American Home Shield 2011 Annual Report Download - page 14

Table of Contents
of our franchise businesses based primarily on operating profit before corporate general and administrative expenses and amortization of intangible assets.
Franchise agreements entered into in the course of these businesses are generally for a term of five to ten years. The majority of these franchise agreements
are renewed prior to expiration. The majority of international licenses are for ten-year terms.
MAJOR CUSTOMERS
ServiceMaster has no single customer that accounts for more than ten percent of its consolidated operating revenue. Additionally, no operating segment
has a single customer that accounts for more than ten percent of its operating revenue. None of ServiceMaster's operating segments is dependent on a single
customer or a few customers, the loss of which would have a material adverse effect on the segment.
REGULATORY COMPLIANCE
Government Regulations
ServiceMaster's operating segments are subject to various international, federal, state, provincial and local laws and regulations, compliance with which
increases ServiceMaster's operating costs, limits or restricts the services provided by ServiceMaster's operating segments or the methods by which
ServiceMaster's operating segments offer, sell and fulfill those services or conduct their respective businesses, or subjects ServiceMaster and its operating
segments to the possibility of regulatory actions or proceedings. Noncompliance with these laws and regulations can subject ServiceMaster to fines or various
forms of civil or criminal prosecution, any of which could have a material adverse effect on its reputation, business, financial condition, results of operations
and cash flows.
These international, federal, state, provincial and local laws and regulations include laws relating to consumer protection, wage and hour, deceptive trade
practices, permitting and licensing, real estate settlements, workers' safety, tax, healthcare reforms, franchise-related issues, collective bargaining and other
labor matters, environmental and employee benefits. The TruGreen and Terminix businesses must also meet certain Department of Transportation and Federal
Motor Carrier Safety Administration requirements with respect to some types of vehicles in their fleets. American Home Shield is regulated in certain states
by the applicable state insurance regulatory authority and by the Real Estate Commission in Texas. TruGreen and Terminix are regulated by federal, state and
local laws, ordinances and regulations which are enforced by Departments of Agriculture, Pest Control Boards, Departments of Environmental Conservation
and similar government entities. ServiceMaster Clean uses products containing ingredients regulated by the U.S. Environmental Protection Agency ("EPA")
and is subject to licensing and certification requirements for applying disinfectants, sanitizers and other EPA registered products in certain states. AmeriSpec
is regulated by various state and local home inspection laws and regulations.
Consumer Protection and Solicitation Matters
ServiceMaster is subject to international, federal, state, provincial and local laws and regulations designed to protect consumers, including laws
governing consumer privacy and fraud, the collection and use of consumer data, telemarketing and other forms of solicitation.
The telemarketing rules adopted by the Federal Communications Commission pursuant to the Federal Telephone Consumer Protection Act and the
Federal Telemarketing Sales Rule issued by the Federal Trade Commission govern ServiceMaster's telephone sales practices. In addition, some states and
local governing bodies have adopted laws and regulations targeted at direct telephone sales and "do-not-knock," "do-not-mail" and "do-not-leave" activities.
The implementation of these
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