Franchise Disclosure Document of 1-800-Flooded Franchises for sale. Includes information on training, costs, franchise fees, lawsuits, and information on the management and background of the franchising company.

1. FRANCHISE REVIEW
by
PROFYLING.COM
I-800-Flooded
Department
of
Corporations
Los
Angeles
FRANCHISE
OFFERING
CIRCULAR
Franchisor:
I-800-Flooded,
Inc.,
a
Nevada
corporation,
2156
West
Hillside
Drive,
Central
Point,
OR
97501
This
franchise
allows
the
franchisee
the
use
of
the
I
-800-Flooded
tradename
and
telephone
number
within
a
designated
territory.
The
initial
franchise
fee
is
$59,995.00.
The
franchisee's
initial
investment
for
the
first
three
months
is
approximately
$63,380.
This
assumes
that
the
franchisee
has
an
ongoing
water
damage
restoration
business.
Information
comparing
franchisors
is
available.
Call
the
administrator
for
your
state
or
your
public
library
for
sources
of
information.
Registration
of
this
franchise
by
a
state
does
not
mean
that
the
state
recommends
it
or
has
verified
the
information
in
this
offering
circular.
If
you
learn
that
anything
in
this
offering
circular
is
untrue,
you
may
contact
the
Federal
Trade
Commission
and
the
franchise
administrator
for
your
state.
Effective
date:
Risk
factors:
INSUFFICIENT
TELEPHONE
CALLS
MAY
BE
RECEIVED
AT
THE
I-800-FLOODED
TELEPHONE
NUMBER
AND
DIRECTED
TO
YOU
TO
RECOVER
THE
COST
OF
YOUR
INITIAL
INVESTMENT.

3. Table of Contents
ITEM
I
The
Franchisor,
its
Predecessors
and
Affiliates
2.
Business
Experience
3.
Litigation
4.
Bankruptcy
5.
Initial
Franchise
Fee
6.
Other
Fees
7.
Initial
Investment
8.
Restrictions
on
Sources
of
Products
and
Services
9.
Franchisee's
Obligations
10.
Financing
11.
Franchisor's
Obligations
12.
Territory
13.
Trademarks
14.
Patents,
Copyrights
and
Proprietary
Information
15.
Obligation
to
Participate
in
the
Actual
Operation
of
the
Franchise
Business
16.
Restrictions
on
What
the
Franchise
May
Sell
17.
Renewal,
Termination,
Transfer
and
Dispute
Resolution
18.
Public
Figures
19.
Earning
Claims
20.
List
of
Outlets
21.
Financial
Statements
22.
Contracts
23.
Receipt
Exhibits
A.
Franchise
Agreement
B.
Financial
Statements
C.
Receipt

4. I.
The
Franchisor,
its
Predecessors
and
Affiliates
Our
name
is
I
-800-Flooded,
Inc.
We
are
a
Nevada
corporation.
We
have
no
affiliates
or
predecessors.
Our
principal
business
is
licensing
and
franchising
the
tradename
and
telephone
number
"
I
-800-Flooded,"
to
which
we
have
exclusive
rights.
We
have
no
other
business
activities.
We
do
not
engage
in
the
flood
damage
business
ourselves.
The
franchise
consists
of
the
following:
(a)
the
non-exclusive
right
to
use
the
tradename
"
I-800-Flooded"
in
your
geographical
area;
and
(b)
the
exclusive
right
to
receive
and
respond
to
telephone
calls
to
the
I-800-Flooded
number
from
the
telephone
prefixes
that
you
license
from
us.
There
are
no
requirements
that
you
buy
advertising
or
marketing
materials
from
us
although
they
are
available
if
you
want
them.
We
do
not
participate
in
the
management
of
your
business
in
any
way,
shape,
or
form.
We
only
ask
that
you
refrain
from
any
activity
that
will
bring
our
tradename
into
disrepute
and
that
you
indemnify
us
in
case
of
any
claim
advanced
against
us
on
account
of
your
activities.
Most
franchisees
will
have
an
existing
water
damage
restoration
business
and
will
be
interested
in
expanding
their
market
share
through
use
of
the
800-Flooded
tradename
and
number.
We
do
not
operate
the
kinds
of
businesses
being
franchised.
The
potential
customers
for
the
business
being
offered
to
the
franchisees
include
principally
owners
of
real
property
damaged
by
water,
such
as
might
result
from
natural
flooding,
faulty
construction,
or
burst
pipes.
We
are
not
aware
of
any
regulations
specific
to
the
industry
other
than
those
which
might
be
imposed
by
the
state
or
local
authorities
in
your
area,
such
as
the
requirement
for
a
contractor's
license
or
a
business
license
for
the
municipality
in
which
you
are
located.
There
is
no
competition
for
the
I-800-Flooded
tradename
or
number.
We
have
the
exclusive
rights
to
both
the
tradename
and
the
800
number.
At
this
time
we
are
not
aware
of
any
use
of
a
confusingly
similar
tradename
anywhere
in
the
United
States.
Of
course,
there
is
significant
competition
for
the
water
damage
restoration
business,
and
companies
are
engaged
in
this
business
throughout
the
United
States
and
Canada.
Our
principal
place
of
business
is
2156
West
Hillside
Drive,
Central
Point,
OR
97501.
We
are
a
new
company
organized
in
Nevada
on
or
about
July
1,
2001.
Our
agent
for
service
of
process
is
the
California
Corporations
Commissioner,
320
West
4th
Street,
Los
Angeles,
CA
90013-2344.
We
have
not
offered
franchises
in
any
other
line
of
business.

5. 2.
Business
Experience
Our
principal
director,
having
responsibility
for
the
franchises
offered
by
this
offering
circular,
is
Phillbert
R.
Thomas.
Mr.
Thomas's
principal
occupation
during
the
last
five
years
has
been
the
restoration
of
property
damaged
by
water
through
Aquatele,
a
company
which
he
owned
and
managed
in
Fontana,
CA.
We
are
not
using
any
franchise
brokers.
3.
Litigation
We
do
not
have
any
administrative,
criminal
or
material
civil
action
pending
against
us
of
any
nature,
including
any
which
alleges
a
violation
of
a
franchise,
antitrust,
or
securities
law,
fraud,
unfair
or
deceptive
practices,
or
comparable
allegations.
During
the
ten
year
period
immediately
before
the
date
of
this
offering
circular,
we
have
not
been
convicted
of
a
felony
or
pleaded
nolo
contendere
to
a
felony
charge;
or
been
held
liable
in
a
civil
action
by
final
judgment
or
been
the
subject
of
a
material
action
involving
violation
of
a
franchise,
antitrust
or
securities
law,
fraud,
unfair
or
deceptive
practices,
or
comparable
allegations.
We
are
not
subject
to
a
currently
effective
injunctive
or
restrictive
order
or
decree
relating
to
the
franchise
or
under
a
federal,
state
or
Canadian
franchise,
securities,
antitrust,
trade
regulation
or
trade
practice
law
resulting
from
a
concluded
or
pending
action
or
proceeding
brought
by
a
public
agency.
4.
Franchisor
The
Franchisor
and
its
president,
secretary,
and
treasurer
(it
has
no
affiliates)
have
not,
during
the
ten-year
period
before
the
date
of
the
offering
circular,
(a)
filed
as
debtor
or
had
filed
against
us
a
petition
to
start
an
action
under
the
U.S.
Bankruptcy
Code;
(b)
obtained
a
discharge
of
our
debts
under
the
Bankruptcy
Code;
or
(c)
been
a
principal
officer
of
a
company
or
a
general
partner
in
a
partnership
that
either
filed
as
a
debtor
(or
had
filed
against
it)
a
petition
to
start
an
action
under
the
U.S.
Bankruptcy
Code
or
that
obtained
a
discharge
of
its
debts
under
the
Bankruptcy
Code
during
or
within
one
year
after
the
officer
or
general
partner
of
the
franchisor
held
this
position
in
the
company
or
partnership.

6.
5.
Initial
Franchise
Fee.
The
initial
franchise
fee
is
$59,995.00
payable
at
the
time
the
franchise
agreement
is
signed.
It
is
nonrefundable.
In
addition,
there
is
a
deposit
of
$400.00
for
telephone
charges,
which
is
refundable
to
the
extent
it
has
not
been
applied
during
the
term
of
the
agreement.
6.
Other
Fees.
You
are
also
required
to
pay
a
nonrefundable
monthly
licensing
fee
of
$995.00,
payable
on
the
first
day
of
each
month
by
automatic
checking
account
withdrawal.
This
fee
is
collected
by
us
and
paid
to
us.
No
third
party
participates
in
the
fees.
This
fee
may
increase
over
time.
You
will
be
given
at
least
sixty
days
notice
of
any
fee
increase.
7.
Initial
Investment.
EXPENSE
AMOUNT
METHOD
WHEN
DUE
TO
WHOM
INITIAL
$59,995
LUMPSUM
AT
SIGNING
1-800-
FRANCHISE
OF
FRANCHISE
FLOODED,
FEE
AGREEMENT
INC.
MONTHLY
$995
PER
LUMPSUM
EVERY
MONTH
1-800-
FRANCHISE
MONTH
OR
FLOODED,
PAYMENTS
$2,985
FOR
THREE
MONTHS
INC.
DEPOSIT
FOR
$400
LUMPSUM
AT
SIGNING
1
-800-
TELEPHONE
OF
FRANCHISE
FLOODED,
CHARGES
AGREEMENT
INC.
TOTAL
(Ist
3
$63,380
MONTHS)

7. None
of
the
foregoing
payments
is
refundable.
We
do
not
finance
the
payments.
We
do
not
provide
real
estate,
equipments,
fixtures,
other
fixed
assets,
construction,
remodeling,
leasehold
improvements,
inventory,
or
any
other
assets.
We
do
not
require
deposits
except
for
the
telephone
charges.
We
do
not
assist
you
with
establishing
a
water
damage
restoration
business
or
with
obtaining
licenses
required
to
operate
one.
This
investment
is
not
suitable
for
anyone
not
having
or
capable
of
establishing
and
operating
a
water
damage
restoration
business.
8.
Restrictions
on
Sources
of
Products
and
Services
We
have
no
required
specifications,
designated
suppliers,
or
approved
suppliers
for
goods,
services,
or
real
estate
relating
to
your
franchise
business.
We
will
not
derive
revenue
from
your
purchases
or
leases.
You
are
not
required
or
expected
to
purchase
marketing
materials
or
any
other
items
from
us
such
as
services,
fixtures,
equipment,
inventory,
computer
hardware
or
software,
or
real
estate.
Marketing
materials
are
available
separately
for
purchase
and
it
is
probably
to
your
advantage
to
use
them
because
we
can
probably
make
them
available
to
you
at
a
lower
cost
than
comparable
items
which
you
would
purchase
independently,
due
to
volume
discounts.
However,
there
are
no
purchases
required
either
by
written
agreement
or
by
our
practice.
We
do
not
issue
or
modify
specifications.
We
have
no
standards
which
we
impose
on
franchisees
except
that
they
comply
with
all
applicable
laws
and
regulations
and
that
they
engage
in
no
business
practices
that
would
bring
the
I
-800-Flooded
tradename
into
disrepute.
We
grant
approval
to
existing
water
damage
restoration
firms
if
the
prefixes
are
available.
We
have
no
criteria
for
approval
except
availability
of
the
prefixes,
although
we
would
strongly
discourage
anyone
without
an
existing,
viable,
ongoing
water
damage
restoration
business
from
investing
in
this
franchise.
The
franchisee
will
be
informed
immediately
whether
his
application
to
purchase
a
franchise
is
approved.
We
do
not
revoke
approval
except
upon
the
following
contingencies:
A.
The
Franchisee
is
delinquent
by
more
than
thirty
days
in
the
payment
of
any
of
the
required
fees
or
in
its
payment
for
marketing
materials
purchased
from
Franchisor.
B.
The
Franchisee
files
a
petition
in
bankruptcy
(any
chapter)
or
a
bankruptcy

8. petition
(any
chapter)
is
filed
against
the
Franchisee,
or
the
Franchisee
becomes
insolvent,
or
the
Franchisee
makes
a
general
assignment
for
the
benefit
of
creditors,
or
a
receiver
or
other
custodian
takes
control
of
the
Franchisee's
business,
or
a
judgment
against
the
Franchisee
exceeding
$10,000
remains
unsatisfied
for
more
than
sixty
days.
C.
The
Franchisee
breaches
any
of
its
obligations
under
this
Agreement.
D.
The
Franchisee
violates
any
law
or
regulation
concerning
its
business,
or
the
Franchisee
commits
an
act
of
dishonesty
or
moral
turpitude
which
might
tend
to
bring
the
Tradename
or
the
Franchisor
into
disrepute.
E.
The
Franchisee
dies
or
is
incapacitated
or
fails
to
maintain
active
operation
of
the
business
in
which
the
Tradename
and
Number
are
used.
We
are
not
approved
suppliers
of
any
categories
of
goods
or
services.
We
do
not
have
suppliers.
We
have
no
criteria
for
evaluating,
approving
or
disapproving
suppliers.
We
do
not
provide
any
goods
or
services
to
franchisees
through
suppliers.
We
have
no
purchase
arrangements
with
suppliers.
We
do
not
derive
revenue
from
required
purchases
or
leases.
There
are
no
required
purchases
or
leases.
We
do
not
provide
material
benefits
to
a
franchisee
based
on
a
franchisee's
use
of
designated
or
approved
sources.
There
are
no
purchasing
or
distribution
cooperatives.
9.
Franchisee's
Obligations.
This
table
lists
your
principal
obligations
under
the
franchise
agreement.
It
will
help
you
find
more
detailed
information
about
your
obligations
in
these
agreements
and
in
other
items
of
this
offering
circular.
OBLIGATION
SECTION
IN
AGREEMENT
ITEM
IN
OFFERING
CIRCULAR
SITE
SELECTION
AND
ACQUISITION/LEASE
NONE
NONE

9.
OBLIGATION
SECTION
IN
AGREEMENT
ITEM
IN
OFFERING
CIRCULAR
PRE-OPENING
PURCHASES/LEASES
NONE
NONE
SITE
DEVELOPMENT
AND
OTHER
PRE-OPENING
REQUIREMENTS
NONE
NONE
INITIAL
AND
ONGOING
TRAINING
NONE
NONE
OPENING
NONE
NONE
FEES
SCHEDULE
C
5-6
COMPLIANCE
WITH
STANDARDS
AND
POLICIES/OPERATING
MANUAL
9
7
TRADEMARKS
AND
PROPRIETARY
INFORMATION
1,6
13
RESTRICTIONS
ON
PRODUCTS/SERVICES
OFFERED
NONE
NONE
WARRANTY
AND
CUSTOMER
SERVICE
REQUIREMENTS
NONE
NONE
TERRITORIAL
DEVELOPMENT
AND
SALES
QUOTAS
NO
SALES
QUOTAS
NO
SALES
QUOTAS
ONGOING
PRODUCT/SERVICE
PURCHASES
NONE
NONE

10.
10.
Financing.
We
do
not
offer
financing
arrangements.
10
OBLIGATION
SECTION
IN
AGREEMENT
ITEM
IN
OFFERING
CIRCULAR
MAINTENANCE,
APPEARANCE
AND
REMODELING
REQUIREMENTS
NONE
NONE
INSURANCE
NONE
NONE
ADVERTISING
NONE
NONE
INDEMNIFICATION
II
NONE
OWNER'S
PARTICIPATION/MANAGE
MENT/STAFFING
NONE
NONE
RECORDS
AND
REPORTS
NONE
NONE
INSPECTIONS
AND
AUDITS
NONE
NONE
TRANSFER
8
17
RENEWAL
3,9
17
POST-TERMINATION
OBLIGATIONS
10
17
NON-COMPETITION
COVENANTS
NONE
NONE
DISPUTE
RESOLUTION
15,16
COVER
PAGE
OTHER
(DESCRIBE)
N/A
N/A

11. 11.
Franchisor's
Obligations.
Except
as
listed
below,
we
need
not
provide
any
assistance
to
you.
A.
The
obligations
that
the
franchisor
will
perform
before
the
franchise
business
opens.
We
maintain
the
registered
trademark
with
the
U.S.
Patent
and
Trademark
Office
in
good
standing.
We
maintain
the
exclusive
right
to
receive
calls
to
the
I
-800-Flooded
telephone
number
in
good
standing.
We
reserve
one
or
more
prefixes
for
you
and
provide
instructions
to
the
telephone
company
that
all
telephone
calls
originating
from
any
of
the
prefixes
you
have
reserved
will
be
routed
to
the
telephone
number
you
designate.
(See
Franchise
Agreement,
paragraph
2.)
B.
The
obligations
to
be
met
by
the
franchisor
during
the
operation
of
the
business.
We
do
not
provide
any
assistance
in
products
or
services,
hiring
or
training
employees,
improvements
or
developments
in
the
franchised
business,
pricing,
administrative,
bookkeeping,
accounting
and
inventory
control
procedures,
or
operating
problems
which
you
may
encounter.
We
do
not
have
an
advertising
program.
You
are
not
required
to
participate
in
a
local
or
regional
advertising
cooperative.
There
is
no
advertising
fund
to
which
you
are
required
to
contribute.
You
are
not
required
to
spend
any
amount
of
money
on
advertising
in
your
territory.
You
are
not
required
to
buy
or
use
electronic
cash
register
or
computer
systems.
We
are
not
obligated
to
provide
or
assist
you
to
obtain
any
of
the
above
items
or
services.
We
have
no
operating
manual.
(See
Franchise
Agreement,
paragraph
7.)
C.
We
do
not
select
the
location
of
your
business.
D.
There
is
no
typical
length
of
time
between
the
signing
of
the
franchise
agreement
or
the
first
payment
of
consideration
for
the
franchise
and
the
opening
of
the
franchisee's
business,
because
we
expect
that
you
already
have
an
existing
water
damage
restoration
business.
If
you
do
not,
you
should
not
invest
in
this
franchise.
E.
We
have
no
training
program
or
instructional
material.
11

12. We
do
not
provide
any
assistance
to
you
in
the
operation
of
your
business.
We
have
no
requirements
regarding
site
selection,
site
appearance,
equipment,
signs,
fixtures,
inventory,
employees,
bookkeeping,
pricing,
customer
service,
or
any
other
aspect
of
the
management
of
your
business
except
only
that
we
require
that
you
take
no
action
that
would
bring
our
name
into
disrepute
and
that
you
indemnify
us
from
claims
by
any
of
your
customers.
We
will
provide
you
with
a
non-exclusive
right
to
use
our
tradename
and
the
exclusive
right
to
receive
calls
from
selected
telephone
prefixes
to
the
I
-800-Flooded
number.
We
expect
to
make
marketing
materials
available
to
you,
but
your
use
of
these
materials
is
optional.
12.
Territory.
You
have
no
exclusive
geographical
area,
but
you
do
have
the
exclusive
right
to
receive
telephone
calls
to
I
-800-Flooded
for
the
telephone
number
prefixes
that
you
license
from
us.
The
word
"territory"
whenever
it
appears
in
this
offering
circular
or
in
the
franchise
agreement
refers
to
the
telephone
number
prefixes
that
we
have
licensed
to
each
franchisee,
not
to
a
geographical
territory.
We
charge
the
initial
franchise
fee
for
each
prefix.
We
will
not
allow
anyone
else
to
receive
calls
from
the
telephone
number
prefixes
which
we
have
licensed
to
you.
We
will
not
establish
a
company-owned
outlet
or
other
channel
of
distribution
using
the
your
number
prefixes.
Continuation
of
your
license
does
not
depend
on
achievement
of
any
particular
sales
volume.
Your
license
will
not
be
altered
or
terminated
as
long
as
you
comply
with
your
obligations
under
the
franchise
and
licensing
agreement.
We
do
not
guarantee
that
there
are
any
particular
number
of
people
living
within
the
geographical
area
served
by
your
telephone
number
prefixes.
You
may
acquire
other
telephone
number
prefixes
from
us
if
they
are
available
in
your
geographical
area.
Other
franchisees
may
advertise
and
do
work
within
your
geographical
area
and
vice
versa.
There
is
no
restriction
on
where
you
may
work,
nor
any
restriction
on
where
other
franchisees
may
work.
The
only
restriction
is
that
no
other
franchisee
will
get
calls
from
the
telephone
number
prefixes
which
have
been
reserved
for
you.
12

13. 13.
Trademarks.
The
principal
trademark
licensed
to
the
franchisee
is
I-800-Flooded.
We
have
common
law
rights
to
this
trademark
resulting
from
our
assignor's
use
of
this
trademark
in
connection
with
water
damage
restoration
since
1976.
In
addition,
we
have
the
federally
registered
trademark
for
I
-800-Flooded,
as
assignees
from
Phillbert
and
Betty
Thomas.
It
is
registered
with
the
U.S.
Patent
and
Trademark
Office
on
the
principal
register.
Its
registration
date
is
April
23,
2002.
Its
registration
number
is
2563655.
We
have
filed
all
required
affidavits.
No
registration
has
been
renewed
yet.
There
are
no
currently
effective
material
determinations
of
the
Patent
and
Trademark
Office,
Trademark
Trial
and
Appeal
Board,
the
Trademark
Administrator
of
this
state
or
any
court.
There
are
no
known
pending
infringements,
opposition
or
cancellations.
There
is
no
pending
litigation
involving
the
principal
trademark.
There
are
no
agreements
in
effect
that
significantly
limit
the
rights
of
the
franchisor
to
use
or
license
the
use
of
the
trademark
listed
above
in
a
manner
material
to
the
franchisee.
We
do
not
undertake
to
protect
your
right
to
use
the
tradename.
If
it
comes
to
your
attention
that
someone
else
is
using
the
tradename
within
your
territory,
you
may
have
the
option
to
pursue
a
claim
of
infringement
or
unfair
competition
against
that
party
at
your
own
expense,
and
we
reserve
the
right
to
do
so
as
well.
As
a
practical
matter,
it
is
extremely
unlikely
that
any
third
party
would
attempt
to
use
the
tradename
apart
from
the
number,
which
no
third
party
can
access
without
our
knowledge
or
consent.
You
are
not
required
to
notify
us
of
the
use
or
claims
or
fights
to
a
trademark
identical
to
or
confusingly
similar
to
the
trademark
licensed
to
you.
We
are
not
required
to
take
affirmative
action
if
you
do
notify
us
of
such
uses
or
claims.
In
case
of
administrative
proceedings
or
litigation
involving
us,
we
have
the
right
to
control
it.
We
will
protect
you
against
claims
of
infringement
or
unfair
competition
arising
out
of
your
use
of
the
trademark.
We
will
assume
your
defense
and
indemnify
you
for
expenses
and
damages
if
you
become
a
party
to
an
administrative
or
judicial
proceeding
against
your
will
involving
a
trademark
licensed
by
us
to
you,
or
if
the
proceeding
is
resolved
unfavorably
to
you.
If
you
are
required
to
modify
or
discontinue
the
use
of
the
trademark
as
a
result
of
a
proceeding
or
settlement,
the
difference
between
your
franchise
fee
and
the
net
revenue
you
derived
from
the
franchise
will
be
refunded.
We
do
not
know
of
either
superior
prior
rights
or
infringing
uses
that
could
materially
affect
the
franchisee's
use
of
the
principal
trademark
in
this
state
or
the
state
in
which
the
13

14. franchised
business
is
located.
14.
Patents,
Copyrights,
and
Proprietary
Information.
No
patents
or
copyrights
are
material
to
the
franchise
at
this
time.
We
reserve
the
right
to
apply
for
copyrights
for
our
marketing
materials.
15.
Obligation
to
Participate
in
the
Actual
Operation
of
the
Franchise
Business.
We
do
not
require
that
you
personally
supervise
your
business.
16.
Restrictions
on
What
Franchisee
May
Sell.
We
have
no
restrictions
as
to
what
you
may
sell.
17.
Renewal,
Termination,
Transfer
and
Dispute
Resolution.
This
table
lists
certain
important
provisions
of
the
franchise
agreement.
You
should
read
these
provisions
in
the
agreement
attached
to
this
offering
circular.
14
PROVISION
SECTION
IN
FRANCHISE
AGREEMENT
SUMMARY
TERM
OF
THE
FRANCHISE
3
INDEFINITE
TERM
RENEWAL
OR
EXTENSION
OF
THE
TERM
3
CONTINUES
INDEFINITELY
REQUIREMENTS
FOR
YOU
TO
RENEW
OR
EXTEND
N/A
N/A
TERMINATION
BY
YOU
3
2
MONTHS
NOTICE
TERMINATION
BY
US
WITH
"CAUSE"
10
TERMINATION
ON
DEFAULT

15.
15
PROVISION
SECTION
IN
FRANCHISE
AGREEMENT
SUMMARY
"CAUSE"
DEFINED
-
10
SPECIFIED
EVENTS
SET
DEFAULTS
WHICH
CAN
FORTH
IN
PARAGRAPH
10
BE
CURED
"CAUSE"
DEFINED
-
10
SPECIFIED
EVENTS
SET
DEFAULTS
WHICH
FORTH
IN
PARAGRAPH
10
CANNOT
BE
CURED
YOUR
OBLIGATIONS
ON
10
TRADENAME
AND
TERMINATION/NONRENE
TELEPHONE
PREFIXES
WAL
REVERT
TO
FRANCHISOR
ASSIGNMENT
OF
8
FREELY
ASSIGNABLE
CONTRACT
BY
US
"TRANSFER"
BY
YOU
-
8
MORE
THAN
50%
DEFINITION
CONTROL
FRANCHISOR
APPROVAL
8
WILL
NOT
BE
OF
TRANSFER
BY
UNREASONABLY
FRANCHISEE
WITHHELD
CONDITIONS
FOR
8
WILL
NOT
BE
FRANCHISOR
APPROVAL
UNREASONABLY
OF
TRANSFER
WITHHELD
FRANCHISOR'S
RIGHT
OF
NONE
NONE
FIRST
REFUSAL
TO
ACQUIRE
FRANCHISEE'S
BUSINESS
FRANCHISOR'S
OPTION
NONE
NONE
TO
PURCHASE
FRANCHISEE'S
BUSINESS
DEATH
OR
DISABILITY
OF
NONE
NONE
FRANCHISEE

16.
18.
Public
Figures.
We
do
not
use
any
public
figures
to
promote
our
franchise.
19.
Earnings
Claims.
We
do
not
make
earnings
claims.
None
of
our
sales
people
is
authorized
to
make
any
representation
as
to
how
the
use
of
the
tradename
or
800
number
might
increase
your
sales.
We
do
not
know.
16
PROVISION
SECTION
IN
FRANCHISE
AGREEMENT
SUMMARY
NON-COMPETITION
COVENANTS
DURING
THE
TERM
OF
THE
FRANCHISE
NONE
NONE
NON-COMPETITION
COVENANTS
AFTER
THE
FRANCHISE
IS
TERMINATED
OR
EXPIRES
NONE
NONE
MODIFICATION
OF
THE
AGREEMENT
NONE
NONE
INTEGRATION/MERGER
CLAUSE
12
INTEGRATED
DISPUTE
RESOLUTION
BY
ARBITRATION
OR
MEDIATION
NONE
NONE
CHOICE
OF
FORUM
16
LOS
ANGELES
COUNTY,
CA
CHOICE
OF
LAW
15
CALIFORNIA

17. 20.
List
of
Outlets.
As
of
the
time
of
the
preparation
of
this
offering
circular
(June
2003),
the
franchise
concept
has
not
yet
been
marketed,
and
there
are
no
franchises
of
a
type
substantially
similar
to
those
offered
nor
any
franchisor
owned
or
operated
outlets
as
of
the
close
of
the
franchisor's
last
three
fiscal
years.
There
are
no
franchise
outlets
in
this
state.
We
do
not
know
the
number
of
franchises
to
be
sold
during
the
I
year
period
after
the
close
of
the
franchisor's
most
recent
fiscal
year.
There
have
been
no
franchisee
outlets
for
the
3-year
period
immediately
before
the
close
of
the
franchisor's
most
recent
fiscal
year
which
have
transferred
controlling
ownership,
been
canceled
or
terminated
by
the
franchisor,
not
been
renewed
by
the
franchisor,
been
reacquired
by
the
franchisor,
or
been
reasonably
known
by
the
franchisor
to
have
otherwise
ceased
to
do
business
in
the
system.
No
franchisee
has
had
an
outlet
terminated,
canceled,
not
renewed,
or
otherwise
voluntarily
or
involuntarily
ceased
to
do
business
under
the
franchise
agreement
during
the
most
recently
completed
fiscal
year
or
who
has
not
communicated
with
the
franchisor
within
10
weeks
of
the
application
date.
21.
Financial
Statements.
As
we
are
new,
we
do
not
have
a
history
of
earnings.
The
only
available
financial
statements
for
us
are
annexed
to
this
circular
as
an
exhibit.
22.
Contracts.
A
copy
of
the
franchise
agreement
which
you
are
asked
to
sign
if
you
want
to
become
a
franchisee
is
attached.
17

18. 23.
Receipt.
THIS
OFFERING
CIRCULAR
SUMMARIZES
CERTAIN
PROVISIONS
OF
THE
FRANCHISE
AGREEMENT
AND
OTHER
INFORMATION
IN
PLAIN
LANGUAGE.
IF
WE
OFFER
YOU
A
FRANCHISE,
WE
MUST
PROVIDE
THIS
OFFERING
CIRCULAR
TO
YOU
BY
THE
EARLIEST
OF:
(I)
THE
FIRST
PERSONAL
MEETING
TO
DISCUSS
OUR
FRANCHISE;
OR
(2)
TEN
BUSINESS
DAYS
BEFORE
THE
SIGNING
OF
A
BINDING
AGREEMENT;
OR
(3)
TEN
BUSINESS
DAYS
BEFORE
A
PAYMENT
TO
US.
YOU
MUST
ALSO
RECEIVE
A
FRANCHISE
AGREEMENT
CONTAINING
ALL
MATERIAL
TERMS
AT
LEAST
FIVE
BUSINESS
DAYS
BEFORE
YOU
SIGN
A
FRANCHISE
AGREEMENT.
IF
WE
DO
NOT
DELIVER
THIS
OFFERING
CIRCULAR
ON
TIME
OR
IT
IF
CONTAINS
A
FALSE
OR
MISLEADING
STATEMENT,
OR
A
MATERIAL
OMISSION,
A
VIOLATION
OF
FEDERAL
AND
STATE
LAW
MAY
HAVE
OCCURRED
AND
SHOULD
BE
REPORTED
TO
THE
FEDERAL
TRADE
COMMISSION,
WASHINGTON
D.C.
20580
AS
WELL
AS
TO
ANY
AGENCY
IN
YOUR
STATE
HAVING
JURISDICTION
OVER
FRANCHISE
OPERATIONS
OR
BUSINESS
OPPORTUNITIES,
WHICH
IS
THE
DEPARTMENT
OF
CORPORATIONS,
320
WEST
4th
STREET,
LOS
ANGELES,
CA
90013-2344.
THE
DEPARTMENT'S
TOLL
FREE
NUMBER
IS
1-866-275-2677.
THE
UNDERSIGNED
ACKNOWLEDGES
RECEIPT
OF
A
UNIFORM
FRANCHISE
OFFERING
CIRCULAR.
THIS
OFFERING
CIRCULAR
INCLUDES
THE
FOLLOWING
EXHIBITS:
A.
FRANCHISE
AGREEMENT
B.
FINANCIAL
STATEMENTS
OF
FRANCHISOR
C.
THIS
RECEIPT
FRANCHISEE
DATE
OF
RECEIPT
18

19. FRANCHISE
AND
LICENSING
AGREEMENT
1.
Parties and Recitals.
The
effective
date
and
the
identity
of
the
parties
to
this
Agreement
are
set
forth
in
Schedule
A.
Franchisor
owns
and
has
the
right
to
license
the
tradename
1-800-
Flooded
("Tradename").
Franchisor
also
has
the
exclusive
right
to
the
1-
800-Flooded
telephone
number
("Number")
throughout
the
United
States.
Franchisor
has
also
developed
marketing
materials
for
businesses
using
the
Tradename.
Franchisee
wishes
to
obtain
a
license
to
use
the
Tradename
and
Number
within
the
Territory
defined
in
Schedule
A.
2.
Grant of Franchise.
Subject
to
the
terms
of
this
Agreement,
Franchisor
grants
to
Franchisee
the
exclusive
to
receive
telephone
calls
to
the
1-800-Flooded
telephone
number
from
the
telephone
prefixes
set
forth
in
Schedule
A
to
this
agreement
(hereafter
referred
to
as
"Territory").
Franchisee
acknowledges
that
Franchisor
cannot
give
Franchisee
exclusive
rights
to
any
particular
geographical
territory,
only
the
exclusive
rights
to
receive
calls
made
to
1-800-Flooded
from
certain
telephone
prefixes.
Any
Franchisee
may
accept
work
in
any
geographical
location.
3.
Term and Termination.
This
Agreement
shall
continue
indefinitely
unless
one
of
the
parties
chooses
to
terminate
it.
Franchisee
may
terminate
this
Agreement
at
any
time
without
cause
upon
two
months
written
notice
to
the
Franchisor.
Franchisor
may
terminate
only
on
the
conditions
set
forth
in
paragraph
10.
4.
Operating Assistance.
Franchisor
will
make
available
to
Franchisee
for
purchase
marketing
materials.
Examples
of
such
marketing
materials
are
set
forth
in
Schedule
B.
The
list
of
available
materials
may
change
from
time
to
time
in
Franchisor's
discretion.
Franchisee
will
be
provided
with
periodic
lists
of
inventory
of
available
marketing
materials
and
price
lists.
Franchisee
is
not
required
to
purchase
marketing
materials
from
Franchisor.
Franchisor
conducts
no
advertising
or
marketing
effort
on
its
own.
Any
advertising
or
public
use
of
the
1-800-Flooded
tradename
or
number
must
be
approved
in
advance
by
the
Franchisor.
l

20. 5.
Fees.
The
Franchisee
will
pay
fees
to
the
Franchisor
for
the
Tradename
and
Number
as
set
forth
in
Schedule
C.
6.
Tradename.
Franchisor
continues
to
own
the
Tradename
and
the
goodwill
associated
with
the
Tradename
throughout
the
term
of
this
Agreement.
Any
use
of
the
Tradename
except
as
authorized
by
this
Agreement
violates
Franchisor's
rights.
Any
advertisement
or
other
public
use
of
the
Tradename
shall
always
be
accompanied
by
the
"TM"
symbol
o
r
other
symbol
that
Franchisor
may
designate
in
writing
from
time
to
time.
7.
Independent Operation.
Franchisor
will
exercise
no
control
over
the
operation
of
Franchisee's
business.
Franchisee
will
refrain
from
representing
or
giving
the
appearance
that
there
is
any
legal
relationship
between
its
business
and
that
of
Franchisor
except
as
set
forth
in
this
Agreement,
that
is,
licensor/licensee
and
franchisor/franchisee.
Neither
party
is
an
agent
or
fiduciary
of
the
other.
Neither
party
is
responsible
for
the
obligations
of
the
other.
Neither
party
has
any
ownership
interest
in
th
e
other.
8.
Assignment.
Franchisor
may
freely
assign
its
rights
under
this
Agreement
including
the
right
to
the
Tradename
and
Number.
Franchisee
may
assign
its
rights
under
this
Agreement
only
with
Franchisor's
prior
written
consent,
which
shall
not
be
unreasonably
withheld.
Sale
of
more
than
a
50
percent
interest
in
Franchisee,
whether
by
sale
of
assets
or
stoc
k
or
any
other
transfer
which
effectively
conveys
more
than
50%
of
the
control
of
Franchisee
to
a
third
party,
constitutes
a
transfer.
Franchisor
may
require
a
transfer
fee.
9.
Acknowledgments.
Franchisee
acknowledges
that
the
following
facts
are
true:
A.
Franchisee
has
conducted
an
independent
investigation
of
the
business
contemplated
by
this
Agreement
and
understands
that
it
involves
business
risks.
The
success
of
the
venture
depends
on
the
abilities
and
participation
of
the
Franchisee.
Franchisor
has
made
no
claims
of
success
or
guarantees
to
Franchisee.
Franchisor
is
unable
to
evaluate
Franchisee's
suitability
for
this
type
of
investment.
Franchisee

21. has
the
sole
responsibility
for
determining
whether
to
enter
into
this

22. Agreement.
B.
Franchisee
acknowledges
that
Franchisor
has
provided
an
offering
circular
not
later
than
the
earlier
of
(a)
the
first
personal
meeting
held
to
discuss
the
sale
of
a
franchise;
(b)
ten
business
days
before
the
execution
of
this
Agreement;
or
(c)
ten
business
days
before
payment
of
any
consideration.
C.
Franchisee
has
read
the
offering
circular
and
understands
it
contents.
D.
Franchisee
has
received
a
copy
of
this
Agreement
at
least
five
business
days
before
signing
it.
E.
Franchisee
has
had
sufficient
opportunity
to
consult
with
its
attorneys,
accountants
and
other
advisors.
Franchisor's
attorneys
have
provided
Franchisee
with
no
legal
advice
or
representation.
Franchisee
has
sufficient
knowledge
and
experience
to
make
an
informed
investment
decision
with
respect
to
this
Agreement.
F.
Franchisee
understands
that
other
Franchisees
will
be
using
the
Tradename
and
Number
in
other
Territories.
Franchisor
has
no
obligation
to
control
other
Franchisees.
Franchisee
has
sole
responsibility
for
addressing
any
infringement
of
any
of
its
rights
under
this
Agreement
by
any
third
party.
10.
Default and Termination.
Franchisor
may
terminate
this
Agreement
immediately
and
revoke
the
license
to
use
the
Tradename
and
Number
if
any
of
the
following
events
takes
place:
A.
The
Franchisee
is
delinquent
by
more
than
thirty
days
in
the
payment
of
any
of
the
fees
set
forth
in
Schedule
C
or
in
its
payment
for
marketing
materials
purchased
from
Franchisor.
B.
The
Franchisee
files
a
petition
in
bankruptcy
(any
chapter)
or
a
bankruptcy
petition
(any
chapter)
is
filed
against
the
Franchisee,
or
th
e
Franchisee
becomes
insolvent,
or
the
Franchisee
makes
a
general
assignment
for
the
benefit
of
creditors,
or
a
receiver
or
other
custodian

23. takes
control
of
the
Franchisee's
business,
or
a
judgment
against
the
Franchisee
exceeding
$10,000
remains
unsatisfied
for
more
than
sixty
days.
C.
The
Franchisee
breaches
any
of
its
obligations
under
this
Agreement.
D.
The
Franchisee
violates
any
law
or
regulation
concerning
its
business,
or
the
Franchisee
commits
an
act
of
dishonesty
or
moral
turpitude
which
might
tend
to
bring
the
Tradename
or
the
Franchisor
into
disrepute.
E.
The
Franchisee
dies
or
is
incapacitated
or
fails
to
maintain
active
operation
of
the
business
in
which
the
Tradename
and
Number
are
used.
11.
After Termination.
After
this
Agreement
terminates,
Franchisee
will
cease
to
use
in
advertising
or
in
any
other
manner
the
Tradename.
12.
Indemnification.
Franchisee
will
hold
Franchisor,
its
officers,
directors,
employees,
agents,
attorneys
and
shareholders,
harmless
from
any
claims
for
damages
advanced
against
them
arising
out
of
the
operation
of
Franchisee's
business.
13.
Entire Contract
This
contract
sets
forth
the
entire
understanding
between
the
parties.
Any
conversations
that
the
parties
might
have
had
before
this
Agreement
was
signed
were
mere
discussions
and
have
no
force
or
effect.
Neither
party
has
made
any
representations
or
promises
to
the
other
regarding
the
subject
matter
of
this
Agreement.
Franchisor
has
made
no
statements
or
promises
about
what
revenue,
if
any,
the
Tradename
or
Number
might
generate
for
the
Franchisee.
14.
Amendments.
Any
amendments
to
this
Agreement
must
be
in
writing.
15.
Notices.
Any
notices
required
by
this
Agreement
may
be
sent
to
the
addresses
set
forth
in
Schedule
A
or
to
such
other
addresses
as
the
parties
may
designate
in
writing
from
time
to
time.

24.
16.
Choice of Law.
This
Agreement
shall
be
construed
according
to
the
laws
of
the
state
of
California.
17.
Choice of Forum.
Any
litigation
filed
by
either
party
against
the
other
arising
under
or
relating
to
this
Agreement
or
any
alleged
breach
of
the
obligations
of
either
party
under
this
Agreement
shall
be
filed
only
in
the
Superior
Court
of
Los
Angeles
County,
CA,
Central
District,
and
not
i
n
any
other
forum.
18.
Attorneys' Fees.
The
prevailing
party
in
any
dispute
arising
under
this
Agreement
shall
recover
its
reasonable
attorneys'
fees
and
costs,
including
fees
and
costs
incurred
on
appeal
or
in
enforcing
any
judgment
entered
in
its
favor
under
this
Agreement.
19.
Severability.
If
any
provision
of
this
Agreement
is
held
invalid,
such
provision
shall
be
deemed
to
be
restricted
in
its
application
as
necessary
to
render
it
valid,
and
the
remainder
of
this
Agreement
shall
remain
valid
and
enforceable
for
all
purposes.
1-800-Flooded,
Inc.
Franchisee
By:
Its:

25. Schedule
A
The
effective
date
of
this
Agreement
is:
The
name,
address,
and
telephone
number
of
the
Franchisor
are
1-800-
Flooded,
Inc.,
2156
Hillside
Drive,
Central
Point,
OR
97501.
The
name,
address,
and
telephone
number
of
the
Franchisee
are
The
numerical
prefixes
from
which
the
Franchisee
has
the
exclusive
right
to
receive
telephone
calls
to
1-800-Flooded
("Territory")
is

26. Schedule
B
The
marketing
materials
that
are
available
to
the
Franchisee
may
change
from
time
to
time
and
so
may
the
prices.
A
representative
sample
of
marketing
materials
which
may
be
available
from
the
Franchisor
is
liste
d
below.
The
Franchisor
will
supply
the
Franchisee
with
current
inventory
items
and
price
lists
on
request.
The
Franchisee
is
not
required
to
purchase
marketing
materials
from
Franchisor.
business
cards
magnetic
refrigerator
stickers
flyers
and
handouts
envelopes
stationery
newspaper
advertisements
signs
postcards
stickers

27. Schedule
C
The
Franchisee
will
pay
fees
to
the
Franchisor
as
follows:
1.
An
initial
franchise
fee,
payable
on
execution
of
this
Agreement,
i
n
the
amount
of
$59,995.00.
2.
A
monthly
franchise
fee,
payable
on
the
first
day
of
each
and
every
month
following
execution
of
this
agreement,
in
the
amount
of
$995.00.
Franchisee
acknowledges
that
the
monthly
franchise
fee
may
increase,
but
that
Franchisor
will
provide
at
least
sixty
days
notice
of
any
price
increase.
3.
Actual
charges
made
to
Franchisor
for
incoming
telephone
calls.
Franchisee
will
deposit
$400.00
for
these
charges.
Any
balance
remaining
at
the
conclusion
of
this
agreement
is
refundable
to
Franchisee.

28. 1000
•
Bank
of
America
-
Checking
719.87
1-800-Flooded,
Inc.
Balance
Sheet
cash
Basis
As
of
December
31,
2001
Dec
31,01
ASSETS
Current
Assets
Checking/Savings
Pagel
Total
Checking/Savings
719.87
Total
Current
Assets
719.87
Fixed
Assets
1210
•
Computer
1,359.92
Total
Fixed
Assets
1,359.92
Other
Assets
1320
•
1-800
Flooded
Number
30,000.00
Total
Other
Assets
30,000.00
TOTAL
ASSETS
32,079.79
LIABILITIES
&
EQUITY
Liabilities
Current
Liabilities
Other
Current
Liabilities
2020
-
Payable
to
Randy
T
210.94
Total
Other
Current
Liabilities
210.94
Total
Current
Liabilities
210.94
Total
Liabilities
210.94
Equity
3020
■
Add'l
to
Capital
3050
■
Capital
Stock
Net
Income
30,000.00
10,000.00
-8,131.15
Total
Equity
31,868.85
TOTAL
LIABILITIES
&
EQUITY
32,079.79

29. 1-800-Flooded,
Inc.
Profit
&
Loss
cash
Basis
September
through
December
2001
Net
Ordinary
Income
Other
Income/Expense
Other
Expense
8010
•
Other
Expenses
Total
Other
Expense
Net
Other
Income
Net
Income
Pagel
Sep
-
Dec
01
Ordinary
Income/Expense
Expense
6110
■
Automobile
Expense
61
i1
■
Gasoline
244.24
6112
•
Auto
Rental
(Auto
Rental)
287.68
6113
•
Auto
Repairs
159.26
Total
6110
•
Automobile
Expense
691.18
6120
-
Bank
Service
Charges
38.00
6230
-
Licenses
and
Permits
25.00
6250
-
Postage
and
Delivery
221.47
6270
•
Professional
Fees
6273
■
Web
Design
4,000.00
Total
6270
•
Professional
Fees
4,000.00
6340
•
Telephone
296
37
6350
•
Travel
&
Ent
6360
■
Entertainment
23.92
6370
•
Meals
612.56
Total
6350
•
Travel
&
Ent
636.48
6540
■
Office
Expenses
48.90
6550
■
Office
Supplies
146.67
Total
Expense
6,104.07

30. 1110-
Petty
Cash
560.52
Total
Equity
12,570.04
Cash
Basis
1-800-Flooded,
Inc.
Balance
Sheet
As
of
December
31,
2002
ASSETS
Current
Assets
Checking/Savings
1000
•
Bank
of
America
-
Checking
Total
Checking/Savings
Other
Current
Assets
Dec
31,
02
262.86
262.86
T
O
T
A
L
L
I
A
B
I
L
I
T
I
E
S
&
E
Q
U
I
T
Y
32,183.30
Page
1
Total
Other
Current
Assets
560.52
Total
Current
Assets
823.38
Fixed
Assets
1210
•
Computer
1,359.92
Total
Fixed
Assets
1,359.92
Other
Assets
1320
•
1-800
Flooded
Number
30,000.00
Total
Other
Assets
30,000.00
)TAL
ASSETS
32,183.30
LIABILITIES
&
EQUITY
Liabilities
Current
Liabilities
Other
Current
Liabilities
2020
■
Payable
to
Randy
T
19,613.26
Total
Other
Current
Liabilities
19,613.26
Total
Current
Liabilities
19,613.26
Total
Liabilities
19,613.26
Equity
3020
■
Add'l
to
Capital
30,000.00
3050
-
Capital
Stock
10,000.00
3500
■
Retained
Earnings
-8,131.15
Net
Income
-19,298.81

31. 2,000.00
920.27
Cash
Basis
1-800-Flooded,
Inc.
Profit
&
Loss
January
through
December
2002
Ordinary
Income/Expense
Expense
6110
■
Automobile
Expense
6111
•
Gasoline
6112
•
Auto
Rental
(Auto
Rental)
6113
-
Auto
Repairs
6110
•
Automobile
Expense
-
Other
Total
6110
•
Automobile
Expense
6120
■
Bank
Service
Charges
6170
■
Equipment
Rental
6180
•
Insurance
6184
■
Auto
Insurance
Total
6180
•
Insurance
6200
-
Interest
Expense
6220
■
Loan
Interest
Total
6200
•
Interest
Expense
6250
-
Postage
and
Delivery
6260
•
Printing
and
Reproduction
6261
-
Supplies
6260
•
Printing
and
Reproduction
-
Other
Total
6260
•
Printing
and
Reproduction
6270
•
Professional
Fees
6273
•
Web
Design
6270
•
Professional
Fees
-
Other
Total
6270
•
Professional
Fees
6300
■
Repairs
6330
-
Equipment
Repairs
Total
6300
■
Repairs
6340
•
Telephone
6350
•
Travel
&
Ent
6360
■
Entertainment
6370
■
Meals
6380
•
Travel
Total
6350
•
Travel
&
Ent
6390
■
Utilities
6400
-
Gas
and
Electric
Total
6390
•
Utilities
6540
-
Office
Expenses
6550
-
Office
Supplies
Total
Expense
Net
Ordinary
Income
Other
Income/Expense
Other
Expense
8010
■
Other
Expenses
Total
Other
Expense
Net
Other
Income
Net
income
Jan
-
Dec
02
684.16
40.89
1,925.52
314.00
2,964.57
174.00
320.00
248.83
248.83
300.00
5,275.00
5,575.00
13.95
13.95
1,932.34
72.69
334.43
2,600.00
3,007.12
129.28
129.28
403.47
491.46
18,210.31
-18,210.31
1,088.50
1,088.50
-1,088.50
-19,298.81
Pagel
2,000.00
30.02
887.94
32.33