Investment Contract
1. Fund Distribution:
I acknowledge that all returns and distributions will be made in accordance with the fund's distribution policy and its performance.
2. Risks:
I understand that all investments carry inherent risks, including the possibility of loss. I acknowledge that the value of my investment in the FSXR1 Restaurant Fund may fluctuate due to market conditions and the fund’s performance.
3. Withdrawal Policy:
I am aware that withdrawal requests are subject to the fund's withdrawal policy, which may impose penalties or restrictions.
4. Profit Sharing:
As a shareholder, I will receive a proportionate share of the profits from the business based on my investment.
5. FSXR1 Restaurant Fund Purpose:
The FSXR1 Restaurant Fund has been established to invest in the launch of a new Ethiopian restaurant in the Washington, DC area, known as Dorobay.
6. Share Structure:
Each individual share of the FSXR1 Fund is equivalent to one share in Dorobay. The FSXR1 Fund aims to raise two million dollars, with a minimum investment of ten thousand dollars per share. Specifically, each share of the FSXR1 Fund represents an investment of ten thousand dollars.
7. Share Classes:
The fund consists of 200 Class A shares and 24 Class B shares. Each Class A share confers one voting right, while each Class B share grants ten voting rights. Although Class A and Class B shares are of equal monetary value, they differ in their voting powers. FSX Management exclusively holds all 24 Class B shares.
8. Management Fees:
FSX Management will charge a 15% management fee on the fund, which is intended to cover expenses related to capital raising, operations, and other fund management activities.
9. Restaurant Management:
FSX Management will oversee the daily operations of the restaurant, including tasks such as hiring staff, marketing, payroll, research, and expansion strategies. FSX Management will be compensated for these responsibilities.
10. Investor Participation:
Investors will not have any authority to participate in the management or operational decisions of any restaurants overseen by FSX Management.
11. Share Transfer:
The sale or transfer of shares requires prior approval from FSX Management.
12. Board of Directors:
Upon the successful completion of the fundraising, a board of directors consisting of nine members will be established. FSX Management will appoint two directors, while the remaining members will be chosen based on their investment levels and expertise.
13. Waiver of Lawsuits:
Investors agree to waive their rights to initiate legal action against FSX Management or the fund for any potential losses, including the failure of the fund to generate profits or in the event of the fund’s dissolution.
14. Restrictions on Returns and Share Sales:
Investors commit not to request the return of their investments or attempt to sell their shares for a period of five years. FSX Management is also restricted from selling any of its shares for the same duration.
15. Valuation and Fund Return:
FSX Management reserves the right to return investors’ funds based on a fair market valuation, should FSX Management decide to discontinue the business relationship for valid and legal reasons.
Additional Information
Board MembersFSXR1's board comprises seven members, with one permanent seat reserved for FSX Management. Board membership prioritization is determined by investment amount and Class B shareholder status. Once a location is secured, investors will convene to elect board members, who must hold investor status and serve three-year terms. Board members are elected through online or text voting processes and are subject to third-party criminal background checks. Removal of a board member requires a 70% vote in favor by other board members.
Purpose of Board Members and Their Responsibilities
Board members play a crucial role in providing oversight, guidance, and leadership to ensure the effective operation and strategic direction of FSXR1. Their responsibilities include establishing and upholding the organization's vision, overseeing financial health, ensuring compliance, and serving as ambassadors for the organization.
Voting Structures
FSXR1 shareholders exercise voting rights on business decisions affecting their investments. Proposals are subject to board approval before shareholder voting. Shareholders will be notified of significant decisions, such as expansion or share issuance, and will have the opportunity to vote via phone, call, or text.
Voting Power
FSXR1 offers Class A and Class B shares, with Class B shares granting ten voting powers per share, compared to one voting power per Class A share. FSX Management holds 30 Class B shares.
Switching Your Shares to Dorobay
Shareholders' names are listed on state corporation certificates as part owners of the restaurant. However, shareholders may opt to retain ownership through FSX Management if they prefer anonymity. Shares in FSXR1 will be converted to restaurant shares upon the restaurant's opening for business.
Quarterly and Annual Earning Report
Shareholders will receive detailed quarterly and annual reports via email or traditional mail, providing insights into financial health, operational milestones, and strategic endeavors. These reports foster transparency and invite shareholder feedback.
Independent Auditing Company
Independent accounting firms conduct quarterly and annual reports to verify accuracy, providing shareholders with peace of mind and access to findings.
Tax Responsibilities for Investors
Investors are responsible for paying taxes on investment income. FSX Management reports dividends to the IRS and verifies investor identities to comply with regulatory requirements.
The Fund's GoalFSXR1 aims to create a successful business with substantial value growth potential. FSX Management anticipates a valuation between $50,000,000 and $100,000,000 within twenty years, driven by restaurant expansions and increased fund value.
FSX Management Roles
FSX Management oversees various aspects, including hiring, marketing, supply chain management, payroll, and expansion, to ensure the restaurant's success and growth.
FSX Management Fees
FSX Management charges a 15% upfront fee and holds a 15% stake in the fund. Additionally, management fees amount to $3,000 per month per restaurant, with incremental increases for additional managed restaurants. FSX Management is ineligible for-profit sharing if investor dividends do not exceed 10% of their initial investment.