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@WIRELESS ENTERPRISES, INC.

INFORMATION FOR PROSPECTIVE FRANCHISEES


REQUIRED BY THE FEDERAL TRADE COMMISSION
TO PROTECT YOU, WE'VE REQUIRED YOUR FRANCHISOR TO GIVE
YOU THIS INFORMATION. WE HAVEN'T CHECKED IT, AND DON'T
KOW IF IT'S CORRECT. IT SHOULD HELP YOU MAKE UP YOUR
MIND. STUDY IT CAREFULLY. WHILE IT INCLUDES SOME
INFORMATION ABOUT YOUR CONTRACT, DON'T RELY ON IT
ALONE TO UNDERSTAND YOUR CONTRACT. READ ALL OF YOUR
CONTRACT CAREFULLY. BUYING A FRANCHISE IS A
COMPLICATED INVESTMENT. TAKE YOUR TIME TO DECIDE. IF
POSSIBLE, SHOW YOUR CONTRACT AND THIS INFORMATION TO
AN ADVISOR, LIKE A LAWYER OR AN ACCOUNTANT. IF YOU FIND
ANYTHING YOU THINK MAY BE WRONG OR ANYTHING
IMPORTANT THAT'S BEEN LEFT OUT, YOU SHOULD LET US KNOW
ABOUT IT. IT MAY BE AGAINST THE LAW.
THERE MAY ALSO BE LAWS ON FRANCHISING IN YOUR STATE.
ASK YOUR STATE AGENCIES ABOUT THEM.
FEDERAL TRADE COMMISSION
Washington, D.C. 20580
ISSUANCE DATE: MARCH 31, 2004
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OFFERING CIRCULAR FOR PROSPECTIVE FRANCHISEES
@WIRELESS ENTERPRISES, INC.
(a Delaware Corporation)
50 Methodist Hill Drive, Suite 1500
Rochester, New York 14623
(585) 359-3390
The tranchlse ottered is to open an @WIRELESS store. @WIRELESS stores provide the
sale of cellular telephones, pagers and wireless cable units, wireless and cellular handsets,
satellite systems, and paging, GPS, wireless data, and interet products and accessories, and the
sale of cellular telephone services, pager services and other related goods and services.
The initial fanchise fee is $15,000 for each Franchise Ageement siged. The estimated total
initial investment required, including the initial franchise fee and additional fnds, is $83, I 00 -
$150,700, not including real estate costs. See Item 7 . You must also pay certain ongoing fees
and expenses. See Item 6.
If you enter into an Area Development Agreement, you will have the option to operate more than
one @WIRELESS store. Each @WIRELESS store will be operated under a separate
Franchise Agreement. The initial fanchise fee is $15,000 for each store. For more information
on the initial franchise fee and initial investment, see Items 5 and 7.
RISK FACTORS:
1. THE FRANCHISE AGREEMENT REQUIRES THAT THE PARTIES
ARBITRATE I THE PRINCIPAL CITY CLOSEST TO THE FRANCHISOR'S
PRINCIPAL PLACE OF BUSINESS AT THE TIME OF THE START OF
ARBITRATION. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A
LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU
MORE TO ARBITRATE WITH THE FRANCHISOR IN NEW YORK THAN IN YOUR
HOME STATE.
2. THE FRANCHISE AGREEMENT REQUIRES THAT ANY LEGAL
ACTIONS BE BROUGHT IN THE PRINCIPAL CITY CLOSEST TO THE
FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS. OUT OF STATE LEGAL
ACTIONS MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT
FOR DISPUTES. IT MAY ALSO COST MORE TO SUE THE FRANCHISOR IN NEW
YORK THAN I YOUR HOME STATE.
3. THE FRANCHISE AGREEMENT STATES THAT NEW YORK 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.
4. WE MAY TERMINATE YOUR FRANCHISE IF YOU PURCHASE
GOODS OR SERVICES THAT ARE NOT ACCORDING TO OUR SPECIFICATIONS
OR THAT A NOT FROM OUR APPROVED SUPPLIERS.
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5. AS PER THE AUDITED BALANCE SHEET DATED DECEMBER 31,
2003, DECEMBER 31, 2002, AND DECEMBER 31, 2001, THE FRANCHISOR HAD A
WORKING CAPITAL SURPLUS /(DEFICIENCY) OF $402,439, $202,971, AND
($163,648), RESPECTIVELY.
6. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Infonnation about comparisons of fanchisors is available. Call the state administrators
listed in Exhibit A of this ofering circular or your public library for sources of infonnation.
Registration of this fanchise by a state does not mean that the state recommends it or has
verifed the infonnation in this ofering circular. If you lear that anything in this offering
circular is untrue, contact the Federal Trade Commission and the state administator listed in
Exhibit A.
THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT
ITEMS COVERED IN THE PROSPECTUS. HOWEVER, THE FRANCHISOR
CANNOT USE THE NEGOTIATIG PROCESS TO PREVAIL UPON A
PROSPECTIVE FRANCHISEE TO ACCEPT TERMS WHICH ARE LESS
FAVORABLE THAN THOSE SET FORTH IN THIS PROSPECTUS.
Issued Date: March 31, 2004
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@WIRELESS
FRANCHISE OFFERING CIRCULAR
TABLE OF CONTENTS
ITEM PAGE
I. THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES .................................. 1
2. BUSINESS EXPERIENCE ................................................................................................ 3
3. LITIGATION ...................................................................................................................... 4
4. BANKRUPTCY ................................................................................................................. 4
5. INITIAL FRANCHISE FEE ............................................................................................... 4
6. OTHER FEES ..................................................................................................................... 5
7. INITIAL INVESTMENT ................................................................................. .................. 9
8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES ........................... 12
9. FRANCHISEE'S OBLIGATIONS .................................................................................. 14
10. FINANCING ..................................................................................................................... 15
11. FRANCHISOR OBLIGATIONS ..................................................................................... 15
12. TERRITORY .................................................................................................................... 23
13. TRADEMARKS ............................................................................................................... 24
14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION ........................... 26
15. OBLIGATION TO PARTICIPATE IN THE ACTUAL
OPERATION OF THE FRANCHISE BUSINESS .............................................. 27
16. RESTRICTIONS ON WHAT YOU MAY SELL ............................................................ 27
17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION .............. 28
18. PUBLIC FIGURES ........................................................................................................... 33
19. EARNINGS CLAIMS ...................................................................................................... 34
20. LIST OF OUTLETS ......................................................................................................... 34
21. FINANCIAL STATEMENTS .......................................................................................... 37
22. CONTRACTS.......................................... ......................................................................... 37
23. RECEIPTS ........................................................................................................................ 38
EXHIBITS:
A. STATE ADMINISTRATORS
B. AGENT FOR SERVICE OF PROCESS
C. FINANCIAL STATEMENTS
D. FRANCHISE AGREEMENT
E. AREA DEVELOPMENT AGREEMENT
F. CALIFORNIA ADDENDUM
G. LIST OF CURRENT FRANCHISEES
H LIST OF TERMINATED FRANCHISEES
I. FRANCHISE DISCLOSURE QUESTIONNAIRE
J. RECEIPTS
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Description
Item 1
THE FRANCHISOR. ITS PREDECESSORS AND AFFILIATES
To simplif the language of this ofering circular, "we," "us," or "@Wireless" refers to
@Wireless Enterprises, Inc., the franchisor. "You" refers to a franchisee who enters into a
fanchise ageement. The franchisee may be a person, corporation, partnership or limited
liability company. If the fanchisee is a corporation, partnership or limited liability company,
''you'' does not include the principals of the corporation, partnership or limited liability company.
@Wireless was incorporated in Delaware on August 26, 1999. Our principal business
address is 50 Methodist Hill Drive, Suite 1500, Rochester, New York 14623. We do business
under the name "@Wireless" or "@Wireless Enterprises" and under no other name. Our agents
for service of process are listed in Exhibit 8.
On January 26, 2000, @Wireless Enterprises merged with Cellular Unlimited USA, Inc.,
our predecessor ("CUUI"). CUUI was formed under Delaware law on March 19, 1997. CUUI
. does not provide products or services to @Wireless franchisees. Since 1997, CUUI, has
conducted a business of the type to be operated by you. CUUI has not ofered fanchises for the
same type of business as that to be operated by you and has not offered franchises in other lines
of business. We have no affliates for purposes of Item 1.
We have been ofering fanchises of a type substantially similar to those offered in this
ofering circular since January 2000. Since 1994, we have conducted a business of a type
substantially similar to those offered in this ofering circular. We operate two company-owned
@WIRELESS Stores, one of which was formerly operated by CUUI, which ofer the same
goods and serices as the franchised business and upon which the fanchised business is
modeled. We have never operated fanchises in any other line of business. We do not engage,
and have never engaged, in any business activities or any oter line of business other than as
described in this ofering circular.
In certain areas, @WIRELESS may enter into a brokerage sales ageement ("Brokerage
Sales Agreement") with a broker and support agent (the "Agent"). Under the Brokerage Sales
Ageement, we have the right to delegate duties to the Agent who may provide certain site
assistance, and initial and ongoing assistance to fanchisees on behalf of us.
of the Franchised Business
GeneraL We grant fanchises to establish and operate an @WIRELESS store (the
"Franchise Business" or the "@WIRELESS Store") under a franchise ageement ("Franchise
Ageement"). The Franchised Business is a retail store which features and ofers for sale to the
public cellular telephones, pagers and wireless cable units, wireless and cellular handsets,
satellite systems, and paging, GPS, wireless data, and inteet products and accessories, and
cellular telephone services, pager services and other related goods and services, under the trade
name "@WIRELESS." In order to become a franchisee, you will be required to operate your
@WIRELESS store in accordance with our standards and specifcations, and you will be
required to sign a Franchise Agreement. We also grant fanchises to establish more than one
Franchised Business under an area development agreement ("Area Development Ageement") to
be siged at the same time as or following the siging of a single unit Franchise Ageement.
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The @WIRELESS System. The Franchised Business will operate according to a unique
system developed and owned by us (the "System"). The distinguishing characteristics of the
System include distinctive business formats, methods, procedures, designs, layouts, standards,
and specifications, and the Marks (defined below).
The Franchised Business will be operated in accordance with an Operations Manual
("Operations Manual") to be provided to you. You will also be provided with the right to use
certain trade names, service marks, and other commercial symbols, including the
@WIRELESS trademarks and service marks and associated logo, which have gained and
continue to gain public acceptance and goodwill, and other additional trademarks, service marks
and commercial symbols in conjunction with the operation of @WIRELESS stores
(collectively, the "Marks").
Market and Competition. The market for cellular telephones, pages, and wireless cable
units, and other accessories, and for cellular telephone services, pager services, and other related
goods and services, such as those that will be offered by the Franchised Business, is well
developed and competitive. The Franchised Business will compete with other regional, national
and local retail businesses that sell cellular telephone and pager services and goods. Your ability
to compete will depend upon such factors as consumer taste and local economic conditions.
Industr Speciic Laws and Regulations. Your Franchised Business will be subject to
laws and regulations that are applicable to businesses generally, but not specific to the industry in
which the Franchised Business operates. You should check the laws within your state to
determine whether any state licensing laws or regulations are applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Craig Jerabeck,
Battaglia, Development
Chandler, Development Manager
Chapman, Marketing
Item 2
BUSINESS EXPERIENCE
Listed below are our principal offcers, directors and other executives who will have
management responsibility in connection with the fanchises offered by this offering circular.
The principal occupation and business experience of each, including the names and locations of
prior employers, are indicated below. Unless otherwise indicated, the employer is @Wireless
and the location of employment is Rochester, New York. We also list below our fanchise
brokers.
J. President and Chief Executive Ofcer
Since our inception in August 1999, Mr. J erabeck has served as our President and Chief
Executive Oficer. Since July 1997, Mr. Jerabeck has also served as the President of CUU!. Mr.
Jerabeck was the Regional Manager of Let's Talk Cellular & Wireless in Miami, Florida fom
December 1997 to January 1999.
Michael C. Vice President of Franchise
Since March 2000, Mr. Battaglia has served as our Vice President of Franchise
Development. Mr. Battaglia was the Director of On Air Wireless for Bell Atlantic Mobile fom
December 1999 to March 2000. From November 1997 to December 1999, Mr. Battaglia was a
Director for Frontier Cellular.
Mike Area
Since December 2002, Mr. Chandler has served as our Area Development Manager for
the Central part of the state of Kentucky. Mr. Chandler has been the Owner/Manager of
Advanced Communications in Radclife, Kentucky, since that company's inception in November
2000. From June 1994 to November 2000, Mr. Chandler worked as an estimator for Chandler
Electric Co. in Radclife, Kentucky.
Denise Director
Ms. Chapman has served as our Marketing Director since December 2004. From February 1998
to December 2004, Ms. Chapman served as the Marketing Communications Director for
Germanow-Simon Companies in Rochester, New York.
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Giuseppe Aprano,
TrujiUo,
Franchise Broker
Mr. Aprano has served as our franchise broker since October 2003. Since August 2003,
Mr. Aprano has served as Vice President of At Wireless Group, Inc. in Miami Florida. In
addition, fom October 1998 to August 2003, Mr. Aprano was the President of G.T. Times, Inc.
in Miami, Florida.
Robert Franchise Broker
Since October 2003, Mr. Trjillo has served as a franchise broker and has been a
fanchisee owner of an @WIRELESS store. From October 1998 to August 2003, Mr. Trujillo
served as Vice President/Operations for Latin America for G.T. Tires Inc. in Miami, Florida.
Item 3
LITIGATION
No litigation is required to be disclosed in this offering circular.
Item 4
BANKRUPTCY
No person previously identifed in Items 1 or 2 of this offering circular has been involved
as a debtor under the U.S. Bankruptcy Code required to be disclosed in this Item.
ItemS
INITIAL FRANCHISE FEE
Franchise Fee
You must pay to us a nonrecurring and non-refndable initial franchise fee, except as
described below, in the amount of $15,000 for a single @WIRELESS store to be operated
under an individual Franchise Agreement. You must pay the entire initial fanchise fee no later
than the date of your signing the Franchise Ageement. If you fail to locate an approved site
within 60 days afer the date of the Franchise Ageement, we will refnd to you the initial
franchise fee paid, less the geater of: (I) 10% of the initial fanchise fee paid, or (2) our
reasonable administative, supervisory, and legal costs incurred. During our preceding fiscal
year, we ofered existing fanchisees and fanchisees who developed more than one
@WIRELESS store within one year, a lower initial franchise fee of$5,000.
Goods and Services
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Sigage, proprietar computer point of sale ("POS") system, and fxtures
Development
You must purchase your initial inventory and supplies, which are desigated in the
Inventory and Supplies Ageement attached as Exhibit E to the Franchise Agreement. This
initial inventory purchase fom us or our designee will cost between $15,000 and $25,000,
depending on a variety of factors (see Item 7 for a more detailed description). This purchase is
non-refndable.
If you purchase your initial signage, POS system, and fxtures fom us, the initial sigage
cost ranges fom $0 to $6,000, the initial POS system cost ranges fom $2,600 to $5,000, and the
initial fxtures cost ranges fom $20,000 to $30,000.
Contractor's Fee
If we or our afliates serve as the contractor to construct your @WIRELESS Store, you
must pay us or our afiliates a contractor's fee in connection with such services. The contractor's
fee will be a 10% markup on all associated costs.
Area Fee
You may sign the Area Development Agreement, which is attached as Exhibit E to this
ofering circular, either when or afer you sign the Franchise Ageement. In this event, you must
pay us a lump-sum nonrefndable area development fee which is 50% of the mathematical
product of the single-unit fanchise fee (described above) multiplied by the number of units to be
developed under the Area Development Agreement ("Area Development Fee"). Only a deposit
of the Area Development Fee, 50% of the Area Development Fee, is due at the time of signing of
the Area Development Ageement. The balance of the Area Development Fee is paid pro rata
90 days before the opening deadline date for each store location as desigated in the Area
Development Agreement.
Item 6
OTHER FEES
The following table describes other recurring or isolated fees or payments that you must
pay to us, or which we impose or collect on behalf of a third party, in whole or in part. Unless
otherwise indicated below, all of the fees listed below are non-refndable and are imposed by,
payable to, and collected by us.
NA OF FEE AOUNT
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--------
I
I R"f,h,,,

IP"ricd
I
I
Interest'
COIILpulter Maintenance Fee3
Training Fees -Training
Employees'
Commission Revenue Royalty of
10% of all commission revenue
("Commission Revenue"), as defined
in our Methods of Operation (a
defined in Note 1), per Accounting
(as defmed in Note 1). In the
that you achieve 500 net
monthly cellular/wireless activations
any Accounting Period, the royalty
all Commission Revenue in that
A,counting Period will be reduced to
Monthly within 10 days following
close of Accounting Period.
Royalty is paid
Day Fee' Per day fees and charges as we As incurred
establish
.:..ns Manual Replacement $1 per page When rePlacement pages are
;
delivered to you
to exceed the greater of 5% of When the Royalty is paid
Revenue or $1,250
Advertising' As incurred
Ongoing Inventory' of Ongoing Inventory
Insurance10 of insurance and, if not obtained required and as incurred.
you, our procurement expense
Auditing Costs
I I
Cost of Audit
$10,000 of tansfer
Successor Franchise Fee13 50% of the then-current initial fee of successor
Cost of Liability As incurred
and Attorey's Feesls Costs of collection and attoreys' fees As incurred
for approval of supplier and Our actual cost of evaluations When incurred
testing of samples of itemsl'
Relocation 17 out-of-pocket expenses As incurred
Notes:
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During the term of the Ageement, you must pay a non-refndable royalty ("Royalty") for
each calendar month (the "Accounting Period") in the amount of 10% of all commission revenue
(the "Commission Revenue"), per Accounting Period. In the event you achieve 500 or more net
monthly cellular/wireless activations, as defned in our mandatory and suggested specifcations,
standards, operating procedure and rules we desigate in the Operations Manual ("Methods of
Operation"), in any Accounting Period, the Royalty on all Commission Revenue will be reduced
for such Accounting Period to 6%. In addition to the Royalty you pay to us on a Commission
Revenue, you must pay 5% of Gross Revenue per Accounting Period.
As used in this ofering circular, the term "Gross Revenue" means all revenue you derive
fom operating the @WIRELESS Store, including all amounts you receive for merchandise,
goods or services sold at or away from the approved location of the @WlRELESS Store
desigated in the Franchise Agreement ("Approved Location"), and whether fom cash, check or
credit transactions, but excluding all revenue you derive fom the sale of promotional equipment
as defined in our Operations Manual, all payments (including as security deposits and bill
payments) received for wireless communication service providers ("Communication Carrier
Companies"), all federal, state or municipal sales, use or service taxes collected fom customers
and paid to the appropriate taxing authority and excluding customer refnds, adjustments, credits
and allowances actually made by the @WIRELESS Store in compliance with our Methods of
Operation.
If the Commission Revenue we receive on your behalf in any Accounting Period is an
amount insuficient to cover the Royalty and any other amounts due to us or our afliates under
the Franchise Agreement, you will pay us immediately the Royalty and any other amounts due to
us or oUr afliates under the Franchise Ageement, by check through U.S. mail or bank-wire
transfer, as we determine, afer you receive notice from us of such outstanding amounts due to us
or our afiliates.
2
All amounts which you owe us or our affliates under the Franchise Agreement and do not
pay us or our afliates when due will bear interest afer their due date at the highest contract rate
of interest permitted by law.
You must pay us a non-refndable ongoing computer maintenance fee ("Computer
Maintenance Fee") at our then-current rate as specifed in our Methods of Operations (as defned
in Item 14 of this offering circular), for our ongoing support and maintenance of the proprietary
point of sale computer system you are required to use in operating the @WIRELESS Store.
4
For periodic refresher training courses conducted by us or our Agent, you are responsible for
reasonable fees that we may charge for these courses. You may also be responsible for fees for
training of your new employees hired afer your @WIRELESS Store opens for business, if
you so request.
We or our Agent will frish additional guidance and assistance and may charge the per diem
fees and charges we establish fom time to time. If you request, or if we require, additional or
special training for your employees, all of the expenses that we or our Agent incur in connection
with this training, including per diem charges and travel and living expenses for our personnel,
will be your responsibility.
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10
If your copy of the Operations Manual is lost, destroyed, or significantly damaged, you agee
to obtain a replacement copy at our then applicable charge.
You agee to contribute to the @WlRELESS advertising fnd (the "Advertising Fund")
amounts that we designate, not to exceed the geater of 5% of Gross Revenue or $1,250 (the "Ad
Fee"). In the event that the combined Eaed Co-Operative Advertising Funds (defined in Item
11 of this ofering circular) and the Commission Revenue is in an amount insufcient to pay
your required contribution to the Advertising Fund during any Accounting Period, you must pay
us the Ad Fee, by check through United States Mail, bank-wire transfer, or it will be debited
fom eaed commissions, as we deterine, within 7 business days afer you receive notice fom
us of such outstanding amounts due to us.
You must spend annually for advertising and promotion of the @WIRELESS Store at
least I% of Gross Revenue. If you elect to list and advertise the @WlRELESS Store in the
principal regular (white pages) and classified (yellow pages) telephone directories covering the
area in which the @WIRELESS Store is located, the costs of your telephone directory
advertising will not be credited toward this advertising and promotion obligation.
You must purchase your ongoing inventory of cellular phones, accessories, wireless cable
units, pre-merchandising materials and other equipment, products or items as we desigate in the
Operations Manual or otherwise in writing fom us or our desigee (which may be our affliate).
If you fail to pay us or our afliates for purchases required by the Franchise Ageement, we and
our afliates have the right, among other remedies, to withhold shipment to you of inventory or
any other product which we are providing to you under the Franchise Ageement. You agee to
assume all responsibility, risk of loss, and bear all costs, including insurance and tansportation,
once the equipment, products and items leave the shipping party's place of business, even though
we may make shipping and related arrangements for shipping to you.
You must obtain the types, amounts, terms and conditions of insurance coverage required to
be carried for the @WIRELESS Store and standards for underwriters of policies providing
required insurance coverage. If you fail to obtain required coverage, we have the right to obtain
insurance coverage for the @WlRELESS Store at your expense.
"
We, our Agent, and other designated agents will have the right during normal working hours
to inspect, examine and copy, at our expense, your books, records, accounts and tax returs with
respect to the @WIRELESS Store. We will also have the right, at any time, to have an
independent audit made of your books. If an inspection should disclose your underreporting on
any Gross Revenue Report or any other report or the underpayment of any Royalty fee or
advertising fee payable under the Franchise Agreement, you must immediately pay to us the
amount underreported and/or underpaid, in addition to interest fom the date this amount was due
until paid. In addition, if (a) the underreporting and/or underpayment exceeds two percent of the
total Royalty fee or advertising fee payable for any period covered under the audit, or (b)
inspection or audit is made necessary by your failure to frish reports, supporting records or
other information as required, or to fish these items on a timely basis, you agree to reimburse
us for the reasonable cost of this inspection or audit, including the charges of attoreys and
independent accountants and the travel expenses, room and board and compensation of our
employees. These remedies will be in addition to our other remedies and rights under the
Franchise Ageement and applicable law.
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