Trademark Trial and Appeal Board Electronic Filing System. https://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA1125607
`
`Filing date:
`
`04/07/2021
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`91249446
`
`Party
`
`Correspondence
`Address
`
`Submission
`
`Filer's Name
`
`Filer's email
`
`Signature
`
`Date
`
`Attachments
`
`Plaintiff
`Music Makers Holdings LLC
`
`SHELDON H KLEIN
`LATHROP GPM LLP
`600 NEW HAMPSHIRE AVENUE NW THE WATERGATE - SUITE 700
`WASHINGTON, DC 20037
`UNITED STATES
`Primary Email: sheldon.klein@lathropgpm.com
`Secondary Email(s): molly.littman@lathropgpm.com, cyn-
`thia.hefferan@lathropgpm.com, trademark@lathropgpm.com
`202-295-2200
`
`Testimony For Plaintiff
`
`Molly R. Littman
`
`molly.littman@lathropgpm.com, sheldon.klein@lathropgpm.com, trade-
`mark@lathropgpm.com, lois.siljander@lathropgpm.com
`
`/Molly R. Littman/
`
`04/07/2021
`
`Exhibit 5 Part 1 to Sakell Declaration.pdf(5241583 bytes )
`Exhibit 5 Part 2 to Sakell Declaration.pdf(5166218 bytes )
`Exhibit 5 Part 3 to Sakell Declaration.pdf(5201779 bytes )
`Exhibit 5 Part 4 to Sakell Declaration.pdf(5128062 bytes )
`Exhibit 5 Part 5 to Sakell Declaration.pdf(5214836 bytes )
`Exhibit 5 Part 6 to Sakell Declaration.pdf(5241588 bytes )
`Exhibit 5 Part 7 to Sakell Declaration.pdf(4888802 bytes )
`
`

`

`EXHIBIT 5
`EXHIBIT 5
`
`

`

`FRANCHISE DISCLOSURE DOCUMENT
`
`
`
`AMERICA’S MUSIC SCHOOL LLC
`(a Marylandlimitedliability company)
`4819 St. Elmo Avenue
`Bethesda, MD 20814
`855-227-7570
`www. Bachtorock.com
`franchise@bachtorock.com
`
`America’s Music School LLC offers franchises for the establishment and operation of “Bach to
`Rock” music education centers that utilize a distinctive teaching method based onthe principle
`that music instruction is most effective when conductedin a socially interactive environment. The
`Bach to Rock music education centers, or schools, offer a diverse variety of classes and programs
`for children and adults, including group classes, private lessons, band sessions, early childhood
`classes, and special events programming.
`
`The total investment necessary to begin operation of a Bach to Rock franchise is $292,700 to
`$525,225. This includes $45,000 that must be paid to the franchisororits affiliates.
`If you sign
`an Area Development Agreementto develop multiple Bach to Rock schools in a specified area,
`you must also pay the franchisor an area development fee equal to the greater of 50%ofinitial
`franchise fees that are required for each Bach to Rock school or $20,000.
`
`This disclosure document summarizescertain 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 documentat least 14 calendar days before you sign
`a binding agreement with, or make any paymentto, the franchisor or an affiliate in connection
`with the proposed franchise sale. Note, however, that no governmental agency hasverified
`the information contained in this document.
`
`You may wish to receive your disclosure document in another format that is more convenient for
`you. To discussthe availability of disclosuresin different formats, contact Ralph Rillon, America’s
`Music Schoo! LLC, 4819 St. Elmo Avenue, Bethesda, MD 20814, 855-227-7570, or
`franchise@bachtorock.com.
`
`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-HELPor
`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 sourcesof information on franchising.
`
`There mayalso be laws on franchising in your state. Ask your state agencies about them.
`
`The issuance date of this Franchise Disclosure Documentis: April 17, 2020.
`
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`How to Use This Franchise Disclosure Document
`
`Here are some questions you may be asking about buying a franchise and tips on
`how to find more information:
`
`QUESTION
`
`WHERE TO FIND INFORMATION
`
`How much can|earn? Item 19 may give you information about
`
`outlet sales, costs, profits or losses. You
`should alsotry to obtain this information from
`others, like current and formerfranchisees.
`You can find their names and contact
`information in Item 20 or Exhibits G and H.
`
`How much will | need to ltems 5 and6list fees you will be paying
`
`invest?
`to the franchisor or at the franchisor’s
`direction. Item 7 lists the initial investment
`to open. Item 8 describes the suppliers
`you must use.
`
`
`
`ltem 21 or Exhibit E includes financial
`Does the franchisor have
`statements. Review these statements
`the financial ability to
`provide support to my
`carefully.
`
`business?
`
`Is the franchise system
`stable, growing, or
`shrinking?
`
`ltem 20 summarizesthe recent history of the
`number of company-owned and franchised
`outlets.
`
`ltem 12 and the “territory” provisions in the
`Will my business be the
`only Bach to Rock business|franchise agreement describe whetherthe
`in my area?
`franchisor and otherfranchisees can
`compete with you.
`
`Doesthe franchisor have a
`troubled legal history?
`
`Items 3 and 4 tell you whether the
`franchisoror its management have been
`involved in material litigation or bankruptcy
`proceedings.
`
`What’s it like to be a Bach to} Item 20 or Exhibits G andHlists current
`
`Rock franchisee?
`and formerfranchisees. You can contact
`them to ask abouttheir experiences.
`
`Whatelse should | know?
`
`These questions are only a few things you
`should look for. Review all 23 Items and all
`Exhibits in this disclosure documentto
`better understand this franchise
`opportunity. See the table of contents.
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`What You Need To Know About Franchising Generally
`
`Continuing responsibility to pay fees. You may have to pay royalties and other
`fees even if you are losing money.
`
`Business model can change. The franchise agreement mayallow the franchisor
`to change its manuals and business model without your consent. These changes
`may require you to make additional investmentsin your franchise business or may
`harm your franchise business.
`
`Supplier restrictions. You may haveto buy or lease items from the franchisor or
`a limited group of suppliers the franchisor designates. These items may be more
`expensive than similar items you could buy on your own.
`
`Operating restrictions. The franchise agreement may prohibit you from operating
`a similar business during the term of the franchise. There are usually other
`restrictions. Some examples mayinclude controlling your location, your accessto
`customers, what you sell, how you market, and your hours of operation.
`
`Competition from franchisor. Even if the franchise agreement grants you a
`territory, the franchisor may have the right to compete with you in your territory.
`
`Renewal. Your franchise agreement may not permit you to renew. Even if it does,
`you may have to sign a new agreementwith different terms and conditions in order
`to continue to operate your franchise business.
`
`When your franchise ends. The franchise agreement may prohibit you from
`operating a similar business after your franchise ends even if you still have
`obligations to your landlord or other creditors.
`
`Some States Require Registration
`
`Your state may have a franchise law, or other law, that requires franchisors
`to register before offering or selling franchises in the state. Registration does not
`mean that the state recommends the franchise or has verified the information in
`this document. Tofind outif your state has a registration requirement, or to contact
`your state, use the agencyinformation in Exhibit F.
`
`require special disclosures or
`Your state also may have laws that
`amendments be made to your franchise agreement. If so, you should check the
`State Specific Addenda. See the Table of Contents for the location of the State
`Specific Addenda.
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`Special Risks to Consider About This Franchise
`
`Certain states require that the following risk(s) be highlighted:
`
`1. Qut-of-State Dispute Resolution. The franchise agreement requires
`you to resolve disputes with the franchisor by mediation, arbitration
`and/orlitigation only in Maryland. Out-of-state mediation, arbitration, or
`litigation may force you to accept a less favorable settlement for
`disputes. It may also cost more to mediate, arbitrate, orlitigate with the
`franchisor in Maryland than in your own state.
`
`2.
`
`Spousal Liability. Your spouse must sign a document that makes your
`spouseliable for all financial obligations under the franchise agreement
`even though your spouse may have no ownership interest
`in the
`franchise. This guarantee will place both your and your spouse’s marital
`and personal assets, perhaps including your house, at risk if your
`franchisefails.
`
`3.
`
`There may be otherrisks concerningthis franchise.
`
`Certain states may require otherrisks to be highlighted. Check the “State
`Specific Addenda’ (if any) to see whether your state requires other risks to be
`highlighted.
`
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`ADDENDUM FOR THE STATE OF MICHIGAN
`
`THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE
`SOMETIMES IN FRANCHISE DOCUMENTS.
`IF ANY OF THE FOLLOWING PROVISIONS
`ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT
`BE ENFORCED AGAINST YOU:
`
`(A)
`
`A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN
`ASSOCIATION OF FRANCHISEES.
`
`
`
`(B) A REQUIREMENT THAT A FRANCHISEE ASSENT TO A_RELEASE,
`ASSIGNMENT, NOVATION, WAIVER, OR ESTOPPEL WHICH DEPRIVES A
`FRANCHISEE OF RIGHTS AND PROTECTIONS PROVIDED IN THIS ACT.
`THIS SHALL NOT PRECLUDE A FRANCHISEE, AFTER ENTERING INTO A
`FRANCHISE AGREEMENT, FROM SETTLING ANY AND ALL CLAIMS.
`
`(C)
`
`(D)
`
`A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A
`FRANCHISE PRIOR TO THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD
`CAUSE.
`GOOD CAUSE SHALL INCLUDE THE FAILURE OF THE
`FRANCHISEE TO COMPLY WITH ANY LAWFUL PROVISIONS OF THE
`FRANCHISE AGREEMENT AND TO CURE SUCH FAILURE AFTER BEING
`GIVEN WRITTEN NOTICE THEREOF AND A REASONABLE OPPORTUNITY,
`WHICH IN NO EVENT NEED BE MORE THAN
`
`30 DAYS, TO CURE SUCH FAILURE.
`
`APROVISION THAT PERMITS A FRANCHISOR TO REFUSE TO RENEW
`A FRANCHISE WITHOUT FAIRLY COMPENSATING THE FRANCHISEE BY
`REPURCHASE OR OTHER MEANS FOR THE FAIR MARKET VALUE, AT
`THE TIME OF EXPIRATION, OF THE FRANCHISEE’S INVENTORY,
`SUPPLIES,
`EQUIPMENT,
`FIXTURES, AND FURNISHINGS.
`PER-
`SONALIZED MATERIALS WHICH HAVE NO VALUE TO THE FRANCHISOR
`AND INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS
`NOT REASONABLY REQUIRED IN THE CONDUCT OF THE FRANCHISED
`BUSINESS ARE NOT SUBJECT TO COMPENSATION. THIS SUBSECTION
`APPLIES ONLY IF:
`(1) THE TERM OF THE FRANCHISE IS LESS THAN 5
`YEARS; AND (Il) THE FRANCHISEE IS PROHIBITED BY THE FRANCHISE
`OR
`OTHER AGREEMENT
`FROM CONTINUING
`TO
`CONDUCT
`SUBSTANTIALLY THE SAME BUSINESS UNDER ANOTHER TRADEMARK,
`SERVICE MARK, TRADE NAME, LOGOTYPE, ADVERTISING, OR OTHER
`COMMERCIAL SYMBOL IN THE SAME AREA SUBSEQUENT TO THE
`EXPIRATION OF THE FRANCHISE OR THE FRANCHISEE DOES NOT
`RECEIVE AT LEAST 6 MONTHS ADVANCE NOTICE OF FRANCHISOR’S
`INTENT NOT TO RENEW THE FRANCHISE.
`
`(E)
`
`A PROVISION THAT PERMITS THE FRANCHISOR TO REFUSE TO RENEW
`A FRANCHISE ON TERMS GENERALLY AVAILABLE TO OTHER
`FRANCHISEES OF THE SAME CLASS OR TYPE UNDER SIMILAR
`CIRCUMSTANCES.
`THIS SECTION DOES NOT REQUIRE A RENEWAL
`PROVISION.
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`(F)
`
`(G)
`
`(H)
`
`A PROVISION REQUIRING THAT ARBITRATION OR LITIGATION BE
`CONDUCTED OUTSIDE THIS STATE. THIS SHALL NOT PRECLUDE THE
`FRANCHISEE FROM ENTERING INTO AN AGREEMENT, AT THE TIME OF
`ARBITRATION, TO CONDUCT ARBITRATION AT A LOCATION OUTSIDE
`THIS STATE.
`
`A PROVISION WHICH PERMITS A FRANCHISOR TO REFUSE TO PERMIT
`A TRANSFER OF OWNERSHIP OF A FRANCHISE, EXCEPT FOR GOOD
`CAUSE. THIS SUBDIVISION DOES NOT PREVENT A FRANCHISOR FROM
`EXERCISING A RIGHT OF FIRST REFUSAL TO PURCHASE THE
`FRANCHISE. GOOD CAUSE SHALL INCLUDE, BUT IS NOT LIMITED TO:
`
`(i)
`
`(ii)
`
`(ili)
`
`(iv)
`
`THE FAILURE OF THE PROPOSED FRANCHISEE TO MEET
`THE
`FRANCHISOR’S
`THEN CURRENT
`REASONABLE
`QUALIFICATIONS OR STANDARDS.
`
`THE FACT THAT THE PROPOSED TRANSFEREE IS A
`COMPETITOR OF THE FRANCHISOR OR SUBFRANCHISOR.
`
`THE UNWILLINGNESS OF THE PROPOSED TRANSFEREE
`TO AGREE IN WRITING TO COMPLY WITH ALL LAWFUL
`OBLIGATIONS.
`
`FRANCHISEE OR PROPOSED
`THE FAILURE OF THE
`TRANSFEREE TO PAY ANY SUMS OWING TO THE
`FRANCHISOR OR TO CURE ANY DEFAULT IN THE
`FRANCHISE AGREEMENT EXISTING AT THE TIME OF THE
`PROPOSED TRANSFER.
`
`APROVISION THAT REQUIRES THE FRANCHISEE TO RESELL TO THE
`FRANCHISOR ITEMS THAT ARE NOT UNIQUELY IDENTIFIED WITH THE
`FRANCHISOR. THIS SUBDIVISION DOES NOT PROHIBIT A PROVISION
`THAT GRANTS TO A FRANCHISOR A RIGHT OF FIRST REFUSAL TO
`PURCHASE THE ASSETS OF A FRANCHISE ON THE SAME TERMS AND
`CONDITIONS AS A BONA FIDE THIRD PARTY WILLING AND ABLE TO
`PURCHASE THOSE ASSETS, NOR DOES THIS SUBDIVISION PROHIBIT A
`PROVISION THAT GRANTS THE FRANCHISOR THE RIGHT TO ACQUIRE
`THE ASSETS OF A FRANCHISE FOR THE MARKET OR APPRAISED VALUE
`OF SUCH ASSETS IF THE FRANCHISEE HAS BREACHED THE LAWFUL
`PROVISIONS OF THE FRANCHISE AGREEMENT AND HAS FAILED TO
`CURE THE BREACH IN THE MANNER PROVIDED IN SUBDIVISION(C).
`
`(I)
`
`A PROVISION WHICH PERMITS THE FRANCHISOR TO DIRECTLY OR
`INDIRECTLY CONVEY, ASSIGN, OR OTHERWISE TRANSFER ITS
`OBLIGATIONS TO FULFILL CONTRACTUAL OBLIGATIONS TO THE
`FRANCHISEE UNLESS PROVISION HAS BEEN MADE FOR PROVIDING THE
`REQUIRED CONTRACTUAL SERVICES.
`
`*
`
`*
`
`*
`
`*
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`THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY
`GENERAL
`DOES
`NOT
`CONSTITUTE
`APPROVAL,
`RECOMMENDATION,
`OR
`ENDORSEMENT BY THE ATTORNEY GENERAL.
`
`*
`
`*
`
`*
`
`*
`
`IF THE FRANCHISOR’S MOST RECENT FINANCIAL STATEMENTS ARE UNAUDITED
`AND SHOW A NET WORTH OF LESS THAN $100,000.00, THE FRANCHISOR MUST, AT
`THE REQUEST OF THE FRANCHISEE, ARRANGE FOR THE ESCROW OF INITIAL
`INVESTMENT AND OTHER FUNDS
`PAID BY THE FRANCHISEE UNTIL THE
`OBLIGATIONS TO PROVIDE REAL ESTATE, IMPROVEMENTS, EQUIPMENT, INVENTORY,
`TRAINING, OR OTHER ITEMS INCLUDED IN THE FRANCHISE OFFERING ARE FULFILLED.
`AT THE OPTION OF THE FRANCHISOR, A SURETY BOND MAY BE PROVIDED IN PLACE
`OF ESCROW.
`
`THE NAME AND ADDRESS OF THE FRANCHISOR’S AGENT IN THIS STATE
`AUTHORIZED TO RECEIVE SERVICE OF PROCESS IS: MICHIGAN DEPARTMENT OF
`COMMERCE, CORPORATION AND SECURITIES BUREAU, 6546 MERCANTILE WAY,P.O.
`BOX 30222, LANSING, MICHIGAN 48910.
`
`ANY QUESTIONS REGARDING THIS NOTICE SHOULD BE DIRECTED TO:
`DEPARTMENTOF THE ATTORNEY GENERAL'S OFFICE
`CONSUMER PROTECTION DIVISION
`ATTN: FRANCHISE
`670 G. MENNEN WILLIAMS BUILDING
`LANSING, MICHIGAN 48913
`
`NOTE: NOTWITHSTANDING PARAGRAPH(F) ABOVE, WE INTEND TO, AND YOU AGREE
`THAT WE AND YOU WILL, ENFORCE FULLY THE PROVISIONS OF THE ARBITRATION
`SECTION OF OUR AGREEMENTS.
`WE BELIEVE THAT PARAGRAPH (F)
`IS
`UNCONSTITUTIONAL AND CANNOT
`PRECLUDE US
`FROM ENFORCING THE
`ARBITRATION PROVISIONS.
`
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`

`Table of Contents
`
`Page
`
`ITEM 1.
`
`ITEM 2.
`ITEM 3.
`ITEM 4.
`ITEM 5.
`ITEM 6.
`ITEM 7.
`ITEM 8.
`ITEM 9.
`ITEM 10.
`ITEM 11.
`
`ITEM 12.
`ITEM 13.
`ITEM 14.
`ITEM 15.
`
`THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND
`AFFILIATES 1.0.0... cccccccecsecsctessstessessetsstesesteseeseeeeseeeeeeeeeeseeeeeeeeeeeseeeeseeeeeeeeeeeeeeeseseeers 1
`BUSINESS EXPERIENCE 1.0.2... cccecccceccscsececescseeeeceneeseeeeensaeseeesensseseeesentneeees 4
`LITIGATION .... 0.22... ccccceceeee eee cee eeeee eee eeeeeeeeeeeuseeeceeeeeeeeeeeeeeeeeeeeeeeeeeeeeeseeceeteeeeeeeeeeeees 6
`BANKRUPTCY .............cccccccsesssesssseseescssessesesseseceseeseesesseseeseseesececeeececeeeeceeeeeeseeeeseeess 6
`INITIAL FEES...0... ccc ccccccccccsscscssescsscssesseseseessessssesceseeseseceeeecesesseeceeceseeceseeeeeceseseeees 6
`OTHER FEES 000... ccc ccc ccccecccccccccceeeeseeeeeeeeseseeseseeaeeaueaeaaaaasseasseeseeesseeeseseeseseeees 7
`ESTIMATED INITIAL INVESTMENT ............0.00c0ccccccccccccccccsssscseeeeeececeseseeennauaueeeeees 14
`RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES ...................... 19
`FRANCHISEE'S OBLIGATIONS 2.00... cccccecseceeceeeeeeeeeeeeeeeeeeeeeeseeseeeeeeeeteeteeeeneetenes 25
`FINANCING 00. ccc ccccccceccececeeeeeeeeeeeeeeeeeeeeeeeeeeeaeeeeseeaeeaeaeeaesanaasauaaeaaaaaaaaaaaanaa 28
`FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS,
`AND TRAINING 000... ccc cccccccececcecceeceesaeauaueeeeeeeceessssaueeeeeeeecescsettananeeeeseesenenes 29
`TERRITORY 20.....ccccccccccccccccccccecccceceecesceeeecseeeeeceeeeceeeeaeeeeseeseeeeseeaeseesesaeeeeaeeaeaseasaaaaes 45
`TRADEMARKS...........0.ccccccccccecceceeesessseceececeseeceesesssseeeeesesesesescsesnaneneeeeeeeesesensnsneees 48
`PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION....................00005 51
`OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE
`FRANCHISE BUSINESS... ccc ccccccccesececeesesseceeceseneueeeccnssaeecesetssseesenetaeeseens 53
`RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL............0 ee 54
`ITEM 16.
`RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION............. 55
`ITEM 17.
`PUBLIC FIGURES 000... cccccccceceeseteeeeneeteeeseaeeeeseeaeeaeaeeaeaaeaeaaaaaaaaaaaasaaaaanaa 62
`ITEM 18.
`FINANCIAL PERFORMANCE REPRESENTATIONS ...............000:0c:ccesssseesesseseeseees 62
`ITEM 19.
`ITEM 20. OUTLETS AND FRANCHISEE INFORMATION ......0.......0.cccccccccessseceecceeeeeneneeeees 69
`ITEM 21.
`FINANCIAL STATEMENTS..................cccccccccceccccceeceececeeeeceeceeeeceeaeeeeeeseeeesaeseeaeeaeaanaes 73
`ITEM 22.
`CONTRACTS 7... oo... cccccccccccccceececsececessnsneuececeseeceeesesssseeeeesesesesescsesenenseeeeeeeeesensnstneees 73
`ITEM 23.
`RECEIPTS 00.0... cc ccc cccceeennneaeeeeeeeeececeeeseeceeeeeeseeeeesesceeseeeeeeeeeeeeeeseneneeeees 13
`
`EXHIBITS:
`
`A Franchise Agreement and Exhibits
`B Area Development Agreement
`C Harmony Gateway License Agreement
`D Table of Contents to Manual
`E Financial Statements
`F List of State Administrators/Agents for
`Service of Process
`List of Current Franchisees/Company-
`Owned Units
`
`@
`
`STATE EFFECTIVE DATES
`
`H List of Former Franchisees
`|
`State-specific Disclosures
`J State-specific Agreement Amendments
`K Franchisee Compliance Certification
`L General Release
`M Receipts (2 copies)
`
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`ITEM 1.
`
`THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
`
`The franchisor is America’s Music School LLC. To simplify the language in this disclosure
`document, we will refer to America’s Music School LLC as “AMS,” or “we,” “us,” or “our.” The
`terms “you” and “your” refer to the person who buys the franchise,
`the franchisee.
`If the
`purchaser of the franchise is a partnership, corporation, or other entity, “you” includes the
`franchisee's owners, who must sign a personal guarantee to the Franchise Agreement. By
`signing a guarantee, you will be personally (and jointly and severally) liable with the franchisee
`for the franchisee’s obligations under the Franchise Agreement.
`
`Unless otherwise defined in this disclosure document, all initially capitalized terms appearing in
`this disclosure document have the same meaning as set out
`in the attached Franchise
`Agreement, which is included as Exhibit A.
`
`Franchisor’s CompanyInformation
`
`We are a Marylandlimited liability company. We were organized on March 9, 2011. We do
`business under the name “America’s Music School” and “Bach to Rock.” Ourprincipal business
`addressis 4819 St. Elmo Avenue, Bethesda, MD 20814, and our phone numberis 855-227-7570.
`
`Ouragents for service of processare listed in Exhibit F of this disclosure document.
`
`Franchisor's Business
`
`Ouraffiliates (described below) own and operate Bach to Rock music education centers, which
`we refer to as “Bach to Rock Schools”or the “Schools.” Our affiliates have operated Bach to
`Rock Schools since July 2, 2007. As of December 31, 2019, our affiliates operated eight Schools.
`Our parent, Music Makers Holdings LLC (“MMH”) owns the Proprietary Marks (including the
`trademarks) and System (described below).
`
`We began offering franchises for Bach to Rock Schools in June 2011. As of February 2020, 32
`franchised locations are open.
`
`This disclosure document describes the franchises we offer for Bach to Rock Schools.
`
`Bach to Rock Schools and Bach to Rock Franchises
`
`Bach to Rock Schools are music education centers that utilize a distinctive teaching method
`based on the principle that music instruction is most effective when conducted in a socially
`interactive environment. The Bach to Rock Schools offer a diverse variety of classes and
`programs for children and adults, including group classes, private lessons, band sessions, early
`childhood classes, and special events programming, utilizing the music curriculum developed by
`us and/or our affiliates. Each Bach to Rock School must offer certain mandatory programs and
`classes, and may offer certain optional programs and classes. While the programming and
`coursesare intendedto be offered only at the School, there may be special events and/or courses
`that are offered or hosted off-site. The Schools feature state-of-the-art recording studios, along
`with practice rooms and equipmentfor individual and group lessons, band sessions, and other
`collaborative activities.
`
`We and our affiliates have developed a distinctive set of specifications and operating procedures
`(collectively, the “System”) for the Schools. The distinguishing characteristics of the System
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`include: a distinctive teaching method and curriculum; mandatory group and private music lessons
`and programs (“Core Programs”), optional group and private music lessons and programs
`(“Optional Programs”), and other coursesof instruction and programs (collectively, “Courses”):
`standards and specifications for School
`layout, design and equipment;
`standards and
`specifications for operation and administration of the Schools; and procedures for management
`and scheduling at the Schools. The System also includes a proprietary and specialized
`information technology and database system, currently identified as “Harmony Gateway” (and
`you will need to sign our Harmony Gateway License Agreement, which is Appendix |
`to the
`Franchise Agreement); training and assistance regarding the teaching methods, management
`and administration of the Schools; advertising and marketing programs; student development and
`service techniques and programs; and confidential operating manuals that include mandatory and
`suggested specifications, standards, policies, procedures and guidelines for operating Bach to
`Rock Schools,
`implementing the System, and teaching and conducting Courses (and the
`specifications, standards, guidelines, policies, programs, techniques and the like are referred to
`in this Disclosure Document as the “Manuals’”). Our System, and various aspects of the System,
`may be changed, improved and further developed byus orouraffiliates from time to time.
`
`Weidentify the Schools operating under the System by means of the trade names and marks
`“BACH TO ROCK,” “AMERICA’S MUSIC SCHOOL,” “B2R and design,” and certain other
`trademarks, service marks, trade names, signs, logos, and otherindicia of origin (collectively, the
`“Proprietary Marks”). We may designate other trade names, service marks, and trademarks as
`Proprietary Marks (and we mayalso periodically delete old names and marks).
`
`Wewill offer to enter into franchise agreements (“Franchise Agreements”) with qualified entities
`and persons that wish to establish and operate a Bach to Rock School. The form of Franchise
`Agreement that we intend to enter into with you should you and we mutually agreeto enterinto a
`franchise relationship is attached to this disclosure document as Exhibit A.
`
`Under a Franchise Agreement, we will grant you the right (and you will accept the obligation) to
`operate one Bach to Rock School(a “School” or “Franchised Business”) under the System and
`using the Proprietary Marks. You must lease, sublease, or acquire a site for the School, subject
`to our approval, under the site selection addendum (‘Site Selection Addendum”) whichis
`attached to the Franchise Agreement as Appendix E. You will sign the Site Selection Addendum
`at the same time you sign the Franchise Agreement, and you must follow the procedures for
`finding, selecting and receiving authorization for a site under the Site Selection Addendum. We
`expectthat the typical location for a School will be in a suburban or urban location, possibly in a
`retail strip mall or other retail location. However, a School may be locatedin a light industrial area
`with appropriate facilities that could accommodate the School.
`
`The Franchise Agreementwill establish a geographic area within which your School will be
`located (the “Territory”). The Franchise Agreement (as more fully described in this disclosure
`document) will describe the rights that you and we will have regarding the Territory, although,
`generally, we will not establish, operate or franchise another Bach to Rock Schoolin your Territory
`during the term of your Franchise Agreement.
`
`Area Development Agreement
`
`We also may offer an area development agreement (the “Area Development Agreement”) to
`qualified entities and persons (“you” or the “Developer’). The Area Development Agreement
`grants the right to establish and operate a specified number of Bach to Rock Schools in a specified
`area (the “Development Area”) at specific locations to be designated in separate Franchise
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`Agreements. The form of Area Development Agreementis attached to this disclosure document
`as Exhibit B.
`
`If you sign an Area Development Agreement, you must open each Bach to Rock School according
`to the schedule for developing Bach to Rock Schools described in Exhibit A to the Area
`Development Agreement (the “Development Schedule”). The Developer will exercise each
`development right by executing a Franchise Agreement for the establishment and operation of a
`Bach to Rock School.
`
`The numberof Bach to Rock Schools to be established under the Development Schedule will be
`mutually determined by you and us, based on the size of the Development Area, demographics
`and economic factors in the Development Area, expected demand for Schools, your desire and
`ability to develop and operate the Schools, and other factors. During the term of the Area
`Development Agreement you must operate and maintain at least the number of Bach to Rock
`Schools which are required to be established according to the terms of the Development
`Schedule.
`
`Beat Refinery
`
`We have developed an Optional Program called “Beat Refinery” that may be available to those
`franchisees that we determine, at our sole option, have satisfied our requirements for offering
`such Optional Program. You may not offer a Beat Refinery Optional Program unless we
`specifically approve you to do so, in writing. Beat Refinery courses teach those variousskill sets
`needed to become a DJ or enhance basic DJ knowledge. Beat Refinery instruction includes how
`to beat, match, scratch, drop mix, create mash-ups, and record multi-track mixes, along with
`various DJ/music theories. We expect that most franchisees will not offer Beat Refinery as part
`of the Bach to Rock School at the outset, but may wish to addit in the future.
`
`Parents, Predecessors and Affiliates
`
`We are a wholly owned subsidiary of Music Makers Holdings LLC (“MMH”), a Maryland limited
`liability company. MMH was organized on March 20, 2007. Its principal place of business is the
`same as ours, at 4819 St. Elmo Avenue, Bethesda, Maryland, 20814. MMH operates under the
`name “Music Makers Holdings” and “Bach to Rock.” MMH is our parent. As discussed below,
`MMH, through its subsidiaries, operates Bach to Rock Schools. MMH hasnotoffered franchises
`for Bach to Rock Schools, or franchises in any otherline of business.
`
`MMH is a subsidiary of Cambridge Information Group II LLC (“CIG’), a Maryland limited liability
`company formed on January 24, 2007. CIG’s principal business address is 7500 Old Georgetown
`Road, Suite 1400, Bethesda, MD 20814. CIG operates under the names CIG and Cambridge
`Information Group. CIG, and/or CIG’s affiliates, manage and invest in a variety of education,
`research and information services companies. (See www.cig.com.) Within the “education space,”
`along with Bach to Rock, CIG also owns Sotheby’s Institute of Art, which is an educational
`institution that offers master’s degreesin art scholarship, connoisseurship and art business. CIG
`also owns The School of the New York Times, which offers pre-collegiate programs and
`professional level online courses relevant to today’s digital world. ClIG does not own, operate or
`franchise any Bach to Rock Schools, and CIG has not offered franchisesin any line of business.
`
`The precursor to the Bach to Rock Schools was the music education center and school located
`in Bethesda, Maryland that was operated under the name “East Coast Music.” East Coast Music
`was owned and operated by East Coast Music Production Camp, LLC (“East Coast Music’).
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`East Coast Music Production Camp, LLC was organized on November 15, 2002 and commenced
`operations around that time. MMH, through a subsidiary, Music Makers St. Elmo LLC (“MM St.
`Elmo’), a Maryland limited liability company formed on April 18, 2007, acquired the assets of East
`Coast Music on July 6, 2007. Shortly thereafter, MMH acquired the intellectual property from MM
`St. Elmo and rebranded the Bethesda location as “Bach to Rock.” In addition, on July 2, 2007,
`MMH,
`through another subsidiary, opened a second Bach to Rock School
`location in
`Gaithersburg, Maryland. Currently, MMH, through wholly ownedsubsidiaries, operates six Bach
`to Rock Schools in the Washington, DC suburbs in Maryland and Virginia, and three Bach to Rock
`Schools in the Chicago,Illinois suburbs. East Coast Music is our “Predecessor” for disclosure
`purposesin this disclosure document. East Coast Music's principal address as of the date we
`acquired it was 4821 St. Elmo Avenue, Bethesda, Maryland.
`
`To our knowledge, East Coast Music has not offered franchises in any line of business. We do
`not have anyaffiliates that offer franchises in any line of business.
`
`General Market and Competition
`
`The primary programs and Coursesat Bach to Rock Schools consist of private, group and band
`lessons for the core audience of elementary, middle and high school students (5-16 years old).
`Schools also offer instruction for toddlers and preschoolers, as well as innovative summer camp
`programs andbirthday parties for kids of all ages. Bach to Rock Schools’ primary constituency
`is middle and upper income parents who place a premium on learning enhancementfor their
`children. Adults are a secondary audience, comprised of those seeking private lessons as well
`as the active adult community seeking musical enrichment activities. The principal competition
`for the programs and services offered at the Schools includes local music schools, music classes
`taught within retail music stores, independent music teachers, online lessons and self-teaching
`through instructional books, DVDs/CDs, etc.
`In addition, there are a small number of regional
`multiple-location branded music schools or programs and one national one.
`
`Industry Regulations
`
`Generally, we are not aware of any industry-specific or music-schoo!l specific laws or regulations
`with which you must comply. You must comply with copyright laws that pertain to copying,
`performing, arranging and recording the music and lyrics of others.
`In addition, you must comply
`with all local, state, and federal laws that apply to your School operations, including for example
`health,
`sanitation, no-smoking, EEOC, OSHA, discrimination,
`employment,
`and sexual
`harassment laws.
`The Americans with Disability Act of 1990 requires readily accessible
`accommodation for disabled persons and therefore may affect your building construction, site
`elements, entrance ramps, doors, seating, bathrooms, etc. You must obtain real estate permits
`(e.