American Home Shield 2011 Annual Report Download - page 15

Table of Contents
marketing regulations requires TruGreen, and, to a lesser extent, ServiceMaster's other operating segments, to rely more extensively on other marketing
methods and channels. In addition, if ServiceMaster were to fail to comply with any applicable law or regulation, ServiceMaster could be subject to
substantial fines or damages, be involved in litigation, suffer losses to its reputation and its business or suffer the loss of licenses or penalties that may affect
how the business is operated, which, in turn, could have a material adverse effect on its financial position, results of operations and cash flows.
Franchise Matters
TruGreen, Terminix, ServiceMaster Clean, AmeriSpec, Furniture Medic and Merry Maids are subject to various international, federal, state, provincial
and local laws and regulations governing franchise sales, marketing and licensing and franchise trade practices generally, including applicable rules and
regulations of the Federal Trade Commission. These laws and regulations generally require disclosure of business information in connection with the sale and
licensing of franchises. Certain state regulations also affect the ability of the franchisor to revoke or refuse to renew a franchise. ServiceMaster seeks to
comply with regulatory requirements and deal with franchisees and licensees in good faith. From time to time, ServiceMaster and one or more franchisees
may become involved in a dispute regarding the franchise relationship, including payment of royalties or fees, location of branches, advertising, purchase of
products by franchisees, non-competition covenants, compliance with ServiceMaster standards and franchise renewal criteria. There can be no assurance that
compliance problems will not be encountered from time to time or that material disputes with one or more franchisees will not arise.
Environmental Matters
ServiceMaster's operating segments are subject to various international, federal, state and local laws and regulations regarding environmental, health and
safety matters. Compliance with such laws increases ServiceMaster's operating costs, limits or restricts the services provided by ServiceMaster's operating
segments or the methods by which they offer, sell and fulfill those services or conduct their respective businesses, or subjects ServiceMaster and its operating
segments to the possibility of regulatory or private actions or proceedings. Terminix and TruGreen are regulated under many federal and state environmental
laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), the Superfund
Amendments and Reauthorization Act of 1986, the Federal Environmental Pesticide Control Act of 1972, the Federal Insecticide, Fungicide and Rodenticide
Act of 1947, the Resource Conservation and Recovery Act of 1976, the Clean Air Act, the Emergency Planning and Community Right-to-Know Act of 1986,
the Oil Pollution Act of 1990 and the Clean Water Act of 1977, each as amended. ServiceMaster cannot predict the effect of possible future environmental
laws on its operations. During 2011, there were no material capital expenditures for environmental control facilities, and there are no material expenditures
anticipated for 2012 or 2013 related to such facilities.
INSURANCE
We maintain insurance coverage that we believe is appropriate for our business, including workers' compensation, auto liability, general liability,
umbrella and property insurance. In addition, we provide various insurance coverages, including deductible reimbursement policies, to our business units
through our wholly owned captive insurance company, which is domiciled in Vermont.
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