a fair market value at the time of termination, the franchisee’s
inventory and supplies, exclusive of (i) personalized materials which have no value to the
franchisor; (ii) inventory and supplies not reasonably required in the conduct of the franchise
business; and (iii) if the franchisee is to retain control of the premises of the franchise business,
any inventory and supplies not purchased from the franchisor or on his express requirement;
provided, that the franchisor may offset against amounts owed to the franchisee under this
subsection any amounts owed by the franchisee to the franchisor.
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PLANET FITNESS®
2.
Washington law RCW 19.100.180(2)(g) provides that it is unlawful to require the
franchisee to assent to a release, assignment, violation or waiver which would relieve the
franchisor from any liability imposed by the Washington Franchise Investment Protection Act.
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
FRANCHISE AGREEMENT FOR THE
STATE OF WASHINGTON
This Amendment pertains to franchises sold in the State of Washington and is for the
purpose of complying with Washington statutes and regulations. Notwithstanding anything
which may be contained in the body of the Franchise Agreement to the contrary, the Agreement
is amended to include the following:
1.
Article 19.13. of the Franchise Agreement is amended by the addition of the
following language:
If any of the provisions in the Franchise Disclosure Document or
Franchise Agreement are inconsistent with the relationship
provisions of R.C.W. 19.100.180 or other requirements of the
Washington Franchise Investment Protection Act, the provisions of
the Act will prevail over the inconsistent provisions of the
Franchise Disclosure Document and Franchise Agreement with
regard to any franchise sold in Washington.
2.
Article 19.16. of the Franchise Agreement is amended by the addition of the
following language:
A release or waiver of rights executed by you will not include
rights under the Washington Franchise Investment Protection Act
except when executed pursuant to a negotiated settlement after the
agreement is in effect and where the parties are represented by
independent counsel. Provisions such as those which unreasonably
restrict or limit the statute of limitations period for claims under
the Act, rights or remedies under the Act such as a right to a jury
trial may not be enforceable.
3.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the Washington Franchise Investment
Protection Act are met independently without reference to this Amendment.
4.
Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
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PLANET FITNESS®
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
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PLANET FITNESS®
AMENDMENT TO
PLANET FITNESS®
AREA DEVELOPMENT AGREEMENT FOR THE
STATE OF WASHINGTON
This Amendment pertains to franchises sold in the State of Washington and is for the
purpose of complying with Washington statutes and regulations. Notwithstanding anything
which may be contained in the body of the Area Development Agreement to the contrary, the
Agreement is amended to include the following:
1.
Article 20 of the Area Development Agreement is amended by the addition of the
following language:
If any of the provisions in the Franchise Disclosure Document or
Franchise Agreement are inconsistent with the relationship
provisions of R.C.W. 19.100.180 or other requirements of the
Washington Franchise Investment Protection Act, the provisions of
the Act will prevail over the inconsistent provisions of the
Franchise Disclosure Document and Franchise Agreement with
regard to any franchise sold in Washington.
2.
Each provision of this Amendment is effective only to the extent, with respect to
such provision, that the jurisdictional requirements of the Washington Franchise Investment
Protection Act are met independently without reference to this Amendment.
3.
Except as amended herein, the Area Development Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Amendment and consents to be bound by all of its terms.
YOU:
WE: PLA-FIT FRANCHISE, LLC
By
Its
By
Its
FDD – 2014
14877235.8
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G - 28
PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “H”
TO THE DISCLOSURE DOCUMENT
GENERAL RELEASE
FDD – 2014
14877235.8
04/17/14
H-1
PLANET FITNESS®
FORM OF RELEASE AGREEMENT
(Subject to Change by Pla-Fit Franchise, LLC)
GENERAL RELEASE – NEW BUSINESS
This General Release (“Release”) is made and entered into on this
day of
, 20
by and between PLA-FIT FRANCHISE LLC, a New Hampshire limited
liability company with its principal place of business at 26 Fox Run Road, Newington, NH 03801
(“Franchisor”) on the one hand, and the following franchisees, developers, and principal owners,
on the other:
Franchisees:
__________________________________________
__________________________________________
__________________________________________
__________________________________________
Developers:
__________________________________________
__________________________________________
Principal Owners:
__________________________________________
__________________________________________
__________________________________________
WITNESSETH:
WHEREAS, Franchisor and Franchisees are parties to one or more existing Planet
Fitness Franchise Agreements (the “Franchise Agreements”), each granting one of the
Franchisees the right to operate a PLANET FITNESS business under Franchisor’s proprietary
marks and system at a certain location; and
WHEREAS, Franchisor and Developers (if any) are parties to one or more existing
Planet Fitness Area Development Agreements (the “Development Agreements”, or together with
the Franchise Agreements the “Prior Agreements”), each granting one of the Developers the
right to develop a specified number of PLANET FITNESS businesses in a designated
development area; and
WHEREAS, Franchisees, Developers, or one of their affiliates wishes to obtain the grant
from Franchisor of additional franchises or development rights (the “New Rights”); and
WHEREAS, Franchisor requires this general release from Franchisees, Developers, and
the Principal Owners, described above, as a condition for granting such rights.
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained in this Release, and other good and valuable consideration, receipt of which is hereby
acknowledged by each of the parties hereto, the parties hereto agree as follows:
FDD – 2014
14877235.8
04/17/14
H-2
PLANET FITNESS®
1.
Release. Franchisees, Developers, and the Principal Owners, for themselves and
their successors, predecessors, assigns, beneficiaries, executors, trustees, agents,
representatives, employees, officers, directors, shareholders, partners, members,
subsidiaries and affiliates (jointly and severally, the “Releasors”), irrevocably and
absolutely release and forever discharge Franchisor and its successors,
predecessors, assigns, beneficiaries, executors, trustees, agents, representatives,
employees, officers, directors, shareholders, partners, members, subsidiaries and
affiliates (jointly and severally, the “Releasees”), of and from all claims,
obligations, actions or causes of action (however denominated), whether in law or
in equity, and whether known or unknown, present or contingent, for any injury,
damage, or loss whatsoever arising from any acts or occurrences occurring as of
or prior to the date of this Release relating to the Prior Agreements, the businesses
operated under the Prior Agreements, and/or any other previously existing
agreement between any of the Releasees and any of the Releasors, including but
not limited to, any alleged violations of any deceptive or unfair trade practices
laws, franchise laws, or other local, municipal, state, federal, or other laws,
statutes, rules or regulations, and any alleged violations of the Franchise
Agreement or any other related agreement. The Releasors, and each of them, also
covenant not to sue or otherwise bring a claim against any of the Releasees
regarding any of the claims being released under this Release. This Release does
not apply to the New Rights or any offer, grant or sale of franchise or
development rights to Franchisees or Principal Owners from this day forward.
2.
Representations and Warranties. The Releasors hereby represent, warrant and
covenant to the Franchisor that:
a. As of the date of this Release, the Franchisees and Developers listed herein
constitute each and every entity (i) in which any of the Releasors have an
interest related to any agreement with Franchisor and (ii) that is party to an
agreement with any of the Releasees. In the event that there is a breach of this
representation and warranty by any of the Releasors, such entity shall be
bound by the terms and conditions of Section 1 of this Release as if such
entity were a party hereto and the Principals Owners and such entity shall
immediately execute a release in the same form as contained in Section 1
hereof on behalf of all such entities.
b. Each party whose signature is affixed hereto in a representative capacity
represents and warrants that he or she is authorized to execute this Agreement
on behalf of and to bind the entity on whose behalf his or her signature is
affixed. In the event that there is a breach of any representation or warranty of
authority to execute this Release, the Releasors shall indemnify and hold
harmless the Releasees from any and all loss or damage, including reasonable
attorneys’ fees, incurred as result of the breach of such representation and
warranty.
FDD – 2014
14877235.8
04/17/14
H-3
PLANET FITNESS®
3.
Acknowledgement of Release of Unknown Claims. The Releasors hereby
acknowledge that the release of claims set forth in Section 1 is intended to be a
full and unconditional general release, as that phrase is used and commonly
interpreted, extending to all claims of any nature, whether or not known, expected
or anticipated to exist in favor of the Releasors against the Releasees. In making
this voluntary express waiver, the Releasors acknowledge that claims or facts in
addition to or different from those which are now known to exist may later be
discovered and that it is the Releasors’ intention to hereby fully and forever settle
and release any and all matters, regardless of the possibility of later discovered
claims or facts. Each of the Releasors expressly acknowledge that they are
familiar with the provisions of Section 1542 of the California Civil Code which
provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing
a release, which if known by him or her must have materially affected
his or her settlement with the debtor.
Each of the Releasors hereby specifically and expressly waive all rights that they
may have under Section 1542 of the California Civil Code or any similar
provision of law in any other jurisdiction. This Release is and shall be and remain
a full, complete and unconditional general release. The Releasors further
acknowledge and agree that no violation of this Release shall void the releases set
forth in this Release.
4.
Voluntary Nature of Agreement. Releasors acknowledge and agree that they have
entered into this Release voluntarily and without any coercion. Releasors further
represent that they have had the opportunity to consult with an attorney of their
own choice, that they have read the terms of this Release, and they fully
understand and voluntarily accept the terms.
5.
Governing Law and Jurisdiction. This Release will be construed and enforced in
accordance with the law of the state of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this Release as of the date
first above written.
PLA-FIT FRANCHISE, LLC
FRANCHISEE
Franchisee Name:
By:
By:
Name:
Name:
Title:
Title:
FDD – 2014
14877235.8
04/17/14
H-4
PLANET FITNESS®
FRANCHISEE
Franchisee Name:
By:
Name:
Title:
FRANCHISEE
Franchisee Name:
By:
Name:
Title:
FRANCHISEE
Franchisee Name:
By:
Name:
Title:
DEVELOPER
Developer Name:
By:
Name:
Title:
FDD – 2014
14877235.8
04/17/14
H-5
PLANET FITNESS®
DEVELOPER
Developer Name:
By:
Name:
Title:
PRINCIPAL OWNER
Name:
Signature:
PRINCIPAL OWNER
Name:
Signature:
PRINCIPAL OWNER
Name:
Signature:
FDD – 2014
14877235.8
04/17/14
H-6
PLANET FITNESS®
PLANET FITNESS®
EXHIBIT “I”
TO THE DISCLOSURE DOCUMENT
VISIONARY LICENSE AGREEMENT
RADIANT SOFTWARE AGREEMENT
PURCHASE ORDER FOR VISIONARY PRODUCTS AND SOFTWARE
MERCHANT AGREEMENTS
FDD – 2014
14877235.8
04/17/14
I-1
PLANET FITNESS®
VISIONARY LICENSE AGREEMENT
TERMS AND CONDITIONS FOR LICENSE AND USE OF VISIONARYTM SOFTWARE
These Terms and Conditions for License and Use of VisionaryTM Software (the “Agreement”) are
entered into by PFIP, LLC (“Licensor”) and each of the entities listed in Attachment 1 to this Agreement
(each such entity is a “Licensee” and they are, collectively, the “Licensees”). Each Licensee
acknowledges that the Licensees are affiliates by virtue of the fact that they control, are controlled by, or
are under common control with the other entities included on such list. The individual signing this
Agreement on behalf of the Licensees represents and warrants that he/she has the power and authority
to execute this Agreement on behalf of each Licensee. This Agreement is effective on the date on which
the individual signing this agreement on behalf of the Licensees executes this Agreement (“Effective
Date”). Each of Licensor and the Licensees is a “Party” and they are, collectively, the “Parties”.
1.
Definitions.
“Confidential Information” shall mean all written or oral information, disclosed by Licensor to
Licensee, related to the operations of Licensor, or a third party, that has been identified as confidential or
that by the nature of the information or the circumstances surrounding disclosure ought reasonably to be
understood to be proprietary and/or confidential. Without limiting the generality of the foregoing, the
VisionaryTM Software, the Visionary Data and the Documentation shall be considered Confidential
Information of Licensor and, where appropriate, its third-party licensor.
“Conversion” shall mean conversion from one Licensor approved dues processing and
membership information software and system to a replacement dues processing and membership
information software and system and to an alternate payment processor(s).
“Data Security Safeguards” shall mean (i) the Payment Rules, together with all other standards,
guidelines, practices or procedures required by the Payment Networks and by Licensor's Payment
Processor(s), as such may be amended from time to time, including, but not limited to the standards
incorporated in the Payment Card Industry Data Security Standards ("PCI-DSS"); (ii) all rules and
operating guidelines concerning the disclosure, use and protection of personal and financial information
adopted by the National Automated Clearing House Association (“NACHA”) to the extent applicable to
Licensee’s payment processing activities; and (iii) Licensor’s security guidelines, all as may be modified
from time to time.
“Documentation” shall mean the user guides, manual, on-line help, software release notes,
instructions, performance descriptions, design documents, test materials, operation guides, training
materials and other materials provided by the Licensor in written or electronic form referring to or relating
to the use of the VisionaryTM Software.
“FDD” shall mean the Franchise Disclosure Document embodying the franchise agreement
between PLA-Fit Franchise LLC and Licensee.
“Governmental Authority” means any applicable federation, nation, state, sovereign or
government, any federal, supranational, regional, state, local or municipal political subdivision, any
governmental or administrative body, instrumentality, department or agency, or any court, administrative
hearing body, arbitrator, commission or other similar dispute resolving panel or body, and any other entity
exercising executive, legislative, judicial, regulatory, taxing or administrative functions of a government
with jurisdiction over the applicable matter.
“Intellectual Property Rights” shall mean all intellectual property rights worldwide arising under
statutory or common law or arising by contract whether or not perfected, now existing or hereafter filed,
issued or acquired, including, without limitation, all patent rights, trade secret rights, copyrights, trademark
rights, mask rights, moral rights, or any other similar rights and privileges relating to intangible property.
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“Laws” means any laws, statutes, ordinances, codes, rules, regulations, published standards,
permits, judgments, decrees, writs, injunctions, rulings, orders, administrative guidance and/or other
requirements of any Governmental Authority.
“Member” means a member of Licensee’s fitness club(s).
“Payment Networks” shall mean Visa, MasterCard, American Express and any credit or debit
card network issuing credit or debit cards or their duly authorized entities, agents, or affiliates, together
with the National Automated Clearing House Association.
“Payment Processor” shall mean RBS Citizens, N.A., WorldPay US, Inc., Jack Henry &
Associates, Inc. or such other credit card, debit card and/or ACH processors whose services Licensor
may require Licensee to utilize, as well as payment gateway service providers (including Maas Global
Solutions Corporation).
“Payment Rules” shall mean the operating rules and regulations of the Payment Processors and
any applicable Payment Network, as in effect from time to time.
“Personal Information” shall mean: (a) information, data and materials relating to identified or
identifiable individuals, including enrollment records, billing and payment records, and other personal
information, data and materials relating to Members and financial transactions with Payment Networks
and Payment Processors, including “Cardholder Data” (as such term is defined in the Data Security
Guidelines (as defined above)); and (b) other financial or personal information in relation to Members.
“Radiant Terminal” shall mean the Radiant hardware purchased by Licensee from Retail Control
Systems, Inc. (“RCS”) for use with the VisionaryTM Software.
“Support” shall mean error fixes and technical support that Licensor or its designee generally
makes available to licensees of the VisionaryTM Software.
“TOSD” shall mean Twin Oaks Software Development, Inc.
“TOSD Agreements” shall mean the Software License and Dues Processing Agreements, the
Franchisee Authorization and Agreement, and Terms and Conditions for License and Use of Software all
as entered into between Licensee and TOSD.
“TOSD Data Retrieval Software” shall mean proprietary software owned and developed by
TOSD and licensed to Licensee under the TOSD Agreements.
“Visionary Ancillary Agreements” shall mean the various agreements in place between
Licensee and RCS (or other supplier of the Radiant Terminals and other components of the Visionary
System), Radiant Systems (“Radiant”), payment gateway providers such as Maas Global Solutions
Corporation, Payment Processors and Payment Networks.
“VisionaryTM Data” shall mean all data and information created by, captured by or uploaded to
the VisionaryTM System (or part thereof) or otherwise derived from the use by Licensee of the VisionaryTM
System or any part of it.
“VisionaryTM Software” shall mean the software supplied or made available by Licensor pursuant
to this Agreement.
“VisionaryTM System” shall mean Licensor’s proprietary branded VisionaryTM hardware,
including the Radiant Terminals, the VisionaryTM Software, and other third-party software licensed to and
services provided to Licensee for use with the VisionaryTM Software and the Radiant Terminals.
2
2.
Grant of License.
2.1
Licensor grants to Licensee a non-exclusive, nonassignable, non-transferable, nonsublicensable, terminable, limited license during the Term to access and use the VisionaryTM
Software only as embedded in or to be used on Radiant Terminals purchased by Licensee, and
not on any other hardware, and solely for Licensee’s ordinary business purposes as a franchisee
of PLA-Fit Franchise, LLC. Licensor also grants to Licensee a non-exclusive, nonassignable,
non-transferable, non-sublicensable, terminable, limited license during the Term to use the
Documentation in order to access and use the VisionaryTM Software as permitted under this
Agreement.
2.2
Although Licensee has the right to transfer the Radiant Terminals, Licensee has no right
to transfer the VisionaryTM Software or the Documentation for use with the Radiant Terminals to
any third party. Accordingly, Licensee must notify Licensor in writing prior to the transfer of any of
the Radiant Terminals and permit Licensor to remotely disable the VisionaryTM Software at the
time of transfer. Licensee must also return the Documentation to Licensor at the time of transfer.
2.3
Licensee agrees not to use the VisionaryTM Software, the VisionaryTM System or the
VisionaryTM Data for any purpose that would be in violation of the Data Security Safeguards or
Laws. A breach of this Section 2.3 entitles Licensor to immediately terminate the limited licenses
granted in Section 2.1 and 2.7.
2.4
Licensee acknowledges and agrees that all Intellectual Property Rights in and to the
VisionaryTM Software and Documentation are owned exclusively by Licensor and its third-party
licensors, are not being sold, assigned, or transferred to Licensee, are being licensed to Licensee
subject to all terms, conditions, limitations, and provisions hereof, and may only be used for the
purposes expressly set forth herein, and for no other purposes. Licensee shall not have the right,
and no rights are granted, to disassemble, duplicate or copy (in whole or in part), assign, sell,
transfer, license, sublicense, or create derivative works from the VisionaryTM Software and
Documentation or any portion of the VisionaryTM Software and Documentation. Upon termination
of the license for the Visionary Software, Licensee shall immediately cease any use of the
VisionaryTM Software, shall delete or return all copies of such VisionaryTM Software and the
Documentation, shall certify in writing to Licensor that it has ceased any such use and that it has
deleted or returned all copies, and shall permit the Licensor to remotely disable the VisionaryTM
Software if Licensor so chooses.
2.5
The VisionaryTM Software and VisionaryTM Documentation comprise proprietary
Confidential Information of Licensor and/or its third-party licensors, shall be held in confidence by
Licensee and shall not be disclosed by Licensee to third parties, unless disclosure is required by
law or legal process. In response to such legal requirements, Licensee shall promptly notify
Licensor in advance of such disclosure and reasonably cooperate in attempts to maintain the
confidentiality of the VisionaryTM Software and VisionaryTM Documentation.
2.6
Licensee agrees to use the VisionaryTM Software in accordance with Licensor’s
guidelines, as amended from time to time, and in accordance with the guidelines for the use of
the Radiant Terminal that have been provided by RCS, Radiant and/or Licensor.
2.7
Licensee acknowledges and agrees that the VisionaryTM Data comprises proprietary
Confidential Information of Licensor. Licensor grants to Licensee a non-exclusive, nonassignable,
non-transferable, non-sublicensable, terminable, limited license during the Term to access and
use the VisionaryTM Data solely for Licensee’s ordinary business purposes as a franchisee in
good standing of PLA-Fit Franchise, LLC. Licensee acknowledges and agrees that all Intellectual
Property Rights in and to the VisionaryTM Data are owned exclusively by Licensor, are not being
sold, assigned, or transferred to Licensee, are being licensed to Licensee subject to all terms,
conditions, limitations, and provisions hereof, and may only be used for the purposes expressly
set forth herein, and for no other purposes. Licensee shall not have the right, and no rights are
3
granted, to disassemble, duplicate or copy (in whole or in part), assign, sell, transfer, license,
sublicense, or create derivative works from the VisionaryTM Data or any portion of the VisionaryTM
Data. Licensee acknowledges and agrees that Licensor shall have the right, without prior notice
to Licensee, to retrieve VisionaryTM Data from Licensee’s computer systems as Licensor deems
necessary or desirable, including the right to obtain such information from vendors of Licensor
and Licensee (eg TOSD, RCS or Payment Processors) and Licensee agrees to fully cooperate
with such efforts. On termination of the limited license granted hereunder for any reason
whatsoever, Licensee shall immediately cease any use of the VisionaryTM Data, shall delete or
return all copies of such VisionaryTM Data, and shall certify in writing to Licensor that it has
ceased any such use and that it has deleted or returned all copies.
2.8
Licensee understands and acknowledges that upon termination of the limited licenses
granted hereunder, for any reason whatsoever, Licensor may remotely disable the VisionaryTM
Software.
3.
Fees. For the rights granted in this Agreement, Licensee shall pay to Licensor the fees
set forth in Attachment 2 to this Agreement, if any, in accordance with the payment terms set forth
therein.
4.
Support. Licensor or its designee shall provide to Licensee Support that Licensor
generally provides to other licensees of the VisionaryTM Software. Licensee acknowledges that Licensor
may, at any time and in its sole discretion, update or modify the VisionaryTM Software or discontinue
updating and/or supporting the VisionaryTM Software. In the case of an update or modification, Licensee
agrees (i) to allow Licensor or its designee to automatically install the update or modification on the
Radiant Terminal on which the VisionaryTM Software is used or, (ii) at Licensor’s request, to itself promptly
install the update or modification locally with media provided by Licensor. Any update or modification to
the VisionaryTM Software shall become part of the VisionaryTM Software and shall be subject to this
Agreement.
5.
DISCLAIMER OF WARRANTIES. THE VISIONARYTM SOFTWARE IS PROVIDED “AS
IS” WITHOUT WARRANTY, AND LICENSOR, ITS LICENSORS AND THEIR AFFILIATES DISCLAIM
ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE WITH REGARD TO THE VISIONARYTM SOFTWARE, THE VISIONARYTM
DOCUMENTATION, THE VISIONARYTM SYSTEM AND THE VISIONARYTM DATA, AND FURTHER
DISCLAIM ANY WARRANTIES THAT THE VISIONARYTM SOFTWARE OR THE VISIONARYTM
SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE WILL OPERATE, WILL OPERATE
WITHOUT INTERRUPTION, OR WILL ACCURATELY OR COMPLETELY RETRIEVE OR PROVIDE
DATA (IN WHOLE OR IN PART) WHEN USED IN LICENSEE’S ENVIRONMENT. LICENSOR, ITS
LICENSORS AND THEIR AFFILIATES SHALL NOT BE HELD RESPONSIBLE FOR MISUSE OR
INCORRECT OPERATION OF THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR
THE TOSD DATA RETRIEVAL SOFTWARE, USE OF THE VISIONARYTM SOFTWARE OR THE
VISIONARYTM SYSTEM OR TOSD DATA RETRIEVAL SOFTWARE BY UNTRAINED PERSONNEL,
IMPROPER ENTRY OF DATA IN CONNECTION WITH THE VISIONARYTM SOFTWARE OR THE
VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE, OR MODIFICATION OF
SETTINGS OR OTHER BEHAVIOR AFFECTING DATA SECURITY. LICENSOR, ITS LICENSORS
AND THEIR AFFILIATES SHALL NOT BE HELD LIABLE OR RESPONSIBLE FOR CONDITIONS
BEYOND THEIR CONTROL THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE
VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL
SOFTWARE OR THE DATA CAPTURED BY OR CONTAINED THEREIN, INCLUDING, BUT NOT
LIMITED TO, LOSS OR INTERUPTION OF POWER, OPERATING ENVIRONMENT FACTORS,
PROGRAM VIRUSES AND MALWARE, INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL
CONDITIONS AND OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA
SECURITY BREACHES.
4
6.
Compliance with Laws, Data Security, the TOSD Agreements and VisionaryTM
Ancillary Agreements. Licensee shall comply with the Data Security Safeguards, Laws, the TOSD
Agreements and the VisionaryTM Ancillary Agreements. Licensee agrees to provide full indemnity to
Licensor, its successors and assigns, officers, directors, shareholders, agents, affiliates (“Indemnified
Parties”) for all claims, losses, fines, fees, assessments, suits, damages, liability, loss (including without
limitation losses associated with loss of PCI-DSS compliant status, penalties or fines, fees, assessment,
attorneys fees, consulting and internal costs, or other expenses (including any audit, investigation or
compliance-related expenses or customer notification costs) that may be threatened, result from, arise
from, or are a consequence of, in whole or in part: (i) Licensee’s breach of this Section 6; (ii) any use by
Licensee of the TOSD Data Retrieval Software, the VisionaryTM Software,, the VisionaryTM System or
VisionaryTM Data; or (iii) any assistance rendered by Licensor to Licensee during a Conversion. In
consideration of Licensor’s provision of the VisionaryTM Software and the licenses granted hereunder, the
Licensee hereby remises, releases and forever discharges the Indemnified Parties, of and from all
manner of action and actions, cause and cause of actions, suits, debts, sums of money, bonds, liens,
bills, controversies, damages, judgments, claims, liabilities, and demands whatsoever, in law and in
equity, which against the Indemnified Parties, the Licensee ever had, now has or which Licensee
hereinafter can, shall or may have, arising out of or relating to the license of the VisionaryTM Software and
VisionaryTM Data hereunder, the use of the VisionaryTM System, and any assistance rendered by the
Indemnified Parties to Licensee during any Conversion.
7.
Limitation of Liability. LICENSOR’S, ITS LICENSORS’ AND THEIR AFFILIATES’
LIABILITY FOR ALL CLAIMS OF ANY KIND, WHETHER BASED ON CONTRACT, INDEMNITY,
WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, FAILURE OF A REMEDY TO
ACCOMPLISH ITS ESSENTIAL PURPOSE, OR OTHERWISE, FOR ALL LOSSES OR DAMAGES
ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THIS AGREEMENT, OR FROM THE
PERFORMANCE OR BREACH THEREOF, OR FROM THE VISIONARYTM SOFTWARE OR ANY PART
THEREOF, FROM THE VISIONARYTM DOCUMENTATION, FROM THE VISIONARYTM DATA OR
FROM ANY SERVICE FURNISHED HEREUNDER, OR FROM THE OPERATION OF THE
VISIONARYTM SYSTEM SHALL, IN THE AGGREGATE, IN NO CASE EXCEED THE FEES PAID BY
LICENSEE TO LICENSOR HEREUNDER. LICENSOR, ITS LICENSORS AND THEIR AFFILIATES
SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL,
PUNITIVE, OR EXEMPLARY DAMAGES WHICH MAY BE SUSTAINED BY LICENSEE OR ANY
OTHER PERSON OR ENTITY AS A RESULT OF ANY USE OF THE VISIONARYTM SOFTWARE OR
THE VISIONARYTM SYSTEM OR THE VISIONARYTM DATA, WHETHER SOUGHT BASED UPON
CONTRACT, TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY, OR OTHER TORT THEORY),
OR UNDER ANY OTHER THEORY OF LAW, EQUITY, OR OTHERWISE.
8.
Term and Termination.
8.1
Licensee may terminate the licenses granted hereunder at any time by removing and
destroying any VisionaryTM Software installed by Licensee, together with all copies thereof, and
notifying Licensor in writing that all use of the VisionaryTM Software and VisionaryTM Data has
ceased and that the copies have been destroyed.
8.2
The licenses granted hereunder shall automatically terminate if Licensee’s FDD expires
and is not renewed by Licensor or the FDD is terminated. The license granted under Section 2.1
shall automatically terminate if Licensee transfers the Radiant Terminal on which the VisionaryTM
Software is used.
8.3
Licensor may terminate the licenses granted hereunder on notice to Licensee in any of
the following situations: (a) Licensee is in breach of any of the VisionaryTM Ancillary Agreements
or TOSD Agreements and such breach would permit the other party to terminate the agreement;
(b) Licensee breaches Section 2.3; (c) as permitted in Section 9; (d) Licensee breaches any other
provision of this Agreement and fails to cure the breach within fourteen (14) days of receiving
notice from Licensor; or (e) in the event that the Licensee becomes insolvent or enters
bankruptcy prior to payment of all amounts due under Section 3 hereof.
5
8.4
On termination of the licenses granted hereunder for any reason whatsoever, Licensee
shall immediately take all steps necessary to allow Licensor to disable, delete and remove the
VisionaryTM Software, the VisionaryTM Documentation and the VisionaryTM Data from Licensee’s
computer systems, including but not limited to the Radiant Terminal.
8.5
The provisions of Sections 1, 2.4, 2.5, 2.7 and 5 through 13 shall survive any termination
of this Agreement.
9.
Data Security Breach. If: (a) Licensee becomes aware of a breach of the security of the
VisionaryTM System related to Licensee’s operations, (b) any Confidential Information of Licensor or
Personal Information of Licensee’s Members is disclosed by Licensee in violation of Laws or the Data
Security Safeguards, or (c) Licensee becomes aware that an unauthorized access, disclosure or use of
such Confidential Information or Personal Information has occurred or is likely to occur as a result of an
act or omission of Licensee (each such event, an “Information Security Breach”), Licensee shall
immediately notify Licensor’s General Counsel of such Information Security Breach, and at Licensor’s
discretion shall promptly: (a) investigate, remediate, and mitigate the effects of the Information Security
Breach in accordance with information technology industry best practices and (b) provide Licensor with
assurances satisfactory to Licensor that such Information Security Breach shall not recur. Additionally, if
any Information Security Breach occurs and applicable Laws, the Data Security Safeguards or Licensor’s
policies require notification of public authorities or of individuals whose data were so affected or require
other remedial actions, or Licensor determines that notices (whether in Licensor’s or Licensee’s name) or
other remedial measures are warranted, including Licensee responding to reasonable requests from
Licensor regarding, and cooperating with Licensor or Payment Networks or Payment Processors in
connection with, any investigation, incident management, media relations or law enforcement activities,
and providing consumer remedies such as credit monitoring or ID theft insurance (the foregoing,
collectively, the “Remedial Actions”), Licensee shall, at Licensor’s request undertake such Remedial
Actions and shall cooperate with Licensor in undertaking Remedial Actions in accordance with
information technology industry best practices. Licensee agrees to provide full indemnity to the
Indemnified Parties for all claims, losses, fines, fees, assessments, suits, damages, liability, loss
(including without limitation losses associated with loss of PCI-DSS compliant status, penalties or fines,
fees, assessment, attorneys fees, consulting and internal costs, or other expenses (including any audit,
investigation or compliance-related expenses or customer notification costs) that may result from, arise
from, that may be threatened or that are a consequence of, in whole or in part, an Information Security
Breach. In the event that Licensor determines in its reasonable discretion that Licensee is unable or
unwilling to provide adequate Remedial Actions or that Licensee is not reasonably capable of complying
with the Data Security Guidelines, or of deploying technology industry best practices to avoid future
Security Breaches, Licensor may terminate the licenses and this Agreement on notice to Licensee.
10.
Audit. Upon Licensor's written request, to confirm Licensee’s compliance with this
Agreement, as well as any applicable laws, regulations and industry standards, Licensee grants Licensor
or, upon Licensor’s election, a third party on Licensor's behalf, permission to perform an assessment,
audit, examination or review of all controls in Licensee’s physical and/or technical environment in relation
to all VisionaryTM Software, Confidential Information or Personal Information being handled pursuant to
this Agreement. Licensee shall fully cooperate with such assessment by providing access to
knowledgeable personnel, physical premises, documentation, and infrastructure. In addition, upon
Licensor's written request, Licensee shall provide Licensor with the results of any audit by or on behalf of
Licensee performed that assesses the effectiveness of Licensee’s information security program as
relevant to the security and confidentiality of Confidential Information shared and Personal Information
collected during the course of this Agreement. Licensor’s assessment, audit, examination or review shall
not be more frequent than annually unless Licensor has a reasonable basis to believe that a Security
Breach has occurred or that a material noncompliance with Section 2 exists, or unless the audit is
required by Law or the Data Security Safeguards.
11.
Indemnity. Licensee shall indemnify, defend and hold harmless the Indemnified Parties
from all claims, losses, fines, fees, assessments, suits, damages, liability, loss (including without limitation
losses associated with loss of PCI-DSS compliant status, penalties or fines, fees, assessment, attorneys
6
fees, consulting and internal costs, or other expenses (including any audit, investigation or compliancerelated expenses or customer notification costs) that may result from, arise from, that may be threatened
or that are a consequence of, in whole or in part, a breach by Licensee of the terms of this Agreement.
12.
Notices. Notices required or permitted to be given under this Agreement (such as any
notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given
or made by delivery in person, by nationally recognized courier service, or by certified mail (postage
prepaid, return receipt requested), to the respective Party at the following address set forth below or at
such other address as such Party may hereafter notify the other Party in accordance with this Section.
Each such notice shall be effective when actually received at the respective addresses specified below:
Licensee: At the address set forth on the execution page below
Licensor:
PFIP, LLC
46 Fox Run Road
Newington, NH 03801
Attention: General Counsel
13.
Miscellaneous.
13.1
This Agreement shall be governed by the laws of the State of New Hampshire, without
regard to its conflict of law provisions. The provisions of the United Nations Convention on the
International Sale of Goods shall not apply to this Agreement.
13.2
Licensee may not assign this Agreement, or any of its rights and obligations hereunder,
without the prior written consent of Licensor, which consent may be withheld for any reason.
Licensor may freely assign this Agreement.
13.3
Licensor may modify this Agreement at any time on notice to Licensee, and, upon receipt
of such notice, Licensee will be required to accept the terms of the modified agreement in order to
continue using the VisionaryTM Software. In all other circumstances, this Agreement may only be
modified with the written consent of the Parties.
13.4
If any provision of this Agreement is invalid or unenforceable for any reason in any
jurisdiction, such provision shall be construed to have been adjusted to the minimum extent
necessary to cure such invalidity or unenforceability. The invalidity or unenforceability of one or
more of the provisions contained in this Agreement shall not have the effect of rendering any
such provision invalid or unenforceable in any other case, circumstance or jurisdiction, or of
rendering any other provisions of this Agreement invalid or unenforceable whatsoever.
13.5
No waiver under this Agreement shall be valid or binding unless set forth in writing and
duly executed by an authorized representative of the Party against whom enforcement of such
waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific
matter described therein and shall in no way impair the rights of the Party granting such waiver in
any other respect or at any other time. Any delay or forbearance by either Party in exercising any
right hereunder shall not be deemed a waiver of that right.
13.6
This Agreement is the complete and exclusive statement of the agreement between
Licensor and Licensee and supersedes any proposal or prior agreement, oral or written, and any
other communications between Licensor and Licensee relating to the subject matter of the
Agreement.
7
[signatures contained on following page]
8
By:
__________________________________________________
Name:
__________________________________________________
Title:
__________________________________________________
Date:
__________________________________________________
Address for Notice: _________________________________________
9
ATTACHMENT 1
TM
TO TERMS AND CONDITIONS FOR LICENSE AND USE OF VISIONARY SOFTWARE
NAME AND ADDRESS OF LICENSEE ENTITIES
1
0
ATTACHMENT 2
TO TERMS AND CONDITIONS OF LICENSE AND USE OF VISIONARYTM SOFTWARE
PRICING
[NOT USED]
1
1
RADIANT SOFTWARE AGREEMENT
EXHIBIT A
Customer Affiliates
Version 2010-11-30
Radiant Systems, Inc.
CounterPoint SQL Software License Agreement
EXHIBIT B
CounterPoint SQL End User License Agreement and Limited Product Warranty
[See Attached]
Version 2010-11-30
Radiant Systems, Inc.
CounterPoint SQL Software License Agreement
END USER LICENSE AGREEMENT AND LIMITED PRODUCT WARRANTY
1. LICENSE GRANT. For purposes of this CounterPoint SQL End User
License Agreement (the “Agreement”), “you” and “your” refers to the
Company/Licensee identified on the first page of the Agreement and on Exhibit
A, if applicable. In consideration of the license fees paid by you, Radiant
Systems, Inc. (“Radiant”) and its licensors hereby grant to you, upon your
acceptance of these terms and conditions, the following non-exclusive, nontransferable and limited revocable license to use the CounterPoint SQL
software (the “Radiant Software”), including any third-party software licensed
by Radiant on the CounterPoint CD or other media upon which the Radiant
Software is provided, and accompanying user documentation and any
upgrades to any of the foregoing provided by Radiant and/or its authorized
resellers (collectively, the “Software”) only as authorized under this Agreement.
The Software is licensed to you solely for your internal use to run your business
only on a single standalone computer system or on the networked computer
system (Wide Area Network or Local Area Network) located at one site for
each license purchased (“Licensed Site”). You may relocate the Software to
another site, such new site will replace the old Licensed Site and will become
the new Licensed Site. All of the Software, and all copies thereof, located at
the old Licensed Site must be moved to the new Licensed Site. Radiant and its
authorized resellers will have no support or maintenance obligations with
respect to the new Licensed Site until you have provided Radiant with written
notice of the Licensed Site.
You may make a reasonable number of backup copies of the Software for
safekeeping at the Licensed Site in accordance with your normal backup
procedures, and you may make one copy of the Software for testing purposes
only, provided that you reproduce all copyright notices and other proprietary
notices on each copy made for such purposes.
2. RESTRICTIONS. WITHOUT THE PRIOR WRITTEN CONSENT OF
RADIANT, YOU MAY NOT:
(i) ASSIGN, SUBLICENSE, TRANSFER, PLEDGE (OTHER THAN
ROUTINE PLEDGES IN FAVOR OF YOUR LENDERS), LEASE, RENT OR
SHARE YOUR RIGHTS TO USE THE SOFTWARE UNDER THIS
AGREEMENT OR USE, COPY OR MODIFY THE SOFTWARE, IN WHOLE
OR IN PART, EXCEPT AS EXPRESSLY PERMITTED UNDER THIS
AGREEMENT;
(ii) DECOMPILE, REVERSE ASSEMBLE OR OTHERWISE REVERSE
ENGINEER THE SOTWARE, EXCEPT TO THE EXTENT YOU ARE
EXPRESSLY AUTHORIZED TO DO SO UNDER APPLICABLE LAW;
(iii) REPRODUCE, DISTRIBUTE OR REVISE THE SOFTWARE OR
DOCUMENTATION, EXCEPT AS EXPRESSLY PERMITTED HEREIN;
(iv) USE THE SOFTWARE TO PROVIDE FACILITY MANAGEMENT,
SERVICE BUREAU OR OTHER ACCESS AND USE OF THE SOFTWARE TO
THIRD PARTIES;
(v) DISCLOSE TO ANY THIRD PARTY (OTHER THAN A RADIANT
RESELLER OR PAYMENT GATEWAY PROVIDER AS NEEDED TO
SUPPORT YOUR USE OF THE SOFTWARE AND SUBJECT TO
APPROPRIATE CONFIDENTIALITY OBLIGATIONS) THE PROPRIETARY
DOCUMENTATION AND OTHER INFORMATION OF RADIANT OR ITS
LICENSORS RELATING TO THE SOFTWARE;
(vi) USE THE SOFTWARE IN A MANNER OR AN ENVIRONMENT THAT
DOES NOT COMPLY WITH THE APPLICABLE PROVISIONS OF THE
PAYMENT CARD INDUSTRY DATA SECURITY STANDARD (“PCI-DSS”); OR
(vii) USE ANY REMOTE ACCESS APPLICATION TO ACCESS THE
SOFTWARE, EXCEPT THOSE THAT MEET PCI DSS SECURITY
STANDARDS.
IF YOU FAIL TO COMPLY WITH ANY OF THE TERMS OF THIS
AGREEMENT, YOUR LICENSE AND RIGHT TO USE THE SOFTWARE WILL
BE AUTOMATICALLY TERMINATED. SUCH TERMINATION SHALL BE IN
ADDITION TO AND NOT IN LIEU OF ANY CRIMINAL, CIVIL OR OTHER
REMEDIES AVAILABLE TO RADIANT.
3. PROPRIETARY RIGHTS. You acknowledge and agree that the Software
(including its code, appearance, structure and organization) and the
accompanying documentation are proprietary products of Radiant or its
licensors and is protected under copyright and other laws, and that all right,
title, and interest in and to the Software and any modifications or derivative
works thereto shall remain with Radiant or its licensors. This Agreement does
not convey to you an interest in or to the Software, but only a limited right to
use the Software revocable in accordance with the terms of this Agreement.
Radiant will, at its expense, defend you against any IP Claim. Radiant will also
pay the damages, costs, and attorneys’ fees that are awarded against you in a
final, non-appealable court judgment for the IP Claim, or required to be paid by
you or on your behalf in a settlement of the IP Claim that Radiant has agreed to
in writing. As used in this Section 3, an “IP Claim” means a suit brought against
you by a third party to the extent the suit alleges that your use of the Software
infringes a patent or copyright of the third party. Radiant’s obligations set forth
in this Section 3 are subject to your (a) providing Radiant prompt written notice
that the IP Claim has been threatened or brought, whichever is sooner (the
“Claim Notice”); (b) providing Radiant sole control of the defense, appeal,
and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to
the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant
with requested documentation and information relevant to the IP Claim or its
defense, appeal, and/or settlement; and (e) complying with all court orders. If
your delay in providing the Claim Notice causes detriment to Radiant with
respect to the defense or resolution of the IP Claim, Radiant’s obligations set
forth in this Section 3 will not apply to the IP Claim. Notwithstanding any other
provision of this Agreement, Radiant is not responsible for any fees (including
attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior
to Radiant’s receipt of the Claim Notice from you. Radiant will have the sole
right to select counsel. You may, at your sole expense, engage additional
counsel of your choosing for purposes of conferring with Radiant’s counsel.
The obligations set forth in this Section 3 will not apply to an IP Claim if the
alleged infringement is based on, caused by, or results from (a) Radiant’s
compliance with your design, specification, or instruction; (b) modification of the
Software other than by Radiant; (c) any product or service not provided by
Radiant to you; or (d) combination or use of the Software with any product or
service not provided by Radiant to you. If an intellectual property infringement
allegation is brought or threatened against the Software, or Radiant believes
that such an allegation may be brought or threatened, Radiant may (a) obtain a
license for the Software; (b) modify the Software; or (c) replace the Software
with a product having substantially the same functionality. If Radiant in its
discretion determines that none of the foregoing is available on a reasonable
basis, upon Radiant’s written request to you, you will promptly return the
Software to Radiant, and Radiant will refund you the price you paid Radiant for
the Software, less depreciation on a five-year straight-line basis. THIS SECTION
3 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND YOUR EXCLUSIVE REMEDIES,
WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP
CLAIM.
4. TERM. This Agreement is effective from the date of your acceptance of
these terms and conditions until terminated as provided hereunder. You may
terminate this Agreement at any time by returning the Software and all copies
thereof and extracts therefrom, to Radiant or the authorized Radiant reseller
from whom you made your purchase. Radiant may terminate this Agreement,
without further obligation to you, upon your breach of any term hereof if such
breach is not rectified within thirty (30) days from notice by Radiant to you,
including your failure to pay any undisputed amounts owed to Radiant or its
authorized resellers in respect of the Software or services provided by Radiant
or such resellers. Upon such termination by Radiant, you agree to return to
Radiant the Software and all copies thereof and extracts therefrom. Upon any
termination of this Agreement, the provisions of the following sections of this
Agreement shall remain in effect: Sections 2, 3, 4, 6, 7, 8, 9, 10, 11, 13 through
19.
5. ACCESS TO YOUR COMPUTER SYSTEM. You agree to allow Radiant
and Retail Control Systems reasonable access to your computer system and
the Software in order to provide any applicable maintenance and support
services, to verify license status, and to change settings and/or install or
remove applications to address data security risks. Any such access will be
performed in a professional manner, in accordance with applicable industry
standards. Radiant agrees to indemnify, defend and hold harmless you
(collectively, the “PF Indemnified Parties”) from all claims, actions, losses and
expenses, including reasonable attorney’s fees and legal costs, incurred by
any of the PF Indemnified Parties and fines, and/or penalties imposed on any
of the PF Indemnified Parties as a result of the negligent performance by
Radiant of any of the activities set forth in the first sentence of this Section 5.
Version 2010-11-30
Radiant Systems, Inc.
CounterPoint SQL Software License Agreement
You further agree to purchase, install and maintain appropriate high-speed
Internet access in order to provide Radiant remote access to your computer
system. You acknowledge and agree that Radiant may use its proprietary
software applications or other third party software applications in order to
access your system, and you agree that Radiant may load such product(s) and
keep them updated on your system solely as needed to provide applicable
maintenance and support services. Radiant may gather statistical information
about your Licensed Site including, without limitation, hardware information,
software versions and feature usage, and use such information for valid
business purposes such as product analysis and billing information.
Additionally, Radiant and/or its authorized resellers may access configuration
and operational data in connection with providing support services. Radiant
may use and disclose transactional and system information in the form of
anonymous, aggregate usage statistics that Radiant derives from the Licensed
Site via your use of the Software, but only in forms that do not reveal your
identity or your confidential information and only in sample sizes that are large
enough to ensure that the aggregate data is truly anonymous, except as
required by law or as needed in connection with any legal proceedings.
6. LIMITED WARRANTY. Radiant warrants to you only, for a period of 30
days from the date of delivery of the Radiant Software to you (referred to as the
“Warranty Period”), that the Radiant Software shall operate substantially in
accordance with the functional specifications in the accompanying
documentation. Radiant does not warrant that the functions contained in the
Software will meet your requirements or that the operation of the Software will
be entirely error free or appear precisely as described in the accompanying
documentation.
Radiant hereby assigns to you all assignable end user warranties received
from the licensors of any third-party software distributed by Radiant to you
under this Agreement.
EXCEPT FOR THE WARRANTIES SET FORTH ABOVE, THE
SOFTWARE IS LICENSED ON AN “AS IS” BASIS, WITHOUT WARRANTY
OF ANY KIND AND RADIANT DISCLAIMS ANY AND ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF
ANY THIRD PARTY RIGHTS. RADIANT SHALL NOT BE BOUND BY OR
LIABLE FOR ANY OTHER REPRESENTATIONS OR WARRANTIES,
WHETHER WRITTEN OR ORAL, WITH RESPECT TO THE SOFTWARE
MADE BY ANY THIRD PARTY, INCLUDING AN AUTHORIZED RESELLER
OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES, NOR SHALL YOU
BE DEEMED A THIRD PARTY BENEFICIARY OF ANY OBLIGATIONS OF
RADIANT TO AN AUTHORIZED RESELLER.
7. LIMITATION OF LIABILITY.
To the maximum extent permitted by applicable law, the remedies described
below are accepted by you as your only remedies, and shall represent
Radiant’s entire liability to you, hereunder:
(i) If the Radiant Software fails to operate substantially in accordance with
the functional specifications set out in the accompanying documentation during
the Warranty Period, you shall, prior the expiration of the Warranty Period,
report such defect to Radiant or your authorized Radiant reseller in writing. In
the event of a timely made report of a defect, Radiant and its authorized
resellers’ only responsibility will be to use reasonable efforts, consistent with
then prevailing industry standards, to cure the defect.
(ii) RADIANT’S AND ITS LICENSORS’ TOTAL LIABILITY TO YOU OR ANY
OTHER PARTY FOR ANY LOSS OR DAMAGES RESULTING FROM ANY
CLAIMS, DEMANDS OR ACTIONS RELATING TO THIS AGREEMENT
SHALL NOT EXCEED THE FEES PAID BY YOU DURING THE
IMMEDIATELY PRIOR TWELVE-MONTH PERIOD FOR THE APPLICABLE
PRODUCT OR SERVICE GIVING RISE TO SUCH DAMAGES (THE “CAP”),
PROVIDED HOWEVER, THAT WITH RESPECT TO RADIANT’S
INDEMNIFICATION OBLIGATIONS HEREUNDER, THE CAP SHALL BE (i) A
CUMULATIVE TOTAL OF $10 MILLION FOR ALL INDEMNIFICATION
OBLIGATIONS TO PLA-FIT HEALTH, LLC AND ITS AFFILIATES AND
FRANCHISEES ARISING FROM A DATA SECURITY BREACH CAUSED BY
RADIANT’S NEGLIGENCE OR WILFUL MISCONDUCT, AND (ii) FOR ALL
OTHER INDEMNIFICATION OBLIGATIONS, 1.5 TIMES THE FEES PAID BY
YOU DURING THE IMMEDIATELY PRIOR TWELVE-MONTH PERIOD FOR
THE APPLICABLE PRODUCT OR SERVICE GIVING RISE TO SUCH
DAMAGES. IN NO EVENT SHALL RADIANT OR ITS LICENSORS BE
Version 2010-11-30
LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
OR EXEMPLARY DAMAGES, LOST SAVINGS OR LOST PROFITS EVEN IF
RADIANT OR ITS LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
8. PAYMENT CARD INDUSTRY. Radiant participates in the Payment Card
Industry (“PCI”) Payment Application Data Security Standard (the “PA-DSS”)
program. The parties acknowledge that the PA-DSS is subject to revision and
clarification regarding security standards for payment applications, and that
validation against the PA-DSS is an annual activity. Radiant represents that
the Software is validated under PA-DSS as of the commencement of the term
of this Agreement. Radiant agrees to gain annual validation against the PADSS, and will promptly notify you if it fails to do so or if it loses PA-DSS
validation. You agree to promptly implement software enhancements,
including installation of new versions, made by Radiant to achieve and maintain
validation against the PA-DSS. You acknowledge that you must remain current
on software maintenance (also referred to as “CSS” or “CounterPoint
Subscription Service”) to receive new versions and updates to the Radiant
Software, that you must use and configure the Radiant Software in a manner
and in an environment that complies with the PCI Data Security Standard
(“PCI-DSS”), and that you are responsible for your own PCI-DSS compliance.
You acknowledge that use of a PA-DSS validated payment application does
not satisfy all of your responsibilities to secure and protect your network and
information under the PCI-DSS. You are strongly advised to engage the
services of a Qualified Security Assessor to: (i) ensure that no credit card track
data is present on your systems or network; (ii) determine your level of PCIDSS compliance, and (iii) assist you with your PCI-DSS compliance obligations
and to mitigate any issues that may arise from your non-compliance. With
respect to the standards set forth in this Section 8, the parties acknowledge
and agree that such standards are subject to change and/or discontinuance
from time to time. To the extent that a standard set forth in this Section 8 is
discontinued or is no longer applicable, the parties agree to work together in
good faith to use the applicable successor standard or the most appropriate
alternate standard to fulfill the requirements of this Section 8. Each party
agrees to indemnify, defend and hold harmless the other party from all claims,
actions, losses and expenses, including reasonable attorney’s fees and legal
costs, incurred by the other party as a result of a breach by the other party of
its obligations under this Section 8.
9. DATA SECURITY AND CYBERCRIME PREVENTION. It is your
responsibility to have and maintain in place malware protection software and
security for all of your systems and data, which security includes properly
configured firewalls, unique, strong passwords per user, physical security, and
access control policies. You acknowledge that the security and protection of
your network and the data and applications on that network, including
protections against unauthorized access, is solely and entirely your
responsibility. A properly configured firewall is required for each site using a
persistent connection to the public Internet or any private network where there
is a potential for unauthorized access. You acknowledge that, to be effective,
malware protection software, hardware firewalls, system passwords and other
security software and hardware components require periodic and routine
updates, which you must obtain or perform as applicable. Radiant, its
authorized resellers and licensors disclaim any warranty, express or implied,
that the Software or your data will remain malware-free. You acknowledge that
your failure to discharge your obligations to keep your systems secure may
result in investigation fees, fines, penalties, charge backs and credit card fraud
costs, and other losses as levied by credit card processors and others,
remediation costs (which may include system component updates or
replacements) and lost profits and lost reputability of your business, which
costs may be so large that they may threaten the survival of your business.
You waive any claims hereunder against Radiant, its authorized resellers and
licensors for any such costs or losses to the extent arising from your failure to
have or maintain a secure system, or to the extent arising as a result of a
failure or breach of your security for your systems or data, or as a result of any
unauthorized access to your systems, unless any of these events was due to a
breach by Radiant of Section 8 of this Agreement. In the event of a security
breach of your systems, you agree to promptly (i) notify Radiant of such
breach, (ii) provide Radiant with copies of any forensic reports related to such
breach, and (iii) authorize any investigating entities to disclose all relevant
information regarding their investigations, including investigations in progress,
of such breach to Radiant.
Radiant Systems, Inc.
CounterPo
10. CONDITIONS BEYOND RADIANT’S CONTROL. Radiant, its authorized
resellers and licensors shall not be held responsible for misuse or incorrect
operation of the Software, use of the Software by untrained personnel,
improper entry of data in connection with the Software, or modification of
settings or other behavior affecting data security. You understand that the use
of any equipment outside the manufacturer’s recommended specifications may
seriously affect the performance of the Software. RADIANT, ITS
AUTHORIZED RESELLERS AND LICENSORS SHALL NOT BE HELD
LIABLE OR RESPONSIBLE FOR CONDITIONS BEYOND THEIR CONTROL
THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE
SOFTWARE OR THE DATA CONTAINED THEREIN, INCLUDING, BUT NOT
LIMITED TO, LOSS OR INTERUPTION OF POWER, YOUR OPERATING
ENVIRONMENT FACTORS, PROGRAM VIRUSES AND MALWARE,
INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL CONDITIONS AND
OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA
SECURITY BREACHES (UNLESS SUCH UNAUTHORIZED ACCESS OR
DATA SECURITY BREACHES WERE DUE TO RADIANT’S NEGLIGENCE
OR RADIANT’S BREACH OF THIS AGREEMENT).
11. YOUR ADDITIONAL RESPONSIBILITIES. Unless otherwise specified in
this Agreement or in a separate writing signed by you and Radiant, you shall
also be solely responsible for the following: (a) selection of the Software to
achieve your intended results; (b) evaluation of Radiant’s products related to
your specific business requirements and technical environment; (c) the results
obtained from use and operation of the Software; (d) providing and maintaining
the appropriate operating environment for the Software in accordance with
Radiant’s specifications provided to you in writing, including related security
and access controls, and maintaining back-up and disaster recovery
procedures, facilities, and equipment (if applicable); (e) adherence to any
applicable electronic payment processing standards or requirements related to
your operations; (f) all data entry and loading; (g) installing upgrades provided
by Radiant and securely deleting previously stored information or data; (h) the
content of all of your information or data, the selection and implementation of
controls on the access and use of such information or data, and the protection
and back-up of the stored information or data; (i) the configuration of all
required data parameters associated with the use of the Software and its
operating environment, including security-related parameters; (j) compliance
will all applicable laws, rules or regulations affecting or governing your
information or data configuration parameters in the Software; and (k) providing
adequate training on the use and operation of the Software to your employees
and maintaining adequate supervision of such employees.
12. NON-PAYMENT. Failure by you to timely pay applicable fees due Radiant
shall entitle Radiant (provided that you have not cured such non-payment
within 10 days of written notice) to suspend, disable and/or discontinue (by
remote means or such other means then available to Radiant), without
necessity of notice to you, your licenses to use any Software. Any such
suspension, disablement or discontinuation shall remain in effect until such
time as the applicable unpaid fees are paid in full and Radiant notifies you that
such suspension, disablement or discontinuation has been lifted, which
Radiant may lift or not in its sole discretion.
13. DISPUTE RESOLUTION. The parties shall make diligent efforts through
good faith negotiations to settle any disputes arising out of or related to this
Agreement, including escalating the issues to their respective upper
management levels.
Notwithstanding anything to the contrary in this Section 13, (i) actions
seeking to validate Radiant's rights to its proprietary information, (ii) actions to
enjoin your unauthorized use of the Software in violation of this Agreement or
Radiant's other intellectual property rights, or (iii) actions to collect any sums
owed to Radiant or its authorized resellers under this Agreement, may, at
Radiant's discretion, be the subject matter of litigation instituted by Radiant.
14. GOVERNING LAW. This Agreement shall be construed and governed in
accordance with the laws of the State of New York without regard to its
conflicts of laws rule. The parties agree to the following venue provisions: if
litigation is instituted by Radiant, the matter shall be subject to the exclusive
jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction,
the United States District Court for the District of New Hampshire. If litigation is
instituted by You, the matter shall be subject to the exclusive jurisdiction of
Georgia state courts or, if there is federal jurisdiction, the United States District
Court for the Northern District of Georgia. The parties agree to submit to the
jurisdiction and venue of such courts hereby waive and covenant not to assert
Version 2010-11-30
any claim that they are not subject to personal jurisdiction in those courts or
that venue in those courts is for any reason improper, inconvenient, prejudicial
or otherwise inappropriate (including, without limitation, any claim under the
judicial doctrine of forum non conveniens)..
15. COSTS OF LITIGATION. If any action is brought by either party to this
Agreement against the other party regarding the subject matter hereof, the
prevailing party shall be entitled to recover, in addition to any other relief
granted, reasonable attorneys fees and expenses of litigation or arbitration, as
applicable.
16. SEVERABILITY. Should any term of this Agreement be declared void or
unenforceable by any court of competent jurisdiction, such declaration shall
have no effect on the remaining terms hereof.
17. NO WAIVER. The failure of either party to enforce any rights granted
hereunder or to take any action against the other party in the event of any
breach hereunder shall not be deemed a waiver by that party as to subsequent
enforcement of rights or subsequent actions in the event of future breaches.
18. ADDITIONAL RULES FOR GOVERNMENTAL USERS. (a) The Software
is provided with “Restricted Rights”. Use, duplication, disclosure by the U.S.
Government is subject to the restrictions set forth in 48 CFR 52.227-10(c)(1)
and (2) or DFARS 252.227-7013(c)(1)(ii) or applicable successor provisions.
The manufacturer is Radiant or its licensors. You are required to observe the
relevant U.S. Export Administration Regulations and may not re-export the
Software in violation of these or other applicable export laws and regulations.
(b) If Licensee is a governmental organization that is expressly prohibited by
applicable law, rule or regulation to being bound by any specific term of this
Agreement (a “Restricted Term”), please so notify Radiant as part of your
registration process for the Software and also provide a copy of the applicable
law, rule or regulation imposing such restriction. Radiant will thereafter advise
you whether your not being bound by such Restricted Term is acceptable to
Radiant, in which case the relevant term shall be deemed to be severed from
this Agreement and the remaining terms of this Agreement shall be in effect. If
the severability of a Restricted Term is not acceptable to Radiant, then Radiant
shall so notify you, will not issue you a Permanent Activation Key and your
rights to use the Software shall be terminated without need for further action by
Radiant (and you shall comply with Section 4 concerning such termination).
19. AMENDMENTS. Any amendments to this Agreement must be in writing
and signed by an authorized officer of you and of Radiant.
20. NOTICES. Notices required or permitted to be given under this Agreement
(such as any notice of breach or termination, and any demand for
indemnification) shall be in writing and shall be given or made by delivery in
person, by nationally recognized courier service, or by certified mail (postage
prepaid, return receipt requested), to the respective Party at the address set
forth on the first page of the Agreement, or at such other address as such party
may hereafter notify the other party in accordance with this Section. Each such
notice shall be effective when actually received.
21. Section 365(n). All rights and licenses granted under or pursuant to this
Agreement by Radiant to you are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code (the
“Bankruptcy Code”), licenses to rights to “intellectual property” as defined under
the Bankruptcy Code.
22. Assignment. Except as provided herein, you may not assign this
Agreement (whether by operation of law or otherwise) without the prior written
consent of Radiant. Notwithstanding any other provision of this Agreement,
you may assign this Agreement without the approval of Radiant to an entity
acquiring, directly or indirectly, Control of you, an entity into which you are
merged, or an entity acquiring all or substantially all of your assets. The
acquirer or surviving entity shall agree in writing to be bound by the terms and
conditions of this Agreement. You may also assign this Agreement, upon prior
written notice to Radiant, to any Affiliate and such assignment shall not require
the prior written consent of Radiant. Subject to the foregoing, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by the
successors and permitted assigns of the parties. “Control” and its derivatives
means, with respect to an entity, possessing, directly or indirectly, the power to
direct or cause the direction of the management, policies, and operations of the
entity, whether through ownership of voting securities, by contract, or
otherwise. Radiant may freely assign this Agreement.
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23. ENTIRE AGREEMENT. This Agreement represents the complete and
exclusive statement of the agreement between you and Radiant, superseding
all proposals or prior agreements, oral or written, and all other communications
between you and Radiant relating to the subject matter of this Agreement,
provided, however, that if you and Radiant have signed by hand a separate
written agreement concerning the Software, the terms and conditions of the
signed by hand separate written agreement shall govern such matter to the
extent of any inconsistent terms.
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EXHIBIT C
CPOnline Merchant Agreement
[See Attached]
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CPONLINE MERCHANT AGREEMENT
The following terms and conditions (the “Agreement”) shall govern the use of the CPOnline (CounterPoint Online)
service (as described below) provided by Radiant Systems, Inc. (“Radiant”).
1. CPOnline description
CPOnline (CounterPoint Online) is a service provided by Radiant that allows the CPOnline Merchant (“Merchant”) to
set up a web site for online stores, to establish the online stores’ appearance and policies, and to administer the
online stores. Merchant’s web sites and business records will reside on servers (computers) owned and operated by
Radiant and Radiant agents. Merchant may use CounterPoint to maintain product (item) information and publish
(transmit) that information to Merchant’s online stores. Third-party shoppers may use web browsers to visit
Merchant’s online stores and view Merchant’s products, and may place orders in Merchant’s online stores. Shopper
information and orders may be retrieved by Merchant and imported into Merchant’s CounterPoint system.
More complete statements of CPOnline and CounterPoint capabilities are described in other materials published by
Radiant and on Radiant’s web site at www.CounterPointPOS.com.
2. Fees and charges
Fees and charges for CPOnline will be paid on Merchant’s behalf by Pla-Fit Health, LLC.
Merchant agrees to use a unique domain (or subdomain) name for each store address and to purchase an SSL
certificate for each store (according to the current price schedule as published on Radiant's web site at
www.CounterPointPOS.com).
The following provision shall apply to the purchase of VeriSign SSL Certificates: By entering into this Agreement you
hereby agree to the terms and conditions applicable to the SSL Certificate as specified by VeriSign and published at
VeriSign’s web site, currently located at http:///www.verisign.com/repository/agreements/serverClass3Org.html (the
“SSL Agreement”). Merchant agrees to periodically review VeriSign’s web site, including the current version of the
SSL Agreement that is posted on such web site. By continuing to use the VeriSign Certificate after any revision to
the SSL Agreement Merchant agrees to abide by and be bound by any such revisions. Merchant acknowledges that
VeriSign is third party beneficiary to the terms of the SSL Agreement, including but not limited to Merchant’s
obligation to indemnify, defend and hold harmless VeriSign, and its subsidiaries, directors, shareholders officers,
agents, employees, successors and assigns, as set forth in the indemnification provision set forth in Section 15 of
the SSL Agreement. Merchant hereby consents to the disclosure of Merchant’s name, address and other Merchant
information as may be necessary for enrollment purposes.
The above fees do not include any a la carte optional services, such as consulting, web site design, custom template
design, custom development, implementation services or marketing services.
After the initial three-year term, rates are subject to change with 30 days notice.
Any contracted rates separately agreed to by Radiant and Merchant take precedence over fees shown in this
Agreement.
3. Data privacy and Security
CPOnline collects certain transactional information for Merchant’s online stores, including but not limited to product
information, customer information, orders and invoices, and as set forth herein Radiant will retain such information
on Radiant’s servers. Radiant agrees not to disclose or otherwise make use of Merchant’s business or transactional
information, except to provide services or in response to a subpoena, warrant, court order, levy, attachment, order
of a court-appointed receiver or other comparable legal process. Notwithstanding the foregoing, Radiant may use
and disclose data associated with Merchant’s usage of CPOnline, in the form of anonymous, aggregate usage
statistics that Radiant derives through Merchant’s use of CPOnline, but only in forms that do not reveal the identity
of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and only in
sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges
and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip
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code information for marketing research purposes will be permitted.
Radiant participates in the Payment Card Industry ("PCI") Data Security Standard ("DSS") program for
CPOnline by undergoing annual assessments based on the PCI DSS in order to be included on Visa's List of
PCI DSS Compliant Service Providers. The parties acknowledge that the PCI DSS is subject to revision and
clarification, and that validation against the PCI DSS is an annual activity. Radiant agrees to gain annual revalidation against the PCI DSS. The data center used by Radiant to host CPOnline has received SSAE 16
certification pursuant to a SOC 1, Type 2 Report and Radiant agrees to ensure that any data center used by
Radiant to host CPOnline in future obtains annual SSAE 16 certification pursuant to a SOC 1, Type 2 Report.
In addition to PCI DSS, Radiant acknowledges that certain Rules, standards, guidelines, practices or
procedures recommended or required by the applicable Payment Networks with respect to data security or
protection of cardholder data, as such may be amended from time to time (together with PCI-DSS, collectively
“Data Security Guidelines”) may be applicable to CPOnline. For purposes of this Agreement, “Payment
Network” or “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing a
Visa or MasterCard credit or debit card, travel and entertainment card, or other credit or debit card. Rules”
shall mean the operating rules and regulations of Visa, MasterCard, and any other applicable Payment
Network, as in effect from time to time.
With respect to the standards set forth in this Section 3, the parties acknowledge and agree that such
standards are subject to change and/or discontinuance from time to time. To the extent that a standard set
forth in this Section 3 is discontinued or is no longer applicable, the parties agree to work together in good
faith to use the applicable successor standard or the most appropriate alternate standard to fulfill the
requirements of this Section 3.
4. Access to systems
Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s CPOnline service in
order to provide Merchant with support services and to monitor Merchant’s compliance with the terms of this
Agreement. Any such access will be performed in a professional manner, in accordance with applicable industry
standards. Radiant agrees to indemnify, defend and hold harmless Merchant (collectively, the “PF Indemnified
Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred
by any of the PF Indemnified Parties and fines, and/or penalties imposed on any of the PF Indemnified Parties as a
result of the negligent performance by Radiant of any of the activities set forth in the first sentence of this Section
4. Radiant may gather statistical information about Merchant’s locations including, without limitation, hardware
information, software versions and feature usage, and use such information for valid business purposes such as
product analysis and billing information. Additionally, Radiant and/or Radiant subcontractors providing support
services to Merchant may access configuration and operational data in connection with providing such support
services.
5. Merchant responsibility
Merchant understands and agrees that Merchant is entirely responsible for the content of Merchant’s online stores,
including the products and services offered for sale therein. Merchant agrees that Merchant will not use Merchant’s
online stores to engage in any illegal, unlawful, immoral, or unethical activities. Merchant agrees to be entirely and
solely responsible for Merchant’s online stores and that under no circumstances will Radiant be liable for any
content or use thereof. Merchant acknowledges and agrees that Radiant does not endorse the content of
Merchant’s online stores or any products or services offered for sale therein and Radiant specifically disclaims any
responsibility for any threatening, libelous, obscene, harassing, or offensive material contained therein.
Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement.
6. Limitations of warranty and liability, and indemnification
The warranties expressed in this Agreement are the only warranties made by Radiant with respect to CPOnline and
are in lieu of all other warranties, expressed or implied, including but not limited to implied warranties of
merchantability and/or fitness for a particular purpose.
Neither Merchant nor Radiant will be liable for any consequential, indirect or special damages, or any claims for lost
profits, lost savings or lost data by or of the other party. In no event will either party’s aggregate liability for any
damages to the other party or to any other person or entity ever exceed the amount of fees and charges paid by
Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise
to such damages (the “Cap”), regardless of the form of action, whether based on contract, tort, negligence, strict
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liability, products liability or otherwise, provided however, that with respect to a party’s indemnification
obligations, the Cap shall be (i) a cumulative total of $10 million for all indemnification obligations to Pla-Fit
Health, LLC and its affiliates and franchisees arising from a data security breach caused by Radiant’s
negligence or willful misconduct, and (ii) for all other indemnification obligations, 1.5 times the amount of
fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the
applicable software or services giving rise to such damages.
Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses,
including reasonable attorneys’ fees incurred by Radiant arising out of or from (i) Merchant’s breach of this
Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement or the content of
Merchant’s online stores, including the products and services offered for sale therein, or (iii) Merchant’s violation of
any applicable international, federal, state or local law, regulation or ordinance in connection with Merchant’s use of
CPOnline, provided that Merchant is promptly notified by Radiant of receipt of notice of such claim, is given
control of the defense or settlement of such claim, and is given reasonable assistance requested by
Merchant, at Merchant’s cost, with regard to such claim.
Radiant agrees to indemnify and hold Merchant harmless for any claims, losses, liabilities, cost and expenses,
including reasonable attorney’s fees incurred by Merchant arising out of or from (i) claims or demands by
third parties against Merchant arising out of Radiant's breach of this Agreement, or (ii) Radiant’s violation of
any applicable international, federal, state or local law, regulation or ordinance in connection with CPOnline,
or (iii) Radiant’s non-compliance with applicable Data Security Guidelines, provided that Radiant is promptly
notified by Merchant of receipt of notice of such claim, is given control of the defense or settlement of such
claim, and is given reasonable assistance requested by Radiant, at Radiant’s cost, with regard to such claim.
Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and
attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or
required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to
in writing. As used in this Section 6, an “IP Claim” means a suit brought against Merchant by a third party to the
extent the suit alleges that Merchant’s use of CPOnline infringes a patent or copyright of the third party. Radiant’s
obligations set forth in this Section 6 are subject to Merchant’s (a) providing Radiant prompt written notice that the
IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole
control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the
defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and
information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court
orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or
resolution of the IP Claim, Radiant’s obligations set forth in this Section 6 will not apply to the IP Claim.
Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’
fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from
Merchant. Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage
additional counsel of Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set
forth in this Section 6 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results
from (a) Radiant’s compliance with Merchant’s design, specification, or instruction; (b) modification of CPOnline
other than by Radiant; (c) any product or service not provided by Radiant to Merchant; or (d) combination or use of
CPOnline with any product or service not provided by Radiant to Merchant. If an intellectual property infringement
allegation is brought or threatened against CPOnline, or Radiant believes that such an allegation may be brought or
threatened, Radiant may (a) obtain a license for CPOnline; (b) modify CPOnline; or (c) replace CPOnline with a
product having substantially the same functionality. THIS SECTION 6 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND
MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM.
The parties’ obligations under this paragraph 6 shall survive termination of this Agreement.
7. Term and termination
This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis
until terminated by one of the parties as described herein.
Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is
under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the date
of Radiant’s receipt of Merchant’s written termination request.
Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or
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condition of this Agreement and fails to remedy the non-compliance within thirty (30) days’ notice by Radiant to
Merchant. Additionally, Radiant reserves the right to decline initial service, disable or suspend Merchant’s access to
CPOnline or otherwise terminate this Agreement without notice (i) if Merchant uses CPOnline for any purpose other
than as expressly permitted in this Agreement, (ii) if Merchant’s products and/or presentation can be considered, in
Radiant’s sole discretion, to be threatening, libelous, obscene, harassing, or offensive (iii) if Merchant violates any
applicable international, federal, state or local law, regulation or ordinance in connection with its use of CPOnline, or
(iv) if Merchant’s use of CPOnline adversely affects the use such service by other Radiant clients.
Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this Agreement
through the applicable date of termination.
8. Governing Law and Venue
This Agreement shall be construed and governed in accordance with the laws of the State of New York without
regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by
Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is
federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by
Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal
jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the
jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are not
subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper,
inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial
doctrine of forum non conveniens).
9. General
This Agreement constitutes the complete and exclusive agreement between Merchant and Radiant with respect to
CPOnline, superseding any prior agreements or understandings, oral or written, with respect to such subject matter,
and can only be amended by signed written agreement of the parties. Should any term of this Agreement be
declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the
remaining terms hereof. The failure of either party to enforce any rights granted hereunder or to take any action
against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to
subsequent enforcement of rights or subsequent actions in the event of future breaches. Notices required or
permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for
indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized
courier service, or by certified mail (postage prepaid, return receipt requested), to the respective party at the
following address set forth below or at such other address as such party may hereafter notify the other party in
accordance with this Section. Each such notice shall be effective when actually received at the respective addresses
specified below.
Merchant:
Pla-Fit Health LLC
26 Fox Run Road
Newington, NH 03801
Attn: Head of Information Technology
With copy to:
Pla-Fit Health LLC
26 Fox Run Road
Newington, NH 03801
Attn: General Counsel
Radiant:
TERMS AND CONDITIONS
FOR SEARCH ENGINE MARKETING SERVICES
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Merchant acknowledges and agrees that these Terms and Conditions for Search Engine Marketing Services (also known as Search
Engine Optimization Services) and the terms of a separate statement of work between Merchant and Radiant, which includes a
scope of work, change order process, fees, payment terms and other applicable terms, shall apply to Radiant’s provision of search
engine marketing services, if such services are being provided by Radiant (the “SEM Services”). Radiant cannot control every
aspect of the search engine marketing process. Merchant acknowledges and agrees that factors inherent in Merchant’s web site, or
with each search engine or directory where the web site may be registered, will affect the ranking results of the web site. Radiant’s
objective is to obtain a certain number of top rankings in the most-used search engines and directories for Merchant’s web site.
Although the goal of high rankings is usually to generate web site traffic and sales or other actions taken on Merchant’s web site,
Radiant cannot control the number of actual click-throughs or any actions taken by any visitor on your web site. Regarding search
engine reputation management, with billions of pages on the Internet, there is no guarantee that Radiant will find every mention of
Merchant. Rankings for search engines are controlled by hundreds of different factors directly and indirectly related to Merchant’s
web site. Although Radiant follows accepted search engine optimization practices, Radiant is not liable for any loss of rankings or
penalties you may incur from any search engine due to spamming, "black hat", artificial back links or any other search engine
techniques. Accordingly, Radiant makes no representation, warranty or guarantee with respect to any SEM Services it may provide
to Merchant.
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EXHIBIT D
CPGateway Merchant Agreement
[See Attached]
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CPGATEWAY MERCHANT AGREEMENT
The following terms and conditions (the “Agreement”) shall govern the use of the CPGateway service (as described below)
provided by Radiant Systems, Inc. (“Radiant”).
1. CPGateway
CPGateway is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point-of-sale software
(“Merchant”) to use Radiant’s electronic payment software to authorize and settle transactions through the Internet for
goods and services sold using major credit cards and checks, provided that Merchant has an existing, signed merchant
agreement and valid merchant ID in place to accept these payment types.
Merchant's electronic payment transactions will pass through servers (computers) owned and operated by Radiant and
Radiant agents. Radiant and Radiant agents will not retain copies of Merchant's transactions or credit card numbers on
Radiant servers. All transactions will be encrypted using secure technology. Radiant agrees to be responsible for the acts
and omissions of the Radiant agents in relation to handling of Merchant’s electronic payment transactions.
CPGateway allows Merchant to perform electronic credit card authorizations for purchases and the settlement or deposit of
purchase transaction funds into Merchant's bank account.
More complete statements regarding CPGateway and its capabilities are described in other materials published by Radiant
and on Radiant’s web site at www.CounterPointPOS.com.
Radiant agrees to provide disaster recovery and business continuity protection for the CPGateway data center from which
the CPGateway services are provided, in accordance with the corporate business continuity program deployed by Radiant
with respect its customers generally. Upon request by Merchant, Radiant will provide a summary of its current corporate
business continuity program, the contents of which shall be deemed to be Radiant Confidential Information.
2. Fees and charges
CPGateway fees and charges will be paid on Merchant’s behalf by Pla-Fit Health, LLC.
After the initial three-year term, rates are subject to change with 30 days notice.
Any contracted rates separately agreed to by Radiant and Merchant take precedence over fees shown in this Agreement.
3. Data privacy and Security
Radiant agrees not to disclose to any third party or otherwise make use of any transactional information Merchant provides
to Radiant, except to provide services to Merchant or in response to a subpoena, warrant, court order, levy, attachment,
order of a court-appointed receiver or other comparable legal process. Notwithstanding the foregoing, Radiant may use and
disclose data associated with Merchant’s usage of CPGateway, in the form of anonymous, aggregate usage statistics that
Radiant derives through Merchant’s use of CPGateway, but only in forms that do not reveal the identity of Merchant or
Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes that are large
enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and agrees that Radiant’s use and
disclosure of anonymous, aggregate usage statistics along with associated zip code information for marketing research
purposes will be permitted.
Radiant participates in the Payment Card Industry ("PCI") Data Security Standard ("DSS") program for CPGateway by
undergoing annual assessments based on the PCI DSS in order to be included on Visa's List of PCI DSS Compliant Service
Providers. The parties acknowledge that the PCI DSS is subject to revision and clarification, and that validation against the
PCI DSS is an annual activity. Radiant agrees to gain annual re-validation against the PCI DSS. The data center used by
Radiant to host CPGateway has received SSAE 16 certification pursuant to a SOC 1, Type 2 Report and Radiant agrees to
ensure that any data center used by Radiant to host CPGateway in future obtains annual SSAE 16 certification pursuant to a
SOC 1, Type 2 Report.
In addition to PCI DSS, Radiant acknowledges that certain Rules, standards, guidelines, practices or procedures
recommended or required by the applicable Payment Networks with respect to data security or protection of cardholder data,
as such may be amended from time to time (together with PCI-DSS, collectively “Data Security Guidelines”) may be
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applicable to CPGateway. For purposes of this Agreement, “Payment Network” or “Payment Networks” shall mean Visa,
MasterCard, and any credit or debit card network issuing a Visa or MasterCard credit or debit card, travel and entertainment
card, or other credit or debit card. Rules” shall mean the operating rules and regulations of Visa, MasterCard, and any other
applicable Payment Network, as in effect from time to time.
With respect to the standards set forth in this Section 3, the parties acknowledge and agree that such standards are subject
to change and/or discontinuance from time to time. To the extent that a standard set forth in this Section 3 is discontinued
or is no longer applicable, the parties agree to work together in good faith to use the applicable successor standard or the
most appropriate alternate standard to fulfill the requirements of this Section 3.
4. Limitations of warranty and liability, and indemnification
Radiant warrants to Merchant that the CPGateway Services will be performed in a professional and timely manner in
accordance with: (i) applicable industry standards; (ii) applicable Data Security Guidelines; (iii) applicable laws and
regulations; and (iv) the service level standards set forth in Exhibit A to this Agreement.
The warranties expressed in this Agreement are the only warranties made by Radiant with respect to CPGateway and are in
lieu of all other warranties, expressed or implied, including but not limited to implied warranties of merchantability and/or
fitness for a particular purpose.
Neither Merchant nor Radiant will be liable for any consequential, indirect or special damages, or any claims for lost profits,
lost savings or lost data by or of the other party. In no event will either party’s aggregate liability for any damages to the
other party or to any other person or entity ever exceed the amount of fees and charges paid by Merchant hereunder during
the immediately prior 12 month period for the applicable software or services giving rise to such damages (the “Cap”),
regardless of the form of action, whether based on contract, tort, negligence, strict liability, products liability or otherwise,
provided however, that with respect to a party’s indemnification obligations, the Cap shall be (i) a cumulative total of $10
million for all indemnification obligations to Pla-Fit Health, LLC and its affiliates and franchisees arising from a data security
breach caused by Radiant’s negligence or willful misconduct, and (ii) for all other indemnification obligations, 1.5 times the
amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable
software or services giving rise to such damages.
Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses, including
reasonable attorney’s fees incurred by Radiant arising out of or from (i) claims or demands by third parties against Radiant
arising out of Merchant's breach of this Agreement, or (ii) Merchant’s violation of any applicable international, federal, state
or local law, regulation or ordinance in connection with Merchant’s use of CPGateway, provided that Merchant is promptly
notified by Radiant of receipt of notice of such claim, is given control of the defense or settlement of such claim, and is given
reasonable assistance requested by Merchant, at Merchant’s cost, with regard to such claim
Radiant agrees to indemnify and hold Merchant harmless for any claims, losses, liabilities, cost and expenses, including
reasonable attorney’s fees incurred by Merchant arising out of or from (i) claims or demands by third parties against
Merchant arising out of Radiant's breach of this Agreement, or (ii) Radiant’s violation of any applicable international, federal,
state or local law, regulation or ordinance in connection with CPGateway, or (iii) Radiant’s non-compliance with applicable
Data Security Guidelines, provided that Radiant is promptly notified by Merchant of receipt of notice of such claim, is given
control of the defense or settlement of such claim, and is given reasonable assistance requested by Radiant, at Radiant’s
cost, with regard to such claim.
Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and attorneys’
fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or required to be paid by
Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this
Section 4, an “IP Claim” means a suit brought against Merchant by a third party to the extent the suit alleges that Merchant’s
use of CPGateway infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 4 are
subject to Merchant’s (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought,
whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the
IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing
Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and
(e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect
to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 4 will not apply to the IP Claim.
Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees),
expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from Merchant.
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Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage additional counsel of
Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 4 will not
apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with
Merchant’s design, specification, or instruction; (b) modification of CPGateway other than by Radiant; (c) any product or
service not provided by Radiant to Merchant; or (d) combination or use of CPGateway with any product or service not
provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened against
CPGateway, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for
CPGateway; (b) modify CPGateway; or (c) replace CPGateway with a product having substantially the same functionality.
THIS SECTION 4 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL
PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM.
The parties obligations under this paragraph 4 shall survive termination of this Agreement.
5. Term and termination
This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis until
terminated by one of the parties as described herein.
Merchant may terminate this Agreement with 30 days written notice to Radiant; however, Radiant is under no obligation to
refund Merchant any fees previously paid. Subject to Exhibit A, Merchant agrees to pay all fees through the date of
Radiant’s receipt of Merchant’s written termination request.
Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or condition of
this Agreement and fails to remedy the non-compliance within thirty (30) days’ notice by Radiant to Merchant. Additionally,
Radiant reserves the right to decline initial service, disable or suspend Merchant’s access to CPGateway or otherwise
terminate this Agreement without notice (i) if Merchant uses CPGateway for any purpose other than as expressly permitted
in this Agreement, (ii) if Merchant violates any applicable international, federal, state or local law, regulation or ordinance in
connection with its use of CPGateway, or (iii) if Merchant’s use of CPGateway adversely affects the use of such service by
other Radiant clients.
Regardless of the method of termination, but subject to Exhibit A, Merchant agrees to pay all fees and charges due under
this Agreement through the applicable date of termination.
6. Governing Law and Venue
This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its
conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter
shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United
States District Court for the District of New Hampshire. If litigation is instituted by Merchant, the matter shall be subject to
the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the
Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts hereby waive and
covenant not to assert any claim that they are not subject to personal jurisdiction in those courts or that venue in those
courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any
claim under the judicial doctrine of forum non conveniens).
7. Force Majeure
If performance by a party, or any of its respective affiliates, or a Payment Network, of any services or obligation under this
Agreement is prevented, restricted, delayed or interfered with by reason of acts or events beyond their reasonable control
(each, a “Force Majeure Event”), including acts of God, war, acts of terrorism, riot, embargoes, acts of civil or military
authorities, fire, floods, hurricanes, earthquakes, or lightning, disputes and strikes (excluding strikes or labor actions by a
party’s employees), then provided that: (i) such failure to perform could not have been prevented by reasonable precautions
by the non-performing party (including with respect to Radiant by Radiant meeting its obligations for performing disaster
recovery and redundancy services as described in this Agreement), and (ii) the non-performing party gives prompt written
notice of the Force Majeure Event and its inability to perform to the other party, the time for the non-performing party’s
performance shall be extended for a period equal to the duration of the Force Majeure Event. For avoidance of doubt, no
Force Majeure Event shall excuse, limit or otherwise affect Radiant’s obligation to perform disaster recovery and redundancy
services. The parties agree that the following shall not be Force Majeure Events: failure in performance of an affiliate,
vendor, agent or sub-contractor of a party asserting the Force Majeure Event unless such failure is due to causes beyond
the reasonable control of such affiliate, vendor, contractor or agent and could not have been avoided by commercially
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reasonable measures.
8. General
This Agreement constitutes the complete and exclusive agreement between Merchant and Radiant with respect to
CPGateway, superseding any prior agreements or understandings, oral or written, with respect to such subject matter, and
can only be amended by signed written agreement of the parties. Should any term of this Agreement be declared void or
unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof.
The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of
any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent
actions in the event of future breaches. Notices required or permitted to be given under this Agreement (such as any notice
of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in
person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the
respective party at the address set forth on the first page of the Agreement or at such other address as such party may
hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received.
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EXHIBIT A
SERVICE LEVEL STANDARDS
1. TRANSACTION PROCESSING SUBMISSION STANDARD
Radiant agrees that the CPGateway will be available for submission of Transaction Card files received from Merchant and will
properly submit such Transaction Card files for processing and settlement by the Payment Networks 99.0% of time
(excluding planned maintenance windows), measured on a monthly basis. This standard will not apply to a Transaction
Card file:
(a) that is subject to a Force Majeure Event pursuant to Section 7 of this Agreement;
(b) that is submitted in a file format to Radiant that does not comply with written specifications which are provided by
Radiant to Merchant or with applicable Payment Network Rules;
(c) that includes fraudulent or erroneous information due to no fault of Radiant or a Radiant agent; or
(d) that excludes information required for processing by Radiant in accordance with this Agreement.
If Radiant fails to meet the above standard, Radiant will credit to Merchant for each month in which Radiant failed to meet
the standard an amount equal to twenty percent (20%) of the monthly fees received by Radiant for the provision of the
CPGateway services and applicable to the month in which Radiant failed to meet the standard, except for a failure caused by
any of the reasons stated in clauses (a) through (d) above or that is otherwise due to acts or omissions of a party other
than Radiant.
In the event that Radiant breaches the above standard more than four times in any six (6) month period, Customer may
terminate this Agreement without penalty by providing Radiant written notice of its intent to so terminate within 30 days of
any such fourth breach.
“Transaction Card” or “Transaction Cards” shall mean a Visa or MasterCard credit or debit card, travel and entertainment
card, or other credit or debit card shown as a qualified card on lists furnished to Merchant by its payment processor(s) from
time to time.
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EXHIBIT E
Customer Connect Merchant Agreement
[See Attached]
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CUSTOMERCONNECT MERCHANT AGREEMENT
The following terms and conditions (the “Agreement”) shall govern the use of the CustomerConnect service and
the Radiant Utility (as described below) provided by Radiant Systems, Inc. (“Radiant”).
1. CustomerConnect description
CustomerConnect is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point
of sale software ("Merchant") to manage customer and contact information, and communicate with such
customers and contacts via e-mails or other electronic messages. In order to provide the CustomerConnect
service to Merchant, Radiant’s servers will access Merchant's CounterPoint database via a Radiant software
utility (the “Radiant Utility”). Depending upon the version of Radiant’s CounterPoint point of sale software
Merchant is currently using, Merchant may be required to download via the Internet and install the Radiant
Utility at the Merchant location where Merchant’s CounterPoint database resides. When applicable, if remote
installation cannot be performed by Merchant for any reason Merchant must work with an authorized
CounterPoint reseller for installation of the Radiant Utility, and in such situation, Merchant acknowledges that
the authorized reseller may charge Merchant for such installation at the reseller’s then-current rates.
During the term of this Agreement, Radiant grants to Merchant the limited right to make use of the Radiant
Utility solely in connection with Merchant’s use of the CustomerConnect service in its business subject to the
terms contained in this Agreement and the additional terms in the separate CounterPoint software license
agreement between Radiant and Merchant. Other than the express limited rights granted above to Merchant to
make use of the Radiant Utility in connection with a valid subscription to the CustomerConnect service, no other
rights are granted to Merchant in and in respect of the Radiant Utility and Radiant reserves all other rights
therein and thereto.
More complete statements of CustomerConnect and CounterPoint capabilities are described in other materials
published by Radiant and on Radiant's web site at www.CounterPointPOS.com.
2. Fees and charges
Fees and charges for CustomerConnect will be paid on Merchant’s behalf by Pla-Fit Health, LLC.
After the initial three-year term, rates are subject to change with 30 days notice.
Any contracted rates separately agreed to by Radiant and Merchant in writing take precedence over fees shown
in this Agreement.
3. Data privacy
CustomerConnect collects customer data and certain transactional information from Merchant's CounterPoint
database, including, but not limited to, product information, customer information, orders and invoices. Radiant
agrees not to disclose or otherwise make use of Merchant's business or transactional information, except to
provide services or in response to a subpoena, warrant, court order, levy, attachment, order of a courtappointed receiver or other legal process. Notwithstanding the foregoing, Radiant may use and disclose data
associated with Merchant’s usage of CustomerConnect, in the form of anonymous, aggregate usage statistics
that Radiant derives through Merchant’s use of CustomerConnect, but only in forms that do not reveal the
identity of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and
only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant
acknowledges and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along
with associated zip code information for marketing research purposes will be permitted.
4. Access to systems
Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s
CustomerConnect service in order to provide Merchant with support services and to monitor Merchant’s
compliance with the terms of this Agreement. Any such access will be performed in a professional manner, in
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accordance with applicable industry standards. Radiant agrees to indemnify, defend and hold harmless
Merchant (collectively, the “PF Indemnified Parties”) from all claims, actions, losses and expenses, including
reasonable attorney’s fees and legal costs, incurred by any of the PF Indemnified Parties and fines and/or
penalties imposed on any of the PF Indemnified Parties as a result of the negligent performance by Radiant of
any of the activities set forth in the first sentence of this Section 4. Radiant may gather statistical information
about Merchant’s locations including, without limitation, hardware information, software versions and feature
usage, and use such information for valid business purposes such as product analysis and billing information.
Additionally, Radiant and/or Radiant subcontractors providing support services to Merchant may access
configuration and operational data in connection with providing such support services.
5. Merchant responsibility
Merchant understands and agrees that Merchant is entirely responsible for Merchant’s use of the
CustomerConnect service, including but not limited to, proper account set up, configuration settings, obtaining
consents or opt-ins from patrons / end-users to participate in use of the service, maintenance of valid phone
numbers, e-mail addresses or other communications identifiers as are appropriate for the particular type of
communications being sent by use of the CustomerConnect service, the content of the communications being
sent, including the products and services offered for sale therein, and compliance with laws and regulations
applicable to Merchant’s sending of electronic communications in various forms.
By enrolling in the CustomerConnect service Merchant acknowledges and agrees that Radiant will be making
available to Merchant a software application that will allow Merchant to send communications of various kinds to
Merchant’s patrons and that these communications may take the form of e-mails or other electronic messages
(collectively, “Communications”). Communications may be routed through one or more wireless or other mobile
carrier service, an Internet service provider or other communications services provider. Merchant
acknowledges and agrees that Communications may not be encrypted and may include confidential
information, so Merchant should use appropriate care when determining the content of, and with the sending of,
any Communications. Delivery and receipt of Communications may be delayed or impacted by one or more
factors pertaining to technical or other issues with wireless and other mobile carrier(s), Internet service
providers, other communication services provider(s) or other third parties, or due to other reasons outside of
Radiant’s control. Radiant will not be liable for any losses or damages arising from any disclosure of any
Communications to any third party or any non-delivery, delayed delivery, misdirected delivery or mishandling of,
or inaccurate content in, any Communications sent via the CustomerConnect service.
Merchant may only use images provided as part of the CustomerConnect service for the sole purpose of
composing Communications in connection with Merchant’s use of the Customer Connect service and for no
other purpose. Further, Merchant’s use of any third party or purchased e-mail list(s) is strictly prohibited in
connection with Merchant’s use of the CustomerConnect service.
Merchant agrees that Merchant will not use the CustomerConnect service to engage in any illegal, unlawful,
immoral, or unethical activities. Merchant acknowledges and agrees that Radiant does not endorse the content
of the Communications or any products or services offered for sale therein and Radiant specifically disclaims
any responsibility for any threatening, libelous, obscene, harassing, or offensive material contained therein.
Merchant acknowledges and agrees that certain aspects of the CustomerConnect service utilize a service
known as CertifiedEmail and Tokens which is provided by a third party, Goodmail Systems Inc. (“Goodmail”). By
entering into this Agreement Merchant agrees to the policies specified by Goodmail as published at Goodmail’s
web site, including the CertifiedEmail Acceptable Use and Security Policy, the Privacy Policy and the Terms of
Service, the current version of which is available at http://www.goodmailsystems.com/docs/Goodmail_aup.pdf
(the “AUP”). Goodmail reserves the right to modify the AUP at any time and if Goodmail so notifies Radiant,
Radiant will provide Merchant with prompt notice of such modifications by any of the notification means set forth
in paragraph 10 below. If any such modification is not acceptable to Merchant, Merchant’s only recourse is to
cease use of the CerfitiedEmail and Tokens portion of the CustomerConnect service by providing notice to
Radiant that it prefers to cease such use. By continuing to use the CustomerConnect service following receipt of
a notice regarding a modification to the AUP, Merchant accepts and agrees to be bound by such new terms.
Additionally, Merchant acknowledges that Radiant may be required to suspend or terminate Merchant’s access
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to the CertifiedEmail and Tokens portion of the CustomerConnect service if Merchant exceeds the maximum
allowable reputation score set forth in the AUP or for violating the terms and conditions of the AUP as
determined by Goodmail in its sole discretion. Merchant hereby consents to the disclosure of Merchant’s name,
address and other Merchant information as may be necessary in connection with Goodmail’s accreditation
process for the use of CertifiedEmail and Tokens.
Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement.
6. Communication Footers
For each Communication sent, Merchant acknowledges and agrees that Radiant may add an identifying footer
stating “Email Marketing by Radiant”, “Powered by Radiant” or a similar message.
7. Limitations of warranty and liability, and indemnification
The warranties expressed in this Agreement are the only warranties made by Radiant with respect to the
CustomerConnect service and the Radiant Utility and are in lieu of all other warranties, expressed or implied,
including but not limited to implied warranties of merchantability and/or fitness for a particular purpose.
Neither Merchant nor Radiant will be liable for any consequential, indirect, or special damages, or any claims
for lost profits, lost savings or lost data by or of the other party. In no event will either party's aggregate liability
for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges
paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or
services giving rise to such damages, regardless of the form of action, whether based on contract, tort,
negligence, strict liability, products liability or otherwise.
Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses,
including reasonable attorneys' fees incurred by Radiant arising out of or from (i) Merchant's breach of this
Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement, (iii) Merchant’s
use of the CustomerConnect service, or (iv) Merchant’s violation of any applicable international, federal, state or
local law, regulation or ordinance (including without limitation, the Federal Trade Commission Act, and the CANSPAM Act), in connection with Merchant’s use of the CustomerConnect service.
Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs,
and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP
Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant
has agreed to in writing. As used in this Section 7, an “IP Claim” means a suit brought against Merchant by a
third party to the extent the suit alleges that Merchant’s use of CustomerConnect infringes a patent or copyright
of the third party. Radiant’s obligations set forth in this Section 7 are subject to Merchant’s (a) providing Radiant
prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim
Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c)
cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing
Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or
settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes
detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in
this Section 7 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is
not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred
prior to Radiant’s receipt of the Claim Notice from Merchant. Radiant will have the sole right to select counsel.
Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of
conferring with Radiant’s counsel. The obligations set forth in this Section 7 will not apply to an IP Claim if the
alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design,
specification, or instruction; (b) modification of CustomerConnect other than by Radiant; (c) any product or
service not provided by Radiant to Merchant; or (d) combination or use of CustomerConnect with any product or
service not provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or
threatened against CustomerConnect, or Radiant believes that such an allegation may be brought or
threatened, Radiant may (a) obtain a license for CustomerConnect; (b) modify CustomerConnect; or (c) replace
CustomerConnect with a product having substantially the same functionality. THIS SECTION 7 SETS FORTH
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RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY
INFRINGEMENT, INCLUDING ANY IP CLAIM.
The parties’ obligations under this paragraph 7 shall survive termination of this Agreement.
8. Term and termination
This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month
basis until terminated by one of the parties as described herein.
Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is
under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the
date of Radiant's receipt of Merchant's written termination request.
Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or
condition of this Agreement and fail to remedy any non-compliance within thirty (30) days’ notice by Radiant to
Merchant. Additionally, Radiant may disable or suspend Merchant’s access to the CustomerConnect service or
otherwise terminate this Agreement without notice (i) if Merchant uses CustomerConnect for any purpose other
than as expressly permitted in this Agreement, (ii) if Merchant uses any third party or purchased e-mail list(s) in
connection with Merchant’s use of the CustomerConnect service, (iii) if Merchant violates any applicable
international, federal, state or local law, regulation or ordinance (including without limitation, the Federal Trade
Commission Act, and the CAN-SPAM Act) in connection with its use of the CustomerConnect service, or (iv) if
Merchant’s use of the CustomerConnect service adversely affects the use such service by other Radiant clients.
Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this
Agreement through the applicable date of termination.
9. Governing Law and Venue
This Agreement shall be construed and governed in accordance with the laws of the State of New York without
regard to its conflict of laws rule. The parties agree to the following venue provisions: if litigation is instituted by
Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is
federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by
Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal
jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to
the jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are
not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper,
inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial
doctrine of forum non conveniens).
10. General
This Agreement and the separate CounterPoint software license agreement between Radiant and Merchant
collectively constitutes the complete and exclusive agreement between Merchant and Radiant with respect to
CustomerConnect and the Radiant Utility, superseding any prior agreements or understandings, oral or written,
with respect to such subject matter, and can only be amended by signed written agreement of the parties.
Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction,
such declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any
rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall
not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event
of future breaches. Notices required or permitted to be given under this Agreement (such as any notice of
breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by
delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt
requested), to the respective party at the address set forth on the first page of the Agreement or at such other
address as such party may hereafter notify the other party in accordance with this Section. Each such notice
shall be effective when actually received.
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EXHIBIT F
SmartAlerts Merchant Agreement
[See Attached]
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SMARTALERTS MERCHANT AGREEMENT
The following terms and conditions (the “Agreement”) shall govern the use of the SmartAlerts service and the
Radiant Utility (as described below) provided by Radiant Systems, Inc. (“Radiant”).
1. SmartAlerts description
SmartAlerts is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point of sale
software ("Merchant") to receive notification of events occurring in Merchant’s CounterPoint database through
one or more mobile communications devices designated by Merchant based upon the specific configuration
parameters within CounterPoint and SmartAlerts that have been initiated and specified by Merchant or
Merchant’s authorized representative. Merchant represents and warrants that Merchant and the holders and
users of such mobile communications devices that are designated by Merchant to receive Smart Alerts
messages in the form specified by Merchant have agreed to receive Smart Alerts messages on such devices.
Radiant’s servers will access Merchant's CounterPoint database via a Radiant software utility (the “Radiant
Utility”) that Merchant will be required to download via the Internet and install at the Merchant location where
Merchant’s CounterPoint database resides. If remote installation cannot be performed by Merchant for any
reason Merchant must work with Merchant’s authorized CounterPoint reseller for installation of the Radiant
software utility (Merchant’s authorized reseller reserves the right to charge Merchant for such installation at the
reseller’s then-current rates).
During the term of this Agreement, Radiant grants to Merchant the limited right to make use of the Radiant
Utility solely in connection with Merchant’s use of the SmartAlerts service in its business subject to the terms
contained in this Agreement and the additional terms in the separate CounterPoint software license agreement
between Radiant and Merchant. Other than the express limited rights granted above to Merchant to make use of
the Radiant Utility in connection with a valid subscription to the Smart Alerts service, no other rights are granted
to Merchant in and in respect of the Radiant Utility and Radiant reserves all other rights therein and thereto.
More complete statements of SmartAlerts and CounterPoint capabilities are described in other materials
published by Radiant and on Radiant's web site at www.CounterPointPOS.com.
2. Fees and charges
Fees and charges for SmartAlerts will be paid on Merchant’s behalf by Pla-Fit Health, LLC.
After the initial three-year period, rates are subject to change with 30 days notice.
Any contracted rates separately agreed to by Radiant and Merchant in writing take precedence over fees shown
in this Agreement.
Merchant is responsible for any and all charges including, but not limited to, fees associated with text or email
messaging imposed by Merchant’s mobile carrier or communication services provider. Message and data rates
may apply. Such charges include those from Merchant’s mobile carrier or communication services provider.
3. Data privacy
SmartAlerts collects certain transactional information from Merchant's CounterPoint database, including, but not
limited to, product information, customer information, orders and invoices. Radiant agrees not to disclose or
otherwise make use of Merchant's business or transactional information, except to provide services or in
response to a subpoena, warrant, court order, levy, attachment, order of a court-appointed receiver or other
comparable legal process. Notwithstanding the foregoing, Radiant may use and disclose data associated with
Merchant’s usage of SmartAlerts, in the form of anonymous, aggregate usage statistics that Radiant derives
through Merchant’s use of SmartAlerts, but only in forms that do not reveal the identity of Merchant or
Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes
that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and
agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip
code information for marketing research purposes will be permitted.
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4. Access to systems
Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s SmartAlerts
service in order to provide Merchant with support services and to monitor Merchant’s compliance with the terms
of this Agreement. Any such access will be performed in a professional manner, in accordance with applicable
industry standards. Radiant agrees to indemnify, defend and hold harmless Merchant (collectively, the “PF
Indemnified Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and
legal costs, incurred by any of the PF Indemnified Parties and fines, and/or penalties imposed on any of the PF
Indemnified Parties as a result of the negligent performance by Radiant of any of the activities set forth in the
first sentence of this Section 4. Radiant may gather statistical information about Merchant’s locations including,
without limitation, hardware information, software versions and feature usage, and use such information for valid
business purposes such as product analysis and billing information. Additionally, Radiant and/or Radiant
subcontractors providing support services to Merchant may access configuration and operational data in
connection with providing such support services.
5. Merchant responsibility
Merchant understands and agrees that Merchant is entirely responsible for the configuration of Merchant's
SmartAlerts service, including but not limited to, proper account set up. By enrolling in the SmartAlerts service
Merchant acknowledges and agrees that Radiant will be sending Merchant notification of events occurring in
Merchant’s CounterPoint database through Merchant’s mobile carrier or other communication services provider
("Alerts") and that Merchant’s mobile carrier or communication services provider is acting as Merchant’s agent
in this capacity. Merchant agrees to provide and maintain a valid phone number, e-mail address or other
delivery location to Radiant that is functionally compatible with Radiant’s then-current delivery mechanism for
receipt of Alerts as documented on Radiant’s web sites for SmartAlerts. Additionally, Merchant agrees to
indemnify, defend and hold Radiant harmless from and against any and all claims, losses, liability, cost and
expenses, including reasonable attorneys' fees, arising from (i) Merchant’s provision of a phone number, e-mail
address, mobile device, or other delivery location that is erroneous or otherwise not Merchant’s (or one for
which Merchant does not have permission for SmartAlerts to be sent), (ii) Merchant’s violation of any applicable
international, federal, state or local law, regulation or ordinance, and (iii) any use by Merchant of the SmartAlerts
service. Merchant acknowledges and agrees that Alerts may not be encrypted and may include confidential
information about Merchant, including transactional information. Delivery and receipt of Alerts may be delayed
or impacted by one or more factors pertaining to Merchant’s Internet service provider(s), mobile carrier(s),
communication services provider(s) or other third parties, or due to other reasons outside of Radiant’s control.
Radiant will not be liable for any losses or damages arising from any disclosure of any Alerts to any third party
or any non-delivery, delayed delivery, misdirected delivery or mishandling of, or inaccurate content in, any Alert
sent via the SmartAlerts service. Merchant acknowledges and agrees that information available directly through
Merchant’s CounterPoint database without the use of a mobile device may not be available via the SmartAlerts
service or may be more current than the information available via the SmartAlerts services.
Additionally, Merchant acknowledges and agrees that Radiant will not be liable for any errors or delays in the
content of any Alert, or for any actions taken in reliance thereon. Merchant agrees to be entirely and solely
responsible for any actions taken as a result of a notification from the SmartAlerts service and that under no
circumstances will Radiant be liable for any use thereof.
Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement.
6. Limitations of warranty and liability, and indemnification
The warranties expressed in this Agreement are the only warranties made by Radiant with respect to the
SmartAlerts service and the Radiant Utility and are in lieu of all other warranties, expressed or implied, including
but not limited to implied warranties of merchantability and/or fitness for a particular purpose.
Neither Merchant nor Radiant will be liable for any consequential, indirect, or special damages, or any claims
for lost profits, lost savings or lost data by or of the other party. In no event will either party’s aggregate liability
for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges
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paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or
services giving rise to such damages, regardless of the form of action, whether based on contract, tort,
negligence, strict liability, products liability or otherwise.
Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses,
including reasonable attorneys’ fees incurred by Radiant arising out of or from (i) Merchant's breach of this
Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement; (iii) Merchant’s
use of the SmartAlerts service, or (iv) Merchant’s violation of any applicable international, federal, state or local
law, regulation or ordinance in connection with Merchant’s use of the SmartAlerts service.
Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs,
and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP
Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant
has agreed to in writing. As used in this Section 6, an “IP Claim” means a suit brought against Merchant by a
third party to the extent the suit alleges that Merchant’s use of SmartAlerts infringes a patent or copyright of the
third party. Radiant’s obligations set forth in this Section 6 are subject to Merchant’s (a) providing Radiant
prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim
Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c)
cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing
Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or
settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes
detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in
this Section 6 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is
not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred
prior to Radiant’s receipt of the Claim Notice from Merchant. Radiant will have the sole right to select counsel.
Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of
conferring with Radiant’s counsel. The obligations set forth in this Section 6 will not apply to an IP Claim if the
alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design,
specification, or instruction; (b) modification of SmartAlerts other than by Radiant; (c) any product or service not
provided by Radiant to Merchant; or (d) combination or use of SmartAlerts with any product or service not
provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened
against SmartAlerts, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a)
obtain a license for SmartAlerts; (b) modify SmartAlerts; or (c) replace SmartAlerts with a product having
substantially the same functionality. THIS SECTION 6 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S
EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM.
The parties’ obligations under this paragraph 6 shall survive termination of this Agreement.
7. Term and termination
This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month
basis until terminated by one of the parties as described herein.
Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is
under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the
date of Radiant's receipt of Merchant's written termination request.
Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or
condition of this Agreement and fail to remedy any non-compliance within thirty (30) days’ notice by Radiant to
Merchant. Additionally, Radiant may disable or suspend Merchant’s access to the SmartAlerts service or
otherwise terminate this Agreement without notice (i) if Merchant uses SmartAlerts for any purpose other than
as expressly permitted in this Agreement or (ii) if Merchant violates any applicable international, federal, state or
local law, regulation or ordinance in connection with its use of the SmartAlerts service.
Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this
Agreement through the applicable date of termination.
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8. Governing Law and Venue
This Agreement shall be construed and governed in accordance with the laws of the State of New York without
regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted
by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there
is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted
by Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal
jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to
the jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are
not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper,
inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial
doctrine of forum non conveniens).
9. General
This Agreement and the separate CounterPoint software license agreement between Radiant and Merchant
collectively constitutes the complete and exclusive agreement between Merchant and Radiant with respect to
SmartAlerts and the Radiant Utility, superseding any prior agreements or understandings, oral or written, with
respect to such subject matter, and can only be amended by signed written agreement of the parties. Should
any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such
declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any rights
granted hereunder or to take any action against the other party in the event of any breach hereunder shall not
be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of
future breaches. Notices required or permitted to be given under this Agreement (such as any notice of breach
or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in
person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested),
to the respective party at the address set forth on the first page of the Agreement or at such other address as
such party may hereafter notify the other party in accordance with this Section. Each such notice shall be
effective when actually received.
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CounterPo
PURCHASE ORDER FOR VISIONARY PRODUCTS AND SOFTWARE
PURCHASE ORDER Page 1 of 27 CONFIDENTIAL PURCHASE ORDER FOR VISIONARY® PRODUCTS AND SOFTWARE RETAIL CONTROL SYSTEMS, INC. 86 Chosen Vale Ln., Suite 206 Enfield, NH 03748 NOTICE TO USERS: YOU MUST AGREE TO ALL TERMS BELOW BEFORE YOU PURCHASE THE PRODUCTS OR SOFTWARE. IF YOU DO NOT AGREE TO ALL TERMS, DO NOT USE THE PRODUCTS OR SOFTWARE. BY USING THE PRODUCTS OR SOFTWARE YOU ACCEPT ALL THE TERMS BELOW IN THIS PURCHASE ORDER (“AGREEMENT”).
PURCHASE ORDER Page 1 of 27 CONFIDENTIAL
PURCHASE ORDER Page 2 of 27 CONFIDENTIAL TABLE OF CONTENTS I. Definitions. ....................................................................................................................... 3 II. Contract. ........................................................................................................................... 5 III. Payment Terms. ................................................................................................................ 5 IV. Right to Suspend, Terminate or Refuse to Accept Orders. .................................................. 6 V. Invoices. ........................................................................................................................... 7 VI. Shipping Charges; Title; Risk of Loss. .................................................................................. 7 VIII. Proprietary Rights. ............................................................................................................ 8 IX. Restrictions. ...................................................................................................................... 8 X. Customer & System Data. .................................................................................................. 9 XI. Important Additional Information. ................................................................................... 10 A. Limited Warranty. ....................................................................................................................... 10 B. Equipment Warranty. ................................................................................................................. 11 C. Equipment Warranty Administration. ........................................................................................ 12 D. Limitation of Liability................................................................................................................... 12 E. Independent Contractor Relationship; Assignment; Subcontracting. ........................................ 13 F. Force Majeure. ............................................................................................................................ 14 G. Export Compliance. ..................................................................................................................... 14 H. Excluded Data. ............................................................................................................................ 15 I. Regulatory Requirements. .......................................................................................................... 16 J. Entire Agreement; Severability. .................................................................................................. 16 K. Governing Law. ........................................................................................................................... 18 L. Venue. ......................................................................................................................................... 18 M. Dispute Resolution. ..................................................................................................................... 18 N. Notices. ....................................................................................................................................... 19 O. Access to Your Computer System. .............................................................................................. 19 P. Data Security and Cybercrime Prevention. ................................................................................. 20 Q. Credit/Debit Card and Banking Information Security. ................................................................ 21 R. Conditions Beyond RCSs’ Control. .............................................................................................. 21 S. Confidential Information. ............................................................................................................ 22 T. Confidentiality Obligations. ........................................................................................................ 23 PURCHASE ORDER Page 2 of 27 CONFIDENTIAL
PURCHASE ORDER Page 3 of 27 CONFIDENTIAL This agreement (“Agreement”), made this , 2013, (“Effective Date”) is by and between Retail Control Systems, Inc. (RCS), a New Hampshire based company having its principal place of business at 86 Chosen Vale Lane, Suite 206, Enfield, NH 03748 and (CUSTOMER) a business located at . Customer is executing this Agreement on behalf of itself and the entities, if any, listed in Attachment 1 to this Agreement (“Customer Group”). Customer acknowledges that the members of the Customer Group are Affiliates by virtue of the fact that they control, are controlled by, or are under common control with Customer and with the other entities included on such list. The individual signing this Agreement on behalf of Customer and the Customer Group represents and warrants that he/she has the power and authority to execute this Agreement on behalf of Customer and each such Customer Group. References to “Customer” in this Agreement include each member of the Customer Group. The Customer agrees to purchase from RCS and RCS agrees to sell to the Customer such Products, Software and Services as agreed pursuant to the following terms and conditions. I.
Definitions. A. “Affiliate” means any entity Controlling, Controlled by, or under common Control with a Party. In addition, Affiliates of Customer shall include all of the entities participating in the Customer Group, regardless of whether such entities meet the requirements set forth in the previous sentence. B. “Control” and its derivatives means, with respect to an entity, possessing, directly or indirectly, the power to direct or cause the direction of the management, policies, PURCHASE ORDER Page 3 of 27 CONFIDENTIAL
PURCHASE ORDER Page 4 of 27 CONFIDENTIAL and operations of the entity, whether through ownership of voting securities, by contract, or otherwise. C. “Customer” or “You” means the person(s) or entity(ies) placing this Purchase Order with Retail Control Systems, Inc. (hereinafter “RCS”). D. “Franchisor” means Pla‐Fit Franchise LLC. E. "Materials" means all manuals, documents, content and other items included with or as part of the Products or Software, such as text, graphics, logos, button icons, images, audio clips, information, data, photographs, graphs, videos, typefaces, music, and sounds. F. “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing credit or debit cards or their duly authorized entities, agents, or affiliates, together with the National Automated Clearing House Association. G. “Payment Processor” shall mean RBS Citizens, N.A., WorldPay US, Inc., Jack Henry & Associates, Inc. or such other credit card, debit card and/or ACH processors whose services Franchisor may require Customer to utilize. H. “Payment Rules” shall mean the operating rules and regulations of the Payment Processors and any applicable Payment Network, as in effect from time to time. I. "Products" means computer hardware and peripheral products provided hereunder. J. "Software" means any software, license, library, utility, tool, or other computer or program code, in object (binary) or source‐code form, as well as the related documentation, provided by RCS to you. “Software” includes software locally PURCHASE ORDER Page 4 of 27 CONFIDENTIAL
PURCHASE ORDER Page 5 of 27 CONFIDENTIAL installed on your systems and software accessed by you through the Internet or other remote means (such as websites, portals, and "cloud‐based" solutions). K. “Services” means any work performed by RCS for You covered under this agreement. L. “Visionary Ancillary Agreements” shall mean the various agreements in place between Customer and Franchisor related to the VisionaryTM System, Radiant Systems (“Radiant”), payment gateway providers such as Maas Global Solutions Corporation, Payment Processors and Payment Networks. M. “VisionaryTM Software” shall mean the software supplied or made available by Franchisor to Customer for use with the VisionaryTM System. “VisionaryTM System” shall mean Franchisor’s proprietary branded VisionaryTM hardware, including the Radiant Terminals, the VisionaryTM Software, and other third‐party software licensed to and services provided to Customer for use with the VisionaryTM Software and the Radiant Terminals. II.
Contract. This Purchase Order forms a legally binding contract between you and RCS in relation to your purchase and use of Products, Software and Materials. III. Payment Terms. Payment in full must be received by RCS prior to RCS's acceptance of an order or shipment of any Products, Software or Material. Each accepted order will be interpreted as a single Agreement, independent of any other orders. Payment for Products, Software, and Services must be made by credit card or check. It is the responsibility of Customer to ensure PURCHASE ORDER Page 5 of 27 CONFIDENTIAL
PURCHASE ORDER Page 6 of 27 CONFIDENTIAL payments are authorized and approved on time to ensure receipt of payment. In no event shall RCS ship any Products or Software to you prior to payment in full of all amounts due under this Purchase Order. IV. Right to Suspend, Terminate or Refuse to Accept Orders. In the event Customer cancels payment, or Customer’s tender of payment is refused or returned for insufficient funds, Customer shall immediately return all Products in original packaging and condition and Software subject to such payment to RCS, and RCS shall have the right in its sole direction to suspend or refuse to accept additional orders from Customer. RCS further reserves the right to charge a restocking fee and/or seek collection of all amounts due (including by referral to third party collectors), plus all reasonable legal fees (including reasonable attorneys’ fees) and costs associated with efforts to obtain payment and/or return of the Products and Software. RCS reserves the right to remove Customer from the VisionaryTM System in the event Customer (or Franchisor on Customer’s behalf) fails to remit payment. All Software licenses granted pursuant to this Agreement and all Services to be performed under this Agreement shall automatically terminate if any of the following events occur: (1) Customer’s Franchise Disclosure Document with Franchisor expires and is not renewed by Franchisor or is terminated; (2) Customer transfers the Radiant Terminal on which the Software and VisionaryTM Software is used; (3) Customer is in breach of any of the VisionaryTM Ancillary Agreements and such breach would permit the other party to terminate such agreement; (4) Customer is in breach of this Agreement and fails to cure such breach within thirty (30) days from notice by RCS. Customer shall place all orders in the country where the Products and PURCHASE ORDER Page 6 of 27 CONFIDENTIAL
PURCHASE ORDER Page 7 of 27 CONFIDENTIAL Software are to be shipped, and payment of the corresponding price and costs shall be made in U.S. currency. V. Invoices. Customer agrees that all invoices shall be deemed accurate unless Customer advises RCS in writing of a bona fide, material error within fourteen (14) days of the date of such invoice. In the event that Customer advises RCS of a material error, payment of any amounts corrected or modified by RCS in writing shall be due within fourteen (14) days of such correction. VI. Shipping Charges; Title; Risk of Loss. Taxes, shipping and handling charges are not included in Product prices unless expressly indicated at the time of sale. Title to Products (except title to Software remains with the applicable licensors) and risk passes from RCS to Customer upon delivery to Customer at the location specified by Customer. RCS is responsible for shipping and handling of Products to RCS’s facilities from RCS’s suppliers. Customer is responsible for shipping and handling costs of Products from RCS’s facilities to that Customer’s determined locations. Shipping and delivery dates are provided as estimates only. You must notify RCS within three (3) days of the date of your receipt of Product or Software if you believe any part of your order is missing, inaccurate, or damaged. VII. Taxes. RCS shall supply Customer an estimate of the taxes due on purchased Products and Software. Customer shall be solely responsible for verifying and remitting taxes required to the relevant tax authority. To the maximum extent permitted by law, Customer shall indemnify, hold harmless, and defend, including the payment of reasonable attorneys’ fees and costs, RCS, PURCHASE ORDER Page 7 of 27 CONFIDENTIAL
PURCHASE ORDER Page 8 of 27 CONFIDENTIAL Franchisor and Pla‐Fit Health, LLC against any claim arising from taxes due or claimed to be due on account of Customer’s purchase of Products and/or Software from RCS. VIII. Proprietary Rights. All right, title, and interest in the intellectual property (including all copyrights, patents, trademarks, trade secrets, and trade dress) embodied in the Software, Products and Materials, shall belong solely and exclusively to RCS, PFIP LLC, Franchisor, Pla‐Fit Health, LLC, or the applicable suppliers or licensors, and you shall have no rights whatsoever in any of the above, except as expressly granted in this Agreement or in any agreement between you, Franchisor or Pla‐Fit Health, LLC or any of their Affiliates. The Software, Products and Materials are protected pursuant to copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. You may not modify, remove, delete, augment, add to, publish, transmit, adapt, translate, participate in the transfer or sale of, create derivative works from, or in any way exploit any of the Software, or Materials, in whole or in part. You may use the Software and Materials only in connection with your use of the Products and the VisionaryTM System. IX. Restrictions. Customer may not copy, modify, or create a derivative work, collective work, or compilation of the Software, and may not reverse engineer, decompile or otherwise attempt to extract the code of the Software or any part thereof. Customer may not license, sell, assign, sublicense, or otherwise transfer or encumber the Software; and may not use the Software in excess of the authorized number of licensed seats for concurrent users, sites, or other criteria PURCHASE ORDER Page 8 of 27 CONFIDENTIAL
PURCHASE ORDER Page 9 of 27 CONFIDENTIAL specified in the applicable licensing agreements. Customer is further prohibited from (1) attempting to use or gain unauthorized access to RCS networks or to any third party's networks or equipment; (2) permitting other individuals or entities to use the Software or copy the Software; (3) attempting to probe, scan, or test the vulnerability of Software or a system, account, or network of RCS or any of its customers or suppliers; (4) interfering or attempting to interfere with service to any user, host, or network; (5) engaging in fraudulent activity of any nature; (6) transmitting unsolicited bulk or commercial messages; (7) restricting, inhibiting, or otherwise interfering with the ability of any other person, regardless of intent, purpose, or knowledge, to use or enjoy the Software (except for tools with safety and security functions); or (8) restricting, inhibiting, interfering with, or otherwise disrupting or causing a performance degradation to any RCS (or RCS Service supplier) facilities used to deliver the Services or used for the VisionaryTM System. The bar code scanning Products provided under this Agreement may be used only in accordance with Attachment 2 to this Agreement. X. Customer & System Data. In connection with your use of the Products or Software, it may be necessary for RCS to obtain, receive, or collect data or information, including system‐specific data (collectively, the "Data"). In such cases, you grant RCS a non‐exclusive, worldwide, royalty‐free, perpetual, non‐
revocable license to use, compile, distribute, display, store, process, reproduce, or create derivative works of the Data solely for those purposes. You also grant RCS the right to copy and maintain such material and content on RCS's servers (or the servers of its suppliers). You represent and warrant that you have obtained all rights, permissions, and consents necessary to use and transfer the Data within and outside of the country in which you are located in PURCHASE ORDER Page 9 of 27 CONFIDENTIAL
PURCHASE ORDER Page 10 of 27 CONFIDENTIAL conjunction with RCS's performance of the Services or your use of the Software (including providing adequate disclosures and obtaining legally sufficient consent from your employees, agents, and contractors). XI. Important Additional Information.
NOTHING IN THIS SECTION SHALL EXCLUDE OR LIMIT RCS'S WARRANTY OR LIABILITY FOR LOSSES THAT MAY NOT BE LAWFULLY EXCLUDED OR LIMITED BY APPLICABLE LAW. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF CERTAIN WARRANTIES OR CONDITIONS OR THE LIMITATION OR EXCLUSION OF LIABILITY FOR LOSS OR DAMAGE CAUSED BY NEGLIGENCE, BREACH OF CONTRACT, BREACH OF IMPLIED TERMS, OR INCIDENTAL OR CONSEQUENTIAL DAMAGES. SOME JURISDICTIONS DO NOT ALWAYS ENFORCE CLASS ACTION OR JURY WAIVERS, AND MAY LIMIT FORUM SELECTION CLAUSES AND STATUTE OF LIMITATIONS PROVISIONS, AS SUCH, ONLY THE LIMITATIONS THAT ARE LAWFULLY APPLIED TO YOU IN YOUR JURISDICTION WILL APPLY TO YOU, AND RCS'S LIABILITY WILL BE LIMITED TO THE MAXIMUM EXTENT PERMITTED BY LAW. A.
Limited Warranty.
(1) RCS HAS THE RIGHT TO GRANT THE LICENSES TO THE RCS PROPRIETARY SOFTWARE LICENSED IN SECTION VIII ABOVE, AND SUCH SOFTWARE WILL SUBSTANTIALLY CONFORM TO THE FUNCTIONAL SPECIFICATIONS. EXCEPT AS EXPRESSLY STATED IN THE PRECEDING SENTENCES OF THIS PARAGRAPH, RCS, (INCLUDING ITS AFFILIATES, CONTRACTORS, AND AGENTS, AND EACH OF THEIR RESPECTIVE EMPLOYEES, DIRECTORS, AND OFFICERS), ON PURCHASE ORDER Page 10 of 27 CONFIDENTIAL
PURCHASE ORDER Page 11 of 27 CONFIDENTIAL BEHALF OF ITSELF AND ITS SUPPLIERS AND FRANCHISOR AND PLA‐FIT HEALTH LLC (COLLECTIVELY, THE "RCS PARTIES") MAKES NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO ANY OF THE PRODUCTS, SOFTWARE, OR SERVICES, INCLUDING BUT NOT LIMITED TO ANY WARRANTY (1) OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, PERFORMANCE, SUITABILITY, OR NON‐INFRINGEMENT; (2) RELATING TO THIRD‐PARTY PRODUCTS, SOFTWARE, OR SERVICES; (3) RELATING TO THE PERFORMANCE OF ANY HARDWARE OR SOFTWARE, OR RCS'S PERFORMANCE OF THE SERVICES; OR (4) REGARDING THE RESULTS TO BE OBTAINED FROM THE PRODUCTS, SOFTWARE, SERVICES, OR THE RESULTS OF ANY RECOMMENDATION BY RCS. (2) WARRANTIES DO NOT COVER DAMAGE DUE TO EXTERNAL CAUSES, SUCH AS ACCIDENT, ABUSE, MISUSE, PROBLEMS WITH ELECTRICAL POWER, SERVICE NOT PERFORMED OR AUTHORIZED BY RCS (INCLUDING INSTALLATION OR DE‐INSTALLATION), USAGE NOT IN ACCORDANCE WITH PRODUCT OR SOFTWARE INSTRUCTIONS, NORMAL WEAR AND TEAR, OR USE OF PARTS AND COMPONENTS NOT SUPPLIED OR INTENDED FOR USE WITH THE PRODUCTS, SOFTWARE, OR SERVICES. THESE WARRANTIES DO NOT APPLY TO THIRD‐PARTY PRODUCTS. B.
Equipment Warranty. Subject to payment by Customer of the purchase price and Radiant Warranty 1515 fee, RCS warrants that the Products will be free of malfunctions and defects. For purposes of this Agreement, a “malfunction” or “defect” shall not include reasons relating solely to physical appearance, aesthetic quality, or other cosmetic factors, battery life, printer consumables, or broken cables or connectors. The warranty does not apply to malfunctions, defects, or damage PURCHASE ORDER Page 11 of 27 CONFIDENTIAL
PURCHASE ORDER Page 12 of 27 CONFIDENTIAL arising from (i) failure to operate the Products and VisionaryTM System continually in a suitable operating environment; (ii) use of the Products other than for operating the VisionaryTM System; (iii) neglect or abuse of the Products; (iv) accident or disaster (including, but not limited to, flood, fire, or lightning); (v) alteration or modification of the Products without RCS’s express written consent; (vi) faulty electrical power; or (vii) problems caused by software other than Software provided by RCS. C.
Equipment Warranty Administration. Customer shall promptly notify RCS of any malfunctions or defects in the Products. Within one (1) business day from receipt of the notification, RCS will either correct the malfunction or defect or will notify Customer that replacement of the Product is required. If a replacement Product is required, RCS will deliver the replacement Product within one (1) business day from submission to the hardware manufacturer before 4:00 pm EST and RCS’s representative will issue a returned merchandise authorization (“RMA”) number to Customer. Customer shall return the defective Product to a location specified by RCS. Customer is responsible for the cost of returning the defective Product. RCS reserves the right to (a) charge Customer for the cost of replacement Product(s), and/or (b) remove Customer from the Visionary system, if Customer fails to return the defective or malfunctioning Product to the location specified by RCS within two (2) business days of receiving replacement Product. D.
Limitation of Liability (a) RCS, FRANCHISOR AND PLA‐FIT HEALTH LLC WILL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE PRODUCTS OR SOFTWARE PROVIDED HEREUNDER. EXCEPT AS PURCHASE ORDER Page 12 of 27 CONFIDENTIAL
PURCHASE ORDER Page 13 of 27 CONFIDENTIAL OTHERWISE SPECIFIED IN THIS PURCHASE ORDER, NEITHER PARTY SHALL HAVE LIABILITY FOR THE FOLLOWING: (1) LOSS OF REVENUE, INCOME, PROFIT, OR SAVINGS; (2) LOST OR CORRUPTED DATA OR SOFTWARE, LOSS OF USE OF A SYSTEM OR NETWORK OR THE RECOVERY OF SUCH; (3) LOSS OF BUSINESS OPPORTUNITY; (4) BUSINESS INTERRUPTION OR DOWNTIME; OR (5) SOFTWARE OR PRODUCTS NOT BEING AVAILABLE FOR USE. (b) THE TOTAL LIABILITY OF RCS, FRANCHISOR AND PLA‐FIT HEALTH FOR ANY AND ALL CLAIMS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY PRODUCTS, SOFTWARE, OR SERVICES PROVIDED HEREUNDER) SHALL NOT EXCEED THE TOTAL AMOUNT PAID BY CUSTOMER FOR THE SPECIFIC PRODUCT, SOFTWARE, OR SERVICE GIVING RISE TO SUCH CLAIM(S). (c) THESE LIMITATIONS, EXCLUSIONS, AND DISCLAIMERS SHALL APPLY TO ALL CLAIMS FOR DAMAGES, WHETHER BASED IN CONTRACT, WARRANTY, STRICT LIABILITY, NEGLIGENCE, TORT, OR OTHERWISE. THE PARTIES AGREE THAT THESE LIMITATION OF LIABILITY ARE AGREED ALLOCATIONS OF RISK CONSTITUTING IN PART THE CONSIDERATION FOR RCS'S SALE OF PRODUCTS, SOFTWARE, OR SERVICES TO CUSTOMER, AND SUCH LIMITATIONS WILL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY AND EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITIES. E.
Independent Contractor Relationship; Assignment; Subcontracting. The parties are independent contractors. No provision of this Agreement will or shall be deemed to create an association, trust, partnership, joint venture or other entity or similar legal relationship between RCS and Customer, or impose a trust, partnership or fiduciary duty, PURCHASE ORDER Page 13 of 27 CONFIDENTIAL
PURCHASE ORDER Page 14 of 27 CONFIDENTIAL obligation, or liability on or with respect to such entities. Neither party will have any rights, power, or authority to act or create an obligation, express or implied, on behalf of another party except as specified in this Agreement. Neither party may assign this Agreement without the permission of the other. In the case of an assignment by RCS, the assignment will also require the consent of Pla‐Fit Health LLC. Any attempt to assign this Agreement in breach of this paragraph is void and of no effect. F.
Force Majeure. Neither party shall be liable to the other for any failure to perform any of its obligations (except payment obligations) under this Agreement during any period in which such performance is delayed by circumstances beyond its reasonable control, such as fire, flood, war, embargo, strike, riot, or the intervention of any governmental authority (a "Force Majeure"). In such event, however, the delayed party must promptly provide the other party with written notice of the Force Majeure. The delayed party's time for performance will be excused for the duration of the Force Majeure, but if the Force Majeure event lasts longer than 30 days, then the other party may immediately terminate, in whole or in part, this Agreement or the applicable Service Agreement by giving written notice to the delayed party. G.
Export Compliance. You acknowledge that the Products, Software, and Services provided under this Agreement, which may include technology and encryption, are subject to the customs and export control laws and regulations of the United States ("U.S."), may be rendered or performed either in the U.S., in countries outside the U.S., or outside of the borders of the country in which you or your system is located, and may also be subject to the customs and PURCHASE ORDER Page 14 of 27 CONFIDENTIAL
PURCHASE ORDER Page 15 of 27 CONFIDENTIAL export laws and regulations of the country in which the Products, Software, or Services are rendered or received. You agree to abide by those laws and regulations. You further represent that any software provided by you and used as part of the Products, Software, or Services contains no encryption or, to the extent that it contains encryption, such software is approved for export without a license. If you cannot make the preceding representation, you agree to provide RCS with all of the information needed for RCS to obtain export licenses from the U.S. Government or any other applicable national government and to provide RCS with such additional assistance as may be necessary to obtain such licenses. Notwithstanding the foregoing, you are solely responsible for obtaining any necessary licenses relating to the export of software. RCS also may require export certifications from you for software. RCS's acceptance of any order for Products, Software, or Services is contingent upon the issuance of any applicable export license required by the U.S. Government or any other applicable national government; RCS is not liable for delays or failure to deliver Products, Software, or Services resulting from your failure to obtain such license or to provide such certification. Each Party agrees to indemnify, defend and hold the other harmless from any third‐party claims, demands, or causes of action against the other due to the indemnifying party's violation or alleged violation of the applicable export laws, regulations or orders. H.
Excluded Data. Customer acknowledges that Software and Services provided under this Agreement are not designed with security and access management for the processing and/or storage of the following categories of data: (1) data that is classified and or used on the U.S. Munitions list, including software and technical data; (2) articles, services and related technical data PURCHASE ORDER Page 15 of 27 CONFIDENTIAL
PURCHASE ORDER Page 16 of 27 CONFIDENTIAL designated as defense articles and defense services; (3) ITAR (International Traffic in Arms Regulations) related data; and (4) other personally identifiable information that is subject to heightened security requirements as a result of Customer's internal policies or practices or by law (collectively referred to as "Excluded Data"). Customer hereby agrees that Customer is solely responsible for reviewing its data that will be provided to RCS (or to which RCS will have access) to ensure that it does not contain Excluded Data. I.
Regulatory Requirements. RCS is not responsible for determining whether any third‐party Product to be used in the Products, Software, or performance of the Services, satisfies the local regulatory requirements of the country to which such Products, Software, or Services are to be delivered, and RCS shall not be obligated to provide any Product or Software or perform any Services where the resulting Products, Software, or Services do not satisfy the local regulatory requirements. J.
Entire Agreement; Severability. This Agreement is the entire agreement between you and RCS with respect to its subject matter and supersedes all prior oral and written understandings, communications, or agreements between you and RCS. Any preprinted terms on your purchase order shall be given no force or effect and no terms of a purchase order that conflict with this Agreement shall be binding on RCS. No amendment to or modification of this Agreement, in whole or in part, will be valid or binding unless it is in writing and executed by authorized representatives of both parties. If any provision of this Agreement should be found to be void or unenforceable, such PURCHASE ORDER Page 16 of 27 CONFIDENTIAL
PURCHASE ORDER Page 17 of 27 CONFIDENTIAL provision will be stricken or modified, but only to the extent necessary to comply with the law, and the remainder of this Agreement will remain in full force and will not be terminated. PURCHASE ORDER Page 17 of 27 CONFIDENTIAL
PURCHASE ORDER Page 18 of 27 CONFIDENTIAL K.
Governing Law. This Agreement, any related Service Agreement, and ANY CLAIM, DISPUTE, OR CONTROVERSY (WHETHER IN CONTRACT, TORT, OR OTHERWISE, INCLUDING STATUTORY, CONSUMER PROTECTION, COMMON LAW, INTENTIONAL TORT AND EQUITABLE CLAIMS) BETWEEN CUSTOMER AND RCS, including their affiliates, contractors, and agents, and each of their respective employees, directors, and officers arising from or relating to this Agreement, its interpretation, or the breach, termination or validity thereof, the relationships which result from this Agreement (including, to the full extent permitted by applicable law, relationships with third parties who are not signatories to this Agreement), RCS's advertising, or any related purchase (a "Dispute") shall be governed by the laws of the State of New Hampshire, without regard to conflicts of law. The parties agree that the UN Convention for the International Sale of Goods will have no force or effect on this Agreement. L.
Venue. The parties agree that any Dispute relating to this Agreement, or the Products, Software or Services, shall be brought exclusively in the state or federal courts located in New Hampshire. Customer and RCS agree to submit to the personal jurisdiction of the state and federal courts located within New Hampshire, and agree to waive any and all objections to the exercise of jurisdiction over the parties by such courts and to venue in such courts. M.
Dispute Resolution. PURCHASE ORDER Page 18 of 27 CONFIDENTIAL
PURCHASE ORDER Page 19 of 27 CONFIDENTIAL Customer and RCS will attempt to resolve any Dispute relating to this Agreement, or the Products, Software or Services, through direct negotiation between or among persons fully authorized to resolve the Dispute or through mediation utilizing a mediator agreed to by the parties, rather than through litigation. The existence or results of any negotiation or mediation will be treated as confidential. Notwithstanding the foregoing, either party will have the right to obtain from a state or federal court in New Hampshire a temporary restraining order, preliminary injunction, or other equitable relief to preserve the status quo, prevent irreparable harm, avoid the expiration of any applicable limitations period, or preserve a superior position with respect to other creditors, although the merits of the underlying Dispute will be resolved in accordance with this paragraph. In the event the parties are unable to resolve the Dispute within 30 days of notice of the Dispute to the other party, the parties shall be free to pursue all remedies available at law or in equity. N.
Notices. Notice to the parties under this Agreement must be in writing and sent by certified mail (postage prepaid, return receipt requested) or receipted courier service to the addresses set forth below or to such other address (including facsimile or e‐mail) as specified in writing and notified in accordance with this paragraph, and will be effective upon receipt. O.
Access to Your Computer System. You agree to allow RCS and its authorized sub‐contractors reasonable access to your computer system and the Products or Software to provide any applicable maintenance and support services, verify license status, change settings, and/or install or remove applications to address data security risks. You further agree to purchase, install and maintain appropriate PURCHASE ORDER Page 19 of 27 CONFIDENTIAL
PURCHASE ORDER Page 20 of 27 CONFIDENTIAL high‐speed Internet access in order to provide RCS remote access to your computer system. You acknowledge and agree that RCS may use its proprietary software applications or other third party software applications in order to access your system, and you agree that RCS may load such product(s) and keep them updated on your system as needed. RCS may gather statistical information about your Licensed Site including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, RCS and/or its authorized Sub‐contractors may access configuration and operational data in connection with providing support services. RCS may use and disclose transactional and system information in the form of anonymous, aggregate usage statistics that RCS derives from the Licensed Site via your use of the Software, but only in forms that do not reveal your identity or your confidential information, except as required by law or as needed in connection with any legal proceedings. P.
Data Security and Cybercrime Prevention. It is your responsibility to have and maintain in place malware protection software and security for all of your systems and data, which security includes properly configured firewalls, unique, strong passwords per user, physical security, and access control policies. You acknowledge that the security and protection of your network and the data and applications on that network, including protections against unauthorized access, is solely and entirely your responsibility. A properly configured firewall is required for each site using a persistent connection to the public Internet or any private network where there is a potential for unauthorized access. You acknowledge that, to be effective, malware protection software, hardware firewalls, system passwords and other security software and hardware components PURCHASE ORDER Page 20 of 27 CONFIDENTIAL
PURCHASE ORDER Page 21 of 27 CONFIDENTIAL require periodic and routine updates, which you must obtain or perform as applicable. RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC disclaim any warranty, express or implied, that the Software or your data will remain malware‐free. You acknowledge that your failure to discharge your obligations to keep your systems secure may result in investigation fees, fines, penalties, charge backs and credit card fraud costs, and other losses as levied by credit card processors and others, remediation costs (which may include system component updates or replacements) and lost profits and lost reputability of your business, which costs may be so large that they may threaten the survival of your business. You waive any claims hereunder against RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC for any such costs or losses to the extent arising from your failure to have or maintain a secure system, or to the extent arising as a result of a failure or breach of your security for your systems or data, or as a result of any unauthorized access to your systems. In the event of a security breach of your systems, you agree to promptly (i) notify RCS and Pla‐Fit Health, LLC of such breach, (ii) provide RCS and Pla‐Fit Health, LLC with copies of any forensic reports related to such breach, and (iii) authorize any investigating entities to disclose all relevant information regarding their investigations, including investigations in progress, of such breach to RCS and Pla‐Fit Health, LLC. Q.
Credit/Debit Card and Banking Information Security. Customer agrees to maintain full compliance with current PCIDSS, Payment Rules and standards and proofs as related and applicable to each Customer site, Customer’s use of the VisionaryTM System, services, Products and Software provided. R.
Conditions Beyond RCSs’ Control. PURCHASE ORDER Page 21 of 27 CONFIDENTIAL
PURCHASE ORDER Page 22 of 27 CONFIDENTIAL RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC shall not be held responsible for misuse or incorrect operation of the Software and Hardware, use of the Software and Hardware by untrained personnel, improper entry of data in connection with the Software, or modification of settings or other behavior affecting data security. You understand that the use of any equipment outside the manufacturer’s recommended specifications may seriously affect the performance of the Software. RCS, ITS AUTHORIZED SUB‐CONTRACTORS, FRANCHISOR AND PLA‐FIT HEALTH, LLC SHALL NOT BE HELD LIABLE OR RESPONSIBLE FOR CONDITIONS BEYOND THEIR CONTROL THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE SOFTWARE OR THE DATA CONTAINED THEREIN, INCLUDING, BUT NOT LIMITED TO, LOSS OR INTERUPTION OF POWER, YOUR OPERATING ENVIRONMENT FACTORS, PROGRAM VIRUSES AND MALWARE, INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL CONDITIONS AND OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA SECURITY BREACHES. S.
Confidential Information. RCS and Customer (each, a “Receiving Party”) acknowledges that it may receive or otherwise have access to information, data and materials of the other Party, its Affiliates and agents (each, a “Disclosing Party”) which the Disclosing Party considers to be confidential, proprietary, a trade secret, or otherwise restricted. As used in this Agreement, “Confidential Information” means all information of Disclosing Party, in any form, that is disclosed or otherwise made available directly or indirectly to Receiving Party, or that Receiving Party otherwise acquires in the course of performing under this Agreement, that is marked confidential, restricted, proprietary, or which a reasonably prudent business person would PURCHASE ORDER Page 22 of 27 CONFIDENTIAL
PURCHASE ORDER Page 23 of 27 CONFIDENTIAL deem to be confidential information in light of the nature of the information and the circumstances of its disclosure. T.
Confidentiality Obligations.
(1) Receiving Party shall hold Disclosing Party’s Confidential Information in strictest confidence and exercise at least the same standard of care to prevent the disclosure of such Confidential Information as it exercises to prevent the disclosure of its own Confidential Information and in no event less than reasonable care. (2) Except as otherwise provided herein, Receiving Party shall limit dissemination of Confidential Information of Disclosing Party to those persons within its organization, including contractors, or representatives who have a need to know such information to fulfill the purposes of this Agreement. Receiving Party shall use the Confidential Information of Disclosing Party only to perform its obligations and exercise its rights under this Agreement. Receiving Party shall take appropriate action by instruction or agreement with each of its employees, contractors, consultants, agents and representatives to protect the Disclosing Party’s Confidential Information. Disclosing Party shall retain ownership of, and reserves all rights with respect to, it’s Confidential Information except where provided for under this agreement. (3) Exclusions. The nonuse and nondisclosure restrictions set forth in this Section shall not apply to any Confidential Information of Disclosing Party to the extent that such Confidential Information: (a) is or becomes generally available to the public without any wrongful act or breach of this Agreement by the Receiving Party; (b) was PURCHASE ORDER Page 23 of 27 CONFIDENTIAL
PURCHASE ORDER Page 25 of 27 CONFIDENTIAL ATTACHMENT 1 LIST OF MEMBERS OF CUSTOMER GROUP PURCHASE ORDER Page 25 of 27 CONFIDENTIAL
PURCHASE ORDER Page 26 of 27 CONFIDENTIAL ATTACHMENT 2 SPECIAL TERMS FOR USE OF BAR CODE SCANNING PRODUCTS 1. Customer may not use Bar Code Scanning Products provide under this Agreement (“Scanners”) for the purpose of scanning driver’s licenses or state issued IDs unless and until: a) Customer has obtained written legal advice from a lawyer(s) admitted to practice in the states in which Customer’s clubs are located that the use of the Scanners to scan driver’s licenses and/or state issued IDs in those states is legal and the advice discloses any state law limitation on the use of the Scanners; b) a copy of the legal advice provided pursuant to (a) has been provided to Franchisor’s General Counsel. Thereafter Customer may only use the Scanners in accordance with the legal advice. 2. Customer may not use the Scanners for the purpose of scanning driver’s licenses or state issued IDs where Franchisor directs Customer not to use the Scanners for such purpose. 3. Customer is responsible for monitoring Laws applicable to the states in which Customer’s clubs are located to ensure that Scanners are not used in breach of such Laws. 4. Customer may not re‐configure the Scanners or use the Scanners independently from the Radiant Terminal or other than in the course of day to day transactions contemplated by the VisionaryTM System. PURCHASE ORDER Page 26 of 27 CONFIDENTIAL
PURCHASE ORDER Page 27 of 27 CONFIDENTIAL 5. Breach of any of paragraphs (1) through (4) above entitles RCS to cease its Services and also entitles RCS to terminate all Software licenses provisioned under this Agreement. Customer shall indemnify, defend and hold harmless RCS, Franchisor, Pla‐Fit Health LLC and their employees, agents, Affiliates from and against any and all claims, losses, damages, costs (including customer notification costs), fines or expenses resulting from a breach by Customer of the terms of this Attachment 2. PURCHASE ORDER Page 27 of 27 CONFIDENTIAL
MERCHANT AGREEMENTS
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EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE
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(Insert Pla-Fit’s corporate logo here)
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ENTERPRISE PAYMENT SOLUTIONS
MERCHANT PROCESSING SERVICES AGREEMENT
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This Enterprise Payment Solutions Processing Services Agreement (“Agreement”) is made by and between Jack Henry &
Associates, Inc., acting through its ProfitStars Division, with its principal place of business located at 663 West Highway 60, Monett,
Missouri 65708 (“JHA”), and the undersigned merchant (“Merchant”) as of the date this Agreement is signed by JHA below (the “Effective
Date”). Merchant is executing this Agreement on behalf of itself and the entities, if any, listed in Attachment 1 to this Schedule C (“Merchant
Affiliates”). Merchant acknowledges that the Merchant Affiliates are affiliates by virtue of the fact that they control, are controlled by, or are
under common control with Merchant and with the other entities included on such list. The individual signing this Agreement on behalf of
Merchant and the Merchant Affiliates represents and warrants that he/she has the power and authority to execute this Agreement on behalf
of Merchant and each such Merchant Affiliate.
JHA provides enterprise payment solutions relating to electronic transaction processing services for organizations who receive
payments from customers by paper checks or electronic ACH transactions. With respect to ACH transactions, JHA is the ACH processor
through which debit and credit transactions are submitted to the ACH Network in conjunction with ACH check processing origination and
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settlement services. With respect to transactions involving substitute check images permitted under the Check for the 21 Century (Check
21) Act, JHA provides capture services which facilitates the processing of the substitute check images with financial institutions in the
Federal Reserve System.
Merchant is lawfully engaged in the business of selling goods and/or services to third parties from whom it will receive paper
checks and/or ACH transactions and with whom it will initiate and process ACH and Check 21 transactions in the U.S. Federal Reserve
Bank System, using JHA’s enterprise payment solutions.
The parties agree as follows:
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1.
JHA agrees to provide to Merchant the enterprise payment solutions described in this Agreement and any then-current
merchant processing services price list provided by JHA or a JHA enterprise payment solution reseller partner (as the case may be), on the
Standard Terms and Conditions appended to and incorporated as a part of this Agreement. Merchant agrees to use the JHA enterprise
payment solutions in accordance with these Standard Terms and Conditions.
2.
This Agreement shall become effective once it has been signed by an authorized representative of both JHA and
Merchant, as of the Effective Date referenced above. This Agreement may be terminated by either party as provided in the Termination
section of the Standard Terms and Conditions.
In witness of this Agreement, authorized representatives of the parties have signed this Agreement document where provided
below.
JHA:
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Merchant:
Jack Henry & Associates, Inc.
ProfitStars Division
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By:
By:
Printed Name:
Printed Name:
Title:
Title:
Date:
Date:
JHA’s Federal Tax ID No.:
Merchant’s Federal Tax ID No.:
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Merchant’s Address:
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(Street Address)
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(City, State, Zip Code)
Standard Terms and Conditions
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1.
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DEFINITIONS: The following terms used in this Agreement shall have the
meaning specified below:
(a)
(b)
(c)
“ACH Transaction”: An electronic payment transaction
originated by Merchant and processed through the ACH
Network in the Federal Reserve System.
“Administrator”: The Merchant’s employee who has been
designated as Merchant’s primary contact with JHA for the
Services and has been appointed by Merchant to manage the
administration of Services access, including passwords, and
communicate authorizations to JHA.
“Bank of First Deposit”: In a Check 21 Transaction, the
financial institution which receives the Entry from JHA and
transmits the Entry through the Federal Reserve Bank system
for transmittal to the Customer’s financial Institution for debit or
credit to the Customer’s account.
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(d)
“Check 21”: The Check for the 21 Century (Check 21) Act
and all regulations pertaining to the Check 21 Act.
(e)
“Check 21 Transaction”: An electronic payment transaction
utilizing a Substitute Check image permitted by Check 21.
(f)
“Confidential Information”: The Software programs and
documentation used by JHA to provide the Services to
Merchant and passwords and other information or materials of
a confidential and proprietary nature that JHA provides to
Merchant under this Agreement.
(g)
“Courseware”: The end user training courseware and materials
relating to the use and operation of the Services and JHA’s
processing system that JHA or a Reseller may provide through
classroom training, online training or e-Learning delivery to
Merchant.
(h)
“Customer”: Merchant’s customer who submits a payment to
Merchant by means of a paper check or ACH transfer.
(i)
“Customer Financial Data”: Information, including but not
limited to such things as credit and financial data, bank account
information, concerning Customers and Customers’ paper
check and/or ACH transfers.
(j)
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“Data Security Guidelines”: Written data security guidelines
published by a regulatory agency or industry group that apply
on a mandatory basis to Customer Financial Data and the
Services provided by JHA to Merchant under this Agreement,
which may include tthe Payment Card Industry Data Security
Standards (“PCI-DSS), Statement on Standards for Attestation
Engagements (SSAE) No. 16, and Service Organization
Control Report Type 2 (SOC-2).
(k)
“Entry”: A transaction submitted by Merchant to JHA for
processing by the Services and further defined in the NACHA
Rules.
(l)
“Franchisor”: PLA-Fit Franchise, LLC.
(m)
“Franchisor Fees”: Defined in Section 2.9 below.
(n)
“Franchisor Settlement Account”: A commercial demand
deposit bank account which Franchisor has established for
JHA’s access and use to settle payment of Franchisor Fees
from transactions processed by JHA under this Agreement.
(o)
“Image”: The image that results from an electronic scan of a
paper check by Merchant.
(p)
“NACHA Rules”: The then-current rules, regulations and
procedural guidelines published by the National Automated
Clearing House Association (“NACHA”) and/or all regional
payment alliances associated with NACHA.
(q)
“Originating Depository Financial Institution” or “ODFI”: In an
ACH Transaction, the financial institution which receives the
Entry from JHA and transmits the Entry to its ACH Operator for
transmittal to a Receiving Depository Financial Institution for
debit or credit to the Customer’s account, as these terms are
further defined in the NACHA Rules.
(r)
“Reseller”: A third party reseller, such as an ISO reseller or
Value Added Reseller, appointed and authorized by JHA to
resell and/or deliver the Services and Courseware to Merchant.
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“Services”: The ACH processing services and/or the Check 21
processing services provided by JHA to Merchant under this
Agreement.
(t)
“Settlement Account”: A commercial demand deposit bank
account which Merchant has established for JHA’s access and
use to settle financial payment transactions processed by JHA
under this Agreement.
(u)
“Software”: Software programs and associated documentation
and materials that JHA provides to Merchant for use with the
Services.
(v)
“Substitute Check”: The electronic Image of a paper check, as
defined in Check 21.
2.
SET-UP AND DELIVERY OF SERVICES:
2.1
In conjunction with this Agreement, Merchant has completed and submitted
to JHA or a Reseller (as applicable) an initial written application and
supporting documentation about Merchant’s business and financial status,
for JHA’s consideration in the account set-up and provision of the Services
to Merchant. Merchant acknowledges that JHA shall be entitled to rely
upon the validity, accuracy and completeness of the information provided
by Merchant in its application and supporting documentation to JHA, for
JHA’s use in performing its due diligence review of Merchant’s status and
financial standing for determining (a) if JHA will enter into this Agreement
with Merchant; (b) if JHA will provide all or any of the Services to Merchant
under this Agreement; and (c) the credit and account processing standards
and limits that JHA will apply to the processing of Merchant’s Entries.
Subsequent to the initial acceptance and set-up of Merchant for JHA’s
provision of the Services, JHA may from time to time request that Merchant
provide updated information and supporting documentation to JHA to
confirm Merchant’s then-current business and credit status, which
Merchant shall apply best efforts to deliver to JHA within three (3) business
days following receipt of JHA’s written request. Any failure by Merchant to
provide the information and supporting documentation requested by JHA
via the application or by other means within a timely manner shall be
deemed to be a material breach of this Agreement by Merchant.
2.2
When Merchant’s application has been accepted and approved by JHA,
JHA, either directly or through a Reseller who has contracted for the
delivery of Services with Customer, shall provide the Services selected by
Merchant in its application. Merchant shall utilize and access the Services
in accordance with the terms of this Agreement and the practices and
procedures established by JHA for the Services which have been
communicated in writing to Merchant. As part of the Merchant set-up and
boarding process:
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(s)
JHA will provide Merchant with an administrative and gateway user name
and password (“Password”) to access the Services which are hosted on
JHA’s processing system. Merchant will designate an Administrator who
shall be the sole individual vested with the authority to determine who will
be authorized to use the Services; establish separate passwords for each
user; and establish limits on each user’s authority to access information
and conduct transactions. Merchant is responsible for the actions of its
Administrator, the authority the Administrator gives others to act on
Merchant’s behalf, and the actions of the persons designated by the
Administrator to use the Services. Merchant shall take reasonable security
procedures and practices to safeguard the confidentiality of the passwords;
limit access to its passwords solely to persons who have a need to know
such information; closely and regularly monitor the activities of employees
who access the Services; and prohibit its employees and agents from
initiating entries in the Services without proper authorization and
supervision and adequate security controls.
2.3
JHA will provide to Merchant processing Services for the Entry types
indicated in the Merchant set-up and boarding documentation and/or its
contract with Reseller (if applicable) which Merchant wishes to utilize. JHA
reserves the right to withdraw the processing Services provided generally
to its customers including Merchant for individual Entry types from general
market availability and coverage under this Agreement upon ninety (90)
days prior written notice to Merchant. To the extent reasonably possible,
JHA will first attempt to process an Entry in the Services as an ACH
Transaction, unless the Entry has clearly been designated to be processed
as a Check 21 Transaction, provided that the Entry fully qualifies to be
processed as an ACH Transaction according to applicable NACHA Rules
and JHA has received all of the required information from the Image or
paper check necessary to process the transaction as an ACH Transaction.
If the Entry cannot be processed as an ACH Transaction for any reason,
then JHA will process the Entry in the Services as a Check 21 Transaction.
2.4
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2.5
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Merchant acknowledges that JHA has specific processing deadlines
imposed by its ODFI and the ACH Operator for ACH Transactions and by
the Bank of First Deposit for Check 21 Transactions. Files received by the
deadline will be transmitted that day to the Federal Reserve Bank for
settlement on the effective entry day. Files received after the deadline will
be processed the next Banking Day as defined in the NACHA Rules.
2.6
For Check 21 Transactions, JHA will not be responsible for printing any
Substitute Checks which may be required by a financial institution in order
to receive and process the Entry.
2.7
In the event of any conflicts in the instructions received by JHA regarding
Merchant or any Entries relating to them, JHA may at its option and with or
without notice, hold or interplead, comply with the legal process or other
order, or otherwise limit access by Merchant or by JHA to the funds, Entries
or proceeds thereof.
2.8
JHA or a Reseller may make available to Merchant end-user training and/or
Courseware to assist Merchant in understanding and using the Services
and the JHA processing system. The Courseware is a proprietary product
of JHA and its licensors and is provided to Merchant for its sole internal
use. JHA and its licensors reserve all ownership rights in and to the
Courseware materials. For training classes performed by JHA or the
Reseller at Merchant’s site, Merchant shall pay the applicable onsite
training class fee quoted by JHA or the Reseller and the reimbursable outof-pocket travel expenses of the JHA or Reseller trainer who travels to and
from Merchant’s location to deliver the training session. For on-line classes
and e-Learning modules provided by JHA or the Reseller, Merchant shall
pay the training class fee specified in the online class registration site. If
JHA or the Reseller offers a Courseware license which permits the
Merchant to perform its own internal training classes for the personnel of
Merchant and its Customers, Merchant shall pay the annual Courseware
license fee quoted by JHA or the Reseller for use of the Courseware
modules licensed by Merchant for this purpose.
2.9
Merchant hereby authorizes JHA to debit the Settlement Account on behalf
of Franchisor and pursuant to instructions of the Franchisor for any fees,
charges or penalties as set forth in Merchant’s Franchise Agreement
including, but not limited to monthly royalties, advertising funds, late
payment to vendors, and penalties for non-compliance (“Franchisor Fees”).
Merchant authorizes JHA to rely on information and instruction provided to
JHA by Franchisor without further consent from Merchant. JHA shall
be fully protected in acting on any such information and instruction from
Franchisor without making inquiry whatsoever as to Franchisor’s right or
authority to give such instruction or as to the application of any payments
made pursuant to such instruction.
3.
RECOUPMENT AND SET-OFF:
3.1
Merchant shall immediately reimburse JHA for any returns or shortfalls that
occur in Merchant’s Settlement Account unless those returns or shortfalls
are due to (i) a security breach or fraudulent activity involving JHA’s
systems or computer networks which was caused by JHA or (ii) a Services
processing error on the part of JHA. JHA reserves the right to delay the
availability of funds for deposit without prior written notices to Merchant if,
in its sole discretion, JHA deems itself at financial or relative risk for any
and all Services performed under this Agreement.
3.2
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Prior to submitting an Entry to JHA for processing, Merchant shall secure
all authorizations and approvals from its Customer and deliver any
notifications pertaining to that Entry which are required by the
NACHA Rules and/or applicable laws and regulations. Merchant shall
be responsible for the accuracy and propriety of all Entries submitted to
JHA for processing. If Merchant utilizes a scanner to create Images which
are delivered
to JHA for processing, Merchant shall be solely
responsible to ensure the accuracy and completeness of the Image
transmitted to JHA for processing.
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(a)
any amounts JHA would otherwise be obligated to deposit into
Merchant’s account, and
(b)
any other amounts JHA may owe Merchant under this Agreement.
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This Section 3.2 shall not apply in the event of a good faith dispute
between the parties as to whether or not amounts are owed by Merchant to
JHA.
4.
USE OF REMOTE DEPOSIT CAPTURE SERVICES: If Merchant utilizes
JHA’s Remote Deposit Capture Services, the following supplemental terms
shall apply to those Services:
(a)
All checks deposited electronically by Merchant through use of the
Remote Deposit Capture Services shall be subject to the following
requirements:
EPS Merchant PSA—Reseller--US (rev 0811)
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c.
Merchant shall review and validate the accuracy and
completeness of the check data being captured including but
not limited to the amount of the check and the legibility of the
check Image generated from use of the Remote Deposit
Capture Services;
Merchant shall be solely liable and responsible for all damages,
losses, expenses and claims arising from any of the following:
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Merchant hereby acknowledges and agrees that JHA shall have a right of
setoff against:
All checks will conform to the requirements of Merchant’s
deposit agreement with its financial institution; and
(c)
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b.
Merchant shall be solely responsible for the selection, use and
operation of the scanner equipment used to capture the Image using
the Remote Deposit Capture Services, including the quality of the
Image results generated from the scanner. Any scanner used by
Merchant with the Remote Deposit Capture Services must meet the
technical specifications for scanners published by JHA in order to be
deemed compatible with the Remote Deposit Capture Services.
JHA offers scanners which it has certified are compatible for use with
the Remote Deposit Capture Services for purchase or lease to
customers of its Remote Deposit Capture Services. Any purchase or
lease of scanners by Customer from JHA or a Reseller for its use
shall be transacted between Merchant and JHA or a Reseller in a
separate equipment purchase/lease agreement.
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The original paper check will not be deposited through the
Remote Deposit Capture Services more than once;
(b)
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a.
(1)
Duplication of Images transmitted by Merchant to JHA through
the Remote Deposit Capture Services;
(2)
Alteration of scanned Images not caused by JHA’s Services or
Software;
(3)
Deposit of checks on accounts with insufficient funds,
counterfeit checks, fraudulent checks, or checks bearing
unauthorized or forged endorsements;
(4)
Acts of fraud, negligence or willful misconduct committed by
employees of Merchant in depositing checks using the Remote
Deposit Capture Services;
(5)
Hardware failure not caused by JHA’s Services or Software; or
(6)
Merchant’s failure to properly store original checks once the
scanned Image has been captured.
5.
PRICING AND PAYMENT:
5.1
Merchant shall pay JHA or Reseller the fees for the Services or
Courseware shown in Attachment 2 of this Agreement. All amounts are
stated and due and payable in U.S. dollars, and are exclusive of any
taxes or other charges which may be imposed by a government entity on
the Services or Courseware, except for taxes due on JHA’s or the
Reseller’s income. For Services or Courseware fees invoiced by JHA
directly to Merchant, JHA reserves the right to require Merchant’s
payment of these fees due under this Agreement via an ACH debit
made by JHA against Merchant’s Settlement Account or other banking
account.
5.2
After the initial term of this Agreement has been completed, if Merchant
has contracted directly with JHA for JHA’s provision of the Services to
Merchant, JHA reserves the right to increase the Services or Courseware
fee rates once each twelve (12) month period during the term of this
Agreement by no more than ten percent (10%) from the previous Services
or Courseware fee rates by giving Merchant at least sixty (60) days prior
written notice of such increase. If Merchant has contracted with a Reseller
for JHA’s provision of the Services to Merchant, then any price increases in
the Services or Courseware fee rates will be determined and applied in
accordance with the written agreement between Reseller and Merchant.
The foregoing restrictions on JHA’s imposition of a Services or Courseware
fee rate increase during and after the initial three (3) year term period of
this Agreement will not apply to:
(a)
third party fees, taxes, surcharges or other amounts imposed on the
processing of Services transactions by a government entity or other
body which exercises authority over the processing of ACH
Transactions or Check 21 Transactions through payment networks;
or
(b)
Services fee increases due to changes in laws, regulations or industry
rules (e.g. NACHA Rules) or Data Security Guidelines that
affect JHA’s cost structure for processing ACH Transactions or
Check 21 Transactions.
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6.
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NACHA RULES AND JHA GUIDELINES: Each party shall comply with
the then-current NACHA Rules which apply to ACH Transactions processed
under this Agreement. In addition, JHA may publish to Merchant and other
merchants its own standard operating and implementation guidelines for
the Services with respect to specific NACHA Rules which will govern and
apply to this Agreement as if set forth herein.
7.
CONFIDENTIAL INFORMATION AND SECURITY PROCEDURES:
7.1
The parties acknowledge that each of their respective businesses is highly
competitive and that their Confidential Information is valuable, special and
unique assets of the parties that they use in their respective business to
obtain a competitive advantage over their competitors. The parties further
acknowledge that the protection of each other's Confidential Information
against unauthorized disclosure and use is of critical importance to each in
maintaining their respective competitive position. Accordingly, the parties
hereby agree that neither they, nor any of their respective employees or
agents, shall make any unauthorized disclosure of any Confidential
Information, or make any use thereof, except for the benefit of, and on
behalf of, that party for purposes of performing this Agreement. The
following information shall not be subject to protection under this Section
7.1: information that (a) is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party, generally known or available
to the public; (b) was known by the receiving party before receiving such
information from the disclosing party; (c) is hereafter rightfully obtained by
the receiving party from a third party, without breach of any obligation to the
disclosing party; or (d) is independently developed by the receiving party
without use of or reference to the Protected Information. Each party may
disclose the other party’s Confidential Information if and to the extent that
such disclosure is required or requested by applicable law or any regulatory
or governmental authority. Additionally, Merchant hereby authorizes JHA
to disclose Confidential Information to Franchisor or its affiliates.
7.2 Merchant and JHA shall each comply with the security procedures described
in this Agreement and in any JHA Guidelines. Merchant acknowledges that
the purpose of these security procedures is for verification of authenticity of
an Entry and not to detect an error in the transmission or content of an
Entry. No security procedure for the detection of any such error has been
agreed upon between JHA and Merchant. Merchant is strictly responsible
to establish and maintain the procedures to safeguard against unauthorized
transmissions occurring within Merchant’s systems.
7.3
7.4
Merchant understands that the password and Services access and use
instructions provided by JHA are confidential and agrees to assume all
risks of accidental disclosure or inadvertent or wrongful use by any party
whatsoever except for JHA or any JHA employee, agent or sub-contractor.
or any third party that, without the fault of Merchant, gains access to
passwords and/or Services access and use instructions by accessing
JHA’s system, whether such disclosure of use are on account of
Merchant’s negligence or are deliberate acts. Merchant acknowledges that
no person from JHA will ever ask for any password and that JHA
employees do not need and should not ask for Merchant’s password.
Merchant shall change its password periodically and whenever anyone who
has had access to a password is no longer employed or authorized by
Merchant to use the Services. JHA may require Merchant to change its
password at any time. JHA may deny access to the Services without prior
notice if it is unable to confirm to its satisfaction any person’s authority to
access the Services or if JHA believes such action is necessary for security
reasons.
7.5
Merchant acknowledges that the Services and Software provided by JHA
under this Agreement incorporates trade secrets of JHA and its licensors,
and as such is protected by civil and criminal law. Merchant shall notify
JHA immediately of the unauthorized possession, use or knowledge of any
item supplied under this Agreement by any person or organization not
authorized by this Agreement to have such possession, use or knowledge.
7.6
The provisions of this Section 7 shall be effective during the term of this
Agreement and shall survive for a period of two years thereafter, provided
with respect to Confidential Information that constitutes a trade secret
under applicable law, the provisions of this Section 7 shall be effective
during the term of this Agreement and shall survive for the longer of (i) two
years after the termination of this Agreement, or (ii) for so long as such
information continues to qualify as a trade secret under applicable law,
excluding failure to so qualify as a result of breach of this Agreement.
Notwithstanding anything contained to the contrary herein, the parties
further agree that all Customer Financial Data shall be protected in
accordance with applicable law and the NACHA Rules.
7.7
The parties acknowledge that the unauthorized use or disclosure of
Confidential Information may cause the disclosing party irreparable harm
that could not be compensated by monetary damages. Accordingly, the
receiving party agrees that disclosing party shall be entitled to seek, from
any court of competent jurisdiction, injunctive and preliminary relief to
prevent or remedy any actual or threatened unauthorized use or disclosure
EPS Merchant PSA—Reseller--US (rev 0811)
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of the Confidential Information of disclosing party, without being required
to show harm.
7.8
Notwithstanding anything contained to the contrary herein, the
parties further agree that each party shall protect all Customer
Financial Data in accordance with (i) applicable law, (ii) protections
that are at least as stringent as the then-current Data Security
Guidelines and (iii) the NACHA Rules. Customer Financial Data is the
Confidential
Information
of Merchant; provided, that Merchant
consents to the release by JHA of any or all Customer Financial Data to
Franchisor on Franchisor’s request.
8
DATA PRIVACY AND SECURITY BY JHA:
8.1
In accordance with data privacy laws and regulations applicable to
this Agreement, which may include but not be limited to the GrammLeach- Bliley Act (“GLBA”) and the Health Insurance Portability and
Accountability Act ("HIPAA"), JHA shall not disclose or permit access to or
use of the non- public personal information of Merchant or its Customers
made available by Merchant to JHA for any purposes other than those
specifically required to fulfill JHA's contractual obligations with Merchant.
JHA shall not sell the information regarding Merchant or its Customers
for any reason. In connection with providing services to Merchant,
JHA shall comply with Section 7.8 and take all commercially
reasonable steps to ensure the privacy and security of the information
of Merchant and its Customers in JHA’s possession and protect
against anticipated threats and hazards to the security of such
information.
JHA shall take all commercially reasonable steps to
prevent unauthorized access to or use of such information that could
result in substantial harm or inconvenience to Merchant or its
Customers. In the event any court or regulatory agency seeks to
compel disclosure of the information, JHA shall, if legally permissible,
promptly notify Merchant of the disclosure requirement and will cooperate
so that Merchant may at its expense seek to legally prevent this
disclosure of the information.
8.2
JHA has separately published its data privacy and security
compliance commitment to its customers, which corresponds at a
minimum to the provisions of this Section 8 as of the effective date of
this Agreement. To the extent that additional commitments by JHA are
reflected in future published versions of this policy, these additional
commitments shall be incorporated as part of this Agreement without
further actions by the parties. In no event shall a future published
data privacy and security compliance statement issued by JHA lessen
or eliminate any of the commitments by JHA stated in this Section 8.
8.3
If a breach of security results in an unauthorized intrusion into JHA’s
systems which directly and materially affects Merchant or its
Customers, JHA will take appropriate measures to stop the intrusion;
report on the intrusion to Merchant within a reasonable time after
discovery of the intrusion; subsequently report the corrective action
taken by JHA in response to the intrusion; and provide reasonable
assistance to Merchant to support any mandatory disclosures about the
intrusion by Merchant to its Customers required by law. If JHA has
notified law enforcement agencies about the intrusion, JHA may delay
its notification of the intrusion to Merchant until authorized to do so by
the law enforcement agencies.
9
WARRANTIES:
9.1
JHA warrants to Merchant that its Services will be performed in a
professional and timely manner consistent with ACH and Check 21
transaction processing industry standards and in accordance with the
NACHA Rules and applicable laws and regulations and any written
JHA policies and procedures communicated by JHA to Merchant. In the
event that Merchant discovers an error in the Services or Software
which has been caused by JHA, if Merchant has contracted directly with
JHA for the Services, Merchant shall immediately notify JHA of the
existence and details of the error; if Merchant has contracted with a
Reseller for the Services, then Merchant shall provide this notification to
Reseller. JHA shall apply commercially reasonable efforts to correct
the error within a reasonable time after JHA’s receipt of notification
of the error. EXCEPT FOR THE FOREGOING
WARRANTY, JHA
MAKES
NO
OTHER WARRANTIES
FOR
THE
SERVICES
PROVIDED BY JHA AND JHA DISCLAIMS ANY AND ALL
PROMISES,
REPRESENTATIONS
AND WARRANTIES
WITH
RESPECT TO THE SERVICES, WHETHER EXPRESS OR
IMPLIED,
INCLUDING
WARRANTIES
OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
JHA
does not guarantee the completeness or accuracy of the information
provided from a third-party database. JHA shall have no liability to
Merchant for any invalid Customer information provided by Merchant
or Entries returned unpaid to Merchant.
9.2
Merchant warrants that:
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(a)
all Entries submitted to JHA for processing will comply with
applicable laws and regulations and the NACHA Rules pertaining to
the Entries;
(b)
Merchant will comply with all laws, regulations and the NACHA
Rules applicable to Merchant’s activities covered by this Agreement;
(c)
all information provided by Merchant initially in its application and
supporting documentation and subsequently in all updates to its
application and supporting documentation provided to JHA pursuant
to Section 2.1 above is valid, complete, accurate and up-to-date; and
(d)
9.3
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the individual signing and submitting this Agreement, the application
for purchase of the Services from JHA, and all future updates to the
application and supporting documentation has the legal authority to
make and bind Merchant to the agreements, warranties and
commitments stated in this Agreement and the submitted application
on Merchant’s behalf.
With regard to Check 21 Transactions, the party who prints a Substitute
Check shall be wholly liable for all Check 21 warranties and applicable
indemnifications associated with the printed Substitute Check. JHA shall
not be liable for the duplicative presentment warranty or any Substitute
Check indemnity as they may arise under Check 21. JHA shall only be
responsible for the legal equivalence warranty under this Agreement if JHA
is the party who does the initial conversion of Merchant’s Entries to a
Substitute Check, and in no event shall JHA be liable for any subsequent
degradation to the Substitute Check which may occur due to the handling
of the Substitute Check by any third party.
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expenses, including reasonable attorney's fees and legal costs, incurred
by JHA, the ODFI and/or the Bank of First Deposit arising out of (a)
Merchant’s breach of this Agreement, the NACHA Rules or applicable
laws and regulations; (b) return of an Entry due to incorrect or incomplete
data or information provided by Merchant in the submission of the Entry to
JHA, a closed Customer account, or insufficient funds in the Customer
account, and/or (c) fraudulent activity, wrongful or unauthorized use of the
Services, or submission of fraudulent or illegal Entries by Merchant or a
third party who has gained access to the Services through the use of
Merchant’s password.
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LIMITATIONS OF LIABILITY:
(a) Incidental and Consequentlal Damages. IN NO EVENT SHALL JHA,
THE ODFI OR THE BANK OF FIRST DEPOSIT BE LIABLE
TO MERCHANT OR ANY OTHER PARTY FOR ANY LOSS
OF PROFITS OR ANY INCIDENTAL, CONSEQUENTIAL,
SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF
THE POSSIBILITY OF THE OCCURRENCE OF SUCH
DAMAGES WAS FORESEEABLE.
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(b)
INDEMNIFICATION:
10.1 JHA shall indemnify, defend and hold Merchant harmless from and against
all claims, actions, losses and expenses, including reasonable attorney’s
fees and legal costs, incurred by any of these indemnified parties arising
out of a claim that:
(a)
the Services or Software owned and provided by JHA under this
Agreement infringe the valid intellectual property rights of a third
party;
(b)
JHA has violated any laws, regulations or NACHA Rules applicable to
this Agreement or the Services or Software owned and provided by
JHA under this Agreement;
(c)
JHA has wrongfully disclosed the Customer Financial Data of
Merchant to third parties through the fault or negligence of JHA or its
employees, agents or contractors;
(d)
JHA has failed to comply with the provisions of Sections 7.8 or 8
above;
(e)
JHA has failed to maintain equipment and software used in the
provision of the Services to Merchant that complies with the Data
Security Guidelines applicable to use of such equipment and
software;
(f)
JHA has committed processing errors in its provision of the Services
to Merchant and Franchisee Businesses through the fault or
negligence of JHA or its employees, agents or contractors; or
(g)
JHA has failed to comply with its notification obligation to Merchant
under Section 8.3 above regarding the occurrence of a security
breach incident involving JHA’s systems upon which the Services are
provided by JHA to Merchant.
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10.2 Merchant shall indemnify, defend and hold JHA, the ODFI and the Bank of
First Deposit harmless from and against all claims, actions, losses and
EPS Merchant PSA—Reseller--US (rev 0811)
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TERM AND TERMINATION:
12.1
Term: This Agreement shall have an initial term of three (3) years
from and after the Effective Date. Upon expiration of the initial
term, this Agreement
shall automatically renew for additional
consecutive twelve
(12) month terms unless either party gives written notice of its election
not to renew this Agreement to the other party no later than sixty (60)
calendar days prior to the end of the then-current term.
12.2
Termination For Cause:
(a)
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JHA shall be promptly notified by Merchant of its receipt of notice of such
claim, given control of the defense or settlement of such claim, and is given
reasonable assistance requested by JHA at JHA’s cost with regard to such
claim.
10.2 The parties acknowledge that JHA is providing separate indemnification to
Franchisor and its affiliates against certain claims and losses as specified
in the separate Merchant Processing Services Agreement executed
between Franchisor or its affiliate and JHA. To the extent that the basis for a
claim for indemnification presented by Merchant to JHA under its Merchant
Processing Services Agreement is the same as any of the bases of claims
which are identified in Section 10.1 above, then JHA’s satisfaction of the
claim presented by the Franchisor or its affiliate to JHA shall be deemed
to be satisfaction of the same claim presented by Merchant to JHA with
respect to Franchisor or its affiliate.
The foregoing limitation on the amount of recoverable
indemnification liability and other actual direct damages shall not
apply to (i) such damages arising as a result of the gross
negligence or willful misconduct of JHA; or (ii) Merchant’s
payment obligations for Services delivered by JHA to Merchant.
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Indemnification Liability and Other Actual Direct Damages. JHA’s
aggregate, cumulative liability to the Merchant for all claims of
indemnification under Section 10 (Indemnification) above and
other actual direct damages relating to the Services, this
Agreement, or the relationship between JHA and Merchant,
including any cause of action in contract, negligence, tort, strict
liability or otherwise, shall not exceed an amount equal to the
total amount of all fees paid by the Merchant to JHA or a Reseller
(as the case may be) for Services delivered under this Agreement
during the twelve (12) month period preceding the origination of the
claim giving rise to liability.
Termination Due to Material Breach: This Agreement may be
terminated by either party for cause upon giving the other
party written notice of the breach of this Agreement committed by
the other party and giving the other party a reasonable time to cure
the breach. For the purpose of this Agreement, a reasonable
time to cure the breach specified in the written notice shall be
deemed to be:
(1)
For any breach of Sections 2.1, 2.2, 3.1, 3.2, 5.1, 7 or
9.2 above: Five (5) business days from receipt of written
notice.
(2)
For all other types of breach of this Agreement, except as
provided below: Thirty (30) calendar days from receipt of
written notice of the breach.
Notwithstanding the foregoing, in the event either party materially
breaches any provision of this Agreement by fraud, act of intent to
defraud, failure to notify the other party of a material change in party’s
financial structure or a material change in the information originally
provided to induce the other party to enter into the Agreement, the nonbreaching party may immediately terminate this Agreement in writing
without giving the breaching party an opportunity to cure the breach with
prior written notice.
(b)
Termination Due to Changed Circumstances: JHA reserves the
right to terminate this Agreement in whole or in part at any time due
to the occurrence of any of the following changed circumstances:
(1)
Merchant becomes insolvent, enters into suspension of
payments, moratorium, reorganization or bankruptcy, makes
a general assignment for the benefit of creditors, admits in
writing its inability to pay debts as they mature, suffers or
permits the appointment of a receiver for its business or
assets, or avails itself of or becomes subject to any other
judicial or administrative proceeding that relates to
insolvency or protection of creditors' rights, any of which in
JHA’s reasonable judgment impairs the ability of Merchant
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to perform its responsibilities under this Agreement;
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(3)
In JHA’s sole judgment, there is a deterioration or other
materially negative change in Merchant’s financial status or
structure which increases the financial risk being assumed
by JHA in processing Merchant’s Entries;
There is a change in the laws, regulations or NACHA Rules that
are applicable to this Agreement and JHA’s provision of any of
the Services which restricts or prohibits JHA from providing
the affected Services to Merchant or significantly increases
JHA’s
costs in providing the affected Services to its customers
generally;
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Merchant’s business and/or assets are acquired by a
competitor of JHA; or
(5)
Merchant’s Franchise Agreement with PLA-Fit Franchise LLC
terminates for any reason,
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In these instances, JHA will provide written notice of the termination on this
basis to Merchant, which shall become effective upon receipt by Merchant.
12.3
Notification to Franchisor. JHA shall promptly notify Franchisor in writing in
the event that JHA determines that Merchant is in breach of this Agreement
or in the event that JHA has elected to terminate this Agreement pursuant
to Sections 12.2 (b)(1) through (4).
12.4
Post-Termination Wind-down:
(a)
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(b)
12.5
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Upon termination or expiration of this Agreement, the parties shall
reasonably cooperate to wind-down the activities contemplated by
this Agreement. Within thirty (30) days following the end of the period
referred to in Section 12.4(b) below, each party shall return all copies
of the other party’s Confidential Information and purge from its
computer systems, storage media and other files all copies of the
Confidential Information in its possession. As an exception to the
foregoing, JHA shall be entitled to retain and use the Customer
information provided by Merchant only as reasonably necessary to
continue to provide the Services to Merchant and Franchisee
Businesses following the termination or expiration of this Agreement.
In the event of termination or expiration of this Agreement other than
pursuant to Section 12.2(b)(5), JHA guarantees that it will continue to
provide the Services to Merchant, on the terms and conditions of this
Agreement for up to six (6) months beyond the effective termination
or expiration date of this Agreement to facilitate Merchant’s transition
of its Customers to a different enterprise payments processing
services provider. Merchant shall notify JHA in writing within ten (10)
business days following the effective termination or expiration date of
this Agreement whether it wishes JHA to continue to provide the
Processing Services as stated above. In this instance, the terms of
this Agreement shall continue to apply to these Services delivered by
JHA to Merchant’s affected Customers. The foregoing obligation by
JHA is expressly contingent upon JHA receiving a legally binding
assurance reasonably acceptable to JHA of receiving full and timely
payment of all Services fees due for the delivery of the Services
during this post-termination period.
Survival of Obligations: The provisions of Sections 7, 8, 9, 10, 11, 12 and
13 of this Agreement and any other provisions of the other Sections of
this Agreement which by their nature should reasonably be expected
to continue to apply after termination of this Agreement shall survive
the termination of this Agreement.
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termination of this Agreement sent to JHA shall be directed to the same
address, attention Legal Department. Notice to Franchisor shall be
directed to: PLA-Fit Franchise, LLC 26 Fox Run Road, Newington, NH
03801, Attention: General Counsel.
13.3 Assignment: This Agreement shall not be assigned or delegated in whole
or in part by Merchant to any other party without the prior written consent
of JHA, which shall not be unreasonably withheld.
13.4 Legal Fees: In the event of any dispute arising out of or related to
the terms of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees, court costs and collection
expenses in addition to any other recovery.
13.5 Force Majeure: If performance by a party, the ODFI, the Bank of First
Deposit, or any of their respective affiliates, of any Services or
obligation under this Agreement is prevented, restricted, delayed or
interfered with by reason of acts or events beyond their reasonable
control (each, a “Force Majeure Event”), including acts of God, war, acts
of terrorism, riot, embargoes, acts of civil or military authorities, fire,
floods, hurricanes, earthquakes, or lightning, disputes and strikes
(excluding, for JHA, strikes or labor actions by JHA employees), then
provided that: (i) such failure to perform could not have been prevented
by reasonable precautions by the non-performing party (including with
respect to JHA by JHA meeting its obligations for performing disaster
recovery and redundancy services as described in this Agreement),
and (ii) the non-performing party gives prompt written notice of the Force
Majeure Event and its inability to perform to the other party, the
time for the non-performing party’s performance shall be extended for a
period equal to the duration of the Force Majeure Event.
For
avoidance of doubt, no Force Majeure Event shall excuse, limit or
otherwise affect JHA’s obligation to perform disaster recovery and
redundancy services. The parties agree that the following shall not be
Force Majeure Events: failure in performance of an affiliate, vendor,
agent or sub-contractor of a party asserting the Force Majeure Event
unless such failure is due to causes beyond the reasonable control of
such affiliate, vendor, contractor or agent and could not have been
avoided by commercially reasonable measures.
13.6 Amendment: This Agreement may be amended only by a written
document signed by authorized representatives of both parties.
13.7 Entire Agreement:
This Agreement contains the entire agreement
between Merchant and JHA relating to the subject matter addressed
herein, and supersedes any prior or contemporaneous understandings or
agreements, whether oral or written, between the parties regarding the
subject matter of this Agreement.
13.8 Form and Delivery of Signed Agreement:
This Agreement may be
executed by the parties by applying manual or electronic signatures of its
authorized representatives to original documents or facsimile, scanned or
other electronic copies of original documents and transmitted by physical
or electronic means for this purpose. For legal evidentiary purposes, a
facsimile, scanned or other electronic copy of this Agreement bearing the
signatures of the authorized representatives of both parties shall be
accepted as an equivalent to a signed original copy of this Agreement.
13.9 Independent Contractors: The parties are and shall remain independent
contractors and shall have no legal right or authority to make any binding
commitments on behalf of the other party.
< End of Standard Terms and Conditions >
GENERAL PROVISIONS:
13.1 Governing Law: This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
conflict of laws principles.
13.2 Notice: Any notice required or permitted hereunder shall be in writing and
shall be sent by certified mail, return receipt requested, or by overnight
express mail, with proof of delivery retained, and addressed to the
respective parties at the address set forth below. Notice of breach or
EPS Merchant PSA—Reseller--US (rev 0811)
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ATTACHMENT 1 TO
EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE
LIST OF MERCHANT AFFILIATES!
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EPS Merchant PSA—Reseller--US (rev 0811)
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ATTACHMENT 2 TO
EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE
FEE SCHEDULE
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1.
Standard Fee Pricing for Processing Services Applicable to Merchant:
For the Processing Services processed by JHA for Merchant under this Agreement, the Merchant shall pay the following fees, which are subject to
adjustment as provided in Section 3 below:
Transaction Type
ACH Origination: All SEC Codes
ACH Return: All SEC Codes
Fee per Transaction
These fees exclude any separate bank fee charges (other than ODFI fees) which may be payable by JHA on these processing transactions. These fees will
apply for as long as a Merchant maintains its relationship in good standing with Franchisor. If the relationship between Merchant and Franchisor is
suspended or terminated, JHA reserves the right to re-price the Services fees payable by the Merchant thereafter in any amount deemed appropriate by
JHA.
2.
Distribution of Processing Services Collections; Billing and Payment of Fees:
JHA will collect the fees referenced in paragraph (1) above and will pay the settlement proceeds from ACH transactions processed by JHA in accordance
with an agreement between JHA and Franchisor.
3.
Changes in Fee Prices:
(a) During the initial three (3) year term period of this Agreement, the fee pricing shown in Section 1 above shall remain fixed except as provided in clause (b)
below. Following this initial term period, JHA may increase the then-current standard fee prices in accordance with Section 5.2 of the terms and conditions
of this Agreement and 3(b) below.
(b) JHA shall have the right to increase the standard fee prices shown in Section 1 or Section 2 at any time, in the event that a change in laws, regulations
or NACHA Rules applicable to the activities described in this Agreement or the transactions processed under this Agreement (i) increases JHA’s costs or
decreases JHA’s profit margin with regard to performing its responsibilities or complying with these changes under this Agreement, or (ii) increases JHA’s
liability for performing its responsibilities under this Agreement. The increase shall become effective thirty (30) days following JHA’s delivery of the written
notice of the fee price change to Merchant. The notice shall identify to Merchant the specific change in the applicable laws, regulations or NACHA Rules
which has caused JHA to increase the fee prices on this basis.
4.
Relationship of this Attachment to the Agreement: In the event of any conflict between the provisions of this Attachment and the Standard
Terms and Conditions of this Agreement, the provisions of this Attachment shall govern and control.
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EPS Merchant PSA—Reseller--US (rev 0811)
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FRANCHISEE FORM - Customer:
, LLC
CUSTOMER PROCESSING AGREEMENT
This Customer Processing Agreement (the “Agreement”) is made by and among RBS Citizens, N.A., a federally chartered financial institution, having its principal office at 1 Citizens Plaza, Providence, Rhode Island 02903 (the “Bank”) and WorldPay US, Inc., a Georgia
corporation, with offices at 600 Morgan Falls Road, Atlanta, Georgia 30350 (“WorldPay”) and
,est,
a
_________________________, with offices at
____________.
Each of Customer, WorldPay and Bank is a “party” and they are, collectively, the “parties”.
RECITALS
WHEREAS, Customer sells goods and services to consumers or businesses and desires to accept certain credit and debit cards as a form
of payment for such goods and services; and
WHEREAS, Customer desires for WorldPay to provide Customer with processing, and the Bank to provide Customer with settlement of
certain debit and credit card transactions.
NOW, THEREFORE, in consideration of the above Recitals and the promises and payments as set forth herein, and subject to the Terms
and Conditions below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Bank,
WorldPay and Customer agree as follows:
TERMS AND CONDITIONS
SECTION 1. DEFINITIONS.
The following terms shall have the meanings set forth below when used in this Agreement:
“ACH” means the electronic network for financial transactions in the United States known as the Automated Clearing House.
“Affiliate” means Pla-Fit Health, LLC’s parent company, a subsidiary company of Pla-Fit Health, LLC in which Pla-Fit Health, LLC holds
controlling ownership interest; or a subsidiary of Pla-Fit Health, LLC’s parent company in which the parent company holds controlling
ownership interest.
“Authorized Card Transaction” shall mean a sales transaction involving a Transaction Card, provided the transaction has been authorized by
the Transaction Card issuer as contemplated by this Agreement.
“Chargeback” shall have the meaning set forth in Section 6.2 below.
“Corporate Processing Agreement” shall mean that certain Customer Processing Agreement previously entered into by Pla-Fit Health, LLC
(“Pla-Fit Health”), Bank and WorldPay, as the same may be amended by the parties from time-to-time.
“Deposit/Chargeback Account” shall mean a U.S. banking account established and owned by Customer to be utilized by the Bank in settling
transactions involving Transaction Cards as contemplated by this Agreement. The Deposit/Chargeback Account shall be maintained by
Customer in accordance with Section 4.4.
“Franchise Agreement” shall mean a franchise agreement between Customer and Franchisor.
“Franchisee” shall mean entities that enter into a Franchisee Agreement with Franchisor pursuant to which such entity is licensed and
franchised to independently own and operate health and fitness centers under the name Planet Fitness in the United States.
“Franchisor” shall mean Pla-Fit Franchise, LLC, a New Hampshire limited liability company.
“MasterCard” shall mean MasterCard International, Inc.
“Non Visa/MasterCard Card” means Transaction Cards issued by credit or debit card networks other than Visa or MasterCard.
“Payment Network” or “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing Transaction Cards.
“Processing Charges” shall mean the authorization, processing, settlement, and other fees or amounts charged by WorldPay and the Bank
or passed through (from the Payment Networks or other third parties) to Customer by WorldPay and the Bank as set forth in this Agreement
or any amendment, addenda or schedule hereto.“Rules” shall mean the operating rules and regulations of Visa, MasterCard, and any other applicable Payment Network, as in effect from time to time.
“Reserve Fund” shall mean a non-segregated and non-interest bearing account established by the Bank or WorldPay in its own name to
ensure payment of Chargebacks, fines and penalties assessed by the Payment Networks, Processing Charges, and other amounts due
from Customer to WorldPay or the Bank under this Agreement.
“Transaction Card” or “Transaction Cards” shall mean a Visa or MasterCard credit or debit card, travel and entertainment card, or other
credit or debit card shown as a qualified card on lists furnished to Customer by the Bank or WorldPay from time to time.
“Visa” shall mean Visa USA, Inc. or VISA International, Inc.
31623v3
LL
“Visa/MasterCard” shall mean Visa and MasterCard collectively.
SECTION 2. RULES AND REGULATIONS, LAWS.
Customer agrees to abide by the Rules of the Payment Networks and to comply with all federal, state, local or other laws, rules and
regulations applicable to Customer. Customer shall not require cardholders to provide personal information such as home or business
telephone number, home or business address, or any form of identification (such as a driver’s license) as a condition for accepting a
Transaction Card, unless required by the Rules. In the event Customer fails to comply with this Section 2, Customer will be liable for all fees
and fines imposed by the Payment Networks as a consequence of such failure, and Customer will indemnify and hold harmless the Bank
and WorldPay from and against any and all damages suffered by the Bank and WorldPay as a result of such failure.
SECTION 3. SERVICES.
3.1
Services Provided by WorldPay. WorldPay agrees to provide authorization, electronic draft capture, submission of transactions to
Payment Networks, and additional related services for Transaction Card sales originated by Customer as set forth in this Agreement.
3.2
Services Provided by the Bank. The Bank shall settle all Visa/MasterCard (and certain other credit and debit cards) transactions
processed by WorldPay hereunder for Customer in accordance with this Agreement and the Rules.
3.3
Service Level Agreement. WorldPay will provide the Services in accordance with the service level standards set forth in
Schedule B to this Agreement and the terms and conditions of this Agreement. WorldPay will also provide disaster recovery and business
continuity protection, in accordance with commercially reasonable industry standards for business continuity programs. Upon request by
Customer, but no more frequently than once in any consecutive 12 month period, WorldPay will provide a summary of its current corporate
business continuity programs, the contents of which shall be deemed to be WorldPay’s Confidential Information.
SECTION 4. PROCESSING AND PAYMENTS.
4.1
Submission of Transactions. Customer will transmit information to WorldPay, which information represents Customer sales to
be authorized and settled (paid) by Transaction Cards. Customer shall transmit transactions to WorldPay at the time of each sale or as
soon thereafter as practicable. It is understood that the time of receipt by WorldPay will affect the timing of settlement and payment to
Customer. If Customer fails to submit transactions on a timely basis as provided herein and as provided in the Rules, transactions may be
subject to increased interchange fees, and Customer agrees to pay such fees.
4.2
Payment of Visa/MasterCard. Customer hereby designates the Bank and WorldPay as its agents to receive all payments
pertaining to Customer's Visa/MasterCard transactions. All payments required to be made to Customer under this Agreement for
Visa/MasterCard transactions will be made by the Bank to the Deposit/Chargeback Account, via electronic funds transfer by ACH (or other
electronic means) or by wire transfer as soon as practicable after the Bank’s receipt of such funds from the Transaction Card issuer.
4.3
Payment of Non Visa/MasterCard Cards. Customer hereby designates the Bank and WorldPay as its agents to receive all
payments pertaining to Customer's Non Visa/MasterCard Card transactions, except when WorldPay’s role is to provide authorization only services. All payments required to be made to Customer under this Agreement for Non Visa/MasterCard Cards will be made by WorldPay
to the Deposit/Chargeback Account, via electronic funds transfer by ACH (or other electronic means) or by wire transfer as soon as
practicable after the Bank and WorldPay’s receipt of such funds from the relevant Transaction Card issuer.
4.4
Customer Deposit/Chargeback Account. Customer hereby certifies that the Deposit/Chargeback Account number provided by
Customer to WorldPay is correct and warrants that this account number may be relied upon for debit and/or credit transactions as they
occur in relation to this Agreement and are presented to the bank at which the Deposit/Chargeback Account is maintained. Customer
agrees that it shall not close or restrict the Bank’s or WorldPay’s access to the Deposit/Chargeback Account.
4.5
Customer Transactions. Customer may not present for processing, directly or indirectly, any transaction which was not
originated as a result of an act between the cardholder and Customer or which is not an Authorized Card Transaction. If authorization for a
transaction is denied, Customer shall not complete the transaction. Customer may contact the authorization center by magnetic stripe
reading terminal, telephone or any other means acceptable to the Bank and WorldPay. For all transactions, Customer shall provide the
cardholder with a transaction receipt, which shall evidence purchases made by a cardholder or credits to a cardholder’s account, as the
case may be, in accordance with the Rules. Calculation, collection and remittance of sales tax are the sole responsibility of the Customer.
4.6
Telephone, Internet and Mail Orders. If Customer is authorized by WorldPay and the Bank to accept telephone, Internet or mail
orders, Customer shall comply with all requirements of this Section 4.6. Authorization for each such transaction, regardless of the face
amount, must be obtained. Customer shall obtain the expiration date of the Transaction Card as part of the authorization inquiry and utilize
address verification where possible. Customer assumes all responsibility for identification of the cardholder and the validity of the
Transaction Card information. For transactions where merchandise is to be shipped or delivered to the cardholder, the shipping date shall
not be more than seven calendar days after the authorization is obtained, and any shipping costs not included in the authorization amount
must not exceed 15% of the amount authorized. An installment payment option may be offered if all items are clearly disclosed, each
installment is authorized, the first installment is not submitted for settlement until the merchandise is shipped, and subsequent installments
are submitted no more frequently than monthly. Under no circumstances may Customer require that a cardholder complete a postcard or
other document, which displays the cardholder’s account data in plain view when mailed. 4.7
Payment Card Industry Data Security. Customer acknowledges that it is bound to abide by all standards, guidelines, practices
or procedures recommended or required by the applicable Payment Networks with respect to data security or protection of cardholder data,
as such may be amended from time to time (collectively “Data Security Guidelines”), including, without limitation, Payment Card Industry 31623v3
Data Security Standards (“PCI”), PIN Entry Device Standards (“PED”), and Payment Application- Data Security Standards (“PA-DSS”). Currently, the PCI guidelines require Customer (a) to observe, among other things, standards of due care with regard to the protection of
sensitive cardholder information; and (b) to insure that the point of sale equipment and applicable software used by Customer comply with
PCI guidelines. Currently, the PCI guidelines are based on a list of twelve basic security requirements with which all payment system
constituents need to comply. The requirements are:
(1)
Install and maintain a firewall configuration to protect cardholder data;
(2)
Do not use vendor-supplied defaults for system passwords and other security parameters;
(3)
Protect stored cardholder data;
(4)
Encrypt transmission of cardholder data across open, public networks;
(5)
Use and regularly update anti-virus software;
(6)
Develop and maintain secure systems and applications;
(7)
Restrict access to cardholder data by business need-to-know;
(8)
Assign a unique ID to each person with computer access;
(9)
Restrict physical access to cardholder data;
(10)
Track and monitor all access to network resources and cardholder data;
(11)
Regularly test security systems and processes; and
(12)
Maintain a policy that addresses information security.
Customer must also notify WorldPay of all third parties who have access to cardholder data on behalf of Customer (i.e., store, process or
otherwise transmit cardholder data). If Customer knows or suspects a security breach, Customer shall notify WorldPay immediately.
Customer shall then go through its security program to identify and remediate the source of the suspected compromise. If a Payment
Network requires Customer to submit to an audit in connection with a breach or suspected compromise of cardholder data or any other
breach of Data Security Guidelines. Customer shall cooperate with such audit and shall be responsible for the cost of the audit. Customer
acknowledges that if a Payment Network determines that Customer was responsible for a disclosure of cardholder transaction information
or other breach of Data Security Guidelines, WorldPay, the Bank, and Customer may be subject to fines and penalties imposed by the
Payment Network. Further, if Customer is responsible for a disclosure of cardholder transaction information or other breach of Data
Security Guidelines, WorldPay, the Bank, and Customer may be subject to potential third party claims. Customer’s obligations under this Section 4.7 shall survive termination of this Agreement. If a breach of security results in an unauthorized intrusion into WorldPay’s systems, which directly and materially affects Customer, WorldPay shall, where practical and allowable by law, use commercially reasonable efforts
to promptly notify Customer of such breach.
4.8
Customer Web Site Requirements. If Customer is authorized by WorldPay and the Bank to accept Internet orders over an Internet
Web site, Customer is required to comply with all Rules regarding electronic commerce conducted through web sites. Specifically, Customer’s web site must include the address of Customer’s permanent establishment along with its country of domicile either: (i) on the same screen
view as the check out screen used to present the total purchase amount; or (ii) within the sequence of web pages that the cardholder accesses
during the check out process. The Customer acknowledges and agrees that the Customer is required by the Payment Networks and this
Agreement to have certain information, including the Customer’s name, address, customer service telephone number, e-mail address, URL,
what goods and services are being offered for sale, the price, the action that must be taken to make a purchase, the point at which a sale is
completed, Customer’s shipping, returned merchandise and refund policies, transaction currency, export or legal descriptions, and delivery
policy displayed on its web site or other point of sale. The Customer must also post its consumer data privacy policy, if required by law, and its
method(s) of transaction security on the Customer’s web site.
4.9 Retention of Documents. The Bank and WorldPay may examine and verify at reasonable times all records of Customer pertaining to
card transactions processed by WorldPay hereunder, and Customer agrees to preserve such records, including transaction receipts, credit
vouchers, and all other written evidence of such transactions, where applicable and if collected in the ordinary course of Customer’s business, for a period of at least three years from the date of the processing of the transaction. Customer shall bear all risk of loss with
respect to transaction documents that Customer fails to preserve for up to three years.
4.10
Changes in Rules. If there is a change in the Rules (excluding a change in the Bank’s or WorldPay’s Rules) or the regulations of a pertinent governmental agency, which change would make a provision of this Agreement in conflict with such Rule or regulation, the Bank
or WorldPay may unilaterally amend this Agreement, upon written notice to Customer and the other party, to conform and/or be compatible
with such changed Rules or regulations.
4.11
Authorization to Draft Bank Account. Customer hereby authorizes Bank and World Pay to debit the Deposit/Chargeback
Account on behalf of Franchisor and pursuant to instructions of the Franchisor for any fees, charges or penalties as set forth in Customer’s Franchise Agreement including, but not limited to monthly royalties, advertising funds, late payment to vendors, and penalties for noncompliance. Customer authorizes Bank and World Pay to rely on information and instruction provided to Bank and WorldPay by Franchisor
without further consent from Customer. Bank and WorldPay shall be fully protected in acting on any such information and instruction from
Franchisor without making inquiry whatsoever as to Franchisor’s right or authority to give such instruction or as to the application of any
payments made pursuant to such instruction. Notwithstanding anything in this paragraph to the contrary, all remittances from WorldPay or
Bank to Customer are first subject to the rights of WorldPay or Bank under this Agreement.
SECTION 5. PRICING.
5.1
Pricing. As consideration for the services set forth in Section 3 hereof, Customer shall pay the Bank, or WorldPay on behalf of the
Bank, Processing Charges in the manner and pursuant to Schedule A attached hereto. The Processing Charges set forth on Schedule A
are the only charges to which WorldPay and Bank are entitled for the services set forth in Section 3 hereof, provided Customer
acknowledges that the Payment Network Fees are subject to change by the Payment Networks and any such change will be passed
through to Customer without mark-up.
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5.2
Deduction of Processing Charges. Processing Charges shall be deducted from amounts due to Customer under this Agreement
or such amounts shall be deducted from Customer's Deposit/Chargeback Account. Customer hereby authorizes the Bank or WorldPay to
debit Customer's Deposit/Chargeback Account by ACH (or other electronic means) or by wire transfer for amounts due hereunder.
5.3
Estimated Averages. The Processing Charges for services contemplated in this Agreement are based upon assumptions
associated with the aggregate anticipated volume and average transaction size of Customer, Affiliates and Franchisees (as shown on
Schedule A), Franchisee’s status as a Franchisee, as well as Customer’s method of doing business. If the average transaction size is materially different from the anticipated amount set forth on Schedule A, or if Customer significantly alters its method of doing business (i.e.,
the nature and type of business conducted by Customer), WorldPay or the Bank may adjust Customer’s Processing Charges without prior notice. Any such adjustments shall be in addition to, and not in lieu of, any other remedies available to WorldPay or the Bank hereunder. In
the event WorldPay or Bank elect to adjust Customer’s Processing Charges as permitted by this Section 5.3, Customer shall have the right
to terminate this Agreement upon 30 days prior written notice, provided (i) such notice is given within 60 days following the adjustment of
the Processing Charges, and (ii) Customer is not then in breach of this Agreement and has fulfilled any reserve requirements required
pursuant to this Agreement.
5.4
Additional Expenses. To the extent Customer requests that WorldPay provide services to Customer in connection with
Chargebacks, Payment Network requests or communications, data security or PCI issues (other than data security or PCI issues arising as
a result of a security breach related to WorldPay or Bank’s computer networks or failure by WorldPay or Bank to comply with Data Security
Guidelines), or similar services, such services shall be provided at WorldPay’s then current standard hourly rate.
5.5
Equipment. Customer shall be responsible for obtaining all point of sale or similar equipment required in order to transmit
transactions to WorldPay, including related communication or utility costs.
SECTION 6. CHARGEBACKS.
6.1
Retrieval Requests. Either the Bank or WorldPay may, from time to time, request an original or copy of a transaction receipt or
credit voucher (a “Retrieval Request”). Customer will be responsible for responding to Retrieval Requests in accordance with the Rules and
shall provide WorldPay and the Bank with originals or copies of such transaction receipts or credit vouchers within ten business days of the
Retrieval Request.
6.2
Chargebacks. Customer agrees to pay the Bank (as set forth in Section 6.5 below) the face amount of any card transaction
processed by WorldPay pursuant to this Agreement whenever any card transaction is reversed in accordance with the Rules or any
applicable consumer protection statute other than (i) as a result of a security breach involving WorldPay’s computer networks or (ii) as a result of a processing error of WorldPay or Bank (a “Chargeback”), including by way of example, but not limited to, the following:
(a)
Goods are returned, whether or not a credit voucher is delivered to the Bank;
(b)
The sale transaction was not specifically authorized as set forth in Section 4 above;
(c)
Any card transaction is alleged by the cardholder to have been executed improperly or without authority;
(d)
The documentation prepared by Customer evidencing the draft is illegible or incomplete;
(e)
The cardholder disputes the sale, quality or delivery of goods or the performance or quality of services covered by the draft;
(f)
Cardholder asserts against the Bank any claim, dispute, defense, offset, or counterclaim which cardholder may have as a buyer
against Customer, in which case the Bank or WorldPay shall not have any obligation to inquire into or determine the validity of any
such claim, dispute, defense, offset, or counterclaim;
(g)
The extension of credit for goods sold or services performed was in violation of law, rules or regulations of any government
agency, federal, state, local, or otherwise, or in violation of this Agreement;
(h)
The draft lacks a Transaction Card imprint (if required) and cardholder's signature;
(i)
Cardholder claims the dollar amount was altered after the draft was completed;
(j)
Two or more drafts were prepared by Customer for the same card transaction (except as otherwise permitted in Section 7.3);
(k)
The Transaction Card had expired before the transaction date or the sales transaction arises from the use of a counterfeit or
otherwise ineffective Transaction Card;
(l)
The embossed name on the Transaction Card differs from or is dissimilar to the name signed on the signature panel of the
Transaction Card of the draft; or the signature on the signature panel of the Transaction Card differs from or is dissimilar to the
signature on the draft;
(m)
The information contained in the draft was received by WorldPay more than 30 business days after the transaction date showing
thereon;
(n)
The draft is a duplicate of one previously processed or includes a charge previously paid by the cardholder;
(o)
The draft is fraudulent or the sales transaction was not a bona fide transaction in Customer's ordinary course of business;
(p)
The Transaction Card issuer has information that fraud occurred at the time of the transaction, whether or not such transaction
was properly authorized by the Transaction Card issuer, and the cardholder neither participated in nor authorized the transaction;
(q)
In any other situation where a draft was executed or depository credit given in circumstances constituting a breach of any duty,
term, condition, representation, or warranty by Customer hereunder, or where any action or lack of action by Customer in violation
of the Rules has resulted in the draft being charged back to the Bank by an issuing member of Visa/MasterCard pursuant to the
Rules or the draft is charged back to the Bank for any other reason; and
(r)
Merchant is listed on the Questionable Merchant Report of MasterCard.
Additions and deletions to this list may occur as the Rules change.
6.3
Reserve Fund. WorldPay and the Bank generally institute a Reserve Fund based on the potential risk of loss associated with the
Customer’s account, which risk level may change if, for example, there is a change in the Customer’s method of doing business, it has an
adverse change in its financial condition, it has an adverse change in its Chargeback experience, it experiences a data compromise event
or other security breach, it becomes a target for illegal or fraudulent use, or similar events. If required by the Bank or WorldPay at the time
this Agreement is executed, Customer shall establish with the Bank a Reserve Fund. Further, at any time during the term of this
31623v3
Agreement, the Bank and WorldPay may determine in their commercially reasonable discretion that it is necessary to create or additionally
fund a Reserve Fund. In which case, the Bank or WorldPay shall have the right, after five days written notice to Customer, to establish,
replenish or increase a Reserve Fund by debiting Customer’s daily collected transactions. If such collections are inadequate in the Bank’s and WorldPay’s commercially reasonable discretion to adequately establish, replenish or increase the Reserve Fund in a timely manner, the Bank or WorldPay may deduct (by ACH debit or other electronic means) from Customer’s Deposit/Chargeback Account additional sums as necessary, in their commercially reasonable discretion, to establish an adequate Reserve Fund. Upon termination of this
Agreement, the funds held in the Reserve Fund shall be used to fund the account described in Section 10.4, up to the estimated aggregate
dollar amount of Customer’s Chargebacks and other obligations and liabilities that the Bank and WorldPay anticipate in their reasonable
discretion may become due under this Agreement subsequent to termination as set forth in Section 10.4, and any excess shall be refunded
to Customer. Customer acknowledges and agrees that the Bank and WorldPay shall have a perfected first priority security interest in the
Reserve Fund.
6.4
Temporary Holdback. In addition to any of the other rights granted to the Bank and WorldPay in this Section 6, in the event that
the Bank and WorldPay, at any time during the term of this Agreement, determine in their commercially reasonable discretion that it may be
prudent or necessary to do so as a result of any unusual or suspicious activity involving Customer’s account, a cardholder’s account, or otherwise, including, without limitation, money laundering, invalid sales transactions, counterfeit transactions, altered or duplicate
transactions, activity related to a suspected compromise of cardholder data or other breach of Data Security Guidelines by Customer, or
Customer is identified by a Payment Network as experiencing excessive Chargebacks, the Bank, or WorldPay on behalf of the Bank, may
hold funds otherwise due Customer in the Bank’s name and in a non-segregated and non-interest bearing account for a commercially
reasonable period, not to exceed 10 days, as the Bank or WorldPay, in its commercially reasonable discretion deems necessary, to
reimburse the Bank and WorldPay for Chargebacks and credits issued by Customer in respect of such activity, plus other costs or liabilities
reasonably anticipated to be due from Customer to WorldPay or the Bank under the terms of this Agreement as a result of such activity.
WorldPay and the Bank shall communicate the findings of the related investigation to Customer, as well as their determination regarding
the disposition of such funds, as soon as possible. To the extent (i) the investigation conducted by WorldPay and the Bank with respect to
the unusual or suspicious activity determines that such activity is reasonably likely to result in amounts being due from Customer to
WorldPay or the Bank, and (ii) WorldPay or the Bank requires the establishment of a Reserve Fund in connection therewith, then the funds
held pursuant to this Section 6.4 may be used to fund such Reserve Fund.
6.5
Chargeback Reimbursements. Customer agrees to reimburse the Bank for the amount of the transaction in the event of a
Chargeback and pay a handling fee for each Chargeback in the amount set forth on Schedule A, as updated or amended from time to time.
Customer hereby authorizes the Bank or WorldPay to debit without notice Chargebacks and Chargeback handling fees from Customer’s daily collected transactions and if such collections are inadequate to reimburse the Bank, at the Bank’s election, deduct such amounts by ACH debit or other means from Customer’s Deposit/Chargeback Account or Reserve Fund. Customer acknowledges that the Payment
Networks impose fines in the event Customer experiences excessive Chargebacks as described in the Rules. Customer agrees to
reimburse and indemnify WorldPay and the Bank for any fines imposed by the Payment Networks as a result of Customer’s excessive Chargebacks.
6.6
Maximum Period. Customer will be subject to Chargebacks on Transaction Card sales for the period specified by the Rules.
6.7
Notices of Chargebacks. The Bank and WorldPay agree to deliver all Chargeback documentation to Customer promptly as
directed by Customer as to media and location. Customer is responsible for verifying its deposits and statements for Chargebacks and
Chargeback handling fees. Customer understands that it must respond to all Chargebacks within ten calendar days after notice of the
Chargeback. Customer understands that the failure to respond within each ten day period shall constitute a waiver by Customer of its ability
to question or reverse a Chargeback and Customer shall be solely responsible if it fails to timely provide information with respect to a
Chargeback.
6.8
Successor Responsibility. Customer and any successor of Customer shall remain jointly and severally obligated to pay for all
Chargebacks resulting from Transaction Card sales originated under this Agreement until the Bank has been paid in full. This obligation
shall survive the termination of this Agreement, regardless of whether termination was voluntary or involuntary as to Customer.
SECTION 7. ADDITIONAL CUSTOMER RESPONSIBILITIES.
7.1
Honoring Cards. Customer shall honor any valid Transaction Card that Customer has elected to accept hereunder, which is
properly presented for use. Customer shall not discriminate against cardholders seeking to make purchases with a Transaction Card.
Customer shall not require a minimum transaction amount below which Customer will refuse to honor an otherwise valid Transaction Card.
Customer shall adequately display promotional materials to inform the public that Transaction Cards will be honored by Customer as
required by the Rules.
7.2
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
31623v3
Sales Transactions. Except for transactions originated by telephone, mail order or through the Internet, Customer agrees to:
include on a single sales draft all goods and services purchased in the same transaction and enter a description of the goods or
services sold and the price thereof (including any applicable taxes) in detail sufficient to identify the transaction;
enter on the sales draft the date of the transaction;
obtain the signature of the cardholder on the sales draft, if required by processing category;
compare the signature on the sales draft with the signature on the Transaction Card presented to ascertain that they appear to be
the same;
check the effective date, if any, and expiration date on the Transaction Card;
examine any security features on the Transaction Card;
imprint on the sales draft the embossed data from the Transaction Card and from the Customer plate on the imprinter, if required
by processing category;
deliver to the cardholder at the time of delivery of goods or performance of service a true and complete copy of the sales draft or
credit voucher; and
(i)
ensure that each cardholder receipt contains the following information:
(i)
the transaction payment type, e.g. Visa, MasterCard, etc.;
(ii)
Customer’s name, location and location code;;
(iii)
the account number of the Transaction Card, disguised or suppressed as required by the Rules;
(iv)
transaction amount;
(v)
transaction date;
(vi)
a legend identifying the party to whom it will be delivered, e.g. member copy, merchant copy, cardholder copy,
except as permitted by the Rules; and
(vii)
authorization code, if applicable.
The cardholder receipt must also disguise or suppress the expiration date of the Transaction Card as required by the Rules.
7.3
Recurring Transactions; Multiple Sales Drafts. (a) If Customer agrees to accept a recurring transaction from a cardholder for the
purchase of goods or services which are delivered or performed periodically, the cardholder shall complete the appropriate authorization
with Customer as required by the Rules. The authorization must at a minimum specify the transaction amount(s) charged to the
cardholder’s account, the recurring charges, and the duration of time for which such cardholder’s permission is granted. In the event that a
recurring transaction is renewed, the cardholder shall complete and deliver to Customer a subsequent authorization for continuation of such
goods or services to be charged to the cardholder’s account. A recurring transaction may include the payment of recurring charges such as
subscriptions, membership fees, tuition or utility charges. Except as allowed herein, a recurring transaction may not include partial
payments made to Customer for goods or services purchased in a single transaction, nor may it be used for periodic payment of goods or
services on which Customer assesses additional finance charges. The cardholder’s authorization must be retained for the duration of the recurring charges and provided upon request. Customer must not complete an initial or subsequent recurring transaction after receiving a
cancellation notice from the cardholder or a response that the Transaction Card is not to be honored.
(b) Customer shall include on any single transaction receipt the entire amount due for each transaction unless: (a) the balance of the amount
is paid by the cardholder at the time of sale in cash, by check, by additional Transaction Cards, or by other means; or (b) all or a portion of
the goods or services are to be delivered or performed at a later date, and the cardholder enters two or more transactions, one of which
represents a deposit and the others of which represent payment of the balance and the transaction receipt for the balance is completed only
upon delivery of the goods or performance of the services. In the case of delayed payment of the balance due on a transaction, Customer
shall (i) note on the transaction receipt the words “balance” and (ii) not present the “balance” transaction receipt until all of the goods are
delivered or the services performed.
7.4
Returns. Customer agrees to maintain a fair policy for the exchange and return of merchandise and for adjustment of services
rendered and to give proper credit in such circumstances in accordance with the Rules. In such circumstances, Customer shall prepare and
deliver to the Bank, WorldPay, and the cardholder a properly completed credit voucher. Customer may limit its acceptance of returned
merchandise, provided proper disclosure is made and purchased goods or services are delivered to the cardholder at the time of the
transaction. Proper disclosure by Customer shall be determined to have been given by printing an appropriate notice (such as “NO REFUND” or “EXCHANGE ONLY”) on all copies of the sales draft prior to obtaining the cardholder's signature thereon. Customer shall not
make cash refunds to cardholders for transactions utilizing a Transaction Card.
7.5
Obligation to Report Statement Discrepancies. Customer shall be solely responsible for reviewing its statements from WorldPay
(including statements provided online) and for reporting to WorldPay in writing, within 60 days of Customer’s receipt (including electronic receipt) of any statement from WorldPay, any underpayments, overpayments or other discrepancies between the volume and/or value of
transactions that Customer actually processed during the period indicated on the face of such statement. Customer acknowledges and
agrees that WorldPay and the Bank shall not be liable or otherwise responsible to Customer, and shall have no obligation to reimburse
Customer, for any underpayment to Customer that is not reported to WorldPay in writing within 60 days of Customer’s receipt of the applicable statement. Customer acknowledges and warrants that it shall reimburse WorldPay and/or the Bank upon demand for any
misdirected deposits, duplicate deposits or inadvertent over payments into any of its bank accounts hereunder.
7.6
Charges to Cardholders. Customer shall not require any cardholder to pay any part of the Processing Charges, or to pay any
contemporaneous finance charge in connection with a transaction in which a Transaction Card is used, unless permitted by the Rules.
7.7
Fraud. Customer shall be solely responsible for losses and expenses incurred by the Bank or WorldPay as a result of or arising out
of the fraud, gross negligence or willful misconduct of Customer's employees, contractors or agents.
7.8
Change of Address. Customer shall notify the Bank and WorldPay in writing at least 48 hours in advance of any change of
address. The Bank and WorldPay shall be absolutely entitled to rely on Customer's address shown in this Agreement unless such address
is updated in accordance herewith.
7.9
Cardholders. Customer shall not sell, purchase, provide or exchange account number information obtained by reason of an
Authorized Card Transaction to any third party other than Customer's agents, the Bank, WorldPay, or Payment Networks, except as
specifically required by law. Customer shall not make a cash disbursement to any cardholder (including Customer when acting as a
cardholder) nor receive monies from a cardholder and subsequently prepare a credit to cardholder's account.
7.10
Evidence of Authority. Within 30 days after request by the Bank or WorldPay, Customer shall submit to the Bank or WorldPay a
duly executed corporate or partnership resolution reflecting the authority of Customer to enter into this Agreement and the authority of the
individual executing this Agreement on behalf of Customer to do so.
7.11
Financial Information. Customer shall provide such financial information as may be requested by WorldPay or the Bank from
time to time during the Term of this Agreement as reasonably required in order for WorldPay or the Bank to comply with the Rules of any
Payment Network or to otherwise enable WorldPay and the Bank to assess Customer’s financial condition and the related risk associated 31623v3
with Customer’s business. Such financial information may include copies of quarterly and annual audited (if produced, otherwise
unaudited) financial statements.
SECTION 8. CUSTOMER REPRESENTATIONS.
Customer hereby represents and warrants to WorldPay and the Bank that:
(a)
It has full legal power and authority to enter into and perform its obligations under this Agreement and that such actions have been
duly authorized by Customer;
(b)
Its facsimile signature hereon constitutes a valid and binding Agreement;
(c)
This Agreement constitutes the legal, valid and binding obligations of Customer, enforceable against Customer in accordance with
its terms;
(d)
The transactions transmitted to WorldPay for processing and to the Bank for settlement will represent the indebtedness of the
cardholder in the amount set forth therein for goods sold or services rendered and shall not involve any element of credit for any
other purpose;
(e)
Customer shall not transmit Transaction Card information representing sales made by any individual or entity other than
Customer;
(f)
Customer represents that all of the disclosures in its application or other information submitted to the Bank are true, accurate and
complete and do not omit any information necessary to make such disclosures not misleading to the Bank and WorldPay; and
(g)
As to each transaction receipt delivered to the Bank, and as to the transaction evidenced thereby, the transaction receipt
represents a bona fide sale or lease of goods or services or both, originated by Customer in compliance with this Agreement and
the Rules; all transaction receipts are free from any alteration not authorized by the cardholder; the transaction is in compliance
with all applicable laws, rules, and regulations; except as may be pledged by Customer to Customer’s senior lender, the
indebtedness represented by the transaction receipt has not been pledged as collateral for payment of any indebtedness or
obligation of Customer or any other person; and Customer has no knowledge or notice of information that would lead it to believe
that the enforceability or collectability of the subject transaction receipt is in any manner impaired.
SECTION 9. INDEMNIFICATION, DISCLAIMER, LIMITED LIABILITY.
9.1
Indemnification. a. General. Each party (an “Indemnitor”) agrees to indemnify and hold the other parties (an “Indemnitee”) harmless from and against any direct losses, damages, costs, liability or expenses incurred by the Indemnitee, including, without limitation,
court costs and attorneys’ fees, in connection with any claim or demand made by a third party (i) resulting from any breach by Indemnitor of
the terms of this Agreement, or (ii) arising from any act or omission by the Indemnitor which violates any applicable federal, state or local
laws, rules or regulation, or which violates any of the Rules.
b. Payment Card Industry Data Security. (i) Customer hereby agrees to indemnify and hold WorldPay and the Bank harmless from and
against any and all claims, demands, damages, fines, and/or penalties imposed upon the Bank and WorldPay as a result of Customer's noncompliance with the Data Security Guidelines, Customer’s failure to maintain equipment and software that complies with Data Security Guidelines, or any other data compromise for which a Payment Network or a court with competent jurisdiction determines that Customer is
responsible, including, without limitation, Chargebacks resulting from breach of the Data Security Guidelines or any compromise of
cardholder data. (ii) Bank and WorldPay hereby agree to indemnify and hold Customer harmless from and against any and all third party
claims, demands, damages, fines, and/or penalties imposed upon Customer as a result of Bank’s or WorldPay’s, respectively, noncompliance with the Data Security Guidelines, Bank’s or WorldPay’s, respectively, failure to maintain equipment and software that complies with Data Security Guidelines, or any other data compromise for which a Payment Network or a court with competent jurisdiction determines
that Bank or WorldPay, respectively, is responsible. The parties obligations under this Section 9.1(b) shall survive termination of this
Agreement.
c. Procedures. The Indemnitee shall provide the Indemnitor prompt written notice of any claim or demand subject to indemnification
hereunder. The Indemnitor shall have the right, by prompt written notice to the Indemnitee, to assume the defense of any such claim or
demand, provided (i) Indemnitor shall bear the cost of such defense and (ii) the Indemnitor does not have a conflict of interest in connection
with such defense. If the Indemnitor assumes such defense, the Indemnitee may participate therein through counsel of its choice, but at the
sole cost of Indemnitee. The party not assuming the defense of any such claim shall render all reasonable assistance to the party assuming
such defense, and all reasonable out-of-pocket costs of such assistance shall be reimbursed by the Indemnitor. No such claim shall be
settled other than by the party defending the same, and then only with the consent of the other party, which shall not be unreasonably
withheld or delayed. Each party agrees to use reasonable efforts to mitigate the losses it suffers as a result of any indemnification claim
made under this Agreement.
9.2
Disclaimer of Warranties. WorldPay and the Bank hereby disclaim all warranties, with respect to the services and products
provided hereunder, whether expressed, implied, statutory or otherwise, including without limitation, any warranty of merchantability or
fitness for a particular purpose.
9.3
Limitation of Liability. With the exception of (i) their respective settlement obligations to Customer hereunder, (ii) a breach of the
confidentiality obligations under Section 11.7, and (iii) their respective indemnification obligations under Section 9.1(a)(ii) and Section
9.1(b)(ii), under no circumstances shall the financial responsibility of WorldPay or the Bank for any failure of performance by WorldPay or
the Bank under this Agreement exceed the fees or charges paid to such party for the transaction or activity that is or was the subject of the
alleged failure of performance. Except for breaches of Section 11.7, in no event shall a party to this Agreement, its agents, officers,
directors, employees or affiliates, be liable for any special, incidental, consequential or exemplary damages or claims by another party to this
Agreement or any third party relative to the transactions or activities hereunder, whether or not such damages were foreseeable, provided
the parties acknowledge and agree that any amounts required to be paid in connection with a third party claim subject to indemnification
under this Section 9 or amounts payable with respect to any wrongful early termination of this Agreement shall be considered direct
damages.
31623v3
SECTION 10. TERM, TERMINATION.
10.1
Term. This Agreement shall be binding upon Customer upon execution of this Agreement by Customer. This Agreement shall be
binding upon WorldPay and the Bank upon WorldPay’s and the Bank’s acceptance hereof (as evidenced by an authorized signature hereon with respect to such party). The term of this Agreement shall be co-terminous with the Corporate Processing Agreement.
10.2
Termination Without Notice. WorldPay or the Bank may terminate this Agreement without notice, at any time as a result of any of
the following events: (a) any material noncompliance by Customer with the Rules; (b) any voluntary or involuntary bankruptcy or insolvency
proceedings involving Customer, its parent or an affiliated entity or individual; (c) WorldPay or the Bank, in its commercially reasonable
discretion, deems Customer to be financially insecure such that WorldPay or the Bank is at a material risk of loss; (d) Customer or any other
person owning or controlling Customer's business is or becomes listed in the Combined Terminated Customer File (or its equivalent)
maintained by the Payment Networks; (e) Customer materially alters the nature and type of business conducted, (f) WorldPay or the Bank is
prohibited by applicable law from conducting business with Customer or its principals; (g) WorldPay or the Bank receive written notice from
Pla-Fit Health that Customer is no longer a Franchisee; or (h) termination of the Corporate Processing Agreement.
10.3
Termination With Notice. In the event any party breaches any of the provisions hereof (excluding breaches described in Section
10.2), and fails to cure such breach within 60 days of receipt of written notice from the other of such breach, the non-breaching party may
terminate this Agreement immediately at the expiration of the 60 day cure period.
Should Customer terminate this Agreement (or breach the exclusivity provision hereof) without cause on or prior to the first anniversary of
the Start Date (as defined in the Corporate Processing Agreement), Customer shall pay to WorldPay, as an early termination fee, a sum
which equals (a) the average of the last three months processing and statement fees in which Customer utilized (or should have utilized)
WorldPay’s processing services or anticipated monthly processing and statement fees based on forecasted Transaction Card volume shown
on Schedule A attached hereto, at the option of the Bank, multiplied by (b) the lesser of 12 or the remaining months left in the then current
term. Such termination fee shall be applicable on a location by location basis.
After the first anniversary of the Start Date (as defined in the Corporate Processing Agreement), Customer may terminate this Agreement for
convenience without payment of any early termination fees, provided Customer provides WorldPay with at least 60 days prior written notice
of such termination.
Any termination fee payable under this Section 10.3 shall be deducted from Customer’s account by electronic debit by the Bank and shall be
in addition to, and not in lieu of, any other remedies available to WorldPay or the Bank hereunder. Customer’s obligation to pay such
termination fee shall survive any termination or expiration of this Agreement.
10.4
Additional Rights. Upon notice of any termination of this Agreement, the Bank shall determine and the Bank, or WorldPay on
behalf of the Bank, may notify Customer of the estimated aggregate dollar amount of Customer's Chargebacks, refunds, and other
obligations and liabilities that the Bank and WorldPay reasonably anticipate may become due subsequent to termination, and Customer
shall immediately deposit such amount with the Bank or the Bank may withhold such amounts from credits due to Customer or may utilize
the funds in the Reserve Fund, if applicable. The Bank is authorized to hold such funds for a reasonable period not to exceed the latter of
the ten months after termination of this Agreement or the length of time applicable laws, rules or regulations or Payment Networks impose
actual or potential liability upon any party to this Agreement. Customer shall have no rights to such funds until all of its obligations under this
Agreement are satisfied, and WorldPay and the Bank may receive out of such funds those amounts that are or become due to WorldPay
and the Bank pursuant to this Agreement. The Bank shall periodically release funds held pursuant to this Section 10.4 as the risk of loss to
the Bank and WorldPay reduces (as determined by Bank and WorldPay in their commercially reasonable discretion).
10.5
Survival. The obligations of all parties hereto incurred prior to the effective date of termination or arising from transactions
processed prior to the termination shall survive the termination of this Agreement. Without limiting the generality of the foregoing, Customer
shall be liable both before and after termination for all Chargebacks relating to card transactions prior to such termination. Each party shall
be liable for all obligations, warranties and liabilities of such party pertaining to the period during which WorldPay and the Bank processed or
settled transactions for Customer under this Agreement, including all indemnification obligations under Sections 2, 4.7, and 9.1, regardless
of whether Customer has paid an early termination fee under Section 10.3. In addition to the foregoing and in addition to those sections of
this Agreement which by their terms survive, Sections 4.9, 7.5, 7.7, 9.1, 9.2, 9.3, 10.4, 10.5 and 11.2 through 11.11 shall survive any
termination or expiration of this Agreement.
SECTION 11. GENERAL PROVISIONS
11.1
Exclusivity. Subject to Schedule B hereof, Customer agrees that prior to the first anniversary of the Start Date (as defined in the
Corporate Processing Agreement), it will not use the services of any bank, corporation, entity or person other than WorldPay and the Bank
to provide services similar to those contemplated in this Agreement. The parties agree that after the first anniversary of the Start Date, this
exclusivity provision shall not apply to Customer.
11.2
Assignment, Binding, No Third Party Beneficiaries. Customer may not assign this Agreement, directly or indirectly, including by
operation of law, without the prior written consent of the other parties. Any sale or transfer of the equity interests of Customer such that the
holders of the equity interests as of the date hereof do not own more than 50% of the equity interests of Customer immediately after such
transfer shall be deemed an assignment of this Agreement. The Bank may assign this Agreement without Customer’s consent. WorldPay
may assign its rights and obligations under this agreement to another transaction processor approved by the Bank. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors or permitted assigns. This Agreement will not confer any rights
or remedies upon any person or entity other than the Bank, WorldPay, and Customer.
31623v3
11.3
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
11.4
Attorneys' Fees. In the event any party hereto shall employ legal counsel or bring an action at law or other proceeding against
another party to enforce any of the terms, covenants, or conditions hereof, the prevailing party shall be entitled to its reasonable attorneys'
fees and costs so incurred.
11.5
Maintenance of Records by Electronic Means. Customer understands and acknowledges that WorldPay, in the ordinary course
of its regularly conducted business activities, may keep or maintain certain of its business records and documentation by scanning such
records and documents so as to create a photographic or other image or representation of same that may be stored by electronic means
and, if necessary, subsequently reproduced in paper form. Customer hereby waives any objection to WorldPay’s maintenance and/or reproduction of such records and documents in this manner, and Customer further agrees that it shall not challenge or contest the
authenticity or admissibility of same on such grounds in any legal action or proceeding, provided, however, that nothing in this sentence
shall preclude Customer from challenging the accuracy and completeness of such records and documents.
11.6
Notices. Except as otherwise provided in this Agreement, written notices required under the terms of this Agreement shall be sent
by (a) Priority U.S. mail, return receipt requested, (b) personal delivery including Federal Express, DHL, UPS, or other reputable express
courier services, or (c) facsimile, provided written confirmation of receipt is received, return receipt requested and a copy is sent by either
the method described in (a) or (b). Notices shall be addressed to the Bank at RBS Citizens, N.A., 1 Citizens Plaza, Providence, Rhode
Island 02903, Attention: Merchant Services; to WorldPay at WorldPay US, Inc., 600 Morgan Falls Road, Atlanta, Georgia, 30350, Attention:
Legal Department, Fax 678-587-2244; and to Customer at its address shown in this Agreement; or such other address as shall be provided
by the Bank, WorldPay or Customer in writing, to the other. Notices shall be effective upon actual receipt or upon refusal of delivery.
11.7
Confidentiality. The parties acknowledge that each of their respective businesses is highly competitive and that their respective
books, records and documents, technical information concerning their respective products, equipment, services and processes,
procurement procedures and pricing information, financial information and the names or other information (such as credit and financial
data) concerning cardholders, all comprise confidential business information and trade secrets of each and are valuable, special and
unique assets of the parties that they use in their business to obtain a competitive advantage over their competitors, which do not know or
use this information or have access to it (collectively, “Protected Information”). The parties further acknowledge that the protection of each
other's Protected Information against unauthorized disclosure and use is of critical importance to each in maintaining their respective
competitive position. Accordingly, the parties hereby agree that neither they, nor any of their respective employees or agents, shall make
any unauthorized disclosure of any Protected Information, or make any use thereof, except for the benefit of, and on behalf of, that party for
purposes of performing this Agreement. The following information shall not be subject to protection under this Section 11.7: information
that (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available to the
public; (b) was known by the receiving party before receiving such information from the disclosing party; (c) is hereafter rightfully obtained
by the receiving party from a third party, without breach of any obligation to the disclosing party; or (d) is independently developed by the
receiving party without use of or reference to the Protected Information. Each party may disclose the other party’s Protected Information if
and to the extent that such disclosure is required or requested by applicable law or any regulatory or governmental authority. Additionally,
Customer hereby authorizes WorldPay or Bank to disclose Protected Information to Affiliates and Franchisor. The provisions of this
Section 11.7 shall be effective during the term of this Agreement and shall survive for a period of two years thereafter, provided with
respect to Protected Information that constitutes a trade secret under applicable law, the provisions of this Section 11.7 shall be effective
during the term of this Agreement and shall survive for the longer of (i) two years after the termination of this Agreement, or (ii) for so long
as such information continues to qualify as a trade secret under applicable law, excluding failure to so qualify as a result of breach of this
Agreement. Notwithstanding anything contained to the contrary herein, the parties further agree that all cardholder data shall be protected
in accordance with applicable law and the Rules.
11.8
Force Majeure. No party shall be liable for delays in processing, settlement, or other non-performance caused by such events as
fires, telecommunications or utility or power failures, equipment failures, labor strife, riots, war, non-performance of such party’s telecommunication vendors or suppliers, acts of God, or other causes over which such party has no reasonable control. Nothing in this
Section 11.8 shall relieve WorldPay of its obligations to provide redundancy and disaster recovery as set forth in Section 3.4 above.
11.9
Entire Agreement; Modification, Waiver. This Agreement and any accompanying schedules constitutes the entire understanding
of WorldPay, the Bank and Customer with respect to the subject matter hereof and supersedes all prior agreements, understandings or
negotiations, whether oral or written between them with respect to the subject matter hereof. Except as otherwise set forth herein, this
Agreement and accompanying schedules may not be amended or modified, except by an instrument in writing executed by all parties. No
waiver by any party of any provision of this Agreement will be valid unless the same will be in writing and signed by the party making such
waiver. No waiver of a provision of this Agreement shall constitute a waiver of any other provision or of the same provision on another
occasion.
11.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
11.11 Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not
affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
11.12
U.S. Patriot Act Customer Identification Notice, Regulatory Requirements, Credit Reports. In order to assist the U.S.
government in its efforts to fight terrorism and money laundering activities, federal law requires WorldPay and the Bank to obtain, verify, and
record information that identifies persons and entities establishing a business relationship with WorldPay or the Bank through the purchase
of products or services. The information required varies based on whether Customer is a publicly or privately owned business. When
31623v3
establishing a business relationship, WorldPay and the Bank shall ask for identification and verification information, which may include,
without limitation, the legal name of the entity, identification of the primary principal contact of the business (if required by law), physical
address of the entity or principal, date of formation (for business entities), date of birth (for individuals), and other information that allows
WorldPay and the Bank to identify Customer and its principals. Customer agrees to provide all information requested by WorldPay and the
Bank that is required in order for WorldPay and the Bank to comply with applicable law. In addition and in connection with such regulatory
requirements, Customer shall provide prior written notice to the Bank and WorldPay of any change in the ownership or composition of
Customer if as a result of such change, an individual or entity who does not own 20% or more of the beneficial equitable ownership of
Customer as of the date hereof becomes the owner of 20% or more of the beneficial equitable interest of Customer hereafter. Customer
acknowledges that WorldPay and the Bank may require that a consumer report of certain officers, partners, or owners of Customer be
provided from a consumer and/or credit reporting agency at the inception of this Agreement and from time to time thereafter.
_
By:
Print:
Title:
Date:
WorldPay US, Inc./ RBS Citizens, N.A.
(As to WorldPay & the Bank)
By:
Name:
Title:
Date:
31623v3
Schedule A
To Customer Processing Agreement
Transaction Pricing for
/Customer
1.
Processing assumptions:

Aggregate Annual credit card volume of Customer, Pla-Fit Health, LLC and Franchisees: $

Average ticket – $

Number of active locations 
Communication type - IP
Customer shall give WorldPay at least 30 days prior written notice in the event it switches its communication type.
2.
Payment Network Fees: Published fees of the Payment Networks for credit or debit card transactions or other electronic
payment transactions processed pursuant to this Agreement, including interchange, assessment, authorization, risk, transmission and all
other fees shall be passed through to Customer. It is the Customer’s sole responsibility to notify WorldPay in writing if it qualifies for
discounts with the Payment Networks based on the volume of the Customer. Following receipt of such notice, WorldPay shall take
appropriate action to seek implementation of such discounted pricing with the Payment Networks. Discounts based on Customer’s volume
shall be passed through to Customer once implemented by the Payment Networks.
3.
WorldPay Fees: Based on the above processing assumptions and the specific "communication type" listed below, WorldPay
fees shall be as follows:
PER TRANSACTION FEES
Authorization/Settle*
FOR ALL TRANSACTIONS OTHER THAN
RECURRING TRANSACTIONS
Dial
Visa/MasterCard Credit Card Transactions
Non Visa/MasterCard Credit Card Transactions
1
Debit Card Transactions
Authorize.net Transactions
Gift Card Transactions
High Speed**
$
$
$
$
$
$
$
$
2
3
* Represents the per transaction fee charged by WorldPay and the Bank for settlement of transactions (in the case of Visa/MasterCard Credit Card
Transactions) and for authorization of transactions (in the case of Non Visa/MasterCard Credit Card Transactions). In addition, one half of one percent
(“Basis Points”) will be charged based on the value of the settled transaction (sales & credits).
** High speed is if the communication type is frame relay, ISDN, DSL or internet.
Authorization/Settle*
FOR RECURRING TRANSACTIONS***
Dial
Visa/MasterCard Credit Card Transactions
Non Visa/MasterCard Credit Card Transactions
Debit Card Transactions
Authorize.net Transactions
Gift Card Transactions
3
1
High Speed**
$
$
$
$
$
$
$
$
2
* Represents the per transaction fee charged by WorldPay and the Bank for settlement of transactions (in the case of Visa/MasterCard Credit Card
Transactions) and for authorization of transactions (in the case of Non Visa/MasterCard Credit Card Transactions). In addition, Basis Points will be charged
based on the value of the settled transaction (sales & credits).
** High speed is if the communication type is frame relay, ISDN, DSL or internet.
***Except for the Basis Points applicable to the transaction, the per transaction fees for Recurring Transactions will not be billed by or collected by WorldPay.
The per transaction fees for Recurring Transactions will be collected by Maas Global Solutions Corporation (“Maas”) on behalf of Franchisor.
1
Examples of Non Visa/MasterCard Cards include, but are not limited to, American Express, Discover/Novus, Diners Club, Carte Blanche and JCB. Settlement (payment) for
certain Non Visa/MasterCard Card transactions is the responsibility of the issuing organization and additional fees apply as specified in their respective separate agreements.
2
Separate agreement between Customer and Authorize.net is required and Customer is responsible for all fees specified therein.
3
Billable transactions include activations, redemptions, balance inquiries and dormancy fees. Separate agreement with WorldPay is required.
31623v3
Schedule A
To Customer Processing Agreement
Transaction Pricing for
Minimum Processing Fee - $
/Customer
per month.
Administration Statement Fee - $
4
Chargeback Handling Fee - $
per month/per location.
per Chargeback.
ACH Reject, NSF or Returned Check Fee - $
5
Voice Authorization Fee - $
per occurrence.
per call.
Equipment Replacement and Supplies Program - The Equipment Replacement and Supplies Program must be accepted at the Customer
level. If accepted, all terminals at all locations must be included.
Check if elected:
Equipment Only - $
Supplies Only - $
per month/per terminal
per month
Equipment and Supplies - $
per month/per terminal
4.
Frequency of Billing: Fees due under Section 2 shall be payable on a monthly basis. Fees due under Section 3 shall be
payable on a monthly basis. WorldPay has the right to accelerate the frequency of billing without notice in the event WorldPay or the
Bank, in its commercially reasonable discretion, believes that Customer’s credit profile has changed in such a manner that WorldPay is at a risk of material loss by billing on other than a daily basis or either party has given notice of termination of this Agreement.
___
C
By:
Print:
Title:
Date:
WorldPay US, Inc./ RBS Citizens, N.A.
(As to WorldPay & the Bank)
By:
Name:
Title:
Date:
4
$
5
Debit adjustment fee is $
if adjustment date is greater than 10 calendar days after transaction (pass-through fee charged by debit networks). Debit chargeback fee is
(pass-through fee charged by debit networks).
Voice Authorization Referral Fee is $
per call; Voice AVS Request Fee is $
per call.
31623v3
Schedule B
To Customer Processing Agreement
Service Level Agreements
WorldPay agrees to provide the following service level commitments to Customer:

WorldPay’s authorization system will be available 99.99% of time, measured on a weekly (seven consecutive day) basis. In the event
WorldPay breaches this guaranteed availability commitment more than twice in any consecutive 12 month period during the term of
this Agreement, Customer’s exclusivity obligation set forth in Section 11.1 shall terminate and Customer may terminate this Agreement
without penalty by providing WorldPay written notice of its intent to so terminate within 30 days of any such third breach, provided such
notice must specify a date, which date must be within 90 days from the date of such notice of termination, upon which the termination
shall become effective. Any down time not attributable to WorldPay's authorization system (i.e., network outages, communication
outages or other third party difficulties) shall not apply to this availability. The ability to terminate this Agreement as set forth in the
foregoing sentence shall be Customer’s sole and exclusive remedy for any failure by WorldPay to meet these service level
commitments.

In the event a chargeback is received by WorldPay for an authorization-related reason code on a transaction authorized when the
system was not available, Customer will not be held liable for such chargeback.

WorldPay will assign an Account Management Team for resolution of day to day questions/issues that might arise.

The corporate office will be given a direct extension for their Account Management Team and Relationship Manager to handle high
level issues such as additional locations, billing questions, interchange qualification, etc. This team is available from 8:30AM EST –
5:30PM EST, M-F. All follow up calls will be returned within two hours from the time the call is received.

Updates of outstanding research items will be provided within 24 hours, excluding weekends and holidays.

WorldPay will supply escalation procedures and contacts for any issues that may arise.
31623v3
STANDARD MASTER AGREEMENT FOR FRANCHISEES
MGS GATEWAY AGREEMENT
MGS offers payment gateway services (the “PaymentSite Services”) to its customers that are party to a merchant
processing agreement with MGS and/or its processors and acquiring banks (collectively, “CUSTOMERS” and
individually, “CUSTOMER”). In order for a CUSTOMER to obtain or continue using PaymentSite Services,
CUSTOMER must agree to and accept the terms and conditions of this Agreement. The Agreement sets out the terms
and conditions under which CUSTOMER may utilize the PaymentSite Services. Please read this Agreement carefully.
By signing below, or by using the PaymentSite Services, CUSTOMER acknowledges and agrees that
CUSTOMER has reviewed and understands the Agreement and agrees to be legally bound by all its
terms and conditions.
NOW THEREFORE, the parties agree as follows:
1. CUSTOMER Capacity and Related Matters. By accepting the terms and conditions of this Agreement,
CUSTOMER represents and warrants that (a) to the best of CUSTOMER’s knowledge and belief all information
CUSTOMER has provided to MGS related to Customer’s payment processing activities is true and correct in all
respects, and (b) CUSTOMER will update MGS by e-mail with any changes to information CUSTOMER has
previously supplied. CUSTOMER further represents and warrants that CUSTOMER’s signatory has the legal authority
to accept the terms and conditions of this Agreement on behalf of CUSTOMER and that such acceptance will be
binding on CUSTOMER. Words and phrases with initial letters capitalized and not otherwise defined herein shall
have the meaning set forth in Section 13.12.
2. Undertakings of MGS.
2.1 MGS Grant. MGS hereby grants CUSTOMER a non-exclusive, royalty-free, fully-paid up, limited right, during
the term of the Agreement, to use the PaymentSite Services, subject to the restrictions herein , only as necessary to
utilize the PaymentSite Services for its own benefit in accordance with the terms and conditions hereof.
2.2 PaymentSite Services. MGS shall provide the PaymentSite Services to CUSTOMER in all material respects in
accordance with: (a) the terms and conditions of this Agreement; (b) the Data Security Guidelines; and (c) consistent
with all applicable Laws.
3. CUSTOMER Undertakings.
3.1 Compliance with Law and MGS Guidelines. In connection with the exercise of CUSTOMER’s rights and
obligations under this Agreement (including, without limitation, any related to individual privacy), CUSTOMER will
comply, at CUSTOMER’s own expense, with all Laws. CUSTOMER shall comply with all the current policies,
procedures and guidelines of MGS governing the PaymentSite Services as set forth in Schedule 1 to this Agreement.
3.2 Third Party Products and Services. CUSTOMER’s use of third party products and services shall be
governed by and subject to separate third party product, service, software and/or license agreements. MGS will not
be a party to such third party agreements and does not warrant or guarantee any third party product or service.
4. Data Collection, Privacy and Security.
4.1 CUSTOMER Obligations.
a. CUSTOMER is solely responsible for the security of data residing on servers owned or operated by CUSTOMER, or
a third party designated by CUSTOMER (e.g., a Web hosting company, processor or other service provider).
CUSTOMER shall comply with all Laws governing the security, collection, retention and use by CUSTOMER of
financial information, including card account numbers, and all other personally identifiable customer information.
b. CUSTOMER shall comply with the Data Security Guidelines that are applicable to Customer in connection with all
Transactions.
c. CUSTOMER agrees that it will comply with all MGS security protocols and security advisories in effect during the
term of this Agreement. CUSTOMER is solely responsible for verifying the accuracy and completeness of all
Transactions submitted and processed by MGS associated with CUSTOMER’s account and verifying that all
corresponding funds are accurately processed.
4.2 MGS Obligations.
a. MGS will collect, retain, and disclose information and data collected from CUSTOMER and End Users (including
data associated with the PaymentSite Services and the Invoicing Services) (collectively “Customer Data”) solely as
necessary to perform MGS’s obligations under this Agreement and in accordance with Laws, the Data Security
Guidelines and the terms of Section 9 hereof.
b. With respect to the PaymentSite Services and the Invoicing Services, at all times while this Agreement is in effect,
MGS will maintain compliance with all applicable laws, policies and regulations governing the security, collection,
retention and use by MGS of financial information, including card account numbers, and all other personally
identifiable customer information.
c.
Within eight (8) business hours after MGS becomes aware of any breaches in security or potential breaches in
security at any of the MGS Sites utilized by the Customer or in the Transaction Processing Platform, including any
breaches or potential breaches that compromise or could compromise the security or safety of the PaymentSite
Services, Transactions, or Customer Data, MGS shall notify CUSTOMER of the breaches or potential breaches. MGS
shall be responsible for any and all such security breaches and any loss or damage arising therefrom or related
thereto, unless such security breaches were caused by CUSTOMER or an employee, agent or contractor under
CUSTOMER’s control.
d. In accordance with reasonable standards of care and diligence and the specific requirements of Schedule 2, MGS
shall (i) establish and maintain adequate safeguards and controls against the destruction, loss, or alteration of
Customer Data; (ii) establish and maintain safeguards against unauthorized access to the MGS Sites, the Transaction
Processing Platform and Customer Data; and (iii) establish and maintain network and internet security procedures,
protocols, security gateways and firewalls with respect to the Customer Data. During the term of the Agreement,
MGS shall ensure at its own expense that any facility housing Customer Data maintains an audit certification by a
nationally recognized outside audit firm conforming with the American Institute of Certified Public Accountants
Statement on Standards for Attestation Engagements 16 (SSAE 16), Type II and shall provide CUSTOMER with a
copy of each of its SSAE, Type II reports, at CUSTOMER’s request, together with MGS’s corrective action plans in
response to any adverse audit findings, conclusions or recommendations.
5. Fees.
5.1 MGS Service Fees.
On every billing run, Customer authorizes MGS to collect from Customer via an ACH
authorization $
for each submitted recurring credit and debit card transaction initiated by the Customer during
that billing run.
5.2 Account Updater. If CUSTOMER elects to use the Account Updater service, Customer shall so notify MGS.
MGS shall be entitled to collect from CUSTOMER via an ACH Authorization a service fee of $ per cycle and a fee of
$
per match for CUSTOMER’s use of the Account Updater service for the relevant month. MGS reserves the right
to change the fees referred to in this Section 5.2 on notice to CUSTOMER. CUSTOMER acknowledges that: 1)
MasterCard and Visa provide the interface necessary to support the Account Updater service and may, without notice,
change features and functions of the program; and 2) Credit card issuing banks participate at will and may, without
notice, adjust their participation in the MasterCard and Visa Account Updater programs.
6. [NOT USED]
7. Term. This Agreement shall commence on the date of CUSTOMER’S execution of this Agreement as set forth
below and shall remain in full force and effect until terminated pursuant to Section 8.
8. Termination.
8.1 Termination by Merchant. CUSTOMER may immediately terminate this Agreement, at any time and for any
reason, with or without cause, upon written notice to MGS with a 30day notice.
8.2 Termination by MGS. MGS may terminate this Agreement and/or CUSTOMER access to the PaymentSite
Services, at any time and for any reason, with or without cause, upon written notice to CUSTOMER with a 120-day
notice.
8.3 Termination of Franchise or Master MSA Gateway Agreement. This Agreement shall automatically
terminate: 1) if MGS is notified in writing by Franchisor that CUSTOMER’s franchise agreement with Franchisor has
terminated and that CUSTOMER is no longer a franchisee of Franchisor, or ii) in the event of a termination of the
Master MGS Gateway Agreement entered into by MGS and PLA-Fit Health LLC.
8.4 Effect of Termination. Termination of this Agreement for any reason shall not release either party from any
liability or obligation that, at the time of such termination, has already accrued to the other party or that is
attributable to a period prior to such termination, nor shall it preclude either party from pursuing any right and/or
remedy that such party may have hereunder, at law or in equity, with respect to any breach of this Agreement. The
following provisions shall survive termination of this Agreement: Section 6, 9.1, 9.6, 9.7, 9.8, 10, 11, 12 and 13.
9. Intellectual Property and Confidentiality.
9.1 MGS. The parties agree that MGS owns and retains all right, title and interest in and to the MGS Trademarks,
PaymentSite Services, copyrights and any related technology utilized under or in connection with this Agreement,
including but not limited to all intellectual property rights associated therewith. No title to or ownership of any of the
foregoing is granted or otherwise transferred to CUSTOMER or any other entity or person under this Agreement.
CUSTOMER will not reverse engineer, disassemble, decompile or otherwise attempt to discover the source code or
trade secrets for any of the PaymentSite Services or related technology.
9.2 MGS Trademarks License. Subject to the terms and conditions contained herein, MGS hereby grants to
CUSTOMER a non-exclusive, royalty-free, fully-paid up right to use, reproduce, publish, perform and display MGS
Trademarks on the CUSTOMER website in connection with CUSTOMER offering of payment options to End Users.
9.3 CUSTOMER Trademarks License. Subject to the terms and conditions contained herein, CUSTOMER
hereby grants to MGS during the Term a non-exclusive, personal (non-transferable), non-subicensable, royalty-free,
fully-paid up right to use, reproduce, publish, perform and display trademarks licensed to CUSTOMER by Franchisor
(“CUSTOMER Trademarks”) as necessary in connection with the performance of the terms and conditions set forth in
this Agreement provided that MGS does so in compliance with Francishor’s guidelines as such guidelines may be
changed from time to time by CUSTOMER on written notice to MGS.
9.4 Use of Trademarks. Each party shall strictly comply with all standards with respect to the other party's
Trademarks contained herein or which may be furnished by such party from time to time. Further, neither party shall
create a combination mark consisting of one or more Trademarks of the other party. All uses of the other party's
Trademarks shall inure to the benefit of the party owning such Trademark. Either party may update or change the list
of Trademarks usable by the other party hereunder at any time by written notice to the other party.
9.5 Provide Appropriate Trademark Attribution. CUSTOMER must include a statement of ownership when
displaying or reproducing any MGS Trademarks. The statement should read: “MGS and the MGS logo [or any other
applicable mark] are trademarks or registered trademarks of Maas Global Solutions Corporation.” If it is not feasible
to include the attribution statement, it is acceptable to use a general-purpose attribution statement in a form such the
following: “All other trademarks are the property of their respective owners.”
9.6 Trademark Registration. Except as otherwise provided herein, neither party shall use, register or attempt to
register any (a) Trademarks of the other party or (b) marks or domain names that are confusingly similar to any of the
Trademarks of the other party.
9.7 Trademark Restrictions. Neither party shall (a) use the other party’s Trademarks except as expressly
authorized in this Agreement; (b) take any actions inconsistent with the other party’s ownership of the its Trademarks
and any associated registrations, or attack the validity of the other party’s Trademarks, its ownership thereof, or any
of the terms of this Agreement; (c) use the other party’s Trademarks in any manner that would indicate it is using the
other party’s Trademarks other than as a licensee of the other party; nor (d) assist any third party do any of the same.
9.8 Confidential Information.
9.8.1 Each Party (the “Receiving Party”) hereby agrees (i) to hold the other party’s (the “Disclosing Party”)
Confidential Information in strict confidence and to take reasonable precautions to protect such Confidential
Information (including, without limitation, all precautions the Receiving Party employs with respect to its own
confidential materials), (ii) not to divulge any such Confidential Information or any information derived therefrom to
any third person; (iii) not to make any use whatsoever at any time of such Confidential Information except as
contemplated hereunder, (iv) not to remove or export from the United States or re-export any such Confidential
Information or any direct product thereof, except in compliance with, and with all licenses and approvals required
under, applicable U.S. and foreign export laws and regulations, including, without limitation, those of the U.S.
Department of Commerce, (v) not to copy or reverse engineer any such Confidential Information, and (vi) that any
employee, subcontractor, or agent given access to any such Confidential Information must have a legitimate “need to
know” and shall be bound in writing to comply with the Receiving Party’s confidentiality obligations, whether
generally or specific to this Agreement.
9.8.2 Notwithstanding any provision in this Agreement to the contrary, each party may disclose Confidential
Information of the other party to the extent it is required to be disclosed pursuant to a valid order or requirement of a
governmental agency or court of competent jurisdiction.
9.8.3 CUSTOMER consents to the release by MGS of any or all Customer Data to Franchisor on Franchisor’s
request.
10. Representations and Warranties; Disclaimers; Limitations.
10.1 Mutual Warranties. Each party represents and warrants to the other that (a) it has all necessary right, power
and ability to execute this Agreement and to perform its obligations therein; (b) no authorization or approval from
any third party is required in connection with such party's execution, delivery or performance of this Agreement, (c)
this Agreement constitutes a legal, valid and binding obligation, enforceable against it in accordance with its terms,
(d) the party's obligations under this Agreement do not violate any law, policy or regulation or breach any other
agreement to which such party is bound; and (e) it has all right, title or interest, or valid license to use its respective
Trademarks, and that its grant of rights associated therewith do not violate any intellectual property or other
proprietary rights of any third party.
10.2 MGS Warranty.
10.2.1 With respect to the PaymentSite Services, MGS represents and warrants that the PaymentSite Services
provided to CUSTOMER hereunder will conform substantially to specifications set forth in the applicable Services
Documentation, as may be amended from time to time at MGS’s sole discretion1. The preceding warranty will not
apply if (a) any PaymentSite Services or products provided hereunder are used in material variation with this
Agreement or the applicable documentation; (b) any PaymentSite Services or products have been modified with the
prior written consent of MGS; or (c) a defect in any PaymentSite Services or products has been caused by any of
CUSTOMER’s malfunctioning equipment or software. CUSTOMER expressly acknowledges that the PaymentSite
Services are computer network-based services, which may be subject to outages, interruptions, attacks by third
parties and delay occurrences; provided, however, that this acknowledgement does not relieve MGS from its
obligations under Section 4.2 above or its indemnification obligations under this Agreement.
10.2.2 In the event CUSTOMER discovers that any PaymentSite Services or products are not in conformance with
the representations and warranties made in Section 10.2.1 and reports such non-conformity to MGS or if the
PaymentSite Services are subject to outages, interruptions, attacks by third parties and delay occurrences, MGS shall
use commercially reasonable efforts to remedy material interruptions and will provide adjustments, repairs and
replacements, within its capacity, that are necessary to enable the PaymentSite Services to perform their intended
functions in a reasonable manner .
10.2.3 DISCLAIMER. APART FROM THE EXPRESS WARRANTIES PROVIDED IN SECTION 10.2.1 , MGS DOES
NOT REPRESENT OR WARRANT THAT THE PAYMENTSITE SERVICES WILL BE AVAILABLE, ACCESSIBLE,
UNINTERRUPTED, TIMELY, SECURE, ACCURATE, COMPLETE, OR ENTIRELY ERROR-FREE. CUSTOMER
MAY NOT RELY UPON ANY REPRESENTATION OR WARRANTY REGARDING THE PAYMENTSITE SERVICES
BY ANY THIRD PARTY IN CONTRAVENTION OF THE FOREGOING STATEMENTS. EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 10.2.1 , MGS SPECIFICALLY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES, AND
CONDITIONS WHETHER EXPRESS OR IMPLIED, ARISING BY STATUTE, OPERATION OF LAW, USAGE OF
TRADE, COURSE OF DEALING, OR OTHERWISE, INCLUDING BUT NOT LIMITED TO, WARRANTIES OR
CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR
TITLE WITH RESPECT TO THE PAYMENTSITE SERVICES, OR OTHER SERVICES OR GOODS PROVIDED
UNDER THIS AGREEMENT. SUBJECT TO SECTIONS 2.2, 2.3, 4, and 12.1, CUSTOMER UNDERSTANDS AND
AGREES THAT MGS SHALL BEAR NO RISK WITH RESPECT TO CUSTOMER SALE OF PRODUCTS OR
SERVICES, INCLUDING, WITHOUT LIMITATION, ANY RISK ASSOCIATED WITH CREDIT CARD FRAUD OR
CHARGEBACKS.
10.3 CUSTOMER Warranties. CUSTOMER represents and warrants that:
10.3.1 All representations and statements made by CUSTOMER in this Agreement are true, accurate and complete
in all material respects. CUSTOMER hereby authorizes MGS to investigate and confirm the information submitted by
CUSTOMER herein. For this purpose, MGS may utilize credit bureau reporting agencies and/or its own agents.
10.3.2 CUSTOMER is engaged in a lawful business that includes the sale of products and/or services, and is duly
licensed to conduct such business under the laws of all jurisdictions in which CUSTOMER conducts business.
10.3 Third Party Programs. CUSTOMER acknowledges that the PaymentSite Services are designed for use with
certain third party programs, including, without limitation, certain Internet browser and software programs
developed and owned by third parties. CUSTOMER will look solely to the developers and manufacturers of such
programs with regard to warranty, maintenance or other support regarding the same. MGS does not warrant and
shall not be responsible for services or software provided by unaffiliated third party vendors. CUSTOMER authorizes
MGS to disclose to any third party vendor providing payment processing services on behalf of CUSTOMER
information concerning CUSTOMER solely to the extent required to deliver the requested service and solely in
compliance with Data Security Guidelines and Laws.
11. LIMITATIONS OF LIABILITY AND DISCLAIMERS.
11.1 LIMITATIONS. SUBJECT TO SECTION 11.3, UNDER NO CIRCUMSTANCES WILL: (A) EACH PARTY OR
ANY OF ITS PARENTS, AFFILIATES OR VENDORS (OR ANY OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS
OF THE PARTIES, OR ITS PARENTS, AFFILIATES OR VENDORS) BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (HOWEVER OR WHENEVER ARISING),
INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST REVENUE, LOST PROFITS, ANTICIPATED
PROFITS, LOST BUSINESS OR INJURY TO BUSINESS REPUTATION, COST OF PROCUREMENT OF
SUBSTITUTE SERVICES, UNDER ANY THEORY OF LIABILITY OR CAUSE OF ACTION WHETHER IN TORT
(INCLUDING NEGLIGENCE), CONTRACT OR OTHERWISE, REGARDLESS OF WHETHER IT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; OR (B) EACH PARTY’S TOTAL LIABILITY TO THE
OTHER, WHETHER ARISING IN TORT (INCLUDING NEGLIGENCE), CONTRACT OR OTHERWISE, UNDER
THIS AGREEMENT OR WITH REGARD TO ANY PRODUCTS OR SERVICES, EXCEED THE AGGREGATE
COMPENSATION MGS RECEIVED FOR PROVIDING THE PAYMENTSITE SERVICES TO CUSTOMER DURING
THE THIRTY (30) DAYS PRECEDING THE DATE ON WHICH THE CLAIM AROSE OR $1,000, WHICHEVER IS
LESS.
11.2 DISCLAIMER. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, CUSTOMER EXPRESSLY
AGREES THAT MGS SHALL NOT BE LIABLE FOR ANY LOSS ARISING FROM OR RELATED TO: (A)
CUSTOMER’S FAILURE TO PROPERLY ACTIVATE, INTEGRATE OR SECURE CUSTOMER’S MERCHANT
ACCOUNT; (B) FRAUDULENT TRANSACTIONS PROCESSED THROUGH CUSTOMER’S PAYMENT GATEWAY
ACCOUNT(S) WHERE THE FRAUDULENT TRANSACTIONS ARE DUE TO THE ACTIONS OR INACTIONS OF
CUSTOMER.
11.3 EXCLUSIONS.
11.3.1 The limitations set forth in Section 11.1(A) shall not apply to any liability arising from or relating to a breach of
Section 9.8.
11.3.2 The limitations set forth in Section 11.1(B) shall not apply to any liability arising from or relating to: (a) the
parties’ obligations to indemnify, hold harmless and defend hereunder; (b) any infringement, misappropriation or
other violation of any patents, copyrights, trade secrets, trademarks, or other intellectual property rights; (c) a party’s
breach of Section 9.8; or (d) violation of or failure to comply with any Laws.
11.3.2 The aggregate liability of each party for claims listed in Section 11.3.2 shall not exceed Ten Thousand Dollars
(US $10,000).
12. Indemnification.
12.1 Indemnification by MGS.
12.1.1 General. MGS shall defend, indemnify and hold CUSTOMER and any of CUSTOMER officers, directors,
agents and employees harmless from and against any and all third party claims, actions, proceedings, and suits and
all related liabilities, damages, settlements, penalties, fines, costs or expenses (including reasonable attorneys' fees
and other litigation expenses) incurred by CUSTOMER, arising out of or relating to (a) any breach or alleged breach
by MGS of any representation, warranty, or obligation of MGS set forth in this Agreement; or (b) any damage or loss
caused by negligence, fraud, dishonesty or willful misconduct by MGS or any of MGS employees or agents; (c) a
failure to properly deliver a Transaction or an Invoicing Services batch file to the Payment Processor complete and in
accordance with the instructions therefore; provided, however, that MGS is not responsible for a general Internet
failure (eg DNS issue; DOS or network failure outside the control of MGS) (d) material failure to perform its
obligations under Section 4.2; (e) any fraud or security breach affecting a Payment Transaction or an Invoicing
Services batch file during such time as MGS is responsible for the transaction, unless such fraud or security breach
was due to the actions of CUSTOMER or an employee, agent or contractor under CUSTOMER’s control or a failure by
CUSTOMER or an employee, agent or contractor under CUSTOMER’s control to comply with the Data Security
Guidelines.
12.2 Indemnification by CUSTOMER. CUSTOMER shall defend, indemnify, and hold harmless MGS and any of
its officers, directors, agents and employees, from and against any and all third party claims, actions, proceedings,
and suits and all related liabilities, damages, settlements, penalties, fines, costs or expenses (including reasonable
attorneys' fees and other litigation expenses) incurred by MGS, arising out of or relating to (a) any breach or alleged
breach by CUSTOMER of any representation, warranty, or obligation of CUSTOMER set forth in this Agreement; (b)
any damage or loss caused by negligence, fraud, dishonesty or willful misconduct by CUSTOMER or any of
CUSTOMER employees, agents or customers; or (c) claims by End Users, including, without limitation, claims
relating to the disclosure of consumer data unless such claims are covered by Section 12.1. In the event CUSTOMER’s
actions cause fines and/or penalties to be charged to MGS by the Payment Networks or any other entity, CUSTOMER
agrees to immediately reimburse MGS for said fines or penalties.
12.3 Indemnification Procedure. The obligations of each party (“Indemnitor”) under this Section 12 to defend,
indemnify and hold harmless the other party (“Indemnitee”) shall be subject to the following: (a) Indemnitee shall
provide Indemnitor with prompt notice of the claim giving rise to such obligation; provided, however, that any failure
or delay in giving such notice shall only relieve Indemnitor of its obligations under this section to the extent it
reasonably demonstrates that its defense or settlement of the claim or suit was adversely affected thereby; (b)
Indemnitor shall have control of the defense and of all negotiations for settlement of such claim or suit; and (c)
Indemnitee shall cooperate with Indemnitor in the defense or settlement of any such claim or suit, provided that
Indemnitee shall be reimbursed for all reasonable out-of-pocket expenses incurred in providing any cooperation
requested by Indemnitor. Subject to clause (b) above, Indemnitee may participate in the defense of any such claim or
suit at its own expense. Indemnitor shall not, without the consent of the Indemnitee, enter into any settlement that
reasonably can be expected to require a material affirmative obligation of, result in any ongoing material liability to,
or materially prejudice Indemnitee in any way.
13. General Provisions.
13.1 Publicity. The parties may work together to issue publicity and general marketing communications concerning
their relationship and other mutually agreed-upon matters, provided, however, that neither party will have any
obligation to do so. In addition, neither party will issue such publicity and general marketing communications
concerning this relationship or the PaymentSite Services without the prior written consent of the other party.
13.2 Non-exclusivity. Each party acknowledges and agrees that the rights granted to the other party in this
Agreement are non-exclusive, and that, without limiting the generality of the foregoing, nothing in this Agreement
shall be deemed or construed to prohibit either party from participating in similar business arrangements as those
described herein.
13.3 Relationship of the Parties. The parties are independent contractors and nothing in this Agreement shall
make them joint venturers, partners, employees, agents or other representatives of the other party. Neither party shall
make any representation that suggests otherwise.
13.4 Amendment; Modifications. No amendment, modification, or change to any provision of this Agreement or
any Appendix or Schedule, nor consent to any departure by either party therefrom, will in any event be effective
unless the same will be in writing and signed by the other party, and then such consent will be effective only in the
specific instance and for the specific purpose for which given.
13.5 Severability; Headings. If any provision of this Agreement is held to be invalid or unenforceable for any
reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The
parties agree to replace any invalid provision with a valid provision, which most closely approximates the intent and
economic effect of the invalid provision. Headings are used for convenience of reference only and in no way define,
limit, construe or describe the scope or extent of any section, or in any way affect this Agreement.
13.6 Governing Law. This Agreement and performance under it will be interpreted, construed and enforced in all
respects in accordance with the laws of the State of New York, as applicable to contracts made between residents of
New York, regardless of the laws which may otherwise be applicable under principles of conflicts of laws. The Parties
hereby agree that this Agreement shall not be governed by the United Nations Convention on Contracts for the
International Sale of Goods or by any applicable provisions of the Uniform Computer Information Transactions Act,
to the extent it is, or has been, adopted in a governing jurisdiction.
13.7 Waiver. The failure of any party to insist on or enforce strict performance of any provision of this Agreement or
to exercise any right or remedy under this Agreement or applicable law will not be construed as a waiver or
relinquishment to any extent of the right to assert or rely upon any such provision, right or remedy in that or any
other instance; rather, the same will be and remain in full force and effect. Waiver by either party of a breach of any
provision contained herein must be in writing, and no such waiver will be construed as a waiver of any other and/or
succeeding breach of such provision or a waiver of the provision itself.
13.8 Assignment; Subcontracting. Except as provided herein, neither Party shall assign this Agreement (whether
by operation of law or otherwise) without the prior written consent of the other Party. Any attempt to assign or
delegate this Agreement in violation of the foregoing shall be void and without effect. Notwithstanding any other
provision of this Agreement, either party may assign this Agreement without the approval of the other party to an
entity acquiring, directly or indirectly, control of party, an entity into which either party is merged, or an entity
acquiring all or substantially all of either party’s assets. The acquirer or surviving entity shall agree in writing to be
bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the successors and permitted assigns of the Parties. MGS shall not
subcontract the performance of any of MGS’s obligations under this Agreement to any third party without
CUSTOMER’s prior written consent, which consent shall not be unreasonably withheld. MGS shall ensure that any
approved subcontractor has executed an agreement in a form approved by CUSTOMER that is consistent with the
terms of this Agreement. Copies of approved subcontractor agreements shall be provided by MGS to CUSTOMER on
CUSTOM