ATAX Area Representative
ATAX Area Representative offers support to unit franchises in specified territories. Known for providing service and management, it operates within the franchising industry.
ATAX Area Representative franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of an Area Representative ATAX Franchise Business ranges from $101,450 to $524,000. This includes a payment ranging from $100,000 to $500,000 that must be paid to the Franchisor or its affiliate [p.1].
What is the initial franchise fee?
The initial franchise fee can vary, but it is typically a significant amount. For example, if a $35,000 initial fee is paid by a Unit Franchisee and certain fees are deducted, the Net Initial Franchise Fee could be calculated as described in [p.9]. This isn't specified in the exact dollar amount for a single franchisee's initial fee.
What are the ongoing royalty and advertising fees?
The ongoing royalties you receive are 50% of all ongoing royalties received by the franchisor from any ATAX Franchised Units located in your Territory during the term of your agreements [p.82]. Additionally, the franchisor may conduct marketing using electronic or print advertising of any kind, which could be local, regional, or national, and may be produced in-house or through an advertising agency [p.83].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
You can sell or transfer your franchise, but it requires the franchisor's permission except for good cause [p.56]. Good cause includes if the proposed transferee fails to meet current qualifications, is a competitor, refuses to comply with obligations, or has unpaid debts [p.56].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on various grounds including insolvency, abandonment, mutual agreement to terminate, material misrepresentation, legal violation persisting 10 days after notice, repeated breaches, judgment, criminal conviction, failure to pay monies owed to the franchisor more than 5 days past due, and imminent danger to public health or safety. [p.61, p.52, p.117]
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, and other channels of distribution or competitive brands controlled by the company [p.35]. Additionally, the territory is non-exclusive for Area Representatives as well [p.79, 3.4].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training [p.40] that must be completed within 60 days of signing the Area Representative Agreement, and ongoing operational and training support [p.84]. This includes marketing assistance and performance and quality control assessments to maintain franchisee relations.
How many franchised outlets are there, and how many have closed or been terminated?
The FDD does not specify the exact number of franchised outlets that have closed or been terminated. However, it mentions a high turnover rate in the last year [p.4], indicating a significant number of terminations, transfers, re-acquisitions, or cessation of operations for other reasons among the franchised outlets.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information for existing outlets, but only under specific conditions as outlined in Item 19 and certain legal requirements [p.45]. The franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets [p.45, p.85].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling only the goods and services approved by the franchisor [p.41, p.85]. You must also sell all the goods and services that the franchisor authorizes [p.3, p.85], with the franchisor having the right to change these but not intending to materially alter them [p.41]. Regarding supplies, you may have to buy or lease items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.3].