MINNESOTA COMMERCE - Unhappy Franchisee

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percentage may only be exceeded with Mateo's prior written approval. Mateo also normally recommends that you setde the Time Payment accounts with the previous distributor only after you have had at least twenty-five (25) business days to evaluate the creditworthiness of the Time Payment accounts purchased. Upon mutual agreement of you and the previous distributor, payment is typically effected by a transfer of funds on deposit with Mateo from your Time Payment Reserve account to the previous distributor. There may be accounts with higher balances from the previous distributor that can be collected by you (without purchasing the accounts). The recommended policy on these higher balance time payment accounts allows you to keep 15% of the weekly collecdons and remit the remaining 85% to the previous distributor via the "Collected in behalf process in MDBS Software. This percentage may only be exceeded with Mateo's prior written approval. Computer Sofhvare License Expenses Mateo has developed computer software for the exclusive use of its distributors. Mateo's proprietary copyrighted software system, called the Mateo Distributor Business System ("MDBS Software"), is designed to assist you in minimizing paperwork, managing your List of Calls and route, handling inventory, receivables and order processing functions, and performing other tasks relating to operating the Distributorship. To ensure performance and software compatibility, your MDBS computer and software is restricted to your Mateo business related funcdons. For example, to protect your computer from viruses, worms and spyware of any nature and to insure that the MDBS Software is not compromised, your MDBS computer should not be used to browse the Internet for personal use, it should not be used for gaming, and other third-party sofhvare should not be loaded and executed on the computer. You must sign the Mateo Distributor Business System Software License, Maintenance and Support Agreement (the "Software License Agreement") attached to this Disclosure Document and pay Mateo the initial sofhvare license fee, which is currently $799, prior to the date you begin operadng your Distributorship. There will be a one-dme charge of an additional $100 for Hcensing Credit Card Processing Sofhvare that interfaces with the MDBS Sofhvare. The Software License Agreement is for an inidal term of one year, with automatic renewals for addidonal one year terms. Beginning with the second month of the Sofhvare License Agreement and each year thereafter, you will be required to pay an annual software maintenance fee, which is currently $400 for systems meedng Mateo's required specificadons. Begirming with the second anniversary of the date of the Software License Agreement, if you have a system that does not meet Mateo's required specifications, including manufacturer, model, configuradon, operadng system, virus protecdon and/or non-Matco-specified use of third-party software and Internet sites, the annual charge for systems maintenance and support will include, in addition to the $400 fee, an annual charge of $400 until you comply, to Mateo's sadsfaction, with Mateo's required and exact PC configuradon and/or removal of non-Matco specified third party software. Computer software license expenses are non-refundable, and are uniformly imposed on all distributors. Web Page Set-Up Fee Mateo has established a Website for the endre system and offers you a web page (or subpage) on Mateo's Website. You are required to sign the Mateo Tools Web Page Agreement (Exhibit Q to the Distributorship Agreement). Under this Agreement, you will have your own subpage on Mateo's website. Also, you must pay Mateo a one-dme web page set-up fee of $ 195 at the execudon of the Web Page Agreement. Document Processing Fee When you elect to start a Mateo franchise, Mateo will prepare franchiseand financial documents for you to review and execute, and, if necessary, will file applicable documents with state agencies as required. The processing/filing fees will be $99. You must pay this fee to Mateo upon signing the Distributorship Agreement. Incendve Programs VetFran Program. Mateo participates in the VetFran Program (Veterans Transition Franchise Initiative) that 11 Mateo 21112_FDD/PK 55575.1251 l2i9QlLS 02/09/4412
was established by the International Franchise Association in cooperadon with the U.S. Department of Veterans Affairs, the Veterans Corporation, and the U.S. Small Business Administration. Mateo will provide to each new disdibutor who is an honorably-discharged U.S. veteran $5I£,000 of hand tools (valued at list price) at no charge. Mateo will require proof of eligibility from those prospecdve distributors who wish to take advantage of the incentives offered under the VetFran Program. Drug Testing Policy For Prospective <strong>Franchisee</strong>s/Distributors. As of April I, 2009, Mateo implemented a drug testing policy for prospective franchisees/distributors.If you are interested in acquiring a Mateo franchise,and you proceed successfully through die applicadon process, before we grant a franchiseto you, you must take and pass a drug test. The test, which is cuirendy intended to test for alcohol and illegal drugs, will be administered by a third party testing company, and the results will be provided to you and to Mateo. It will be administered at a facility within a reasonable distance from your home, and you must take the test within 5 days of our nodce to you. The current cost of the test, or lab fee, is less thanapproximately $50 per test, and we expect that-the eost will be S35 per applicant. If you fail the test, you will not be granted a franchise,and you will not be required to pay the fee. If you pass the test, you will be granted a franchise,and the cost of the test, or lab fee, will be charged to your "Open Purchase Account" (or "OPA"), and will be repaid over time based on your collecdons or revenues in your business. In connection with your application for the Mateo franchise,in addidon to the applicadon forms, credit check authorizadon, and other documents, you must sign a consent to the alcohol and drug testing. A copy of our current consent form is attached to this Disclosure Document as Appendix I. For New/Existing <strong>Franchisee</strong>s/Distributors (during the term of the franchise). As noted above, as of April I, 2009, Mateo implemented a drug testing policy for prospecdve franchisees/distributors.In addidon, Mateo Tools implemented a drug testing policy for franchisees/distributors who are new to Mateo beginning on or after April 1, 2009, or otherwise sign a Distributorship Agreement with Mateo in 2009 or in the future. In addition to the drug testing for prospecdve franchisees/distributors,exisdng franchisees/distributorsmust undergo periodic or random alcohol and drug tesdng, at Mateo's direcdon. You must sign a consent to the drug testing that will apply during the term of your Distributorship. Mateo will bear the cost of any testing or lab fees. Also, in the event you fail a drug or alcohol test, Mateo will have the right to terminate your Distributorship. (6) OTHER FEES Type of Fee' ,(1) Amount Due Date Remarks Minimum Inventory Purchases Maintain an inventory of Products at least equal to the starter inventory; 80% of the lesser of the Nadonal Distributor Purchase Average or the District Distributor Purchase Average; and maintain a ratio of purchase average to total sales of at least 60%*^* Weekly See Items 8 and 12 Computer Maintenance and Support Charge*^* $400 or $800 Annually See Items 5 and 7 Addidonal Training Fee (for spouse) $295 On or before training starts See Item 11 Mateo 2!li2.FDD/PK S^??5743544442tmX .12, ili/09/44j[2
Page 1 and 2: MINNESOTA DEPARTMENT OF COMMERCE 85
Page 3 and 4: UNIFORM FRANCHISE REGISTRATIOK-^gpD
Page 5 and 6: MAR - 8 2012 Mr. Daniel E. Sexton P
Page 7 and 8: UNIFORM FRANCHISE CONSENT TO SERVIC
Page 9 and 10: NMTC, INC. d/b/a MATCO TOOLS FRANCH
Page 11 and 12: FR.\NCHISE DISCLOSURE DOCUMENT NMTC
Page 13 and 14: STATE COVER PAGE Your state may hav
Page 15 and 16: Mateo® Tools FRANCHISE DISCLOSURE
Page 17 and 18: Document. Mateo's affiliates have n
Page 19 and 20: The informadon in this Disclosure D
Page 21 and 22: Communicadons, District Business Ma
Page 23 and 24: damages in the amount of $500,000 a
Page 25: Time Payment Reserve You must, at t
Page 29 and 30: manufacturer, model, configuration
Page 31 and 32: Mateo will finance up to $72,000 (w
Page 33 and 34: include items such as work uniforms
Page 35 and 36: charge fees to suppliers seeking to
Page 37 and 38: Obligation (x) Dispute resolution S
Page 39 and 40: you a late fee of 5% per week for e
Page 41 and 42: who may be potentiol-eustemers for
Page 43 and 44: egional trainers employed by Mateo.
Page 45 and 46: (B) (C) (D) (E) (F) Mateo provides
Page 47 and 48: policy. Mateo will revise its tool
Page 49 and 50: (B) make personal sales calls on at
Page 51 and 52: your Distributorship business. conf
Page 53 and 54: Provision Section in Distributorshi
Page 55 and 56: Provision Noncompetition covenants
Page 57 and 58: Mateo's 1,006134 Distributors repor
Page 59 and 60: 40rExeep^-as----(:Uselosed~sbove;--
Page 61 and 62: State (Note 2) Year Number of Trans
Page 63 and 64: Table 3 Status of Franehised Outlet
Page 65 and 66: State Year Outlets at Start of Year
Page 67 and 68: state Year Outlets at Start of Year
Page 73 and 74: Attached as Appendix B is a list of
Page 75 and 76: MATCO TOOLS FRANCHISE DISCLOSURE DO
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NMTC, Inc. and Subsidiaries Consoli
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NMTC, Inc. and Subsidiaries Notes t
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Ernst & Young LLP Assurance | Tax |
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MATCO TOOLS FRANCHISE DISCLOSURE DO
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PM01701 Run Date :12/30/ll State Di
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PM01701 Run Date :12/30/11 State Di
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M01701 Run Date :12/30/ll Jtate Dis
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PM01701 Run Date :12/30/11 State Di
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PM01701 Run Date ;12/30/ll State Di
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PM01701 Run Date :12/;30/ll State D
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PM01701 Run Date :12/30/n State Dis
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MATCO TOOLS DISTRIBUTORSHIP AGREEME
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ARTICLE 5 5.1 5.2 5.3 5.4 5.5 ARTIC
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Exhibit A Exhibit B Exhibit C Exhib
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variety of reasons^ .which may incl
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the Distributor agrees to sign and
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in Section 4.1, before operating th
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invoice from Mateo, Distributor's O
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purchase said insurance on Distribu
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ARTICLE 7 TRADEMARKS, TRADE NAMES A
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specifications, techniques, compute
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11.34 Notice; Cure Periods. Mateo w
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ARTICLE 12 DISPUTE RESOLUTION 12.1
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shareholders. Spouse, and person a
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(A) "Abandon" will mean the conduct
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MATCO TOOLS LIST OF CALLS AND POTEN
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Z^.M1Z Tools INSTALLMENT PROMISSORY
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SECURITY AGREEMENT APPENDIX D EXHIB
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16. MISCELLANEOUS. This Security Ag
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(b) All credit documents presented
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10. This Agreement shall be binding
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(b) Distributor guarantees that Ass
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BUYER ACKNOWLEDGES RECEIPT OF THE G
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Terms and conditions of Sale/Securi
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MATCO TOOLS DISTRIBUTOR'S PURCHASE-
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(c) Distributor shall not, without
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Appendix D Exhibit K-1 Mateo Tools
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Appendix D Exhibit K-2 Mateo Tools
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MATCO TOOLS DISTRIBUTOR LEASE AGREE
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MATCO TOOLS NMTC, Inc. d/b/a MATCO
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¥^5£i NMTC, Inc, d/b/a/ MATCO TOO
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MATCO TOOLS MATCO DISTRIBUTOR BUSIN
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The Distributor is fiirther respons
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11. ENTIRE AGREEMENT. This Agreemen
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APPENDIX D EXHIBIT P GUARANTEE. IND
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APPENDIX D EXHIBIT Q MATCO WEB PAGE
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4.3 Matco shall own all rights in a
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9. Entire Agreement This Agreement,
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MATCO TOOLS FRANCHISE DISCLOSURE DO
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conceming advertising, marketing, m
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STATE AGENCY EXHIBIT APPENDIX F TO
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AGENTS FOR SERVICE OF PROCESS APPEN
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STATE-SPECIFIC DISCLOSURES AND STAT
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Hawaii Distributorship Agreement Am
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Illinois Distributorship Agreement
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Maine Disclosure Addendum THE INFOR
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Maryland Disclosure Addendum Item 1
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IN WITNESS WHEREOF, each of the und
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(F) (G) A PROVISION REQUIRING THAT
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Minnesota Disclosure Addendum Item
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North Carolina Distributorship Agre
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North Dakota Disclosure Addendum In
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Rhode Island Distributorship Agreem
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Washington Distributorship Agreemen
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MATCO DISTRIBUTOR CONSENT TO ALCOHO
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MUTUAL RELEASE AGREEMENT APPENDIX J
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demands, liabilities, and causes of
Page 263 and 264:
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Matco Tools Ride-Along Acknowledgem
Page 267 and 268:
RECEIPT ^To Be ReHirned «o Matcn T
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MINNESOTA COMMERCE - Unhappy Franchisee

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