Co-Owning a Franchise? Get a Written Partnership Agreement
Buying a franchise with a partner, whether a friend, a family member, or a former colleague, can feel straightforward at the start. Trust already exists, so co-owners often skip a formal franchise partnership agreement. That is a mistake. Even strong relationships run into friction when expectations are not written down, and a franchise adds a wrinkle most partnerships do not have: the franchisor. Here is why a written agreement matters and what belongs in it. (A clean agreement also protects the value you will one day sell, and it heads off the kind of issues covered in what can derail a franchise sale.)
Why co-owners need an agreement
A partnership agreement is one of the most important documents a franchise can have. It creates a shared understanding of how the business runs and heads off misunderstandings before they grow into disputes. Just as important, it protects the value you are both building, which matters enormously when one of you eventually wants to exit or the franchise term comes up for renewal.
What to put in writing
Start with the foundation: ownership percentages, how profits are distributed, and how losses are handled. These feel obvious until an assumption turns into an argument. Then spell out each partner’s role. In many franchises one owner runs day-to-day operations while the other handles finances or growth. Clear duties prevent the confusion and resentment that build up over time.
Account for the franchisor
Unlike an independent business, a franchise operates under a franchise agreement with transfer rules, approval rights, and a defined term. Your partnership agreement should reference those obligations directly: who maintains the relationship with the franchisor, how a partner’s exit interacts with the franchisor’s transfer-approval process, and what happens as the franchise term winds down.
Plan for money and decisions
Money is the most common source of tension. Explain how profits are divided, how expenses are covered, and what happens if the franchise needs additional capital for a remodel, a required upgrade, or a second unit. Then define how major decisions get made, whether by equal vote or assigned authority, and include a clause for breaking a deadlock.
Expect the unexpected
A good agreement prepares for events no one wants to think about: adding a partner, buying out a departing one, or handling a death or disability. A clear buy-sell provision is what keeps a franchise sale clean when the time comes, instead of stalling the deal at the worst possible moment.
Frequently asked questions
Do franchise co-owners really need a written agreement?
Yes. Trust is not a substitute for written terms. An agreement protects both the franchise and the people running it, and it makes an eventual sale or exit far smoother.
How does the franchisor affect a partnership agreement?
The franchisor controls transfers and approvals, so your agreement should map to the franchise agreement, especially around a partner’s exit and the remaining term.
Should I use a template?
Templates rarely cover franchise-specific details. An experienced attorney or brokerage professional can draft an agreement that accounts for franchisor rules and applicable law.
Thinking ahead to a franchise sale?
A clean partnership structure makes selling easier. Talk to Franchise Sellers, or call 800-499-4280.
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Negotiating a Franchise Deal: The Power of Questions
At the heart of any good franchise deal is a series of questions. Whether you are buying or selling, the right questions, asked at the right time, are what move a negotiation forward and surface problems before they become deal-breakers. Here is why questions matter so much, and how to negotiate a franchise deal that works for both sides.
Good deals rely on questions
Choosing the right franchise, or the right buyer, comes down to asking the right questions and probing deeper when an answer seems off. It sounds simple, but it is where most of the value in a negotiation is created. An experienced advisor knows which questions to ask and why, which is a big part of what makes them valuable in a complex deal.
Understanding matters more than money
People often assume negotiation is all about price. In reality it is far more nuanced. The financials matter, of course, but so do arrangements with key employees, how long the current owner stays on to help with the transition, the franchisor’s approval, and more. Good negotiations usually come down to how well each side understands the other’s perspective, and that understanding starts with questions.
Try splitting the difference
Deals often stall on the numbers. One of the simplest ways past that is a single powerful question: can we split the difference? Offering to meet in the middle signals goodwill and a willingness to be reasonable, and it has salvaged countless deals. As long as both sides keep talking, a positive outcome is still possible.
Keep emotion out of it
Negotiating directly, owner to buyer, can get emotional fast, and emotion rarely helps a deal. A business broker or M&A advisor keeps the temperature down while bringing years of hands-on experience to the table. Removing the emotion, and asking the right questions, is often what gets a franchise deal to the finish line.
Frequently asked questions
What is the most useful question in a franchise negotiation?
When the two sides are apart on price, “can we split the difference?” is remarkably effective. More broadly, questions that surface the other side’s real priorities create room for a deal.
Is negotiating a franchise sale only about price?
No. Terms like transition support, employee arrangements, financing, and franchisor approval often matter as much as the number. Understanding both sides’ priorities is what closes deals.
Should I negotiate directly with the other party?
It is usually better to work through an advisor. They keep emotions in check, ask the right questions, and bring experience that protects your interests.
Preparing to negotiate a franchise deal?
The right questions make the difference. Talk to Franchise Sellers about buying or selling a franchise, or call 800-499-4280.
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5 Things to Investigate Before Buying a Franchise Resale
Excitement is the enemy of a good acquisition. A franchise resale can look like a perfect opportunity at first glance, then unravel once you dig in. Keeping a cool head and investigating the right things is what separates a smart purchase from an expensive lesson. Here are five points every buyer should examine before agreeing to a franchise resale. (Once you are serious, it also helps to know what to expect during franchise due diligence.)
1. How the unit is actually performing
Set aside how much you like the concept or the current owner. The decision comes down to how the specific location performs. Look at the trend, not just a single strong year, and be honest about how much work the business demands. A capable manager or a trained team already in place is a major plus, especially in a hands-on franchise.
2. The financials, examined coldly
Once you are under agreement and reviewing the books, be analytical and unemotional. Go through bank statements, profit and loss statements, tax returns, and the balance sheet. Compare them against the franchisor’s reported averages for the brand. If something looks seriously off and cannot be explained, walking away is often the right call.
3. Franchisor approval and the remaining term
This is the step buyers of independent businesses never face. Confirm that the franchisor will approve you as a transferee, understand the transfer fee, and check how many years remain on the franchise agreement. A short remaining term or a costly mandatory remodel can change the math entirely, so get these facts early.
4. Customer and supplier concentration
A location that leans on a handful of large customers or a single key supplier is more fragile than it looks. That is not automatically a dealbreaker, but it should give you pause and shape your plan to diversify.
5. Your own interest and fit
Running a franchise takes real time and energy. You do not need to be passionate about every detail, but genuine interest in the business makes the hard days easier and the good days better. Ask whether this is a business you actually want to operate for years.
Frequently asked questions
What makes buying a franchise resale different?
You inherit real performance history, but you also need the franchisor’s approval to transfer, and you take on whatever time is left on the franchise agreement.
What financials should I review?
Bank statements, profit and loss statements, tax returns, and the balance sheet, checked against the franchisor’s brand averages.
Do I need the franchisor’s approval to buy a resale?
Almost always. Franchisors control transfers, charge a transfer fee, and set requirements for new owners, so build that into your timeline.
Ready to evaluate a franchise resale?
We help buyers find and vet the right opportunity. Talk to Franchise Sellers, or call 800-499-4280.
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How to Buy a Franchise Without Traditional Collateral
If you have ever applied for a mortgage, you know collateral: an asset pledged to secure a loan so the lender can recover a loss if you default. Many would-be franchise buyers assume they need substantial personal assets to qualify for financing. Collateral does strengthen an application, but it is not always the deciding factor. Several financing options let qualified buyers acquire a franchise even with limited collateral.
SBA 7(a) acquisition loans
The SBA 7(a) loan program is one of the most common tools for buying a franchise. A big advantage is that limited collateral does not automatically disqualify an otherwise strong borrower. Lenders weigh the overall strength of the deal and your experience, and cash flow and equity contribution often matter more than collateral. Most acquisition loans still require you to contribute some equity, usually part of it in cash, but there are ways to bridge the rest.
How seller financing helps
Seller financing is one of the most effective ways to buy a franchise with limited collateral. The seller accepts payments over time instead of the full price at closing, which reduces the cash you need up front. A well-structured seller note can even help satisfy part of the equity a lender requires. It benefits both sides: you need less capital, and the seller attracts a larger pool of qualified buyers while signaling confidence in the business.
Combining SBA and seller financing
In many deals, SBA financing and seller financing work together. Layering the two can improve the odds of closing and further reduce your cash requirement. This kind of structure is exactly how a lot of first-time owners get into a franchise without a pile of personal assets.
Work with experienced advisors
Every acquisition is different, and financing options vary widely. Talk to a business broker, an M&A advisor, and one or more lenders to weigh the strategies available to you. Resources like SCORE can also help first-time buyers. A lack of traditional collateral should not stop you: with the right structure and guidance, franchise ownership may be more attainable than you think.
Frequently asked questions
Can I buy a franchise with no collateral?
Often, yes. SBA 7(a) loans weigh cash flow, experience, and deal strength alongside collateral, and seller financing can reduce the cash and assets you need to bring.
Do I still need any money to buy a franchise?
Usually. Most acquisition loans require an equity contribution, often part in cash, but a seller note can help cover part of it and lower your upfront requirement.
How do SBA and seller financing work together?
They can be layered in the same deal: the SBA loan covers the bulk of the price, seller financing covers part of the balance, and your equity fills the rest. It improves the odds of closing.
Want to buy a franchise with limited collateral?
We help buyers structure financing that works. Learn how to buy a franchise with Franchise Sellers, or call 800-499-4280.
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What Helps a Business Sale Actually Reach the Closing Table?
Receiving an offer on your business is a major milestone, but experienced buyers, sellers, and advisors know that an accepted offer is only one step in the transaction process. The real challenge is navigating the weeks (or sometimes months) between an agreement and a successful closing.
While some deals are derailed by unforeseen events, most transactions succeed or fail based on preparation, communication, and expectations.
Here are four factors that consistently contribute to successful business sales.
1. Alignment Starts Early
One of the most common reasons transactions stall is that the buyer and seller never fully align on the key terms of the deal. Price is important, but it’s only one piece of the puzzle. Financing terms, transition support, training periods, inventory, working capital, lease arrangements, and other details can all influence whether a transaction moves smoothly toward closing.
The strongest deals are built on clear communication from the beginning. Buyers understand what they’re purchasing, sellers understand what’s expected of them, and both parties have confidence that no major unanswered questions are waiting to surface later.
The more clarity established upfront, the fewer surprises emerge during due diligence.
2. Patience Is Part of the Process
Business transactions involve many moving parts. Financial reviews, legal documentation, financing approvals, lease assignments, licensing requirements, and other details all require time and coordination. Even relatively straightforward transactions rarely happen overnight.
Successful buyers and sellers understand that progress matters more than speed. They stay focused on solving problems rather than becoming frustrated by every delay or request for information. The goal is not simply to close quickly; it’s to close correctly.
3. Transparency Builds Trust
Few businesses are perfect. Every company has challenges, risks, or areas that could be improved. The key is addressing those realities honestly and early in the process.
When sellers are transparent about operational issues, customer concentration, employee concerns, or financial considerations, buyers can evaluate those factors appropriately. When buyers are upfront about financing needs, timelines, or concerns, sellers can respond accordingly.
Deals rarely fall apart because of known problems. They fall apart because of unexpected ones. Transparency builds trust, and trust keeps transactions moving forward.
4. Both Parties Need to Win
The most successful transactions are not ones where one side “wins” and the other side “loses.” Instead, they are deals where both buyer and seller believe they achieved their objectives. The seller receives fair value for years of hard work and investment. The buyer acquires an opportunity they believe can help them achieve their own financial and professional goals.
When both parties view the transaction as a positive outcome, negotiations become more collaborative, and the closing process becomes far more manageable.
Closing Is the Result of Preparation
A successful business sale is rarely the result of luck. It is usually the product of clear expectations, open communication, realistic timelines, and a commitment from both sides to work toward a mutually beneficial outcome.
For business owners considering a future sale, preparation begins long before a buyer appears. The more organized and informed the process, the greater the likelihood that an accepted offer ultimately becomes a completed transaction.
Copyright: Business Brokerage Press, Inc.
The post What Helps a Business Sale Actually Reach the Closing Table? appeared first on Deal Studio.
How to Evaluate a Franchise Before You Buy
A franchise can look great on paper and still hide problems that only surface once you dig in. The smartest buyers stay curious and ask direct questions, because that is how you get a clear picture of what you are actually buying and avoid surprises later. Here is how to evaluate a franchise before you buy, one good question at a time.
Examine the asking price
Ask how the seller arrived at the price. The explanation should be clear and backed by solid financial data. If the reasoning feels vague or unsupported, treat that as a signal to proceed carefully. Transparent, well-documented financials are the foundation of any sound purchase, so review them thoroughly from the start. It helps to understand how earnings drive value.
Understand the seller’s motivations
Find out why the owner is selling and what they will do if the business does not sell. The answers reveal how flexible they may be and whether they feel pressure to close, which is useful when you structure an offer.
Assess fit and capability
Beyond the numbers, ask whether the business fits you. Every franchise takes a certain mix of skills and experience to run well, and even a profitable one can struggle under the wrong owner. Consider whether you are prepared to step in and lead, and what the franchisor expects of a new franchisee.
Identify risks and dependencies
Ask about past or potential legal issues, and about anything that threatens stability, like heavy reliance on one big customer or a single vendor. In a franchise, also check the standing with the franchisor and how much term remains on the agreement. These factors shape long-term success and should not be overlooked.
Review the operations
Well-documented procedures make for a smoother transition and less disruption after the sale. Ask what employees plan to do once ownership changes so you can anticipate staffing needs and keep things running. The more prepared the operation, the easier your first year.
Learn from the seller’s experience
Ask what they would have done differently. That single question can surface missed opportunities, inefficiencies, and lessons learned, and it points you toward where you might improve the business. An open seller is a goldmine of insight.
Frequently asked questions
What should I ask before buying a franchise?
How the price was set, why the owner is selling, what skills the business needs, what risks and dependencies exist, how operations are documented, and how the franchisor approval and remaining term work.
What are the biggest red flags when evaluating a franchise?
Vague or unsupported pricing, disorganized financials, heavy customer or vendor concentration, legal issues, and poor standing with the franchisor.
Do I evaluate a franchise differently than an independent business?
Mostly the same, plus the franchise layer: the franchise agreement, remaining term, transfer and approval process, and territory. Those are unique to a franchise purchase.
Ready to evaluate a franchise?
We help buyers ask the right questions. Learn how to buy a franchise or browse franchises for sale with Franchise Sellers, or call 800-499-4280.
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How to Achieve Better Negotiation Results
The term “negotiation” tends to stir mixed reactions. Some people enjoy the challenge, while others would rather avoid it altogether. No matter how you feel about the tactics you might use, the end goal is to reach an agreement that works in your favor. Strengthening your approach with proven strategies can help you navigate conversations more confidently and lead to a more successful deal. Let’s take a closer look at some tried and tested negotiation techniques.
Bring in Objective Expertise
Handling your own negotiation can be difficult, especially when personal stakes are high. Owners, in particular, may find it challenging to separate emotion from logic, while buyers can also become attached to a deal for the wrong reasons.
The good news here is that a neutral third party can add real value. Business brokerage professionals bring market knowledge, negotiation experience, and objectivity to the table. This helps both sides stay focused on realistic outcomes and fair terms.
Use Firm Positions Strategically
The “all-or-nothing” approach can sometimes be effective when used thoughtfully. In this scenario, one side presents a final offer with little room for further discussion.
Of course, while this tactic can signal confidence and clarity, it also carries the risk of ending talks prematurely. It’s most useful in situations where demand is high or when one party has strong alternatives. However, it’s also important to know when to avoid this approach. Flexibility often opens the door to better results.
Focus on What Truly Matters
Successful negotiations go beyond numbers. Each party typically has specific priorities. If you’re able to identify these early on, it can unlock creative solutions.
For example, a seller might value employee retention or legacy considerations just as much as price. Or a buyer may prioritize something like transition support or financing terms. By uncovering and addressing these underlying interests, both sides can shape a deal that draws on a wider range of considerations. Remember that every buyer and seller is different and it’s important not to make assumptions.
Meet in the Middle When It Makes Sense
When discussions stall over relatively small gaps, a willingness to compromise can keep momentum alive. Many brokerage professionals recommend trying to bridge the difference between positions. This strategy demonstrates cooperation and reduces potential feelings of tension.
Keep in mind that this particular tactic works best when both sides are already close to agreement and want to avoid unnecessary friction.
Additional Strategies
To further improve the odds of a successful deal, consider incorporating these additional negotiation techniques:
- Anchor the Conversation – Setting the initial offer can influence how the rest of the negotiation unfolds. A well-researched starting point frames expectations and gives you an advantage.
- Leverage Silence – Pausing after an offer or counteroffer can create pressure and encourage the other party to reveal more information or make concessions.
- Create Multiple Options – Presenting several structured proposals allows the other party to choose, which can foster a sense of control while still guiding the outcome.
- Always Know When to Walk Away – Understanding your limits ensures you don’t agree to unfavorable terms under pressure.
Ultimately, negotiation is both an art and a skill. Every deal comes with its own dynamics and you’ll want to keep that in mind. Through combining preparation, and flexibility, you will find that you will be able to consistently reach stronger agreements and navigate even complex negotiations with confidence.
Copyright: Business Brokerage Press, Inc.
The post How to Achieve Better Negotiation Results appeared first on Deal Studio.
Franchise Due Diligence: What Buyers Should Expect
Buying a franchise is an emotional process, and that is completely normal. Much of the anxiety comes from not knowing what happens next. When you understand the steps ahead of time, the process feels far less daunting and your odds of reaching a successful closing go up. Here is what to expect at each stage of buying a franchise, from first contact to due diligence. (Before you start, it helps to know what to investigate in a franchise resale.)
The intake stage and the NDA
Early on, expect to sign a non-disclosure agreement before you see sensitive details. Take its obligations seriously. The seller and their representatives will typically ask for your financial background and even a resume. That can feel intrusive, but it is a routine part of confirming you are a qualified buyer, and it protects the confidentiality every franchise owner depends on.
Financing takes longer than you expect
Securing funding almost always runs longer than buyers anticipate. Lenders request additional documentation throughout the approval process, which can be frustrating. With a franchise, the lender may also review the brand itself, since many franchises are well known to SBA lenders. Patience here is normal and expected.
The role of attorneys
Attorneys are a necessary part of any franchise purchase. Their involvement can add time and occasional stress, but their job is to protect your interests. Their guidance is valuable, and the final decisions still rest with you as the buyer.
Making an offer and doing due diligence
A non-binding offer signals genuine interest while leaving both sides room to walk away if terms are not finalized. New buyers often worry it creates a legal obligation to buy; it does not. It simply moves the conversation forward.
Due diligence is the heart of the process. You get access to detailed, confidential information: financial performance, the lease, supplier arrangements, and the franchisor’s transfer requirements. This is your window to ask questions, verify the numbers, and confirm the franchisor will approve you. You retain the right to withdraw during this phase, which is exactly why it exists.
Why professional guidance matters
Experienced advisors keep the process moving, reduce stress, and point you toward opportunities that fit your goals. That guidance is often the difference between a stalled search and a smooth closing.
Frequently asked questions
What is franchise due diligence?
It is the stage where you review the franchise’s financials, lease, suppliers, and franchisor transfer requirements in detail before committing, with the right to withdraw.
Is a non-binding offer a commitment to buy?
No. It signals serious interest and frames the terms, but either party can walk away if the deal is not finalized.
Why does franchise financing take so long?
Lenders request documentation in stages and may also evaluate the brand. Building extra time into your plan keeps the process on track.
Thinking about buying a franchise?
We guide buyers through every step. Talk to Franchise Sellers, or call 800-499-4280.
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How to Buy a Franchise: A First-Timer’s Roadmap
For many first-time buyers, purchasing an existing franchise is one of the most direct paths to business ownership. You step into a company that already has customers, revenue, systems, and a recognized brand. Still, buying a franchise is more involved than buying a home or a stock, so it helps to know the steps. Here is a practical roadmap for how to buy a franchise, from first search to franchisor approval.
1. Define what you want
Before you browse listings, get clear on your criteria: industry, investment level, location or territory, and the role you want to play day to day. Many first-time buyers start with only a vague picture. Matching your budget and goals to the right type of franchise up front makes the whole search faster and more focused.
2. Protect information with an NDA
When you find a franchise that interests you, the seller will usually ask you to sign a non-disclosure agreement before sharing details. Confidentiality protects the business, its employees, and its customers from learning about the sale prematurely, and signing shows the seller you are a serious, professional buyer.
3. Review the financial and operational details
With the NDA in place, you get access to the real picture: profit and loss statements, tax returns, operational reports, and information on customers and the local market. Study how the business makes money, whether expenses look normal for the industry, and where the risks are. An experienced advisor can help you read the numbers and flag what deserves a closer look.
4. Decide whether it fits
Beyond the financials, weigh industry stability, growth potential, and how dependent the business is on the current owner. Not every good business is the right fit for you, and knowing when to walk away is as valuable as knowing when to move forward.
5. Structure and submit your offer
If it fits, you make a written offer setting out the price, financing terms, and the conditions that must be met before closing. Offers usually include contingencies such as completing due diligence and securing financing, which protect both sides as you move toward a final agreement.
6. Get franchisor approval
This step is unique to franchises. The franchisor must approve you as the new franchisee, which typically means receiving the Franchise Disclosure Document, attending Discovery Day, and completing their qualification process. Start it as early as possible, because leaving it late is a common cause of delays.
7. Build the right team
One of the smartest moves a first-time buyer can make is assembling good advisors: a business broker, an attorney, an accountant, and a lender. With the right guidance, you can navigate the process with confidence and greatly improve your odds of buying a franchise that fits your long-term goals.
Frequently asked questions
How long does it take to buy a franchise?
It varies, but several months is common once you factor in due diligence, financing, and franchisor approval. SBA financing alone can take 60 to 90 days, so it is best to start early and run steps in parallel.
Do I need experience to buy a franchise?
Often not. Many franchisors provide training and prefer transferable skills and the right attitude over industry experience. Ask the franchisor what they look for in a new owner.
How much money do I need to buy a franchise?
It depends on the franchise and its price. Many buyers combine personal funds with an SBA acquisition loan and sometimes seller financing to complete the purchase.
Ready to buy a franchise?
We help first-time buyers through every step. Browse franchises for sale or learn how to buy a franchise with Franchise Sellers, or call 800-499-4280.
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Thinking About Buying a Franchise? Start Here
Buying your first franchise can be both exciting and intimidating. Many people are drawn to ownership for the independence and financial opportunity it offers, but the process takes careful planning and research. Understanding the steps involved, and working with a professional, helps first-time buyers move forward with confidence. Here is where to start.
Start with research
Before contacting sellers or making offers, spend time exploring industries and franchise models. This early research narrows down the types of franchises that fit your interests and finances. Profitability matters, but so does choosing something you actually connect with; buying a business purely because it looks profitable is a fast track to burnout. Matching the opportunity to your skills and passions builds a stronger foundation.
Work with a broker
Once you know what you are looking for, a business broker or M&A advisor makes the search far more efficient. Brokers connect buyers and sellers, often have access to listings and details that are not public, and understand the process, the pitfalls, and how to evaluate opportunities realistically. For a first-time buyer, that guidance is invaluable.
Review details under an NDA
When a franchise sparks your interest, you will typically sign a confidentiality agreement so the seller can share sensitive information safely. Then dig in: prepare thoughtful questions, and look beyond the asking price to how the business operates, its customers, its growth potential, and its challenges.
Evaluate, offer, and do due diligence
With detailed information in hand, review the financials, operations, and market to judge whether the franchise is a sound investment. A broker helps you interpret the numbers and spot red flags. If it fits, submit a written offer, usually with contingencies, and once accepted, complete due diligence to verify everything before you close. Our step-by-step roadmap walks through the full process.
Frequently asked questions
What is the first step to buying a franchise?
Research. Explore industries and franchise models to find what fits your budget, skills, and interests before you ever contact a seller. It makes the whole search faster and sharper.
Do I need a broker to buy a franchise?
You do not have to use one, but a broker gives first-time buyers access to listings, guidance through the process, and help evaluating opportunities, which greatly reduces costly mistakes.
Should I choose a franchise just because it is profitable?
Profitability matters, but a business you do not enjoy can lead to burnout. The best fit aligns with your skills and interests and the numbers.
Ready to explore buying a franchise?
Browse franchises for sale or learn how to buy a franchise with Franchise Sellers, or call 800-499-4280.
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