FRANCHISE AGREEMENT

FRANCHISE AGREEMENT



This Agreement, made this _____ day of _____________, 19_____, by and between FACTUAL DATA CORP a corporation formed and operating under the laws of the State of COLORADO, having its principal place of business at 3665 J.F.K. Parkway, Building 1, Suite 200, Fort Collins, Colorado, 80525 (hereinafter referred to as "FRANCHISOR"), and: __________________________________________ in the City of _________________________, in the State of _______________, (hereinafter referred to as "FRANCHISEE").



WITNESSETH:



WHEREAS as the result of the expenditure of time, effort and money, FRANCHISOR has acquired unique experience, special skills, technique and knowledge with reference to the development, opening and operating of FACTUAL DATA. The FRANCHISEE acknowledges that he does not presently know the special skills, techniques or business policies, nor does the FRANCHISEE have business forms or access to the FRANCHISOR'S body of knowledge; and



WHEREAS FRANCHISOR has devised a standard, unique and uniform system for the establishment, operation and development of such a business with distinctive features in the product, services, production, distribution, accounting, and comprehensive management assistance, which system is identified by the mark, FACTUAL DATA; and



WHEREAS FRANCHISOR is the owner of the entire right, title and interest, together with all the goodwill connected therewith, in and to the service and trademarks, FACTUAL DATA services and the business operated under such system and in its name; and



WHEREAS all of the foregoing having a distinctive and valuable significance to the public, and FRANCHISEE, being cognizant thereof, desires to make use of the name, "FACTUAL DATA", and to enjoy the commercial benefits of the merchandising system and operating services related thereto;



WHEREAS the FRANCHISEE understands that information received from the FRANCHISOR or from any of its officers, employees, agents or franchisees is confidential and has been developed with a great deal of effort and expense. FRANCHISEE acknowledges that the information is being made available to him so that he may more effectively establish and operate a FACTUAL DATA franchise.



WHEREAS the FRANCHISOR has and will continue to license others to use its servicemarks in connection with the operation of FACTUAL DATA offices at FRANCHISOR approved locations;



WHEREAS the FRANCHISEE acknowledges that he received the FRANCHISOR'S Franchise Offering Circular at or prior to the first personal meeting with a FRANCHISOR representative and at least ten business days prior to the signing of this agreement;



WHEREAS the FRANCHISEE acknowledges that he understands that the success of the business to be operated by him under this agreement depends primarily upon his efforts and that neither the FRANCHISOR or any of its agents or representatives have made any oral, written or visual representations or projections of actual or potential sales, earnings, net or gross profits.



NOW THEREFORE, the parties hereto intending to be legally bound in consideration of the mutual agreements, covenants and promises contained herein, do hereby agree as follows:





I. APPOINTMENT AND FRANCHISE FEE



A. FRANCHISOR hereby grants unto FRANCHISEE the right to use the mark, "FACTUAL DATA", and the right, franchise and privilege to use "FACTUAL DATA CORP" procedures, methods and techniques in the operation of a "FACTUAL DATA" office, under the specific conditions hereinafter set forth, at one office only, to be located at a site approved by the FRANCHISOR and the FRANCHISEE. This location shall be the FRANCHISEE'S primary area of responsibility.



B. FRANCHISOR will not, so long as this Agreement is in force and effect and FRANCHISEE is not in default under any of the terms hereof, enfranchise or operate any other "FACTUAL DATA" Business for the same area as that granted to FRANCHISEE.



C. FRANCHISEE shall pay to FRANCHISOR ( $.00), based on the population of FRANCHISEE'S territory, in return for which FRANCHISEE shall receive all the rights to do business in the counties of Broward, Dade, Collier, Hendry, Lee and Monroe as a licensed "Factual Data" FRANCHISEE, subject to compliance by the FRANCHISEE with the terms of this Agreement.



D. Every franchise is directly related to a specific place of business for a designated city, town, or other defined area. Each franchise is an exclusive grant of a license solely in relation to such place of business.



E. FRANCHISOR transfers to FRANCHISEE all items attached hereto and made a part of this Agreement.



In order for the FRANCHISEE to operate a "FACTUAL DATA" franchise in an additional location, a separate Franchise Agreement must be signed and an additional franchise fee will be required.



II. LOCATION



A. FRANCHISOR agrees to analyze FRANCHISEE'S market area, to determine site feasibility, and to designate the franchise location (subject to FRANCHISEE'S approval of the same). When FRANCHISOR agrees to designate a location, nothing contained herein shall be interpreted as an ultimate guarantee of success for said location.



B. Following designation and approval of the location, FRANCHISOR agrees that upon request of the FRANCHISEE, it will aid the FRANCHISEE in the negotiation for the location, and in suggestions for layout and design of a typical franchise place of business.



C. Nothing in the foregoing shall prevent the FRANCHISEE from acquiring, leasing, or developing such a location independent of the FRANCHISOR. The use of the FRANCHISOR'S suggestions and specifications is not included in the price of this franchise, and the FRANCHISEE shall therefore not be entitled to any reduction in the price of the franchise if he uses his own design and services.



D. The FRANCHISEE's primary area of responsibility described by a geographical area is outlined in Exhibit H attached hereto and made a part hereof.





III. PROPRIETARY MARKS



A. FRANCHISEE acknowledges that the name, "FACTUAL DATA", is a valid service and/or trademark owned by FRANCHISOR, and that only the FRANCHISOR or its designated











FRANCHISEES have the right to use such trademark and such other trademarks, servicemarks and tradenames as may exist or be acquired by FRANCHISOR. FRANCHISEE further acknowledges that valuable goodwill is attached to such trademarks, servicemarks and tradenames, and that he will use same only in the manner and to the extent specifically licensed by this Agreement.



1. FRANCHISEE understands and agrees that his license under said Proprietary marks is non-exclusive, and that FRANCHISOR, in its sole discretion, has the right itself to operate businesses under said marks, and to grant other licenses in, to and under said marks, and to grant other licenses in, to and under such Proprietary marks on any terms and conditions FRANCHISOR deems fit; provided, however, that FRANCHISOR agrees to abide by the provisions of Paragraph I.B. of this Agreement.



2. FRANCHISEE expressly covenants that during the term of this Agreement, and after the expiration or termination thereof, FRANCHISEE shall not directly or indirectly contest or aid in contesting the validity or ownership of Proprietary marks and copyrights.



3. FRANCHISEE agrees to promptly notify FRANCHISOR of any claim, demand, or suit based upon or arising from, or of any attempt by any other person, firm, or corporation, to use the service and/or trademarks licensed hereunder, or any trademark, service mark, symbol, trade name, copyright, or colorable variation thereof, in which FRANCHISOR has a proprietary interest. FRANCHISEE agrees also to promptly notify FRANCHISOR of any litigation instituted by FRANCHISEE, or by any person, firm, corporation or governmental agency against FRANCHISEE. In the event FRANCHISOR, pursuant to the terms of Paragraph III, undertakes the defense or prosecution of any litigation, FRANCHISEE agrees to execute any and all documents and do such acts and things as may, in the opinion of counsel for FRANCHISOR, be necessary to carry out such defense or prosecution, either in the name of FRANCHISOR or in the name of FRANCHISEE, as FRANCHISOR shall elect.



4. In the event any of the FRANCHISOR'S servicemarks or trademarks (registered or unregistered) are challenged by third parties claiming infringement of alleged prior or superior rights in such marks, FRANCHISOR shall have the option and right to modify or discontinue use of its servicemarks or trademarks and adopt substitute servicemarks or trademarks in the FRANCHISEE'S geographical business areas and in such other areas as the FRANCHISOR chooses. The FRANCHISOR'S liability to the FRANCHISEE under such circumstance shall be limited to the cost of replacement of the FRANCHISEE'S signs and advertising materials in effecting such modifications, discontinuance or adoption of substitute service marks or trademarks.



B. FRANCHISEE shall not use the word "FACTUAL DATA" as part of its corporate or other business name. FRANCHISEE shall not license, register or purchase vehicles, fixtures, products, supplies or equipment, or perform any other activity or incur any obligation or indebtedness except in his individual, corporate or other business name. FRANCHISEE may, however, identify itself as a "FACTUAL DATA" Franchise as prescribed in the Operating Manual.



C. FRANCHISEE understands and acknowledges that each and every detail of the "FACTUAL DATA" Franchise is important to FRANCHISOR, to FRANCHISEE, and to other licensed "FACTUAL DATA" franchisees in order to develop and maintain uniformity of services, and therefore, to enhance the reputation, trade demand and goodwill of "FACTUAL DATA", FRANCHISEE accordingly covenants:



1. To operate, advertise and promote his franchise under the name, "FACTUAL DATA" without prefix or suffix; and



2. To adopt and use the Proprietary Marks licensed hereunder solely in the manner prescribed by FRANCHISOR; and











3. To carry out his business under said Proprietary marks in accordance with operational standards established by FRANCHISOR, and as set forth in the Operating Manual and/or other documents, if such a Manual or other documents are provided to the FRANCHISEE.



D. In order to preserve the validity and integrity of the Proprietary Marks licensed herein, and to assure that FRANCHISEE is properly employing the same in the operation of its franchise, FRANCHISOR or its agents shall at all reasonable times have the right to entry and inspection of FRANCHISEE'S premises, and, additionally, shall have the right to observe the manner in which FRANCHISEE is rendering its services, to confer with FRANCHISEE'S employees and clients, and to suggest products and services for testing and evaluation in order to make certain that they are satisfactory with the quality control provisions established by the FRANCHISOR.





IV. TRAINING AND ASSISTANCE





A. FRANCHISOR shall make available to FRANCHISEE or FRANCHISEE'S designated manager, and FRANCHISEE or its manager shall attend and successfully complete, prior to opening for business, a twenty (20) working day training and familiarization course at such places and for such lengths of time as FRANCHISOR shall designate. Said training program shall cover all aspects of the operation of a "FACTUAL DATA" franchise. Room, board and travel expenses during this period shall be borne by FRANCHISEE.



B. During the first month of operation of FRANCHISEE'S "FACTUAL DATA" business, FRANCHISOR will furnish to FRANCHISEE , one of FRANCHISOR'S representatives for the purpose of facilitating the opening of the FRANCHISEE'S Factual Data office. Such representative will also assist FRANCHISEE in establishing and standardizing procedures and techniques essential to the operation of a distinctive "FACTUAL DATA" business, and, if necessary and requested by the FRANCHISEE, shall assist in hiring and training FRANCHISEE'S personnel at FRANCHISEE'S expense.



C. FRANCHISOR may, but shall not be required to, provide a continuing advisory service which shall include, but not be limited to, consultation on promotional, business, or operational problems with analysis of FRANCHISEE'S sales, marketing, and financial data.



D. FRANCHISOR shall initially, and from time to time when available, offer to FRANCHISEE materials and bulletins on sales, marketing developments, products and techniques either without charge or according to the then current price list.



E. FRANCHISOR will provide FRANCHISEE a marketing representative for on-site consultation during 10 working days of the franchise.





V. ADVERTISING FEES AND CONTROLS



A. FRANCHISEE shall determine when business development expense is necessary for advertising. FRANCHISOR is not bound to provide any advertising to FRANCHISEE.



B. Recognizing the value of advertising and the importance of the standardization of advertising and promotion to the furtherance of the goodwill and public image of "FACTUAL DATA", FRANCHISEE agrees to submit to FRANCHISOR or its designated agency, for its prior approval, all sales promotion materials and advertising to be used by FRANCHISEE, including, but not limited to, newspapers, radio and television advertising, specialty and novelty items. In the event written or oral disapproval of said advertising and promotional material is not received by FRANCHISEE from FRANCHISOR or its designated agency within fifteen (15) days from the date such material is submitted to and received by FRANCHISOR, said materials shall be deemed approved.











Failure by FRANCHISEE to conform with the provisions herein and subsequent non-action by FRANCHISOR to this failure and default shall not be deemed as a waiver of further or additional failures and defaults. The submission of advertising to FRANCHISOR for approval shall not affect FRANCHISEE'S right to determine the prices at which FRANCHISEE sells its services.



C. FRANCHISEE shall not advertise or use in advertising or any other form of promotion, the trademarks of FRANCHISOR without appropriate C, TM or R copyright and registration marks.



D. FRANCHISOR may, but is not required to, advertise for Factual Data and its business outlets.





VI. CONFIDENTIAL OPERATING MANUAL



A. In order to protect the reputation and goodwill associated with the mark, "FACTUAL DATA", and to maintain the uniform standards of operation thereunder, FRANCHISEE shall conduct its "FACTUAL DATA" franchise in strict accordance with FRANCHISOR'S Operating Manual.



B. FRANCHISEE shall at all times treat as confidential, and shall not at any time disclose, copy, duplicate, record or otherwise reproduce, in whole or in part, or otherwise make available to any unauthorized person or source, the contents of said Manual.



C. The Operating Manual shall at all times remain the sole property of FRANCHISOR and shall promptly be returned upon the expiration or other termination of this Agreement. Upon sale to a new FRANCHISEE, all materials will be made available to the purchaser after all purchase and Franchise contracts are completed.



D. FRANCHISOR may, from time to time, revise the contents of said Manuals to convey to FRANCHISEE advancements and new developments in sales, marketing, operational techniques and other items and procedures relevant to the operation of a "FACTUAL DATA" franchised business.





VII. ACCOUNTING AND RECORDS



A. To enable FRANCHISEE and FRANCHISOR to best ascertain their costs and maintain an economical method of operation, FRANCHISEE agrees to keep and preserve, at its cost, during the term of the franchise granted hereunder, full, complete, and accurate books and accounts in an accounting form and manner as prescribed in the Operating Manual. At the request of FRANCHISEE, FRANCHISOR will furnish a list of recommended accounting firms who meet the standards and requirements of FRANCHISOR.



B. FRANCHISEE shall submit to FRANCHISOR such periodic reports, forms and records, at its sole cost, as specified and in the manner and at the time as specified in the Operations Manual.



C. FRANCHISOR'S representatives shall have the right at any time to inspect FRANCHISEE'S books, records, and cash control devises or systems.





VIII. STANDARDS OF QUALITY



A. FRANCHISEE recognizes that it is essential to the proper marketing of "FACTUAL DATA" and to the preservation and promotion of its reputation and acceptance by the public at large, that uniform standards of quality and of appearance be maintained; that uniform size, quality, texture,











absorbency, strength, finish, and appearance, displaying FRANCHISOR'S various Proprietary Marks, be used in distribution to the public. FRANCHISEE therefore agrees, as part of the consideration for this Agreement, that FRANCHISEE will at all times dispense, sell, or offer for sale to the public, only such services as shall meet the reasonable specifications and standards from time to time designated in writing by FRANCHISOR for sale and service from or at the "FACTUAL DATA" business licensed herein; and FRANCHISEE shall sell, serve and dispense all such services as shall meet all such specifications and standards designated by FRANCHISOR.



B. FRANCHISEE shall purchase all printed material required for the operation of the "FACTUAL DATA" franchise licensed herein from FRANCHISOR through requisition procedures set forth in the Operations Manual.





IX. MODIFICATION OF THE SYSTEM



FRANCHISEE recognizes and agrees that from time to time hereafter FRANCHISOR may change or modify the system presently identified by the mark "FACTUAL DATA", including the adoption and use of new or modified trade names, trademarks, service marks or copyrighted materials, new products, new equipment or new techniques, and that FRANCHISEE may accept, use and display for the purpose of this Agreement any such changes in system, including new or modified trade names, trademarks, service marks or copyrighted materials, new products, new equipment or new techniques, as if they were part of this Agreement at the time of execution hereof. FRANCHISEE may make such expenditures as such changes or modifications in the system may reasonably require, and do so within a reasonable time.





X. CONTINUING SERVICES AND ROYALTY FEE



A. FRANCHISEE shall pay to FRANCHISOR, so long as this Agreement shall be in effect, a Continuing Services and Royalty Fee (equal to a percentage in accordance with the Table below) per mortgage credit report ("unit") made by FRANCHISEE'S gross sales derived from the "FACTUAL DATA" Business franchised hereunder. Said royalty is to be paid monthly in the manner specified below or as otherwise prescribed in the Operations Manual.



TABLE OF ROYALTY CHARGES



Number of Units Sold Per Month Percentage of Gross Sales



Number of Units Sold Per Month



5% of Gross sales sold per month



* ON ALL UNITS SOLD THAT MONTH



The FRANCHISEE acknowledges that the above ...