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DISTRIBUTION OFFERING
Last Updated: January 1, 2012
MASTERFIT GOLF LTD DISTRIBUTOR OFFERING
MASTERFIT GOLF LTD. INC.
(A Florida Corporation)
14055 Philips Hwy
Jacksonville, Florida 32256
(904) 886-4800
Masterfit Golf LTD is offering distribution rights for retail facilities utilizing the “MASTERFIT” system of custom built, custom fitted golf equipment built using the most cutting edge technologies available in golf today. A Distributor will be given extensive training in the art of golf club fitting and golf equipment manufacturing. Each Distribution center has a protected geographic “area” where no other distribution center will be located. A Masterfit Distribution location sells custom golf equipment and accessories and provides customized teaching programs utilizing modern computer based video teaching software. The Masterfit product line consists of many club designs from woods to wedges designed and trademarked by the Masterfit principles and are only available to Distributors.
Masterfit Golf LTD has been in business since 1994 providing retail facilities that offer a unique hands on buying experience combining the finest custom built golf equipment with a state of the art “fitting system.” This provides the consumer with the greatest chance of maximizing his or her potential in golf.
The Masterfit principles, Phil Lanza and John Schroeder, founded the company and have been active in the day to day operations of all company owned retail facilities since inception. All training is done by Mr. Lanza and Mr. Schroeder and takes place at the Distribution location and at an operational company owned Masterfit retail facility.
Company's Business Activities
Company's business activities include the grant of Distributors for the establishment, development and operation of a retail store offering and selling custom golf equipment, accessory items, clothing and related merchandise and services.
The Distribution Business and Businesses to be Offered
Each Distribution Business operates in accordance with a unique System ("System"). The distinguishing characteristics of the System include: distinctive interior and exterior layout, decor and color scheme; exclusively designed signage, decorations, furnishings and materials; the MASTERFIT GOLF LTD Confidential Operations Manual ("Manual"); the Trademarked Products ("Trademarked Products"); the Proprietary Software Package ("Software") (if developed); methods and techniques for promoting custom golf equipment, accessory items, clothing and related services and merchandise; special techniques for manufacturing, packaging, display, merchandising and marketing of products and services; procedures for maintenance; retail business operating methods; and methods and techniques for inventory and cost controls, record keeping and reporting, personnel management and training, purchasing, marketing, sales promotion and advertising. Company may change the System periodically.
The Distribution Business will operate under the Marks "MASTERFIT GOLF LTD", "MASTERFIT" plus the design", and associated marks and trademarks that Company designates as part of the System ("Marks").
The Distribution Business targets its services to the general public. The Distribution Business will compete with other local businesses, as well as local, regional or national chains of retail stores selling custom golf equipment, accessories and related clothing and items.
There may be specific laws or regulations in your state or municipality regarding the operation of this business. These may include safety and employment regulations. The laws in your state or municipality may be more or less stringent. You should examine these laws before purchasing a distributorship from Company.
Company believes the market for custom golf equipment, accessories, clothing and related products is developed.
BUSINESS EXPERIENCE
President: Phil Lanza
Mr. Lanza has served as Company's President since its inception. From 1987 to April 1994, Mr. Lanza served as Vice President of Lauden Golf in Jacksonville, Florida.
Vice President: John Schroeder
Mr. Schroeder has served as Company's Vice President since its inception. From 1982 to April 1994, Mr. Schroeder served as Vice President of Sales for Lauden Golf in Jacksonville, Florida.
INITIAL DISTRIBUTOR FEE
When you sign the Distribution Agreement, you must pay to Company an initial Distribution of $20,000.00. This fee covers all training, support both initial and ongoing. This fee also pays for the control of the Distributors designated geographical area.
The individual Distribution fees are fully earned and non-refundable under any circumstances, except as provided below:
a. You and your designated manager, if applicable, must submit to Company all data as to your personal abilities, aptitudes and financial qualifications. Company has 15 business days to evaluate this data and may cancel the Distribution Agreement within that time. If so, Company will refund all monies paid to Company under the terms of the Distribution Agreement, less a reasonable fee for its evaluation of you and related preparatory work performed and expenses incurred, not to exceed $1,000.00.
b. If no acceptable site is found and approved within 60 days from the date on which you sign the Distribution Agreement, either Company or you can terminate the Distribution Agreement and Company will refund the Distribution fee.
c. If Company determines that you and/or your designated manager are unable to satisfactorily complete the training program required of Distributors, Company may require you to attend additional training or terminate the Distributor Agreement and return the distributor fee.
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INITIAL INVESTMENT
Names of Your Actual or Method To Whom Payment
Expenditures Estimated Amounts of Payment When Due Is Made
Initial Distributor $20,000 - Lump Sum Upon Signing Masterfit Golf
Fee
Real Estate/Rent $2,500 - As Arranged As Arranged Landlord
Utility Deposits $200.00 - As Arranged As Arranged Landlord,
Utility Companies
Leasehold $3,000 - As Arranged As Arranged Landlord,
Improvements Approved Suppliers
Furniture, Fixtures &
Signage $20,000 - As Arranged As Arranged Approved Suppliers
Initial Inventory $30,000 - As Arranged As Arranged Masterfit Golf
Insurance $500 - As Arranged As Arranged Insurance
Carrier
Grand Opening $2,500 - As Arranged First Month
Advertising of Operation Approved Suppliers
Additional Funds
Working Capital $5,000 - As Arranged For 3 Months You Determine
TOTAL $83,700 -
*NOTE: THIS IS PURELY AN ESTIMATION OF ORIGINATION COSTS*
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Real Estate/Rent
You must provide a location upon which to operate your business. The floor area required for the Distributor Business is 1,000 to 2,000 square feet. Rental rates may vary between $10.00 and $20.00 per square foot, depending on the location and real estate environment.
Furniture, Fixtures & Equipment
Initial leasehold improvements and store fixturing are required before opening. These costs include office equipment, computer and software.
Additional Funds
The additional funds estimate should be sufficient to cover operating expenses, including employees' salaries and utility expenses, for 3 months of operation. However, Company cannot guarantee that this amount will be sufficient. Company bases its estimate of the amount of additional funds required to operate the Distributor Business on the actual experience of Affiliates in operating a similar business. This may vary based on a number of factors, including owner's salary and the extent of the actual participation of you, your partners (if you are a partnership), your shareholders (if you are a corporation) and any of your family members. Company does not offer, either directly or indirectly, financing to you for any items. However, Company may provide assistance to you in obtaining financing.
Software
Company may develop and custom design Software for conducting accounting, inventory control, point-of-sale functions and related activities. The Software will be Company's proprietary and confidential information. You must comply with Company's standards and specifications regarding the Software, as provided in the Manual. This unique Software is in an ongoing development and testing stage and upgrades may be implemented into the System at Company's discretion. Company will lease the Software to you at the then-current rates published by Company in the Manual.
Trademarked Products
Company has developed certain Trademarked Products consisting of specially developed or private labeled golf accessories and other merchandise and products bearing the Marks. You must carry a 30 day supply and maintain a representative inventory of the Trademarked Products as the Manual requires, and you will maintain, carry and promote the Trademarked Products for use in servicing the general public in order to meet customer demand. You must purchase Trademarked Products from Company, Company's affiliates or other designated sources which manufacture the Trademarked Products to Company's precise specifications.
DISTRIBUTOR'S OBLIGATIONS
Except as listed below, Company need not provide any assistance to you.
A. Company's Obligations Before the Distributor Business Opens:
1. Provide you with written notice of approval or disapproval of the proposed site within 15 business days after receiving your written proposal
2. Approve the lease for the Premises.
3. Train you and 1 employee at the training program before beginning operations of the Distributor Business for approximately 2 weeks as described in this Item 11 below. (Paragraph IV.A.)
Company does not charge for this training or service; however, your employees' costs in attending this program, including travel expenses, room and board expenses and employees' salaries are your responsibility. All training occurs at Company's headquarters or at a location Company designates.
4. Loan you 1 or more copies of the Manual which contains mandatory and suggested specifications, standards and procedures. This Manual is confidential and remains Company's property. Company may modify this Manual.
B. Company's Obligations During the Operation of the Distributor Business:
1. Furnish to you, at your Premises and at Company's expense, for approximately 1 week around the opening of the Distributor Business, a representative to assist you in this opening. If you request it, Company may provide additional training at its then-current fee.
2. Approve or disapprove all promotional materials and advertising you wish to use, including newspapers, radio and television advertising and specialty and novelty items, signs and boxes. If Company does not disapprove in writing any advertising or promotional item you submit to Company within 20 days of receipt, you may consider the particular materials approved. (Paragraph IX.A.)
3. Modify the System, including the adoption and use of new or modified trade names, trademarks, service marks or copyrighted materials, new products, new equipment or new techniques.
8. Periodically advise or offer guidelines to you relative to prices for the services and other products offered for sale by the Distributor Business that in Company's judgment, constitute good business practice. You do not have to accept this advice or guidance and will have the sole right to determine the prices charged by the Distributor Business. (Paragraph XIII.A.)
9. Provide you with the following: (Paragraph XIII.B.)
a. A comprehensive list of established sources of equipment, supplies and containers necessary for the operation of the Distributor Business and provide specifications for these products;
b. Coordination of product distribution for local, regional and national suppliers;
c. Regulation of quality standards and products in conformance throughout the network of Distributor Businesses;
d. Coordination of advertising materials and strategies; and
e. Negotiation of group rates for purchases of products and materials as Company deems appropriate.
10. Make periodic visits to the Distributor Business for the purposes of consultation and guidance in all aspects of the operation and management of the Distributor Business and will prepare written reports concerning these visits outlining any suggested changes or improvements in the operation of the Distributor Business and detailing any defaults in the operations which become evident as a result of any visit. Company will provide you with a copy of each written report. Company will also advise you of problems arising out of the operation of the Distributor Business as disclosed in reports Company submits to you or by inspections Company conducts of the Distributor Business. (Paragraph XIII.D.)
11. Periodically furnish you with assistance in the operation of the Distributor Business as Company reasonably determines necessary which will include the following:
a. Proper utilization of procedures by the Distributor Business regarding the service and sale of all services and products Company approves;
b. Additional products and services authorized for sale from the MASTERFIT GOLF LTD Distributor Businesses;
c. Purchase of inventory items, materials and supplies;
d. The institution of proper administrative, bookkeeping, accounting, inventory control and supervisory and general operating procedures for the effective operation of the Distributor Business;
e. Advertising and promotional programs; and
f. On-going research and development of new procedures and techniques, new products and materials and other enhancements to the System.
12. May develop the Software, as described in Items 6 and 8 of this Offering Circular. Company will lease this Software to you at the then-current rates published by Company. When Company introduces the Software into the System, you must use the Software. (Paragraph XII.I.)
You must upgrade any hardware component or software program during the term of the Distributor Agreement to be compatible with the Software Company requires.
Except for the Software, Company will not provide assistance to you in obtaining the point-of-sale system or computer hardware other than providing the specifications for these items and providing the Approved Supplies List and Approved Suppliers List for these items.
C. Methods Used to Select the Location of the Distributor Business:
You select the site for the Distributor Business within the area designated in the Distributor Agreement. Company requires its previous approval of the site. (Paragraph III.B.)
The methods used by Company in approving the location for the proposed site may include the location, cost and size of the proposed premises.
D. Typical Length of Time Before Operation:
The typical length of time between the signing of the Distributor Agreement, or the first payment of any consideration for the distributorship, and the opening of your business is approximately 1 to 3 months after you sign the Distributor Agreement.
You will open your Distributor Business within 6 months after you sign the Distributor Agreement unless Company otherwise requires or approves in writing. (Paragraph XII.B.)
Training
Company will train you and one employee at Company's headquarters or other Company-designated location before beginning operations of the Distributor Business for approximately 2 weeks as described below:
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HOURS OF HOURS OF
TIME INSTRUCTIONAL CLASSROOM ON-THE-JOB
SUBJECT BEGUN MATERIAL TRAINING TRAINING INSTRUCTOR
Club Assembly Day 1 Manual 15 20 Schroeder
Sales Training Day 5 Manual 15 20 Lanza
Marketing Promotions Day 9 Manual 10 -- Schroeder
Accounting/Computer Day 10 Manual 10 -- Lanza
Golf/Teach Instruction Day 11 Manual 10 -- Lanza
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Company will maintain a formal training staff that will include Company's President, Lanza, and Company's Vice President, Schroeder. Their experience can be found on previous pages.
If you designate new or additional managers after the initial training program, Company will provide training to these managers at the then-current published rates. All designated managers must successfully complete the training program provided at Company's headquarters or other location Company designates. You bear all costs incurred by your employees attending this training program. (Paragraph IV.D.)
Company periodically may provide and require that previously-trained and experienced distributors, their managers and/or employees attend and successfully complete refresher training programs conducted at the location Company designates. Attendance at these refresher training programs will be at your sole expense, however, you do not have to attend more than 1 of these programs in any calendar year which will not exceed 3 business days in duration during any calendar year. (Paragraph IV.E.)
TERRITORY
You will receive an exclusive territory ("Designated Area") with an area outlined on the map attached to the Distributor Agreement as Exhibit A. You will operate the Distributor Business from a location approved by Company and must receive Company's permission before relocating at your sole cost, plus reasonable costs and fees Company incurs in approving the new location. You may relocate the Premises if the lease for the site expires or terminates and it is not your fault, if the site is destroyed, condemned or otherwise rendered unusable or if Company and you otherwise agree. Any relocation will be at your expense and Company will have the right to charge you for all reasonable costs Company incurs.
Company has the right to grant other distributors outside of the Designated Area as Company, in its sole and exclusive discretion, thinks appropriate. (Paragraph I.B.)
Company will not grant another distributorship the right to operate a MASTERFIT GOLF LTD Distributor Business in your Designated Area.
The Designated Area will be defined by zip code boundaries, county boundaries, highways, physical landforms and other factors Company thinks appropriate. The typical territory will include a minimum population base of approximately 30,000 to 40,000 people within a 10-mile radius.
Company will not establish a Company-owned MASTERFIT GOLF LTD business in your Designated Area.
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