Username:
  
  Password:
  
  

 

FRANCHISE DISCLOSURE DOCUMENT

FOR PROSPECTIVE SUBFRANCHISORS

 

logo1.jpg

ESCO GLOBAL REALTY CORP.

594 Dagall Road

Mill Bay, BC  V0R 2P4

CANADA

 

The Subfranchisor will assist the Franchisor in locating and securing prospective Franchisees and will assist in the growth of Franchise offices in a specific geographic territory (the “Regional Territory”). The Franchisee will operate a real estate sales office, but this is not offered here.

 

The total investment necessary to begin operation of an ESCO ® GLOBAL REALTY Regional Territory ranges from $116,000 to $731,000.  This amount includes the Initial Fee for a Subfranchise that must be paid to the Franchisor or affiliate in the amount of $40,000 per 1,000,000 of population within the Regional Territory.  Subfranchisor should refer to Items 5 and 7 of this Circular for further information regarding the investment.

 

This disclosure document summarizes certain provisions of your franchise agreement and other information in plain English.  Read this disclosure document and all accompanying agreements carefully.  You must receive this disclosure document at least 14 calendar-days before you sign a binding agreement with, or make any payment to, the Franchisor or an affiliate in connection with the proposed franchise sale.   Note, however, that no governmental agency has verified the information contained in this document.

 

The terms of your contract will govern your franchise relationship.  Don’t rely on the disclosure document alone to understand your contract.  Read all of your contract carefully.  Show your contract and this disclosure document to an advisor, like a lawyer or an accountant.

 

Buying a franchise is a complex investment.  The information in this disclosure document can help you make up your mind.  More information on franchising, such as “ A Consumer’s Guide to Buying a Franchise ,” which can help you understand how to use this disclosure document, is available from the Federal Trade Commission.  You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington D.C. 20580.  You can also visit the FTC’s home page at www.ftc.gov for additional information.  Call your state agency or visit your public library for other sources of information on franchising.

 

 

 


 

 

STATE COVER PAGE

 

Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in Your state.  REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.  Call the state franchise administrator listed in Exhibit B for information about the franchisor or about franchising in Your state.

 

MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES.  YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

 

Please consider the following RISK FACTORS before You buy this franchise:

 

THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY ARBITRATION ONLY IN MILWAUKEE COUNTY, WISCONSIN.  OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU MORE TO ARBITRATE WITH US IN WISCONSIN THAN IN YOUR OWN STATE.  THE FRANCHISE AGREEMENT REQUIRES THAT WISCONSIN 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.

 

FRANCHISOR BELIEVES THAT AN INTEGRAL PART OF THE ESCO ® SYSTEM INCLUDES THE OWN YOUR FUTURE PLAN (THE “OWN YOUR FUTURE ® PLAN”), WHICH ALLOWS PARTICIPANTS IN THE ESCO ® SYSTEM TO PURCHASE SECURITIES OF THE FRANCHISOR (THE “SECURITIES”).  AS OF THE DATE OF THIS CIRCULAR, FRANCHISOR HAS NOT COMPLETED THE REGISTRATION OF THE SECURITIES NECESSARY TO FULLY IMPLEMENT THE EQUITY PROGRAM.  FURTHERMORE, EVEN IF THE SECURITIES ARE SUCCESSFULLY REGISTERED, OTHER RESTRICTIONS MAY PROHIBIT FRANCHISOR FROM EVER FULLY IMPLEMENTING THE OWN YOUR FUTURE PLAN.  THERE ARE OTHER RISKS CONCERNING THE OWNERSHIP OF ANY SECURITIES.  THIS CIRCULAR IS NOT AN OFFERING OF SECURITIES NOR AN INVITATION OR SOLICITATION TO BUY THEM.

 

THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

 

ESCO uses the services of one or more FRANCHISE BROKERS or referral sources to assist ESCO in selling the Franchise.  A franchise broker or referral source represents ESCO, not You.  We pay this person a fee for selling the ESCO Franchise or referring You to us.  You should make sure to do Your own investigation of the Franchise.

 

Effective Date: See the next page for state effective dates.

 

 

 


 

 

STATE EFFECTIVE DATES

 

The following states require that the Franchise Disclosure Document be registered or filed with the state, or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.  This Franchise Disclosure Document is registered, on file or exempt from registration in the following states having franchise registration and disclosure laws, with the following effective dates:

 

STATE

 

EFFECTIVE DATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page i

 

 

 


 

 

TABLE OF CONTENTS

 

ITEM 1

THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

Page 1

 

 

 

ITEM 2

BUSINESS EXPERIENCE

Page 2

 

 

 

ITEM 3

LITIGATION

Page 3

 

 

 

ITEM 4

BANKRUPTCY

Page 3

 

 

 

ITEM 5

INITIAL FEES

Page 3

 

 

 

ITEM 6

OTHER FEES

Page 4

 

 

 

ITEM 7

ESTIMATED INITIAL INVESTMENT

Page 5

 

 

 

ITEM 8

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Page 6

 

 

 

ITEM 9

SUBFRANCHISOR’S OBLIGATIONS

Page 7

 

 

 

ITEM 10

FINANCING

Page 8

 

 

 

ITEM 11

FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING

Page 8

 

 

 

ITEM 12

TERRITORY

Page 11

 

 

 

ITEM 13

TRADEMARKS

Page 11

 

 

 

ITEM 14

PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

Page 12

 

 

 

ITEM 15

OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE

Page 13

 

 

 

ITEM 16

RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

Page 13

 

 

 

ITEM 17

RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

Page 13

 

 

 

ITEM 18

PUBLIC FIGURES

Page 15

 

 

 

ITEM 19

FINANCIAL PERFORMANCE REPRESENTATIONS

Page 15

 

 

 

ITEM 20

OUTLETS AND FRACHISEE INFORMATION

Page 16

 

 

 

ITEM 21

FINANCIAL STATEMENTS

Page 18

 

 

 

ITEM 22

CONTRACTS

Page 18

 

 

 

ITEM 23

RECEIPTS

Page 19

 

 

 

EXHIBIT A

LIST OF UNITED STATES ESCO SUBFRANCHISORS AND FRANCHISEES

Exhibit A

 

 

 

EXHIBIT B

STATE FRANCHISOR ADMINISTRATOR AND REGISTERED AGENTS FOR SERVICE

Exhibit B

 

 

 

EXHIBIT C

FINANCIAL STATEMENTS

Exhibit C

 

 

 

EXHIBIT D

SUBFRANCHISE AGREEMENT

Exhibit D

 

 

 

EXHIBIT E

PROMISSORY NOTE

Exhibit E

 

 

 

EXHIBIT F

FRANCHISE AGREEMENT

Exhibit F

 

 

 

EXHIBIT G

PERSONAL GUARANTY

Exhibit G

 

 

 

EXHIBIT H

TABLE OF CONTENTS OF TRAINING MANUAL

Exhibit H

 

© 2004 ESCO GLOBAL REALTY CORP.

Page ii

 

 

 


 

 

ITEM 1 – THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

 

To simplify the language in this offering circular, "ESCO" means ESCO GLOBAL REALTY CORP., the Franchisor. "You” means the person who buys this Subfranchise. If You form a corporation, partnership or other organization, the reference to "You” includes the organization's owners.

 

ESCO is a Colorado corporation that was incorporated on January 30, 2003. ESCO does business as “ESCO ® GLOBAL REALTY”. ESCO’s principal office is located at 594 Dagall Road, Mill Bay, BC V0R 2P4, CANADA.  Its United States address for service of process is Suite 700 – 411 East Wisconsin Avenue, Milwaukee, Wisconsin, 53202.  ESCO's agent for service of process is disclosed in Exhibit B for this Offering Circular.

 

ESCO has no parents or predecessors and has never owned or operated real estate sales offices. ESCO sells real estate subfranchises and does not conduct any unrelated business activity. ESCO began offering subfranchises for sale on February 1, 2004, and has sold four (4) Subfranchises to date. ESCO has no prior business experience offering franchises in any line of business, or providing products or services to the franchisees.

 

The franchise described in this Offering Circular is a subfranchise for a specific geographic territory allowing You to sell ESCO ® GLOBAL REALTY franchises and to assist in the growth of the franchisees in that specific geographical territory. You will execute a Subfranchise Agreement in the form of Exhibit D attached to this Offering Circular. The fee structure is outlined in the ESCO ® Formula, which is included as part of the Subfranchise Agreement. The Subfranchise Agreement sets forth the obligations of You, as the Subfranchisor, and ESCO, as the Franchisor.

 

FRANCHISOR BELIEVES THAT AN INTEGRAL PART OF THE ESCO ® SYSTEM INCLUDES THE OWN YOUR FUTURE PROGRAM (THE “OWN YOUR FUTURE ® PLAN”), WHICH ALLOWS PARTICIPANTS IN THE ESCO ® SYSTEM TO PURCHASE SECURITIES OF THE FRANCHISOR (THE “SECURITIES”).  AS OF THE EFFECTIVE DATE OF THIS CIRCULAR, FRANCHISOR HAS NOT COMPLETED THE REGISTRATION OF THE SECURITIES NECESSARY TO FULLY IMPLEMENT THE EQUITY PROGRAM.  FURTHERMORE, EVEN IF THE SECURITIES ARE SUCCESSFULLY REGISTERED, OTHER RESTRICTIONS MAY PROHIBIT FRANCHISOR FROM EVER FULLY IMPLEMENTING THE OWN YOUR FUTURE PLAN.  THERE ARE OTHER RISKS CONCERNING THE OWNERSHIP OF ANY SECURITIES.  THIS CIRCULAR IS NOT AN OFFERING OF SECURITIES NOR AN INVITATION OR SOLICITATION TO BUY THEM.

 

Any real estate office that joins the ESCO ® System is referred to in this Circular as a "Franchisee”. ESCO ® GLOBAL REALTY Franchisees offer real estate brokerage services to the general public as independently owned and operated entities utilizing the ESCO ® System (as defined below) in a specific geographic territory for a certain term pursuant to the terms of a Franchise Agreement in the form of Exhibit F attached to this Offering Circular. You and the Franchisee are the only two (2) parties to the Franchise Agreement. The Franchise Agreement sets out the obligations of You and the Franchisee.

 

Every Franchisee must possess a bona fide real estate broker's license in good standing under the laws of the state where the franchise is located. Your activities as a Subfranchisor are subject to state and federal laws and regulations related to franchise disclosure and real estate transfer and brokerage laws.

 

ESCO has developed a plan (the "ESCO ® System") designed to enable independent real estate brokerage offices to utilize brand name identification for the real estate industry. The ESCO ® System is identified by means of certain trade names, service marks, trademarks, logos, and commercial symbols (the "Marks") that provide recognition of the ESCO ® System for customers and clients. The ESCO ® System includes training programs for Subfranchisors and Franchisees, training and operating manuals, a program for the referral of real estate listings and real estate buyers, and other procedures and systems to assist in the operation and management of a real estate office. The ESCO ® System also includes programs for the establishment of advertising and promotional campaigns. ESCO will provide certain specified support and services to all subfranchisors in their assigned geographical territory. You will sell, service and assist the Franchisees in the development of their franchised offices.

 

© 2004 ESCO GLOBAL REALTY CORP.

Page 2

 

 

 


 

 

The real estate sales business is highly competitive. You must compete with numerous other real estate franchise sales offices. The businesses with which You should expect to compete include, in general, national or regional franchise systems and other chains, and independently owned local firms. Your business will also be affected by its location, the locations of competing real estate sales offices, your financial and managerial capabilities, availability of labor, interest rates, demographic or cultural conditions, and other factors. There is also active competition for management and service personnel.

 

ITEM 2 – BUSINESS EXPERIENCE AND AFFILIATES

 

The following are ESCO's directors, trustees, general partners, principal officers, all individuals who will have a management responsibility relating to the sale or operation of the franchises offered by this disclosure document, and the Franchise Broker utilized by ESCO, together with a brief occupational history of each person:

 

John Alexander, LL.B.

Founder & Consultant

Mr. Alexander is our former Chairman of the Board and Chief Executive Officer. A former trial lawyer, Mr. Alexander has served as the head of our management team since ESCO ® ’s inception. He was a top producing Realtor ® with Re/Max from 1990-1996 and from 1997-2000 owned a real estate office. In 2002, Mr. Alexander began the ground-up development of the ESCO ® Global Realty franchise system. In his role as Consultant, Mr. Alexander will assist the Board of Directors and our Chief Executive Officer to implement the securities and business development activities of the Corporation.

 

ESCO Global Realty Corp. (Victoria, BC)

Consultant

2007-present

ESCO Global Realty Corp. (Victoria, BC)

CEO, Chairman

2002-2007

 

Brent Boyd

Senior Vice President, Chief Operating Officer, Director

Mr. Boyd is our Senior Vice-President and Chief Operating Officer and member of our Board of Directors. He brings over thirty years experience in the communications industry to the Company. Mr. Boyd has worked closely with Mr. Alexander in the development of the ESCO ® Global Realty franchise system and is responsible for ESCO ® ’s organizational structure and technology offerings.

 

ESCO Global Realty Corp. (Victoria, BC)

Senior Vice President, COO

2002-present

Marketing Consultant (Victoria, BC)

Self-employed

1999-present

Watermark Communications Group Inc. (Victoria, BC)

President

1987-1998

 

David Alexander

President, Chief Executive Officer, Chairman

An honors graduate of prestigious Brentwood College, and subsequently an honors graduate of University of Alberta, Mr. Alexander is fluently bilingual in French and English and understands Russian. A gifted public speaker, he brings significant personnel management and administrative experience to ESCO ® . Mr. Alexander has a ‘can do’ attitude and a commitment to realize ESCO ® ’s vision of an ethical, community-minded real estate organization that meets the needs of the public that it serves as well as the needs of its Regional Owners, Franchisee-Brokers, Realtors ® and Support Staff through equity ownership in ESCO Global Realty Corp.

 

ESCO Global Realty Corp. (Vancouver, BC)

President

2008-present

ESCO Global Realty Corp. (Vancouver, BC)

CEO, Chairman

2007-present

Langley Christian School (Vancouver, BC)

Teacher; Fine Arts Coordinator

1995-present

 

Ron Schwartz

Vice-President – Regional Development

A top real estate trainer, Mr. Schwartz began his real estate career over twenty-five years ago. While experienced as a sales agent and owner/broker of a Century 21 franchise, Mr. Schwartz’ gift is his ability to recruit, train and build organizations. For the past 10 years, he has been recruiting and training sales agents for established real estate offices throughout Western Canada. Working with the ESCO ® Training Institute, Mr. Schwartz will develop curriculum and present courses to pass on his skills in recruiting and building real estate organizations.

 

© 2004 ESCO GLOBAL REALTY CORP.

Page 2

 

 

 


 

 

1401041 Alberta Ltd. (Calgary, AB)

Director

2008-present

ESCO Global Realty Corp. (Calgary, AB)

Vice-President

2005-present

Realty Executives Apex (Calgary, AB)

Recruiter

2004-2008

Realty Executives Regional (Calgary, AB)

Recruiter

2004

Market Networks (Calgary, AB)

President

2003-2004

A.E. Lepage (Nanaimo, BC)

Recruiter/ Trainer

2002

 

Gaius Carmichael

Vice President – Atlantic Canada

Mr. Carmichael is Regional Owner of the ESCO ® Atlantic Canada region. He is also the owner of Solid Gold Construction, a Halifax-based construction company that has built and sold over 200 high end homes in Atlantic Canada since 2001. Prior to becoming a full-time home builder Mr. Carmichael owned a highly successful landscaping business that earned him Entrepreneur of the Year Award.

 

ESCO Global Realty Corp. (Halifax, NS)

Vice-President

2007-present

ESCO Atlantic Canada (Halifax, NS)

Regional Owner

2006-present

Solid Gold Construction (Halifax, NS)

Owner

2001-present

 

Lyle Spearing

Vice President – Western Canada

 

Mr. Spearing is Regional Owner of the ESCO ® Western Canada region. He owned and operated a third-generation family farm in Saskatchewan which he sold before moving to Calgary and becoming a Realtor ® . Mr. Spearing volunteers with the Civil Air Search and Rescue Association, flying out of Calgary as a spotter in search of downed aircraft.

 

1401041 Alberta Ltd. (Calgary, AB)

Director

2008-present

ESCO Global Realty Corp. (Calgary, AB)

Vice-President

2008-present

MaxWell Realty (Calgary, AB)

Realtor ®

2006-2008

Realty Executives (Calgary, AB)

Realtor ®

2005-2006

Farming/Highway Trucking Company (SK)

Owner/Operator

1965-2004

 

ITEM 3 – LITIGATION

 

No litigation is required to be disclosed in this offering circular.

 

ITEM 4 – BANKRUPTCY

 

No person previously identified in Items 1 or 2 of this offering circular has been involved as a debtor in proceedings under U.S. Bankruptcy Code required to be disclosed in this Item.

 

ITEM 5 – INITIAL FEES

 

You must pay an initial subfranchise fee of $40,000.00 per 1,000,000 persons who reside in your Regional Territory when the Subfranchise Agreement is signed ("Subfranchise Fee"). Because your Regional Territory may differ in population from those offered to other Subfranchisors, the Subfranchise Fee may not be the same for all subfranchisees.  The Subfranchise Fee generally ranges from $40,000 to $400,000.  This amount is the only Initial Fee payable to ESCO before the business opens. The Subfranchise Fee is due on the date you execute the Subfranchise Agreement, and is not refundable.

 

© 2004 ESCO GLOBAL REALTY CORP.

Page 3

 

 

 


 

 

ITEM 6 – OTHER FEES

 

© 2004 ESCO GLOBAL REALTY CORP.

Page 4

 

 

 


 

 

Type of Fee

 

Amount

 

Due Date

 

Remarks

Transaction Fees

 

50% of the Transaction Fees generated from each Sales Representative transaction

 

Transaction Closing Date

 

Currently, the Transaction Fees from the Sales Representative for each Transaction total $150, resulting in a payment of $75 per transaction end.

 

 

 

 

 

 

 

Transfer Fee

 

$10,000

 

Prior to transfer

 

 

 

 

 

 

 

 

 

Training Fee

 

$1,500 plus costs for travel, lodging, meals and incidental costs

 

Prior to training session

 

There is no charge for tuition fees for the attendance of one person at the training session but there may be a fee for additional persons attending the session. All persons pay their own costs for travel, lodging, meals and incidental costs while attending.

 

 

 

 

 

 

 

Stock Purchase Plan Remittance

 

Two percent (2%) from Sales Agents and two-tenths of one percent (0.2%) from Franchisees of the gross commissions earned by each Sales Agent in Your Regional Territory, plus any elective withholding

 

Transaction closing date

 

Pursuant to the Own Your Future Plan, You will assist ESCO in facilitating the collection and submission of any amounts from the Sales Representatives and Franchisees within Your Regional Territory pursuant to the Own Your Future Plan.  For Sales Agents, this currently totals two percent (2%) of the total gross commissions from each Sales Agent, plus an elective amount up to an additional 3% of the total gross commissions earned by each Sales Agent; and for each Franchisee, two-tenths of one percent (0.2%) of the total gross commissions of the Sa


This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more