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FRANCHISE DISCLOSURE DOCUMENTSignal 88 Franchise Group, Inc.Nebraska Corporation3880 S. 149th Street, Suite 102Omaha, NE 8.comSecurity Re-Engineered The franchise described in this disclosure document is for the establishment and operation of asecurity services business to include patrol and dedicated service under the service mark andtrade name Signal 88 Security. Specifically, franchisees will engage in the provision of onsiteand off-site surveillance, executive security services, and security consulting services forcontracting clients.The total investment necessary to begin operation of a Signal 88 Security franchise ranges from 85,350 to 135,650. This includes a minimum franchise fee of 40,000 that must be paid tothe franchisor or affiliate. Further information regarding the franchisee’s anticipated investmentcan be found in Item 7 of this Disclosure Document.The total investment necessary to begin operations under a development agreement for multipleSignal 88 Security franchise will depend on the number of businesses we grant you the right toopen. By way of example, the total investment necessary to begin operations under adevelopment agreement for the right to open and operate three (3) Signal 88 Security franchisesis 135,350 to 220,650, which includes 90,000 that must be paid to the franchisor or itsaffiliates. This estimate includes the appropriate development fee you must pay to franchisorupon execution of the development agreement, as well as the total estimated initial investmentto open and commence operations of your first Signal 88 Security franchise.This disclosure document summarizes certain provisions of your franchise agreement,development agreement and other information in plain English. Read this disclosure documentand all accompanying agreements carefully. You must receive this disclosure document at least14 calendar-days before you sign a binding agreement with, or make any payment to, thefranchisor or an affiliate in connection with the proposed franchise sale. Note, however, that nogovernmental agency has verified the information contained in this document.You may wish to receive your disclosure document in another format that is more convenient foryou. To discuss the availability of disclosures in different formats, contact Reed L. Nyffeler at3880 South 149th Street, Suite 102, Omaha, Nebraska 68144 and (402) 502-1181.The terms of your contract will govern your franchise relationship. Don't rely on the disclosuredocument alone to understand your contract. Read all of your contract carefully. Show yourcontract and this disclosure document to an advisor, like a lawyer or an accountant.FRANCHISE DISCLOSURE DOCUMENT1 2014 SIGNAL 88 FRANCHISE GROUP, INC
Buying a franchise is a complex investment. The information in this disclosure document canhelp you make up your mind. More information on franchising, such as "A Consumer's Guide toBuying a Franchise," which can help you understand how to use this disclosure document, isavailable from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP orby writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. You can alsovisit the FTC's home page at www.ftc.gov for additional information. Call your state agency orvisit your public library for other sources of information on franchising.There may also be laws on franchising in your state. Ask your state agencies about them.Date of Issuance: April 18, 2014, as amended June 13, 2014.FRANCHISE DISCLOSURE DOCUMENT2 2014 SIGNAL 88 FRANCHISE GROUP, INC
STATE COVER PAGEYour state may have a franchise law that requires a franchisor to register or file with astate franchise administrator before offering or selling in your state. REGISTRATION OF AFRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THEFRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.Call the state franchise administrator listed in Exhibit A for information about thefranchisor, or about franchising in your state.MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEWUNCONDITIONALLY AFTER THE INTIAL TERM EXPIRES. YOU MAY HAVE TO SIGN ANEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TOCONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHATRIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOUMIGHT HAVE TO ACCEPT IN ORDER TO RENEW.Please consider the following RISK FACTORS before you buy this franchise:1.THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENTREQUIRE YOU TO RESOLVE DISPUTES WITH US BY MEDIATION, AT OUROPTION, IN DOUGLAS COUNTY, NEBRASKA. OUT-OF-STATE MEDIATIONMAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FORDISPUTES. IT MAY ALSO COST YOU MORE TO MEDIATE WITH US INNEBRASKA THAN IN YOUR OWN STATE.2.THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENTREQUIRE THAT CERTAIN DISPUTES WITH US NOT SUBJECT TOMEDIATION MUST BE RESOLVED BY LITIGATION IN DOUGLAS COUNTY,NEBRASKA. IT MAY COST YOU MORE TO LITIGATE WITH US IN NEBRASKATHAN IN YOUR OWN STATE.3.THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT STATETHAT NEBRASKA LAW GOVERNS THE AGREEMENT, AND THIS LAW MAYNOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW.YOU MAY WANT TO COMPARE THESE LAWS.4.THE FRANCHISOR HAS MINIMUM SALES VOLUME STANDARDS THAT YOUMUST MAINTAIN IN THE FIRST YEAR AFTER OPENING A LOCATION.FAILURE TO MEET THESE STANDARDS MAY RESULT IN AN ALTERNATIONOR ELIMINATION OF YOUR TERRITORY.5.THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.We use the services of one or more FRANCHISE BROKERS or referral sources to assistus in selling our franchise. A franchise broker or referral source represents us, not you. We paythis person a fee for selling our franchise or referring you to us. You should be sure to do yourown investigation of the franchise.Effective Date: See effective dates page.FRANCHISE DISCLOSURE DOCUMENT3 2014 SIGNAL 88 FRANCHISE GROUP, INC
STATE EFFECTIVE DATESThe following states require that the disclosure document be registered or filed with the state, orbe exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota,New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.This disclosure document is registered, on file or exempt from registration in the following stateshaving franchise registration and disclosure laws, with the following effective MichiganFloridaSouth DakotaEffective DateJuly 25, 2014Not RegisteredJune 23, 2014August 3, 2014September 2, 2014September 27, 2013July 15, 2014EffectiveStateMinnesotaNew YorkRhode IslandVirginiaWashingtonWisconsinNorth DakotaUtahEffective DateJune 24, 2014August 29, 2014June 23, 2014July 23, 2014June 23, 2014June 23, 2014Not RegisteredMarch 17, 2014In all the other states not mentioned above, the effective date of this Franchise DisclosureDocument is the issuance date of April 18, 2014, as amended June 13, 2014.FRANCHISE DISCLOSURE DOCUMENT4 2014 SIGNAL 88 FRANCHISE GROUP, INC
TABLE OF CONTENTSITEM .20.21.22.23.PAGETHE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES . 1BUSINESS EXPERIENCE . 4LITIGATION . 6BANKRUPTCY . 7INITIAL FEES . 7OTHER FEES . 8ESTIMATED INITIAL INVESTMENT . 10RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES . 15FRANCHISEE’S OBLIGATIONS . 17FINANCING. 18FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, ANDTRAINING . 20TERRITORY. 22TRADEMARKS . 22PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION . 24OBLIGATION OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATIONOF THE FRANCHISED BUSINESS . 25RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL . 26RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION . 26PUBLIC FIGURES. 31FINANCIAL PERFORMANCE REPRESENTATIONS. 31OUTLETS AND FRANCHISEE INFORMATION . 43FINANCIAL STATEMENTS . 50CONTRACTS . 56RECEIPT . 57EXHIBITSA.B.C.D.E.F.G.H.I.J.K.TABLE OF STATE AUTHORITIESAGENTS FOR SERVICE OF PROCESSTABLE OF CONTENTS OF CONFIDENTIAL OPERATIONS MANUALSTATE ADDENDA TO THE DISCLOSURE DOCUMENTFRANCHISE AGREEMENTDEVELOPMENT AGREEMENTFINANCING AGREEMENTLIST OF FRANCHISEES AND COMPANY-OWNED BUSINESS UNITSFINANCIAL STATEMENTSFRANCHISEE QUESTIONNAIRE ACKNOWLEDGEMENTRELEASEFRANCHISE DISCLOSURE DOCUMENT5 2014 SIGNAL 88 FRANCHISE GROUP, INC
ITEM 1THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATESTo simplify the language in this disclosure statement, the terms “we,” “Company,” “Signal88,” “Signal 88 Security,” “Franchisor,” and/or “our” shall mean Signal 88 Franchise Group, Inc.,the Franchisor. The terms “we,” “Company,” “Signal 88,” “Signal 88 Security,” and/or “our” donot include the officers, directors or shareholders of Signal 88 Franchise Group, Inc. “You” and“Franchisee” mean the individual or individuals or the business organization that is awardedand/or operates the franchise, as well as any owners of such a business organization. “You”may also refer to other similarly situated franchise operators or prospective franchise operators.OUR NAME, BUSINESS FORM, PREDECESSORS, AFFILIATESSignal 88 Franchise Group, Inc. is a Nebraska corporation which was incorporated onNovember 13, 2007. Our principal business address is 3880 S. 149th Street, Ste. 102, Omaha,Nebraska 68144. We do not have a parent company. Signal 88’s predecessor is Signal 88Security Group, L.L.C., a Nebraska limited liability company. Signal 88 Security Group, LLC, hadits principal business address at 3880 S. 149th Street, Ste. 107, Omaha, Nebraska 68144.Another one of our affiliates is Lyconic, LLC, a Nebraska limited liability company, which isowned in part by Shea Degan. Lyconic’s address is 3880 S. 149th Street, Suite 105, Omaha,Nebraska 68144. Another affiliate, Sage 5, Inc., which is owned in part by Shea Degan, islocated at 3880 S. 149th Street, Suite 107, Omaha, Nebraska 68144.BUSINESS NAME, ADDRESS, AGENTS FOR SERVICEWe do business under our corporate name and under the names “Signal 88,” “Signal 88Security,” “Signal 88 Franchise Group, Inc.”, “Signal 88 – Planning. Prevention. Protection.”, andSignal 88 Security – Security Re-Engineered”. The principal business address of Signal 88Franchise Group, Inc., is 3880 S. 149th Street, Ste. 102, Omaha, Nebraska 68144. The agentsfor service of process for Signal 88 Franchise Group, Inc., and its affiliates are disclosed inExhibit B of this disclosure document.OUR BUSINESS AND FRANCHISES TO BE OFFEREDWe have developed a comprehensive system (the “System”) for the opening andoperation of a security-services business specializing in security patrols and surveillance,security consulting, executive protection, and training in personal safety, risk avoidance, andthreat management for the workplace. Some of the distinguishing characteristics of the Systeminclude: (1) use of highly trained security personnel; (2) use of software known as Inteliguide,Patrolguide, Salesguide, and other proprietary software applications; (3) distinctive uniformdesigns and logos; (4) standards and specifications for equipment, supplies, and signs; (5)technical assistance and training; (6) sales and management assistance and training; and (7)specialized methods and techniques for cost controls, record-keeping and reporting, andpersonnel management, all of which we may periodically change, improve and develop.We identify the System by certain trademarks, trade names, service marks, logos,emblems, and other indications of origin, including “Signal 88”, “Signal 88 Security ”, “Signal 88– Planning. Prevention. Protection.”, “Signal 88 Security – Security Re-Engineered”, “88University”, and other trade names, service marks and trademarks that we have alreadydesignated (and that we may later designate) for you to use under the System (the “Marks”).FRANCHISE DISCLOSURE DOCUMENT 1 2014 SIGNAL 88 FRANCHISE GROUP, INC.
You will be licensed to use the Marks and the System, as they may be periodicallychanged, improved, and further developed. Your franchise agreement (“Agreement”) andOperations Manual 1 will specify the types of services you will offer.We begin the franchise award process by having you sign the Agreement. The grant ofa franchise is conditioned on the following: (1) your completing and signing the FranchiseeQuestionnaire Acknowledgment in Exhibit J; (2) your signing an Agreement and associatedsecurity documents; (3) your submitting financial statements and demonstrating your fitness tooperate a franchised business to our satisfaction; (4) your payment of a Franchise Fee; (5) yourobtaining the necessary insurance and providing us proof of insurance; (6) your attendance andsatisfactory completion of all phases of our initial training program; (7) your obtaining all requiredbusiness licenses needed to operate the franchised business; and (8) your compliance with theterms of the Agreement.Once you complete the initial obligations under the Agreement, we will authorize you toopen and operate a security services business operated under the name “Signal 88 Security”(“Franchised Business”). The Franchised Business will specialize in the sale and performance ofsecurity services, including security patrols and surveillance, security consulting, executiveprotection, and training in personal safety, risk avoidance, and threat management in theworkplace. The term of your Agreement is for five (5) years and will begin on the date you signan Agreement.The security services market is developing. If you qualify to operate a Signal 88 Securityfranchise, you will sell security services primarily to business customers in need of sitesurveillance and security consulting. You will also sell services to individuals and businesseswho need executive protection services or safety training. You will compete with independent,regional, and national security firms offering similar services. Sales are not seasonal. We andour affiliates also reserve the right to establish other franchises or Company-owned officesselling and performing the same or similar services both under the same or a different tradename or trademark outside your designated territory.In addition to granting franchises for the operation of a single Franchised Business, weoffer qualified individuals the right to open three (3) or five (5) Franchised Businesses in adesignated area (“Development Area”) through a development agreement attached as Exhibit F(“Development Agreement”). The total investment necessary to begin operation under aDevelopment Agreement will vary depending upon the number of Franchised Businesses weagree you will open in your Development Area. You must pay us a development fee equal to: (i) 90,000 for the right to open and operate three (3) Franchised Businesses within yourDevelopment Area; or (ii) 125,000 for the right to open and operate five (5) FranchisedBusinesses within your Development Area (“Development Fee”). As a developer, you will berequired to open and operate a specified number of Businesses within a series of time periodslisted in a table in your Development Agreement (the “Development Schedule”). You must openthe second Franchised Business and each subsequent Franchised Business you are required toopen under the Development Agreement no later than thirty (30) days after signing theFranchise Agreement for that Franchised Business.Signal 88 Security Group, L.L.C., from which Signal 88 initially obtained its assets,1All capitalized terms used but not defined in this disclosure document will have the meaningsascribed to them in the Agreement.FRANCHISE DISCLOSURE DOCUMENT 2 2014 SIGNAL 88 FRANCHISE GROUP, INC.
operated a business substantially similar to the one we franchise from 2003 until 2013. Wehave operated businesses substantially similar to the one we franchise since July 2009. Signal88 Security franchises will usually have a protected territory. Neither we nor our affiliates offerfranchises in other lines of business. Our business activities include offering and supportingSignal 88 Security franchises and entering into agreements with area representatives whodevelop and provide support for Signal 88 Security franchises in specified geographical areas.We have no other business activities.The services you perform in your Franchised Business will be subject to certain federal,state, and local laws and regulations, which may include state and local licensing laws orordinances for security guards and security agencies. There may be other local laws andregulations which are not mentioned in this disclosure document. The Lanham Act, 15 U.S.C. §1051, and the rules and regulations of the Federal Trade Commission may constrain theadvertising or representation you can make about services and prohibit you from selling certainservices in some cases. You must submit all advertising to us for approval before you use it.You must permit us and our agents to enter your business premises at any reasonabletime, with or without advance notice, to conduct inspections and to evaluate your compliancewith, among other things, the Agreement, the Operations Manual, and any applicable laws andregulations. If these inspections reveal that you are not in compliance with all applicablerequirements, you must, either on your own initiative or after you receive notice from us, takeimmediate action to correct any deficiency and bring the Franchised Business into compliance.If you fail or refuse to take all necessary corrective measures, we will have the right to do so andto charge you for all costs and expenses associated with these corrective measures. You mustreimburse us fully for our costs and expenses on demand or as soon as applicable law allows.We also have the right to terminate your franchise in accordance with the contract andapplicable law if you fail to comply with the applicable requirements.Despite our oversight of your compliance with applicable law as described in theprevious paragraph, it is still your responsibility to comply with all applicable laws andregulations of the federal, state, and local governments. You must also obtain all certifications,permits, and/or o
Franchise Group, Inc., is 3880 S. 149th Street, Ste. 102, Omaha, Nebraska 68144. The agents for service of process for Signal 88 Franchise Group, Inc., and its affiliate
