DriveItAway Holdings Inc (DWAY)

[upshegrows]

29. Even beyond these basic requirements, Plaintiff found that the Board had sourced,and made available to prospective franchisees that had no liquid assets and even low net worth, a
credit card acquisition process, called Seed Capital.

30. Seed Capital is a company that through some questionable process could get prospective franchisees approved to have up to 10 credit cards awarded to them at the same time. In some cases, Seed Capital would take a large payment up front for this service from the prospective franchisee. The credit on these cards was interest free for six months, but carried very high rates thereafter.

31. Later as Plaintiff took on the role of trying to help franchisees become profitable, he found one case of a franchisee that had borrowed up to $80,000 on 10 credit cards acquired
through Seed Capital. When the interest kicked in, it crippled their business and they had to try and sell. Seed Capital also adversely affected other franchisees in this way as well. Indeed, by he time Plaintiff left the Company, the number of franchisees needing to sell or quit had increased dramatically as he had warned the Board.

32. All of these sales methods obviously had resulted in the quick growth of the number of franchises, which gave the Defendant high rankings in the fastest growing franchises in Entrepreneur Magazine.



Recall when Nickelson left the business, only a few months back and the falling revenue trend ...