Line-X
Date of Incorporation: March 3, 1999
Franchising Since: April, 1999
Address: California
Description: A Line-X business specializes in applying a Line-X brand spray-on coating that covers and protects truck beds and other light industrial products. A Line-X Business is identified by its trademarks. The majority of Line-X Franchise Development Corp. stock was acquired on August 23, 2005 by LFDC Holdings, Inc., a Delaware corporation, a wholly owned subsidiary of Line-X Acquisition, LLC, a Delaware limited liability company.
Franchise Offer: Line-X Development Corporation offer the opportunity to franchise a business that applies a LINE-X brand spray-on coating that covers and protects truck beds and other light industrial products. In addition, the franchisor has developed private-label coatings and other items and merchandise, trademarked products, which the franchisee will use in the franchised business.
Financial Assistance: The franchisor does not offer any direct or indirect financing nor do they guarantee any note, lease or obligation.
Training and Assistance: Initial training is provided at the franchisors headquarters or at another location that they designate. The training consists of up to 5 days at a location designated by the franchisor and up to 5 days at the franchisees’ location.
The franchisor may periodically provide and require that previously-trained and experienced franchisees and their managers and/or employees attend and successfully complete refresher training programs conducted at a location that they designate.
Territory: The franchisee will receive a territory within an area as defined in the Franchise Agreement. The franchisor will not establish or license another business utilizing the Line-X system and marks to market and apply LINE-X brand coatings for use on pick-up trucks in the franchisees’ territory. The territory will contain a minimum population of 50,000 and a maximum population of generally no more than 200,000 and will be defined by political boundaries such as state lines, county lines, city lines and United States Postal Zip Codes.
Term of Agreement and Renewal: The term of franchisee is 10 years. If the franchisee has substantially complied with all of the provisions in the franchise agreement, the franchisee can renew for up to 2 additional successive terms of 5 years each.
Obligations and Restrictions: The franchisee or the full-time manager must devote full-time energy and best efforts to the management and operation of the Franchised Business.
The franchisee must also offer for sale, promote, sell and provide at the Franchised Business, all types of coatings and related products and services that the franchisor authorizes. The franchisee may not offer for sale, sell or provide at the Franchised Business any other category of services or use the premises for any purpose other than in connection with the application of the LINE-X brand coating to cover and protect truck beds in full compliance with the Franchise Agreement unless the franchisor provides written approval.
Total Number of Units: Total number of franchised units for year ended 2007: 453
Investment Table:
Initial Investment:
| Name of Fee |
Low |
High |
|---|---|---|
| Initial Franchise Fee |
$30,000 |
$30,000 |
| Vehicles | $1,600 |
$16,000 |
| Real Estate/ 2 Months Rent |
$3,333 |
$7,500 |
| Utilities |
$0 |
$1,000 |
| Insurance |
$450 |
$1,800 |
| Training |
$1,500 |
$2,500 |
| Grand Opening Advertising |
$2,000 |
$3,000 |
| Leasehold Improvements |
$5,000 |
$10,000 |
| Office Equipment & Supplies |
$2,500 |
$3,500 |
| Initial Inventory |
$4,500 |
$5,500 |
| Equipment Package |
$39,950 |
$69,950 |
| Signage |
$4,000 |
$6,000 |
| Uniforms |
$250 |
$500 |
| Permits |
$100 |
$200 |
| Spray Booth |
$10,000 |
$20,000 |
| Additional Funds (For 3-6 Months) |
$25,000 |
$50,000 |
| Total |
$140,183 |
$252,450 |
Ongoing Fees:
| Name of fee | Amount |
|---|---|
| Royalty Fees | N/A |
| LINE-X Brand Coatings | Varies |
| Grand Opening Advertising | A minimum of $2,000 |
| Local Advertising | At least 3.5% of Net Sales |
| Advertising Fund | $0.10 per pound of Line-X brand coating the franchisee purchases. |
| Cooperative Advertising | Pro rata share, not to exceed 3.5% of Net Sales |
| Audit | Cost of audit plus interest on underpayment |
| Late Fees | The greater of the highest applicable legal rate for open account business credit, or 1.5% per month |
| Supplier/ Supplies Approval | Reasonable cost of inspection and actual cost of test not to exceed $2,000 |
| Advisory Council | Council assessments |
| Insurance Policies | Amount of unpaid premium |
| Transfer Fee | $8,500 for a transfer to a new LFDC franchisee; $2,500 for a transfer to an existing LFDC franchisee |
| Additional Manager Training | $400 per day plus expenses |
| Additional Assistance | $400 per day plus expenses |
| Continuing Education | The franchisee must pay the expenses as well as their employees' expenses in attending these programs |
| Operation of the Franchised Business in Case of the Franchisees’ Default | $500 per day plus expenses |
| Operation of the Franchised Business in Case of the Franchisees’ Absence, Incapacity or Death | $500 per day plus expenses |
| Cost of Enforcement or Defense | All costs including attorneys' fees |
| Indemnification | All costs including attorneys' fees |
| Modification of the System | Up to $5,000 per year for each year of the term, subject to the most recently published Consumer Price Index, as published by the United States Department of Labor, Bureau of Labor Statistics, which will be adjusted annually on January 1st |
The above information has been taken from the UFOC/FDD of Line-X Development Corporation.
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