In accordance to the Artcle 11 of Association Act ("Narodne novine" issue 88/2001), Croatian Association for Franchising held on March 17th 2004, issued

STATUTE
Of CROATIAN ASSOCIATION FOR FRANCHISING

I. GENERAL PROVISIONS
II. AIMS AND ACTIVITIES BY WHICH THE AIMS ARE ATTAINED
III. ASSOCIATION MEMBERS, RIGHTS, OBLIGATIONS AND DISCIPLINARY RESPONSIBILITIES OF THE MEMBERS
IV. ASSOCIATON BODIES
V. STATUTE AND OTHER GENERAL ACTS
VI. TRANSITIONAL AND FINAL PROVISIONS

I. GENERAL PROVISIONS

Article 1

This Statute establishes: name, headquarters and Croatian Association for franchising (subsequently reffered to as Association) area of activity; representation; aims; activities for the realization of the aims, realizing of publicity of associations' activities; membership and membership fee; rights, obligations and disciplinary responsibilities od the members; internal organization of the Association; bodies od Association, their structure,authorities, decicion-making, conditions and methods of election and impeachement, term of mandate and liability of the members; asset and disposal of evental profit; way od acqusition of asset, termination and asset pocedure in case of termination.

Article 2

Full name of Association is: Hrvatska udruga za franšizno poslovanje

Abbreviated name of Association is Hrvatska FIP udruga.

Together with its Croatian name tha Association can use its English name: Croatian Association for Franchising

Association's headquarters are in Zagreb.

The Association operates on the territory of Republic of Croatia.

The Association has a status of a corporate body, and is registered as an association with the competent authority of govenment administration.

Article 3

To achieve the best possible connection among members and improve its work the Association can set up its branch offices and other ogranizational forms in operation at the same area or in other districts, cities or counties.

Branch offices are not corporate bodies.

Setting up of a branch and its method of doing business is regulated by a general act, issued by the Managing Board of the Associationand.

Article 4

Association's seal is a square one with three lined name. In the first line there is a word HRVATSKA, in the last one UDRUGA, and in the middle the abbreviation FIP.

Article 5

The Association can cooperate and join similar associations and federations in the county and abroad.

Article 6

Operation of the Association is a public one..

The publicity of operation is ensured and realized through timely and true informing of the Association members as well as through mass communiction.

The members recieve information on the woek of the Association through sessions of the body of the Association, and by mail or electronicdelivery og written materials.

Representatives od mass media ca be persent at sessions of managing body of Association and inform the public of the work of these bodies and Association when invited by the Association.

For the more complete realization od publicity of its work, the Association can publish its owm newsletter in accordance with mass media regulations. The Assembly makes such publishing decision.

If needed, the Association publishes other means of mass communication (periodicals, bulletins, posters, etc.) in accordance with publishing regulations.

II. AIMS AND ACTIVITIES BY WHICH THE AIMS ARE ATTAINED

Article 7

Aim of the Association is assembling of its members for promoting franchise development and business relationships.

Realization of the aims from paragraph 1 of this article, the Association attains through following activities:

• Organizing counseling sessions, lectures, seminars, congresses,forums and other professional meetings on subject of franchise operation related problems, protection, promotion and encouraging of franchizing through public and legislative education,
• Trade associating and skill and professional improvement of the members,
• Encourages students and young experts to do some studies on franchising
• Collaboration with other similar associations and organizations abroad, and all organizations that support the work od the Association,
• Publishing of a professional magazine in accordance with the law,
• Giving prizes nad awards for acompishments in franchising field,
• Perform other acitvities which help realization of the aims established by the Statute.

IV. MEMBERS OF THE ASSOCIATION, RIGHTS, OBLIGATIONS AND DISCIPLINARY RESPONSIBILITY OF THE MEMBERS

Article 8

Membership of the Association can be regular and honorary.

A Regular Member is subject to the following conditions:

• to accept without reservation the Statutes of the Association as well as any rules and regulations drawn up in accordance with the Statute
• to be franchise networks comprising franchisors and their franchisees or to be master franchisers
• to accept in written without reservation Code of Ethic of the Association

Honorary members of the Association can become franchise systems who have significantly contributed to the development of the Association by their acitvities, and have been nominated by at least two members of the Association. Honorary members have no voting rights.

8.1 The Association can also accept other members, companies whose interest is promoting franchising to be known as Affiliat members. Affiliate members have no voting rights. Their representatives cannot be appointed as members of the board.

Article 9

Managing board decides on the admishion of regular members after reciving admission application of the candidates.

Managing board decides on admission of honorary members at suggestion of at least two members of the Association and written consent of the honorary member.

Register of member is kept in the Association.

Article 10

Rights and obligations of the members are:

• choosing and being chosen in the body of Association;
• being informed on the work of the Association and its bodies, and on its material and financial transactions;
• actively participating in carrying out the aims of the Association nad help realization of its activities;
• offering suggestions, opinions and comments on the work of Association and its bodies;
• upholding the provisions of this Statute and other general acts of the Association;
• regular payment of their membership fees ;
• keeping and elevating the reputation of the Association.

Regular member is one who regularly pays his membership fee for current year.

Honorary member does not pay membership fee.

Article 11

Membership in the Associations is terminated:

• By termination od the Association's activities
• By written statement of withdrawal from the membership
• By expelling from the membership on account of inactivity
• By expelling from the membership on account of not paying of membership fee for a year consecutively
• By death of a member

Article 12

A member of the Association can be expelled if he violates provisions of the Statute or endangers interests of the Association or causes serious damage to Association and its members.

Managing Board decides on the expelling.

Expelled member has a right to submit a complaint within a period of 15 days to Assemby whose decision on expelling is final.

IV. BODIES OF ASSOCIATION

Article 13

Bodies of Association are:

1. Assembly
2. Managing Board of Association
3. President of Association
4. Vice president of Association
5. Secretary of Association
6. Supervisory Board of Association

Article 14

The Assemly is the highest body of Association consisting of all individula persons that are regular members of Association, and representative of a legal person who is a regular member of Association, nominated by a person who is appointed agent of legal person.

Regular Assemby is held at least once a year, and is convened by President of Association.

The President od Association can convene Special Assembly on his own iniciative or at request of at least one third of total membership od Association, with provision that the agenda is suggested immediately.

If the President of the Association does not conviene aSpecial Assembly, on request of sponsors form paragraph 3 of this article, it will be conviened by sponsor within the period of 30 days from the day the request is submitted.

On Special Assembly only the question for which it was conviened is discussed.

Article 15

Invitation includes informaton on place and date of session, as well as the suggestion for the agenda. Together with the invitation, materials about questions on the agenda are delivered by mail or e-mail.

Article 16

Decisions made at the Assembly are valid if at least three thirds of its members are present.

If there are not three thirds of its members present, a new Assembly is convened in period of time not shorter than 8 days, nad in that case the decisons made at the Assembly are valid if at least one quarter of its members are present.

Valid decisions are reached by the majority vote of the present members.

Decisons about changes in the Statute or termination of the Association, Assembly reaches by two-thirds majority of its present members.

Article 17

Assembly of the Association:

• Issues Statute nad its amendments,
• Issues other general acts necessary for Association's activities,
• Elects and relieves president, vice president and secretary of duty,
• Elects and relieves members od Managing and Supervisry Boards of duty,
• Plans the budget and adopts annual finantial statement,
• Reviews Predisent's activity report,
• Makes decisions on participation of the Association in the acitivities of nacional and foreign ogranizations,
• Makes decisions on associating with other organizations, joining in the membership of other organizations or terminating its membership from them,
• Attends to members' complaints on secondary level,
• Decides on termination of the Association and
• Decides on other questions of importance to Association's activity established by this Statute, and which are not under competence of another body.

Article 18

President of the Association ensures regularity and legality of Association's activity, and is elected by Assembly of the Association on a five yers' term, with possibility of being elected for more than one consecutive terms. Managing Board and President of Association can be relieved of duty by Assembly before the end of their terms if they overstep their authorities or if they do not perform their duties conscientiously. In case of relieving a whole Managing Board of duty, the Assemby elects a new one for the eull term of office, and in case it relieves individual members of Managing Board, Assembly elects new members of Managing Board till the expiry of the term of office for which they had been elected.

Managing Board and each of its members answer to the Assembly for their work..

Any member of Managing Board can ask for his relieve of duty before the expiry of the term of his office, provoded that he is obligated to perform hid duties until the decision of his relieve is reached. Managing Board is required to reach the decision on the request of relieving of office at the first session.

Article 19

Managing Board consists of President, Vice president and Secretary elected by Assembly on 5 years' term.

Managing Board of Association:

• meets once in three months
• Establishes draft Statute and its amendments,
• Establishes budget and annual finantial statement proposal
• Submits to the Assembly annual activity report,
• Decides on the change o Association's headquarters address,
• Decides on the use od Association's asset,
• Founds boards, committees and other bodies thet help realization of the aims of the Association,
• Performs other activities which the Assembly may put into its authoruty,
• Enforce the decisions of Assembly and mamange the activities of the Association betwee two sessions of the Assembly.

Managing Board sessions are held when necessary. Managing Board reaches decisions by majority vote .

Article 20

President, vice president and secretary represent Association, preside overPredsjednik, dopredsjednik i tajnik Udruge zastupaju Udrugu, predsjedaju sjed the sessions of the Assembly and answer for the legality of Association's activities.

President of the Association is also President of the Assembly and president of Managing Board.

President of the Association:

• Convenes sessions of the Association's assembly and proposes agenda,
• Initiates discussion on particular questions,
• Overwievs implementation of the decisionsof the Assembly.

Article 21

Association's assembly on their sessions elect president, voce president and secretary of the Association for 10 years' term.

Vice president and Secretary assist the President of the Association in his work and perform other work assigned to them by the President and Managing Board.

Vice president acts in behalf of the president in all of his duties if the president is absent or otherwise prevented.

Article 22

Secretary of the Association:

• Coorinates collecting of information necessary for draft of general acts proposal decided on by the Managing Board,
• Keeps record of Assembly and Managing Board sessions
• Keeps and watches over the archives of the Association and
• Performs professional nad other activities required by Managing Board in accordance with the general acts of the Association
• Keeps membership register.

Article 23

Supervisory Board has two mwmbers elected by Assembly on 5 years' term and they can be reelected.

A member of Supervisory Board cannot be a member of Managing Board.

Supervosory Board makes valid decisions if majority of its members are present at its session, and valid decisions are reached by majority vote of its present members.

President of the Supervisory Board, elected by the members, convenes the sessions of the Board, manages its activities and performs other work assigned to him by the Board o the Assembly.

Members of Supervisory Board answer for its activities to Assembly.

Article 24

Supervisory Board rewievs and supervises:

• Enforcement of the provisions of this Statute and other general acts of the Association,
• Material-financial transactions and the use of Association's asset,
• Enforcing of the decisions, conclusions and other legal acts,
• Performs other duties assigned to it by the Assembly.

Article 25

Supervisory Board has a right to inspect all the information on the activities of the Association. Managing Board and each of its members is obliged to immediately rener possible the inspection of the requested documentation and provide demaned information.

Members of Supervisory Board can be present at ManagingBoard sessions, but hane no vote.

Supervisory Board can request convening of Managing Board and Assembly sessions if it finds irregularities in financial or other transactions of the Association are found, negligence in performing of activities or violation of the Statute or other general acts of the Association.

Article 26

Provisions of article 18 of this Statute are applied regading the manner and procedure of relieving Supervisory Board or its individual members of duty.

Article 27

Assets of the Association consist of income realized through:

• Membership fees,
• Donations andsubventions,
• Assets received from international organizations thet support the activities of the Association,
• Assets realized through its activities in accordance to Law ,
• Other income in accordance to the Law.

Article 28

Association manages its asstes in accordance with the provisions on material and financial transactions of non-profitable organizations.

For justifiable expenses made in connection to Association's activities, the members have right to reinbursement, and for the work done in connection to Association's activities even to a reward.

Amount of reinbursenment and reward is decided on by the Managing Board.

Total income and expenditure are established by financial planbrought for one calendar year and is valid for that year.

At the end of the year for which the financial plan was brought, an annual financila statement is made.

V. STATUTE AND OTHER GENERAL ACTS

Article 29

Statute is an essential gemeral act of the Association and all other act must be in accordance with the provisions of the Statute.

Proposal and amandmends of the Statute are prepared and established by the Managing Board of the Association and is being presented for discussion to the members of the Association by mail or electronic delivery of written materials.

Managing Board of the Association rewievs comments and suggestions presented in the discussion, takes a position on them and establishes a proposition of Statute, so the final decision on alteration of the Statute is made by voting at the Assembly of the Association.

Article 30

Interpretation of the provisions of the Statute is provided by the Assembly of the Association.

Article 31

All internal questions of the Association, as well as other questions not regulated by the Statute, and demand a detailed elaboration, will be regulated by general acts established by the Assembly of the Association.

VI. TRANSITIONAL AND FINAL PROVISIONS

Article 32

Association is terminated by a decision of the Assembly and in cases regulated by law.

In case of termination of the Association the decision abot its assets will be made at the last session of the Assembly.

Article 33

This Statute comes into force on the date of its issuing.

Statute is signed by their name, surname, designation of capacity and signature by President, Vice president and Secretary of the Association.

Predsjednik: LJILJANA KUKEC
Dopredsjednik: KSENIJA SELIMOVIĆ
Tajnik: SLAVICA BAKIŠ