STATUTE ITALIAN ASSOCIATION OF FRANCHISING (Approved by the Extraordinary General Meeting of 30/05/

Transcription

1 Art.1 CONSTITUTION STATUTE ITALIAN ASSOCIATION OF FRANCHISING (Approved by the Extraordinary General Meeting of 30/05/ An Association headquartered in Milan, Via Melchiorre Gioia 70, zip code 20125, is formed with the name "Associazione Italiana del Franchising" (Italian Franchising Association), or in abbreviated form "AIF". Art.2 TERM The Association has unlimited duration. Art.3 PURPOSE The Association is non-profit and has the following aims: a) to represent the general interests of franchising in Italy and other countries; b) to represent, defend and promote, both in Italy and other countries, the economic, social and professional interests of its own Member Franchisors, i.e. those who in the context of their business grant the use of their own commercial formula to the Franchisee through an appropriate contract; this contract includes the right to exploit their know-how (all the techniques and knowledge needed) as well as their distinctive signs, together with other benefits and forms of assistance useful in allowing Franchisees to manage their activity under the same corporate image as the Franchisor; c) to promote suitable initiatives to defend and assert the interests which are common to its members in relation to any administration, body, association and public or private organisation; d) to promote the research of economic, legal, fiscal and commercial problems of general interest to Member Franchisors as well as specific ones, determining criteria and guidelines which should be followed to solve them; e) to distribute information on the development of Franchising in Italy and the world, both among Members and across the economic environment;

2 f) to promote appropriate initiatives with public and private organisations to qualify franchising and thereby include it in official events relating to internal and external commerce (fairs, trade shows, etc.); g) to promote an exchange of information with similar organisations, both within Italy and internationally, with the aim of implementing common initiatives; h) to spread and encourage Members to observe the Assofranchising Code of Ethics; i) to develop the assistance provided to the Association s own Member Franchisors by investigating topics of common interest through the promotion of seminars, conventions, conferences, study days and roundtables; l) to fulfil any additional tasks concerning the association's activity, as decided by the General Meeting. The Association will not distribute, even indirectly, profits or surpluses as well as funds, reserves or capital during the life of the Association, unless the use or distribution is required by law. Art. 4 MEMBERS 4.1. There are 3 categories of Members: a) Effective Member Franchisors, i.e. Companies or Sole Proprietorships which own companies that have been operating Franchises for at least 12 months, with a minimum of 3 operational Franchisees; b) Prospective Member Franchisors, i.e. Companies or Sole Proprietorships which aim to build or manage franchising networks, but which at the time of registration do not yet operate or do not meet all the requirements established for Effective Member Franchisors. After two years have elapsed from registration, any Prospective Member Franchisor who still does not fulfil all the requirements foreseen for the category of Effective Member Franchisor ceases to be a Member of the Association;

3 c) Honorary Members i.e. individuals, Companies and Bodies which have contributed to the spread, support or improvement of Franchising through their activity, by contributing their experience and/or their economic/financial assistance; 4.2. The requirements for being registered in one of the abovementioned categories shall be subject to appropriate resolutions passed by the Advisory Committee and may be modified by subsequent resolutions In order to be admitted to join the Association, it is necessary to forward the appropriate request to the Advisory Committee. This must be accompanied by an indication of the name, registered office, legal representation (or personal particulars) and activity performed. Admission as a Member is decided at the sole discretion of the Advisory Committee and will take effect from the date on which the approved candidate s first membership fees are paid to the Association s bank Members are obliged to comply with this Statute and the resolutions of corporate bodies adopted on the basis of the Statute and the Internal Rules and Regulations, under penalty of exclusion from the association. ART. 5 PROFESSIONAL ADVISORS 5.1. The Register of Professional Advisors is made up of Companies, Sole Proprietorships or individuals which supply goods and/or services to Effective Member Franchisors and/or Prospective Member Franchisors, as well as Companies, Sole Proprietorships, individuals, Bodies, Associations and Institutions which have an interest in raising awareness of and promoting Franchising. All the above can register by forwarding an appropriate request to the Advisory Committee Admission to the Register of Professional Advisors is decided at the sole discretion of the Advisory Committee and will take effect from the date on which the approved candidate s first membership fees are paid to the Association s bank Members of the Register must take responsibility for activities related to researching, raising awareness of and qualifying Franchising, under procedures they have themselves chosen; to this end, they may also organise cultural and awareness-raising events which must in any event remain within the Association s scope and respect its aims They cannot however organise events which go beyond the scope of culture without the prior consent of the Association's Advisory Committee.

4 5.5. Members of the Register undertake to comply with the Code of Conduct for the Register and the Association s Rules and Regulations and Code of Ethics where applicable. Art. 6 MEMBERSHIP FEE AND TERM OF AGREEMENT 6.1. Effective Members and Prospective Franchisors and Members of the Register of Professional Advisors are obliged to pay the membership fees fixed by a resolution of the General Meeting at the Advisory Committee s proposal, having taken account of the estimated budget approved by the same General Meeting Effective Member Franchisors are obliged to pay a variable annual fixed membership fee. This has a minimum and maximum limit which will be in line with the number of Sales Outlets in operation and their surface area in square metres. Effective Member Franchisors will be obliged to disclose the number of Sales Outlets in operation as of 31 December of the year preceding the one relating to the membership payment, and the relevant surface area in square metres for calculating the fee which they are liable for, under procedures and timescales which the Advisory Committee will establish Prospective Member Franchisors and Members of the Register of Professional Advisors are obliged to pay only a fixed annual membership fee; this will differ for each category and, for registration to the Register of Professional Advisors, is also based on the type of member The agreement expires on 31 December each year and is intended to be renewed on an annual basis for a one-year term, providing it is not cancelled by the member by a registered letter sent at least three months before expiry The effectiveness of the relationship of membership expressly excludes temporary arrangements for participation in community life In exceptional cases, if the withdrawal is notified at a later date to September 30, and partner requests that the effects not begin before the end of the following year, the Board of Directors may at its sole discretion to grant the request, provided it is paid 50% of the share over the next year to the balance of amounts accrued and unpaid. Art. 7 - CORPORATE REVENUES FINANCIAL YEAR FINANCIAL STATEMENTS

5 7.1. Corporate revenues are made up of membership fees and any other income The Association s financial year runs from 1 January to 31 December each year The Advisory Committee draws up and submits the final Financial Statements for the approval of the General Meeting, as well as the budget along with the appropriate report. Art. 8 THE ASSOCIATION S INSTITUTIONAL BODIES 8.1. The institutional bodies are: a) The General Members Meeting b) The Advisory Committee c) The Chairman d) The Honorary Chairman, if appointed e) The Deputy Chairman, if appointed f) The Audit Committee g) The Arbitration Committee 8.2. The term in office of the elective institutional bodies referred to in points b), c), d), e), f), g) above is three years, without prejudice to the authority of the General Members Meeting to fix shorter durations from time to time. Members in office may be re-elected With the exception of the Arbitration Committee - for which members are chosen from individuals outside the Association - representatives of Effective Member Franchisors are eligible for positions, and delegated for this purpose. Art. 9 GENERAL MEMBERS MEETING 9.1. The General Meeting is made up of all Effective Member Franchisors, as well as Honorary Members. Only Effective Member Franchisors have the right to vote The Ordinary General Meeting: Approves the final financial statements and budget and sets the membership fees Elects members of the Advisory Committee, the Audit Committee and the Arbitration Committee Decides on all the topics which the Advisory Committee has listed on the agenda.

6 The Ordinary Meeting is validly constituted on first call with the presence of shareholders representing Effective Franchisors 51% of the votes ( as set out below all'art.9.6 ) ; for the validity of the relevant resolutions require the affirmative vote of a majority of the votes present. In the second call the Meeting is validly constituted regardless of the number of shareholders Auditors Franchisors participants and shall be a majority of the votes present The Ordinary General Meeting shall meet at least once a year by April 30 and may be convened whenever the Board of Directors deems it necessary or is requested by at least a number of shareholders Auditors Franchisors who represent a quarter of the votes The Extraordinary General Meeting: Approves amendments in the Statute Decides on the dissolution of the Association by determining procedures for this to occur and by appointing one or more liquidators and defining their powers The Ordinary General Meeting is validly constituted on first convocation with the presence of Effective Member Franchisors representing 51% of the votes referred to in art. 8; for the related decisions to be valid, a favourable vote is required from the majority of those present. On second convocation, the Ordinary General Meeting is validly constituted regardless of the number of Effective Member Franchisors with the right to vote who participate; decisions are taken on the basis of the majority vote of those present In any case, for resolutions relating to the dissolution of the Association is always required the favorable vote of shareholders representing 51% of the votes referred to below article The Extraordinary General Meeting is called every time that the Advisory Committee considers it appropriate or whenever the Advisory Committee receives a request from Effective Member Franchisors representing at least a quarter of the votes The General Meeting is called by a registered letter, and/or by PEC, addressed to each Member at least twenty days before the date fixed 9.5. A Member can be represented at the general meeting by a third person with written proxy. The same person (whether they are a Member or non-member) cannot represent more than two Members in the General Meeting.

7 9.6. Each Effective Member Franchisor has the right to 5 votes plus other votes, for a maximum total of 70 votes in all, which shall be assigned as follows: Franchising of products 5 votes for every 30 shops with a surface area between 0 and 100m2. 7 votes for every 30 shops with a surface area between 101 and 400m2. 10 votes for every 30 shops with a surface area greater than 400m2. Franchising of services 2 votes for every 30 shops with a surface area between 0 and 20 m2. 7 votes for every 30 shops with a surface area between 21 and 100 m2. 9 votes for every 30 shops with a surface area greater than 100 m The General Meeting is chaired by the Chairman of the Advisory Committee, or, in his/her absence, by the Deputy Chaairman, or in them absence, by a person appointed by the General Meeting The Secretary of the General Meeting is appointed by the same General Meeting The General Meeting s resolutions must be accounted for by minutes written by the Chairman or the Secretary. Art. 10 ADVISORY COMMITTEE The Advisory Committee is made up of no less than five and no greater than fifteen members It is formed as follows: - by representatives who, if need be, may be delegates of Effective Member Franchisors - by the retiring Chairman With the purpose of ensuring adequate representation within the Advisory Committee of Effective Member Franchisors with the right to 30 votes or less than 30 votes, at least 20% of the members of the Advisory Committee must be represented by this group The Company s Legal Representative, the Company s Chief Executive, or a qualified Member of a Company which is part of the Association as an Effective Member Franchisor, can be appointed as a member of the Advisory Committee. For Companies

8 which manage diversified activities only, the highest-ranking director responsible for the franchising network can be appointed. The event that members of the Advisory Committee are parties with legal status, they must themselves be represented by their own legal representatives or by individuals delegated in writing for this purpose. Any exceptions must be approved by the Advisory Committee The retiring Chairman is by law part of the new Advisory Committee, with a right to vote during the Committee s mandate period All powers for ordinary and extraordinary management rest with the Advisory Committee, in implementing all aims of the Association which are not expressly granted to the General Meeting by this Statute The Advisory Committee elects a Chairman from its members; a Treasurer, who will manage the Association s funds; and a General Secretary, who will act as Secretary of the Committee and be responsible for organisational and executive aspects of the Association. In addition, the Board of Directors may elect from among its members an Honorary Chairman, a Deputy Chairman, one or more Vice Presidents of which the one with the most seniority in the presence of the Board of Directors will serve as President in the absence of the President and Vice President and / or vacation in the offices of Chairman and Deputy Chairman The General Secretary can also be chosen from individuals who are not part of the Committee; in this case, the General Secretary shall participate in meetings of the Advisory Committee without the right to vote The Advisory Committee can appoint research commissions with responsibility for specific sectors or issues The Advisory Committee has the authority to establish the emoluments of the administrative bodies or their individual members The Advisory Committee is called by the Chairman or in his absence by one or other of the Vice-Chairmen, at least once every quarter The Committee must be called when the Chairman has received a request for this to occur from at least three members of the Committee.

9 10.13 The convocation notice - indicating the topics on the agenda - must be sent to each Committee member at least eight days before the day fixed for the meeting, or, in case of urgency, at least three days before the day of the meeting The Committee s resolutions are valid if expressed with the intervention of the majority of Committee Members and with a favourable vote from the majority of those present In case of equal votes in the resolution, the deciding vote shall be cast by the Chairman In the event of special need or for serious personal reasons, a member of the Committee may be represented by proxy by another Committee Member or by another person who holds a Director s role in a Company or Body which is itself a member, where expressly delegated for this purpose and provided it is for no more than two consecutive sessions On the third consecutive absence, the Advisory Committee shall proceed to replace the absent member by co-opting a new member In the event of one or more members resignation from the Advisory Committee, authority is given to the Committee itself to co-opt new members to replace the missing members. The new co-opted Committee Members shall remain in office until the next elections In the event of simultaneous resignations of more than half the Committee Members, the entire Advisory Committee must tender its resignation and a General Members Meeting - specially called for this purpose - must proceed to elect a new Advisory Committee The Board can not be part of other industry associations having similar purposes (ex art. 3 of this Statute), with similar institutional roles The Advisory Committee s resolutions must be accounted for by minutes written by the Chairman or the Secretary. Art.11 CHAIRMAN 11.1 The Chairman has the following functions:

10 a) to legally represent the Association towards third parties and when faced with legal proceedings. b) to call and chair the General Members Meeting. c) to enforce the decisions of the General Members Meeting and the Advisory Committee. d) to monitor the activity of research commissions The Chairman is elected by members of the Advisory Committee from its own members. The election shall take place by secret ballot. A majority of 50% plus one of the members of the Committee shall be sufficient in the election The Chairman holds office for three years and can be re-elected for a maximum of two additional consecutive terms. The duration is considered completed after at least 18 months and 1 day. Art.11 bis DEPUTY CHAIRMAN 11.1.bis The Deputy Chairman, in case of absence or temporary unavailability of the President, has the following functions: a) legally represents the Association before third parties and in legal proceedings; b) calls the Shareholders' Meeting and the Board of Directors and presides over them; c) implementing the resolutions of the Shareholders and Board of Directors; d) scrutinizes the activities of any study commissions. The above functions can also be delegated, in whole or in part, by the President to the Vice Chairman bis The Deputy Chairman is elected by the members of the Board of Directors from among the members thereof. The election shall be by secret ballot. Will be sufficient to elect a majority of 50% plus one of the members of the Board.

11 11.3.bis The Deputy Chairman holds office for three years, was re-elected for a maximum of two additional consecutive terms. The duration is considered completed after at least 18 months and 1 day. Art. 11 ter HONORARY CHAIRMAN ter The Governing Council, on a proposal from the President-elect, may appoint an Honorary President ter The proposed person must have acquired special merits for their work on behalf of the Association; ter The Honorary President shall attend the meetings of the Governing Council in an advisory capacity, without voting dirtitto ; if it was the Past President to be appointed Honorary President, they will still do right part of the Governing Council, with voting rightsì, as established in the preceding article ter The Honorary President holds office for 3 years and is re-elected. Art.12 AUDIT COMMITTEE The Audit Committee controls the Association s administrative management and is made up of an odd number of members fixed by the General Meeting, consisting of n more than three statutory members and two substitute members Any emoluments to members of the Audit Committee are established by the Advisory Committee. Art. 13 ARBITRATION COMMITTEE The Arbitration Committee is elected by the General Meeting at the Advisory Committee s proposal and is made up of an odd number of between 5 and 7 members, chosen from individuals external to the Association with suitable professional competence in the judicial, legal or economic fields.

12 13.2. The Committee has the following functions: a) to control conflicts of responsibility, representation and any other dispute which could arise between bodies and/or Members of the Association b) to check for possible violations by Members of the rules within the Association s Code of Ethics or Rules and Regulations, according to the procedures described in art. 14 below c) to decide on every appeal relating to the statutory legitimacy of decisions and resolutions issued by institutional bodies. d) to monitor respect of the Statute by notifying the Committee of any violations which have been verified The Arbitration Committee has the authority to be present without the right to vote at General Meetings of Members or the Advisory Committee In the session in which it is inaugurated - which must be called by the Association s Chairman - the Committee elects its own Chairman and Secretary The Committee has an office at the Association and meets on convocation of its Chairman on every occasion he/she considers necessary and/or at the request of the Chairman of the Advisory Committee Except in cases of special commitments (for which a delay can be put in place), the Arbitration Committee must decide within sixty days of receiving the request and in relation to points a), c), d) of this article must notify the Advisory Committee of the arbitration award or in relation to point b) of this article communicate its own decision to the Advisory Committee together with any penalty proposed The Arbitration Committee s meetings are validly constituted when at least 50% plus one of its members is present. The Arbitration Committee takes decisions with a favourable vote from the majority of members present, with abstention not permitted Members of the Arbitration Committee are due an attendance fee, for an amount which is decided by the Advisory Committee each year.

13 13.9. Meetings of the Arbitration Committee are not public. Arbitration awards and decisions of the Committee are final and unappealable. Art VIOLATIONS OF THE CODE OF ETHICS Any interested party, even one that is external to the Association, may request that the Arbitration Committee checks for a violation of the Association s Code of Ethics or Rules and Regulations Requests are formulated in writing and contain a description and documentation of the facts. They are addressed to the Association s General Secretary, who, once adequately informed, proceeds to convey this information to the Chairman, or, in case of his absence or his temporary unavailability, the Vice Chairman, which will convene the Appeals Board. The parties may be assisted or represented by professionals of their choice Without prejudice to the rights of defence and the principle of cross-examination, the Arbitration Committee verifies if the case examined violates the Association s Code of Ethics and Rules and Regulations and issues its own decision of guilty or not guilty, succinctly justified by expressing the seriousness and any recurrence of the offence, filing this with the Association s secretary and forwarding a copy to the Chairman of the Association. The role of Secretary of the Arbitration Committee, when it meets in a disciplinary capacity, is performed by the Association s General Secretary. The Arbitration Committee meets periodically in its disciplinary role on the Chairman s convocation. It does so at the headquarters of the Association, according to a calendar which is fixed from time to time by the Chairman. In urgent cases, the Chairman can also ask the Arbitration Committee to meet as an exception to the calendar already established If the decision issued by the Arbitration Committee confirms that the Organisation s Code of Ethics or Rules and Regulations were violated, the Arbitration Committee itself proposes the penalties which must be prepared for the transgressor to the Advisory Committee, by assessing the seriousness of the violation and any repeat offence that may have occurred The penalties that the Arbitration Committee can propose are: 1. letter of rebuke

14 2. letter of rebuke with warning of further penalties 3. prohibition from use of the Assofranchising trademark 4. proposal to the Advisory Committee of exclusion from the Association Once the Advisory Committee has received the penalty proposal from the Arbitration Committee, it meets after an urgent convocation issued by the Chairman, or, in case of his absence or his temporary unavailability, the Vice Chairman, to reach a majority decision on whether to accept the proposal or not, with a final and unappealable decision. The Chairman of the Arbitration Committee participates in the meeting but any Committee Members implicated in the violation are excluded In the event of enforcement of the penalty referred to in points 3 and 4, the Advisory Committee may arrange to publish an extract of the proceeding in three nationallycirculated newspapers, under its own responsibility but at the transgressor s expense. This may report the transgressor s name or company name, as well as the rationale for and extent of the penalty applied. The decision taken by the Committee is communicated to all parties. Art. 15 TERMINATION OF MEMBERSHIP STATUS Membership status is lost: a) Through voluntary withdrawal which must be communicated by registered letter with acknowledgement of receipt to the Advisory Committee and shall take effect from 1 January of the year subsequent to the date of the registered letter of withdrawal. The latter must be sent to the Association by 30 September each year. b) When the Member no longer performs an activity relevant to the Association s activity. Even in this case, the termination must be communicated to the Advisory Committee by registered letter with acknowledgement of receipt and shall take effect from 1 January of the year subsequent to the date of the abovementioned letter. c) When two years have elapsed from registration and the Potential Member Franchisor still does not satisfy all the requirements foreseen for the category of Effective Member Franchisor.

15 d) If the Member is declared bankrupt or is subject to insolvency proceedings or ceases activity. Art 16 EXCLUSION FROM THE ASSOCIATION Members are excluded under the following circumstances: a) if they violate the rules of this Statute and/or those relating to the use of the trademark, logo and distinctive signs of the Association. b) if their behaviour damages the principles of propriety, seriousness, loyalty and trust which form the basis of the Association. Companies which directly or indirectly have an interest in businesses which conduct themselves in a manner that damages the principles of propriety, seriousness, loyalty and trust which form the basis of the Association are also excluded from the Association. c) if they violate the Association s Code of Ethics and Rules and Regulations. d) if they are in payment arrears for the annual membership fee at the end of the second month following an appropriate payment request from the Association. e) if they issue false declarations or certificates to the Association and/or its bodies Any exclusion is decided on by the Advisory Committee. This decision is final and unappealable. Art USE OF THE ASSOCIATION S TRADEMARK, LOGO AND DISTINCTIVE SIGNS Only the Association and its Members have the right to use the trademark, logo and other distinctive signs of the Association on their own letterhead, advertising and promotional material and on other documents and publications; they must do so in line with the guidelines laid down for each category of Member which are contained in the identification manual prepared for this purpose, and must always jointly use their own company name; for Member Franchisors, this must be done in combination with the trademark which identifies their system of Franchising The trademark, logo and distinctive signs of the Association cannot be used by companies which are subsidiaries of Members or affiliated to them.

16 17.3. Members are obliged to inform the Association s Advisory Committee of every unauthorised use of the Association s trademark, logo and distinctive signs, whether it occurs in their own name or is not in compliance with the rules contained in the identification manual All rights and privileges of the Association s aforesaid trademark, logo and distinctive signs will be fully forfeited at the moment that their membership of the Association is terminated. Art. 18 DISSOLUTION AND LIQUIDATION OF THE ASSOCIATION 18.1 The dissolution of the Association is approved by the Extraordinary Shareholders as stipulated in Article E 'obligation to donate the assets of the institution, in the event of its dissolution for any reason, to another association with similar purposes or for the purposes of public utility. Art. 19 GENERAL PROVISIONS For all aspects not foreseen by this Statute, the laws of the Civil Code regarding Associations apply The Court of Milan is elected to resolve any dispute between Members and the Association which is not within the remit of the Arbitration Committee.