UFOC

Sample UFOC

INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY FEDERAL TRADE COMMISSION

BLENDZ FRANCHISE SYSTEM, INC.

267 E. Campbell Avenue, Suite 200

Campbell, CA 95008

(866) 4-BLENDZ

www.blendz.com

TO PROTECT YOU, WE'VE REQUIRED YOUR FRANCHISOR TO GIVE YOU THIS INFORMATION. WE HAVE NOT CHECKED IT, AND DO NOT KNOW IF IT IS CORRECT. IT SHOULD HELP YOU MAKE UP YOUR MIND. STUDY IT CAREFULLY. WHILE IT INCLUDES SOME INFORMATION ABOUT YOUR CONTRACT, DON'T RELY ON IT ALONE TO UNDERSTAND YOUR CONTRACT. READ YOUR ENTIRE CONTRACT CAREFULLY. BUYING A FRANCHISE IS A COMPLICATED INVESTMENT. TAKE YOUR TIME TO DECIDE. IF POSSIBLE, SHOW YOUR CONTRACT AND THIS INFORMATION TO AN ADVISOR, LIKE A LAWYER OR AN ACCOUNTANT. IF YOU FIND ANYTHING YOU THINK MAY BE WRONG OR ANYTHING IMPORTANT THAT HAS BEEN LEFT OUT, YOU SHOULD LET US KNOW ABOUT IT. IT MAY BE AGAINST THE LAW.

THERE MAY ALSO BE LAWS ON FRANCHISING IN YOUR STATE. ASK YOUR STATE AGENCIES ABOUT THEM.

FEDERAL TRADE COMMISSION WASHINGTON, D.C. 20560

Issuance Date: March 28, 2006

10J848.2

blendz"

BLENDZ FRANCHISE SYSTEM, INC.

267 E. Campbell Avenue, Suite 200

Campbell, CA 95008

(866) 4-BLENDZ

www.Blendz.com

Blendz Franchise System, Inc., a California corporation, ("Blendz") offers franchises to operate a quick service restaurant specializing in tossed-to-order salads, grilled Panini sandwiches, blended smoothies, gourmet soups and specialty coffees and espresso under the trademark Blendz® ("Blendz® Store").

We charge an initial franchise fee ("Initial Franchise Fee") of $25,000 for a single Blendz® Store. If you already operate a Blendz® Store, you may qualify to open an Express Unit. We charge an Express Unit fee of $10,000 ("Express Unit Fee") for a single Express Unit. In addition to the Initial Franchisee Fee and/or Express Unit Fee we also charge an Initial Training, Site Development and Architectural Design and Marketing Fee in the total amount of $40,000 for a Blendz® Store and $25,000 for an Express Unit. We also offer to select qualified persons the opportunity to acquire the exclusive right to develop multiple Blendz® Stores in a designated Development Area.

The estimated initial investment required to open a new Blendz® Store ranges from $227,800 to $295,300. The estimated initial investment required to open a new Express Unit ranges from $92,400 to $139,800.

RISK FACTORS:

1. THE FRANCHISE AND DEVELOPMENT AGREEMENTS PERMIT YOU TO ARBITRATE WITH US ONLY IN CALIFORNIA. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE WITH US IN CALIFORNIA THAN IN YOUR HOME STATE.

2. THE FRANCHISE AND DEVELOPMENT AGREEMENTS STATE THAT CALIFORNIA LAW GOVERNS THE AGREEMENTS AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.

3. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

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Information about comparisons of franchisors is available. Call the state administrators listed in Exhibit F or your public library for sources of information.

Registration of this franchise by a state does not mean that the state recommends it or has verified the information in this Offering Circular. If you learn that anything in this Offering Circular is untrue, contact the Federal Trade Commission and the appropriate state authority listed in Exhibit F.

Date of Issuance for Non-registration States: March 28,2006

Effective Dates for States Requiring Registration and Notice Filings:

California: September 8, 2005

Florida: _______________

Hawai i: _______________

Illinois: _______________

Indiana: _______________

Kentucky: _______________

Maryland: _______________

Michigan: _______________

Minnesota: _______________

Nebraska: _______________

New York: _______________

North Dakota: _______________

Rhode Island: _______________

South Dakota: _______________

Texas: _______________

Utah: _______________

Virginia: _______________

Washington: _______________

Wisconsin:

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ITEM1 THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES

To simplify the language in this offering circular ("Offering Circular"), "Blendz Franchise", "Blendz", "us" or "we" means Blendz Franchise System, Inc., the Franchisor. We will refer to the person, corporation or partnership that buys the franchise as "Franchisee" or "you". If the Franchisee is a legal business entity, certain terms of the Franchise Agreement also apply to the owners of the entity and will be noted.

The Franchisor, its Affiliates and Predecessors

Blendz is a California corporation formed on May 20, 2005. We currently maintain our principal business office at 267 E. Campbell Avenue, Suite 200, Campbell, California 95008 and conduct business under our corporate name. We began offering franchises for Blendz® Stores in August 2005. We do not operate any Blendz® Stores and we do not engage in any other business activities.

We have 1 predecessor ("Predecessor") and 1 affiliate ("Affiliate"). Our Predecessor, Blendz, LLC ("BL"), is a California Limited Liability Company formed in September 2002. BL operates 4 Blendz® Stores in Campbell, Saratoga and Santa Clara, California. Our Affiliate, Blendz Enterprises, Inc. ("BE") is a California corporation formed in December 2004. BE does not engage in any line of business. BL and BE do not offer franchises in this or any other line of business. We share an address with BL and BE.

Our agents for service of process are disclosed on Exhibit F.

The Franchise

We offer franchises for the use of the trademark Blendz® and our other trademarks, tradenames, service marks and logos ("Marks") for the operation of Blendz® Stores. The franchise is operated under a business format per a unique system, including or valuable know-how, information, trade secrets, methods, Operations Manual, standards, designs, methods of trademark usage, copyrights, sources and specifications, confidential electronic and other communications, methods of Internet usage, marketing programs, and research and development connected with the operation and promotion of Blendz® Stores ("System"). We reserve the right to change or otherwise modify the System at any time in our sole discretion.

Each Blendz® Store offers the public a variety of fresh food products, including tossed-to-order salads, grilled Panini sandwiches, blended smoothies, gourmet soups and specialty coffees and espresso. Blendz® Stores are typically located in strip shopping centers, suburban power centers, downtowns, business centers, office parks and malls. Blendz® Stores may also be placed in a permanent, temporary or seasonal food service facility (e.g., a kiosk, concession, or multi-brand facility) and may be placed in a variety of settings, such as food courts, transportation facilities (e.g., airports, train stations, bus terminals, port authorities), hospitals, military, festivals and other health care facilities, cafeterias, commissaries, schools, automobile dealerships, hotels, sports and entertainment facilities (e.g., stadiums, ballparks, convention centers), and other mass gathering locations or events.

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You must operate your Blendz® Store per our standard business operating practices and sign our standard franchise agreement ("Franchise Agreement"). Your Blendz® Store must offer authorized products. We reserve the right to add, modify or delete any product that you must offer or sell at your Blendz® Store at any time in our sole discretion. You must also obtain all necessary permits, licenses and approvals to operate your Blendz® Store.

We offer a standard franchise ("Franchise"). As a Franchise operator you may operate 1 Blendz® Store per Franchise Agreement that you sign with us. We also offer to select qualified persons the opportunity to acquire the exclusive right to develop multiple Blendz® Stores in a designated development area ("Area Development Agreement"). Under an Area Development Agreement, you agree to open 2 or more Blendz® Stores within a particular territory according to a development schedule. The development schedule is determined at the time you sign the Area Development Agreement and will depend in part upon the number of Blendz® Stores you agree to open. Area Development Agreements are negotiated individually and on a case-by-case basis. If you enter into an Area Development Agreement, you must sign a Franchise Agreement in the form attached to this Offering Circular for your first Blendz® Store when you sign the Area Development Agreement. We will require you to sign our then-current form of Franchise Agreement after that for each Blendz® Store that you develop under the Area Development Agreement. Unless otherwise stated, any reference in this Offering Circular to "you" or "Franchisee" includes you both as an Area Developer under an Area Development Agreement and as Franchisee under a Franchise Agreement.

We also offer to select qualified persons already operating a Blendz® Store the opportunity to operate an Express Unit. (See Items 7 and 12 for more information on Express Units).

Market and Competition

The restaurant and food service industry is highly competitive and fragmented. There are numerous restaurants and other food service operations that compete directly and indirectly with Blendz® Stores. In addition to other restaurant companies, Blendz® Stores compete with numerous other retail businesses for suitable locations. Investing in a Blendz® Store is a speculative risk and there is no guaranty that you will be successful. You will also face normal business risks that could have an adverse affect on your Blendz® Store. These include industry developments, such as pricing policies of competitors, supply and demand and changing consumer tastes. Another risk factor is our dependence on key personnel, the loss of whom could have an adverse affect on us. Our ability to fulfill our obligations under our Franchise Agreement or Area Development Agreement depends in part on our present and future financial condition. Litigation risks also exist, including product liability litigation against you or us because of food-related illnesses, and future litigation which may not be foreseeable.

The restaurant industry is affected by changes in consumer tastes. In addition, the restaurant industry may be adversely affected by discretionary spending priorities, national, regional or local economic conditions, demographic trends, consumer confidence in the economy, traffic patterns, weather conditions, employee availability and the type, number and location of competing restaurants. Changes in any of these factors could adversely affect a Blendz® Store. In addition, factors like inflation and increased food, labor and other costs could

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adversely affect a Blendz® Store. Another risk factor is our dependence on key personnel, the loss of whom could have an adverse affect on us. Our ability to fulfill our obligations under our Franchise Agreement depends in part on our present and future financial condition.

There are no regulations specific to the quick serve casual dining industry in which our Blendz® Stores operate, although you will be required to comply with all local, state and federal laws and regulations that apply to restaurant operations, including health, sanitation, smoking restrictions, EEOC, OSHA, discrimination, employment and wage and hour statutes, Family Medical Leave Act, and the federal Americans with Disability Act of 1990. (See Exhibit I). There may be more. You should consult with your attorney to determine what federal, state and local laws may affect your Blendz® Store operations. We also require your compliance with all provisions of the USA Patriot Act and Executive Order 13224. You should talk to an advisor or your attorney regarding compliance with these laws.

ITEM 2 BUSINESS EXPERIENCE

Our directors, principal officers and other executives are:

Matthew Phipps, President and CEO:

Mr. Phipps has been the President and CEO of Blendz since its inception in May 2005. Prior to forming Blendz, Mr. Phipps served as the President and CEO of BL since its inception in September 2002 and President and CEO of BE since its inception in December 2004. Mr. Phipps also acted as President and CEO of GelFuzion, Inc. in Campbell, California from September 2002 to April 2004 and Director of Operations for Liquid Agency, Inc. in San Jose, California from November 2000 to September 2002. Prior to joining Liquid Agency, Inc., Mr. Phipps was the General Manager for the San Jose Division of Full Moon Interactive, Inc/Image Network, Inc. from May 1997 until November 2000.

Denise Phipps, Vice President:

Ms. Phipps has been the Vice President of Blendz since its inception in May 2005. Prior to joining Blendz, Ms. Phipps served as the Vice President of BL since its inception in September 2002 and Vice President of BE since its inception in December 2004. Ms. Phipps also acted as Production Manger at Carta Products, Inc. in San Jose, California from June 2002 to March 2003 and Director of Promotions for Liquid Agency, Inc. in San Jose, California from April 1999 to May 2002.

Kim Cho Torres, Training Manager:

Ms. Torres has been Blendz's Training Manager since December 2005. Prior to joining Blendz, Ms. Torres was the Senior Operating Manager at FedEx Kinkos in Santa Cruz, California from September 2004 until December 2005. She also was a Manager at J. Crew Group in Pleasanton, California from July 2003 until September 2004. Before joining J.Crew Group, Ms. Torres was a Recruiter/Trainer at Compass Group, PLC from February 2001 until March 2002. Prior to that, she worked as a Manager/Trainer for Starbucks Coffee Company in San Francisco, California from August 1999 until February 2001.

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Ryan Cunningham, Director of Real Estate:

Mr. Cunningham acts as Blendz's Director of Real Estate since August 1, 2005. Mr. Cunningham is also President of Javelin Solutions, located in Denver, Colorado since its inception in May 2005. Before that, Mr. Cunningham was an Executive Vice President for Jones Lang LaSalle from July 1985 until April 2005.

James P. Whiteside, Director of Architectural Design and Site Development:

Mr. Whiteside acts as Blendz's Director of Architectural Design and Site Development since BL's inception in May, 2005. Mr. Whiteside is also the President of J.P. Whiteside Consulting located in San Jose, California since its inception in August 2003. Before that, Mr. Whiteside was the Director of Special Projects for Allied Domecq in San Jose, California from September 1999 until August 2003.

Michael Watoski, Director of Sales:

Mr. Watoski acts as Blendz's Franchise Broker since March 2005. Mr. Watoski is also the President of Zgurus, Inc. since February 2006 in San Diego, California. Prior to joining Zgurus, Mr. Watoski was the Vice President of PostalAnnext, Inc. in San Diego, California.

Manish Adhiya, Director of Sales:

Mr. Adhiya acts as Blendz's Franchise Broker since March 2005. Mr. Adhiya is also the CEO of Zgurus, Inc. since March 2006 in San Diego, California. Prior to joining Zgurus, Mr. Adhiya was the Vice President of Development for PostalAnnext, Inc. in San Diego, California.

ITEM 3 LITIGATION

No litigation or dispute resolution is required to be disclosed in this Offering Circular.

ITEM 4 BANKRUPTCY

No person previously identified in ITEMS 1 or 2 of this offering circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code required to be disclosed in this ITEM.

ITEM 5 INITIAL FRANCHISE FEE

When you sign a Franchise Agreement, you must pay us an initial franchise fee ("Initial Franchise Fee") of $25,000 for the rights to operate 1 Blendz® Store. You must also pay us at the time you sign a Franchise Agreement the Initial Training, Site Development and Architectural Design and Marketing Fee in the total amount of $40,000.

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We also charge an Express Unit Fee of $10,000 and an Initial Training, Site Development and Architectural Design and Marketing Fee in the amount of $40,000 for each Express Unit you are authorized to open.

We have not sold any Franchises since our last fiscal year ended December 31, 2005 and have not collected any Initial Franchise Fees, Express Unit Fees or Initial Training, Site Development and Architectural Design and Marketing Fees. We are not obligated to sell any additional franchises to any particular applicant.

Area Developers

At our discretion, we may offer to qualified candidates an Area Development Agreement, attached to this Offering Circular as Exhibit C, pursuant to which the area developer ("Area Developer") obtains the right to develop and operate a prescribed number of Blendz® Stores. When you sign an Area Development Agreement for the development of more than 1 Blendz® Store, we will grant you the right to build a mutually agreed upon number of Blendz® Stores in a specified territory ("Development Territory") in accordance with a specified Development Schedule. The Development Territory will be established based on the consumer demographics of the Development Territory, geographical area, city, county and other boundaries. If you are purchasing a Development Area you must execute an Area Development Agreement.

You must pay an area development fee ("Area Development Fee") of $10,000 for each additional Blendz® Store (after the first Blendz® Store) you intend to develop under the terms of the Area Development Agreement. We will credit $5,000 of the Area Development Fee towards the Initial Franchise Fee for your second and any subsequent Blendz® Store that you open pursuant to the Area Development Agreement at the time you sign each Franchise Agreement. This $5,000 credit will not apply to the first Blendz® Store you open. You must pay the Area Development Fee when you sign the Area Development Agreement. It is fully earned at the time you make the payment to us and is not refundable regardless of whether you ultimately open any or all of your Blendz® Stores.

The Area Development Fee may not be uniform for all franchisees due to the variable nature of negotiations including but not limited to the size of the Development Territory to be developed, the number of Blendz® Stores to be developed, demographic data and trends and other variable conditions. We reserve the right to charge different Area Development Fees in our sole discretion. We calculate the Area Development Fee uniformly for all franchisees, but the total amount you pay will depend on the number of Blendz® Stores you commit to develop. During our last fiscal year ended December 31, 2005, we have not negotiated any Area Development Agreements and have not collected any Area Development Fees.

In addition to the Area Development Fee, for each Blendz® Store that you agree to open pursuant to the Area Development Agreement you agree to pay the then-current Initial Franchise Fee for the first Blendz® Store. You will pay the Initial Franchise Fee being charged by us at the time you sign the Area Development Agreement for each additional Blendz® Store you open under the Area Development Agreement. If you agree to open between 3-5 additional Blendz® Stores (after the first Blendz® Store you open) per an Area Development Agreement, we will reduce the Initial Franchise Fee charged at the time you sign the Area Development Agreement by 25%. If you agree to open 6 or more additional Blendz® Stores per an Area Development

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Agreement, we will reduce the Initial Franchise Fee charged at the time you sign the Area Development Agreement by 40%. You will also be required to pay the then-current Initial Training, Site Development and Architectural Design and Marketing Fee for your first and all subsequent Blendz® Stores. If you form an entity to open any of the additional Blendz® Stores within the Development Territory, you must own at least 51% of the issued equity securities in each entity. You must provide us with necessary documentation to show your ownership interest.

ITEM 6 OTHER FEES

Fees^(l)	Amount	Due Date	Remarks
Royalty Fee	The greater of (a) 6% of Gross Sales; or (b) $900 per month ("Minimum Royalty Fee")	Bi-monthly on or before the 5th and 20th day of each month, or such other period as we may determine	See footnote (2) for definition of Gross Sales. The Royalty Fee payment will be collected by us by electronic funds transfer (EFT) and supported by a royalty report
Marketing Fund Contribution	l%ofGrossSales(3)	Bi-monthly on or before the 5th and 20th day of each month, or such other period as we may determine	The Marketing Fund Contribution will be collected by us by EFT and supported with the royalty report
Local Advertising Expense	The greater of (a) 3% of Gross Sales; or (b) $450 per month ("Minimum Local Advertising Expense") (4)	Monthly	If a Local Advertising Cooperative exists, you must submit monthly reports to us for your local advertising. We reserve the right to direct where your Local Advertising Expense is spent
Local Advertising Cooperative Contribution	Not less than 1% of Gross Sales; more if members of the Local Advertising Cooperative approve (5)	As determined by members of the cooperative	Your total contribution to a Local Advertising Cooperative and Local Advertising Expense will not exceed 3% of your Gross Sales unless the members of the Local Advertising Cooperative vote to increase the amount the members contribute to the Local Advertising Cooperative. In no event will the Local Advertising Cooperative Contribution increase to more than 6% of your Gross Sales
Advertising & Promotional Materials	Varies, based on advertising needs	10 days following invoice date	See ITEMS 7 and 11
Late Fees and Interest	$100 plus the lesser of 18% per annum or highest rate allowed by applicable law	On demand	Interest accrues on all overdue amounts beginning with the first day each payment was due and continues until payment is received by us
Franchise Agreement Transfer Fee	$5,000 plus $3,500 for the transferee to attend the initial training program and transferee's travel and personal expenses incurred to attend the initial training program. Travel and room and board is estimated at $1,000 to $2,500 (6)	Submitted with transfer application	You may only transfer subject to the satisfaction of certain conditions with our consent ( See ITEM 17)

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Fees'¹'	Amount	Due Date	Remarks
Area Development Agreement Transfer Fee	$5,000 for each unopened Blendz® Store under the Area Development Agreement Development Schedule	Submitted with transfer application	You may only transfer subject to the satisfaction of certain conditions with our consent
Subsequent Franchise Fee	$2,500	On signing Subsequent Franchise Agreement	None
Audit Fee	Cost of audit. Cost may range from $500 - $5,000	As incurred	Payable only if you understate your Gross Sales by 2% or more
Inspection and Testing	Cost of inspection or testing for new products, supplies, equipment and/or suppliers	10 days following invoice date	We may require you to pay us or an independent laboratory for the cost of inspection or testing if you purchase or lease items used in the Blendz® Store from sources we have not previously approved (See ITEM 8)
Indemnification	Varies according to circumstances	On demand	You must reimburse us for and defend us against claims against us and taxes imposed on us due to your activities from your Blendz® Store's operation, the Franchise Agreement and/or the Area Development Agreement (See ITEM 9)
Legal Fees and Expenses	Amounts incurred	On demand	If you breach any of the Agreements, you must pay our costs and expenses to enforce the agreement
Arbitration Costs	1/2 of arbitrator's costs	When billed	If we arbitrate any disputes, you must pay 1/2 of the arbitrator's expenses
Insurance	Cost of insurance (7)	When billed	We have the right to acquire insurance on your behalf if you fail to do so
Replacement Manuals	$500 plus shipping and handling	10 days following invoice date	This is the cost for replacement of the Operations Manual. Can be in hard copy or via a CD or secured website
Technology Maintenance Expense	The then-current cost of purchasing required hardware and software upgrades. The estimated range of costs are $0 -$5,000	At the time of upgrade, which may be required at any time if we determine that the existing hardware and/or software is outdated	We impose no cap or limitation on the amount of expense you may incur for hardware or software upgrades
N on-Proprietary Hardware and Software Updates and Upgrades	Cost of upgrade. The estimated range of costs are $0 to $5,000 per year	When incurred	You must maintain, upgrade and update POS and back office hardware, software, and ISP or other communications system as we determine. These upgrade expenses are not limited or capped by us in any way (See ITEM 11)
Equipment Replacement and Upgrades	Cost of upgrade or replacement	As incurred	You must replace or upgrade worn out improvements, fixtures, furniture, furnishings, equipment, signs and utensils as needed, in our sole determination. These expenses are not limited or capped by us in any way
Refurbishing	Varies based on refurbishment needs. The estimated range of costs is $5,000 to $25,000	At time of refurbishment. The refurbishment may be required after 5 years after opening your Blendz® Store or when a majority of Blendz® Store's that we or our Affiliate owns are making or made such refurbishments	We impose no cap or limitation on the amount of expense you may incur for refurbishing your Blendz® Store

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Fees'¹'	Amount	Due Date	Remarks
Management Fee	S200 per day plus travel expenses, meals, and lodging	Payable only upon the death or permanent disability of a Controlling Principal or you	This amount is in addition to any royalties due and the salaries and fringe benefit costs for any of our management employees used to manage the Blendz® Store
Remedial Training	Currently $250 to $300 per day for services of trained representatives plus travel and other expenses incurred. Travel and other expenses are estimated at $500 to $2,500 (8)	10 days following invoice date	We will provide you with trained representatives to provide on-site remedial training, if required in our discretion
Additional Assistance	Currently $250 to $300 per day for services of trained representatives plus travel and other expenses incurred (8)	10 days following invoice date	We will provide you with trained representatives to provide on-site additional training at your request
Return Check Fee	$25.00 for the first returned check and $35.00 for the second return of the same check	At the time the check is returned	We reserve the right to require you to pay all subsequent orders by credit card terms or certified funds
Training for Additional Persons	$2,000 per additional person plus travel and expenses incurred by such additional persons to attend the initial training program. Travel and other expenses are estimated at $1,500 to $2,500 (9)	As incurred	Training for 2 people is included in the Initial Training, Site Development and Architectural Design and Marketing Fee
Relocation Fee	$5,000	Upon approval of relocation request	Payable only if we approve your request to relocate your Blendz® Store
Mandatory Seminars, Conventions or Programs	You must pay your expenses as well as the expenses your employees incur in attending these meetings. The estimated range of costs is $500-$2,500 plus materials estimated at $50	As incurred	We reserve the right to conduct periodic meetings of all Blendz® Store franchisees that you must attend
Music and TV License	Varies based on contract. The range of estimated fees is $15 to $110 per month	When billed	None
High Speed Internet Access Service	Varies based on contract. The range of estimated fees is $25 to $75	When billed	None
Inventory and Supplies	Varies based on need	As incurred	None
Training Fee for a Replacement Designated Store Manager or Operating Principal	$1,300 plus the cost of travel and other expenses. Travel and other expenses are estimated at $1,500 to $2,500(10)	As incurred	Payable only when training a replacement Designated Store Manager or Operating Principal

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Fees¹"	Amount	Due Date	Remarks
Catering Vehicle (11)	Varies based on contract. Estimated lease payment amount is $300 per month	Monthly	These expenses will not be incurred unless and until you elect, subject to our approval, to provide catering services
Sign Wrap for Catering Vehicle 01)	Estimated range of costs is $2,500 - $5,000	As incurred	These expenses will not be incurred unless and until you elect, subject to our approval, to provide catering services
Catering Equipment and Supplies (11)	Estimated range of costs is $500-$1,000	As incurred	These expenses will not be incurred unless and until you elect, subject to our approval, to provide catering services

Notes to ITEM 6:

(1) We reserve the right to require you to pay fees and other amounts due to us via electronic funds transfer or other similar means, as described in the Franchise Agreement and Attachment D to the Franchise Agreement. If payments are required in this method, you must comply with our procedures and/or perform all acts and deliver and execute all documents, including authorization (in the form attached to the Franchise Agreement as Attachment D or any other form that we may accept) for direct debits from your business bank operating account, which may be necessary to assist in or accomplish payment by this method. Under this procedure you shall authorize us to initiate debit entries and/or credit correction entries to a designated checking or savings account for payments of fees and other amounts payable to us and any interest that may be owing. You shall make the funds available to us for withdrawal by electronic transfer no later than the payment due date. If you have not timely reported your Blendz® Store's Gross Sales to us for any reporting period, then we shall be authorized, at our option, to debit your account for (a) the fees transferred from your account for the last reporting period for which a report of the Blendz® Store's Gross Sales was provided to us (b) the amount due based on information retrieved from our approved computer system; or (c) the Minimum Royalty Fee and Marketing Fund Contribution paid to us or our Affiliates are non-refundable under any circumstances once paid. Fees paid to vendors or other suppliers may or may not be refundable depending on your arrangement with your vendors and suppliers. Except as specifically stated above, the amounts given may be subject to increases based on changes in market conditions, our cost of providing services, and future policy changes. At the present time, we have no plans to increase payments over which we have control.

(2) Gross Sales. "Gross Sales" means the total selling price of all food, beverages, services and merchandise at or from your Blendz® Stores, and all income of every other kind and nature related to the Blendz® Store's, operation (including income related to take-out, catering and delivery), whether for cash or credit and regardless of collection in the case of credit (See Franchise Agreement, Section 4.5 for a complete definition of Gross Sales).

(3) Marketing Fund Contribution. The Marketing Fund Contribution is used for national advertising, to generate marketing materials and for administrative costs associated with our marketing efforts ("See ITEM

11).

(4) Local Advertising Expense. Your Local Advertising Expense will be used on local marketing and advertising. You must make these expenditures directly, subject to our approval. We will provide guidelines for local advertising and placement of this advertising in telephone and web directories. (See ITEM 11). We reserve the right to direct where your Local Advertising Expense is spent.

(5) Local Advertising Cooperative Contribution. Local Advertising Cooperatives will be composed of all franchised and Affiliate-operated Blendz® Stores located in a designated market area. You total contribution to the Local Advertising Cooperative and Local Advertising Expense will not exceed 3% of your Gross Sales, unless the members vote to increase the amount of contribution to the Local Advertising Cooperative. In no event will the Local Advertising Cooperative Contribution exceed 6%. We anticipate

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that each franchisee will have 1 vote for each Blendz® Store operated by the member in the designated market. No Local Advertising Cooperatives have been established as of the date of this Offering Circular.

(6) Franchise Agreement Transfer Fee. You must pay a transfer fee of $5,000 plus $3,500 for the transferee to attend the initial training program. The transferee will also be required to pay for its travel and other expenses to attend the initial training program. These expenses are estimated at $1,500 - $2,500. However, no Transfer Fee is required if you transfer your Franchise Agreement to a business entity in which you own the majority of the company's issued equity securities.

(7) Insurance. You must procure and maintain, at your own expense, insurance policies protecting you, us, our designated Affiliates and the officers, directors and employees of us and our designated Parent and Affiliates against any loss, liability, personal injury, death, property damage, or expense resulting from the operation of your Blendz® Stores and all services you provide in connection with the operation of your Blendz® Stores as we may require for your and our protection in our sole discretion in amounts set forth in the Operations Manual and Franchise Agreement (which may be adjusted in our sole discretion). You must also procure and maintain all other insurance required by state or federal law, including workers compensation insurance and unemployment insurance and vehicle insurance if you offer catering services in the amounts we determine from time to time. The policies must also stipulate that we shall receive a 30-day prior written notice of cancellation and must contain endorsements by the insurance companies waiving all rights of subrogation against us. Original or duplicate copies of all insurance policies, certificates of insurance, or other proof of insurance acceptable to us, including original endorsements affecting the coverage required by us, shall be furnished to us together with proof of payment within 10 days of issuance thereof. You shall also furnish us with certificates and endorsements evidencing this insurance coverage within 10 days after each of the following events: (i) at all policy renewal periods, no less often than annually, and (ii) at all instances of any change to, addition to, or replacement of any insurance. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. All certificates and endorsements are subject to our approval. If you fail to procure and maintain the required insurance coverage, we have the right and authority to procure the insurance coverage and charge you, which charges, together with a reasonable fee for our expenses incurred in this procurement, you will pay immediately upon notice.

(8) Remedial Training and Additional Assistance. The Initial Training, Site Development and Architectural Design and Marketing Fee includes the initial training for you or your Designated Store Manager or Operating Principal and 1 additional person and airfare, lodging and some meals for 2 attendees. If we determine that you require on-site remedial training or if you request additional assistance beyond what is provided by us as part of the initial training, we will provide additional remedial training or additional assistance at your request at our then published rate. Currently, our published rate is $250 per day. You will also pay for our travel, meals and lodging.

(9) Training for Additional Persons. Training, for you or your Designated Store Manager or your Operating Principal and 1 additional person is included in your Initial Training, Site Development and Architectural Design and Marketing Fee. We may charge $2,000 per additional persons we train at your request. Training fees can be increased or decreased by us at any time in our discretion. You will be responsible for all travel expenses for all additional attendees attending the initial training program including airfare, lodging, meals, ground transportation, and personal expenses.

(10) Training a Replacement Designated Store Manager or Operating Principal. If your Designated Store Manager or Operating Principal is replaced, you must allow us to train your new Designated Store Manager or Operating Principal, as the case may be, at a location designated by us in our discretion. We charge a training fee of $1,300, plus you will need to pay for airfare, lodging, ground transportation, meals, salary and benefits, and other personal expenses of your new Designated Store Manager or Operating Principal, as the case may be, while he or she is in training.

(11) Catering. We require that you purchase or lease a new sports utility vehicle or van. We will provide you with the type and model, vehicle required, including color. The range provided in this Offering Circular assumes that you will lease a vehicle. If you buy a vehicle the range will be more. You will also be

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required to purchase a sign wrap approved by us, insurance and catering equipment and supplies, including but not limited to, warming equipment and catering menus.

ITEM 7 INITIAL INVESTMENT

BLENDZ® STORE

Expenditure'¹*	Actual or Estimate (Low)	Actual or Estimate (High)	Method of Payment	When Due	Payable To
Initial Franchise Fee^t:ii	$25,000	$25,000	Lump Sum	Signing of Franchise Agreement	Us
Initial Training, Site Development and Architectural Design and Marketing Fee^<3>	$40,000	$40,000	Lump Sum	Signing of Franchise Agreement	Us
Leasehold Improvements/ Construction^<4)	$65,000	$90,000	Negotiable	Negotiable	Landlord and Contractors
Leasehold Negotiation Fee	$0	$1,800	Payable only if our attorneys or we negotiate a lease or sublease on your behalf for your Blendz® Store	As Invoiced	Us
Furniture, Fixtures, Computer Hardware and Software and POS⁽⁵>	$18,000	$24,500	Negotiable	As Invoiced	Vendors
Equipment^,6)	$38,000	$55,000	Negotiable	As Invoiced	Vendors
Signs^{,)	$3,500	$5,000	Negotiable	As Invoiced	Vendors
Insurance	$300	$500	Installment	As Invoiced	Vendors
Opening Inventory and Supplies^<s'	$8,000	$10,000	Negotiable	As Incurred	Vendors
Security and Utilities Deposits /Licenses⁽⁹⁾	$2,500	$5,000	Negotiable	As Incurred	Landlord/Utilities/Local Government Agencies
Pre-Opening and Grand Opening Promotional Expenses 00)	$4,000	$5,500	Cash	As Incurred	Vendors
Legal and Accounting Fees^<ll)	$1,500	$3,000	Negotiable	As Incurred	Attorneys/Accountants
Additional Funds/ Working Capital for 3 Months⁰²'	$22,000	$30,000	Cash	As Needed	Various Payees
TOTAL^(l3)	$227,800	$295,300

Notes to ITEM 7:

(1) Expenditures. All estimates in this ITEM 7 are based upon new Blendz® Store locations with a

building/premises size of approximately 1,250 to 1,500 square feet for a Blendz® Store which are constructed within a 2 to 3 month period. Your costs will be higher if you choose to open a larger Blendz® Store or if it takes longer to construct your Blendz® Store. The costs for fixtures, rent, and improvements will vary based on the square footage, location and other factors. All fees imposed by us or our Affiliates are non-refundable unless otherwise noted. Fees and expenses paid to vendors or other third parties may or may not be refundable depending on the arrangements you make with them.

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(2) Initial Franchise Fee. The Initial Franchise Fee is $25,000. The Initial Franchise Fee is non-refundable once paid.

(3) Initial Training, Site Development and Architectural Design and Marketing Fee. The Initial Training, Site Development and Architectural Design and Marketing Fee is $40,000 and is non-refundable once paid. The Initial Training, Site Development and Architectural Design and Marketing Fee includes: (i) training for you, your Designated Store Manager or Operating Principal and 1 additional person for 4 weeks at our corporate headquarters located in Campbell, California and 1 week of home study training. We will pay for you, your Designated Store Manager or Operating Principal and 1 additional person's airfare, lodging and some meals incurred during the initial training program. You are responsible for all additional expenses; (ii) permit process guidance and assistance and design plans for your Blendz® Store site; (iii) assistance with site selection; and (iv) an initial set of branded supplies, including, uniforms, paper products, menus, gift cards and marketing materials determined in our sole discretion.

(4) Leasehold Improvements. In most cases you will need to alter the interior of your Blendz® Store location before you open your Blendz® Store. The costs will vary widely and may be significantly higher than projected in this table, depending on such factors as property location, labor and material costs, economic climate, prevailing interest rates and other financing costs, the conditions of the property and the extent of the alterations required. The estimates do not include the costs of any necessary site development or site engineering work, nor do they include capitalized costs of rent or other occupancy costs, over either the life of the lease or the life of your investment. In addition, these amounts do not reflect costs for the purchase of unimproved land and construction of a Blendz® Store building, which also would result in a significantly greater initial investment. These estimates assume that the landlord will provide a shell space which, at a minimum, includes concrete floors, demised walls, HVAC, roof, exhaust vent chaseway, and utilities sufficient for a Blendz® Store. You should investigate all of these costs in the area where you wish to establish your Blendz® Store.

(5) Furniture, Fixtures, Computer Hardware and Software and PQS. These amounts include costs for chairs, tables, restaurant smallwares, TV/Stereo system, cameras, wireless network equipment, office furniture, safe, window treatments, artwork/artifacts, fans, flooring, plants, computer hardware and software lighting fixtures, miscellaneous decor items and interior signs required for the Blendz® Store. These estimates also include costs for a complete point-of-sale (POS) system (See ITEM 11), back of the house computer hardware, and all necessary guest check printers, credit card "swipe/read" terminals, printers, and modems. These estimates do not include any freight, tax or installation costs, and will vary depending on the location and size of the Blendz® Store.

(6) Equipment. These amounts include costs for Panini grills, refrigerators, blenders, coffee and espresso makers, other kitchen equipment, prep station, freezers, salad display, soup crocks, all necessary stainless steel fixtures and kitchen smallwares. Costs do not include freight, tax or installation costs that may vary substantially depending on the Blendz® Store's location, configuration and local regulations.

(7) Signs. You must purchase our approved sign for your storefront. We will provide you with the specifications that must be followed.

(8) Opening Inventory and Supplies. We estimate that the range given will provide sufficient inventory (food, beverages and disposables) for opening your Blendz® Store. These amounts may vary according to your sales volume and approved local suppliers' terms. We reserve the right to change the selection of Opening Inventory at any time. Your initial supplies will vary depending upon the anticipated sales volume as well as current market prices. The required supplies will include, but not be limited to, non-branded paper products, silverware, etc., some of which will be purchased directly from us.

(9) Security and Utilities Deposits/Licenses. These amounts include estimated security deposit (equal to 1 months' rent) and utility deposits. The actual amount of these deposits will vary depending on local landlord practices and other factors. These amounts also include the estimated cost of obtaining a license or permit from a state agency to sell food. Other permit and license fees will also vary depending on location

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and on whether applicable laws require the payment of occupational or other taxes for the Blendz® Store. Franchise taxes are not included.

(10) Pre-Qpening and Grand Opening. You should plan to spend a minimum of $1,500 on your pre-opening advertising at least 30 days before your grand-opening of your Blendz® Store. You should also plan to spend a minimum of $2,500 on your grand opening. The recommended grand opening celebration should last at least 2 days.

(11) Legal and Accounting Fees. In most cases, the terms and conditions of all agreements relating to the purchase, lease or alteration of the property for your Blendz® Store will be negotiated by you and/or your legal counsel. However, we may require you to incorporate certain provisions into your lease. This estimate includes the legal expense for negotiating your lease. We may also require you to let us or our attorneys negotiate your lease, in which case we may charge you a Lease Negotiation Fee.

(12) Additional Funds. These amounts represent our estimate of the amount needed to cover your expenses for the initial 3-month start-up phase of your Blendz® Store. They include rent, common area maintenance, insurance, property taxes, and other typical lease expenses, payroll, administrative, janitorial, maintenance and utilities. These figures do not include standard pre-opening expenses, royalties or advertising fees payable under the Franchise Agreement or debt service and assume that none of your expenses are offset by any sales generated during the start-up phase. For purposes of this disclosure, we estimated the start-up phase to be 3 months from the date the Blendz® Store opens for business. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. You must bear any deviation or escalation in costs from the estimates that we have given. Your costs will depend on factors such as: how well you follow our methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market for your products and services; the prevailing wage rate; competition; the sales level reached during the start-up period; and the size of your Blendz® Store.

(13) Total. We relied on the experience of our Affiliate and their principals in opening and developing company-owned Blendz® Stores to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing will depend on factors such as the availability of financing generally, your creditworthiness, collateral you may have and lending policies of financial institutions from which you may request a loan.

(14) Area Development Opportunity. If you enter into an Area Development Agreement with us, you must pay us an Area Development Fee in the amount of $10,000 when you sign the Area Development Agreement multiplied by the number of Blendz® Stores you intend to develop after your first Blendz® Store under the terms of the Area Development Agreement. You must also pay the full amount of the then-current Initial Franchise Fee for your first Blendz® Store. For each subsequent Blendz® Store you open under your Area Development Agreement you must pay the Initial Franchise Fee being charged at the time you sign your Area Development Agreement. After your first Blendz® Store is opened and operating you will receive a credit of $5,000 toward the payment of each subsequent Initial Franchise Fee due pursuant to the Area Development Agreement. We will also reduce the Initial Franchise Fee if you open a certain number of Blendz® Stores per the Area Development Agreement. (See ITEM 5) The fees set forth in ITEM 7 may be multiplied by the number of Blendz® Stores you are establishing under your Area Development Agreement.

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EXPRESS UNIT

Expenditure'¹'	Actual or Estimate (Low)	Actual or Estimate (High)	Method of Payment	When Due	Payable To
Express Unit Fee ^	$10,000	$10,000	Lump Sum	Signing of Franchise Agreement	Us
Initial Training, Site Development and Architectural Design and Marketing Fee'³'	$25,000	$25,000	Lump Sum	Signing of Franchise Agreement	Us
Leasehold Improvements/ Construction '⁴⁾	$20,500	$40,700	Negotiable	Negotiable	Landlord and Contractors
Leasehold Negotiation Fee	$0	$1,800	Payable only if our attorneys or we negotiate a lease or sublease on your behalf for your Express Unit location	As Invoiced	Us
Furniture, Fixtures, Computer Hardware and Software and POS⁽⁵⁾	$11,900	$20,000	Negotiable	As Invoiced	Vendors
Equipment'⁶⁾	$10,000	$18,000	Negotiable	As Invoiced	Vendors
Signs'⁰	$1,300	$2,500	Negotiable	As Invoiced	Vendors
Insurance	$300	$500	Installment	As Invoiced	Vendors
Opening Inventory and Supplies ⁽⁸⁾	$1,100	$2,800	Negotiable	As Incurred	Vendors
Deposits^(y'	$800	$1,500	Negotiable	As Incurred	Vendors
Pre-Opening and Grand Opening Promotional Expenses {i(5	$1,000	$2,000	Cash	As Incurred	Vendors
Legal and Accounting Fees¹"'	$0	$2,000	Negotiable	As Incurred	Attorneys/Accountants
Additional Funds/ Working Capital for 3 Months'¹²'	$10,500	$13,000	Cash	As Needed	Various Payees
TOTAL "³⁾	$92,400	$139,800

Notes to ITEM 7:

(1) Expenditures. All estimates in this ITEM 7 are based upon new Express Unit location with a size of approximately 250 square feet for an Express Unit, which are constructed within a 1 to 2 month period. Your costs will be higher if you choose to open a larger Express Unit location or if it takes longer to construct your Express Unit location. The costs for fixtures, rent, and improvements will vary based on the square footage, location and other factors. All fees imposed by us or our Affiliates are non-refundable unless otherwise noted. Fees and expenses paid to vendors or other third parties may or may not be refundable depending on the arrangements you make with them.

(2) Express Unit Fee. The Express Unit Fee is $10,000. The Express Unit Fee is non-refundable once paid.

(3) Initial Training. Site Development and Architectural Design and Marketing Fee. The Initial Training, Site Development and Architectural Design and Marketing Fee is $25,000 and is non-refundable once paid. The Initial Training, Site Development and Architectural Design and Marketing Fee includes: (i) training for you, your Designated Store Manager or your Operating Principal and 1 additional person for 4 weeks at our corporate headquarters located in Campbell, California and 1 week of home study training. We will pay for you, your Designated Store Manager or your Operating Principal and 1 additional person's airfare, lodging and some meals incurred during the initial training program. You are responsible for all additional expenses; (ii) permit process guidance and assistance and design plans for your Express Unit location; (iii)

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assist with site selection; and (iv) an initial set of branded supplies, including, uniforms, paper products, menus, gift cards and marketing materials determined in our sole discretion.

(4) Leasehold Improvements. In most cases you will need to alter the interior of your Express Unit location before you open your Express Unit. The costs will vary widely and may be significantly higher than projected in this table, depending on such factors as property location, labor and material costs, economic climate, prevailing interest rates and other financing costs, the conditions of the property and the extent of the alterations required. The estimates do not include the costs of any necessary site development or site engineering work, nor do they include capitalized costs of rent or other occupancy costs, over either the life of the lease or the life of your investment. In addition, these amounts do not reflect costs for the purchase of unimproved land and construction of a building, which also would result in a significantly greater initial investment. These estimates assume that the landlord will provide a shell space which^ at a minimum, includes concrete floors, demised walls, HVAC, roof, exhaust vent chaseway, and utilities sufficient for an Express Unit location. You should investigate all of these costs in the area where you wish to establish your Express Unit.

(5) Furniture, Fixtures. Computer Hardware and Software and POS. These amounts include costs for chairs, tables, restaurant smallwares, TV/Stereo system, cameras, wireless network equipment, office furniture, safe, window treatments, artwork/artifacts, fans, flooring, plants, computer hardware and software lighting fixtures, miscellaneous decor items and interior signs required for the Express Unit. These estimates also include costs for a complete point-of-sale (POS) system ("See ITEM 11), back of the house computer hardware, and all necessary guest check printers, credit card "swipe/read" terminals, printers, and modems. These estimates do not include any freight, tax or installation costs, and will vary depending on the location and size of the Express Unit.

(6) Equipment. These amounts include costs for Panini grills, refrigerators, blenders, coffee and espresso makers, other kitchen equipment, prep station, freezers, salad display, soup crocks, all necessary stainless steel fixtures and kitchen smallwares. Costs do not include freight, tax or installation costs that may vary substantially depending on the Express Unit's location, menu offerings, configuration and local regulations.

(7) Signs. You must purchase our approved sign for your storefront. We will provide you with the specifications that must be followed.

(8) Opening Inventory and Supplies. We estimate that the range given will provide sufficient inventory (food, beverages and disposables) for opening your Express Unit. These amounts may vary according to your sales volume and approved local suppliers' terms. We reserve the right to change the selection of Opening Inventory at any time. Your initial supplies will vary depending upon the anticipated sales volume as well as current market prices. The required supplies will include, but not be limited to, non-branded paper products, silverware, etc., some of which will be purchased directly from us.

(9) Deposits. These amounts include estimated security deposit (equal to one months' rent) and utility deposits. The actual amount of these deposits will vary depending on local landlord practices and other factors. These amounts also include the estimated cost of obtaining a license or permit from a state agency to sell food. Other permit and license fees will also vary depending on location and on whether applicable laws require the payment of occupational or other taxes for Express Units. Franchise taxes are not included.

(10) Pre-Qpening and Grand Opening. You should plan to spend a minimum of $1,000 on your pre-opening advertising and grand opening. Your pre-opening advertising should begin at least 30 days before your grand-opening of your Express Unit. The recommended grand opening celebration should last at least 2 days.

(11) Legal and Accounting Fees. In most cases, the terms and conditions of all agreements relating to the purchase, lease or alteration of the property for your Express Unit will be negotiated by you and/or your legal counsel. However, we may require you to incorporate certain provisions into your lease. This estimate includes the legal expense for negotiating your lease. We may also require you to let us or our attorneys negotiate your lease, in which case we may charge you a Lease Negotiation Fee.

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(12) Additional Funds. These amounts represent our estimate of the amount needed to cover your expenses for the initial 3-month start-up phase of your Express Unit. They include rent, common area maintenance, insurance, property taxes, and other typical lease expenses, payroll, administrative, janitorial, maintenance and utilities. These figures do not include standard pre-opening expenses, royalties or advertising fees payable under the Franchise Agreement or debt service and assume that none of your expenses are offset by any sales generated during the start-up phase. For purposes of this disclosure, we estimated the start-up phase to be 3 months from the date the Express Unit opens for business. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. You must bear any deviation or escalation in costs from the estimates that we have given. Your costs will depend on factors such as: how well you follow our methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market for your products and services; the prevailing wage rate; competition; the sales level reached during the start-up period; and the size of your Express Unit.

(13) Total. We relied on the experience of our Affiliate and their principals in opening and developing affiliate-owned Express Units to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing will depend on factors such as the availability of financing generally, your creditworthiness, collateral you may have and lending policies of financial institutions from which you may request a loan.

ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

To insure that the highest degree of quality and service is maintained, you must obtain all food and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including point-of-sale system, computer hardware and software), and other products used or offered for sale at Blendz® Stores solely from us or approved suppliers who demonstrate, to our continuing reasonable satisfaction, the ability to meet our then-current standards. Our criteria for a supplier to get our approval may be found in our Operations Manual (See ITEM 11), or will be provided to you in writing on request. Among other things, the suppliers must have adequate quality controls, the capacity to supply your needs promptly and reliably and must comply with our guidelines. If you wish to purchase, lease or use any products or other items from an unapproved supplier, you must give us a written request for approval, or must request the supplier to do so. We have to approve any supplier in writing before you make any purchases from that supplier. We can require that our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be delivered, either to us or to an independent laboratory for testing. You must pay the cost of the inspection, and the actual cost of the test must be paid by you or the supplier (See ITEM 6). We reserve the right to re-inspect the facilities and products of any approved supplier and to revoke our approval if the supplier fails to continue to meet any of our then-current standards. Our supplier approval procedure does not obligate us to approve any particular supplier. However, we will notify you within 60 days after we complete the inspection and evaluation process of our approval or disapproval of any proposed supplier.

You must use our designated contractors and consultants to design the layout for your Blendz® Store, draw plans for your Blendz® Store, submit permits on your behalf and build-out your Blendz® Store. You must also use a book keeper that meets our criteria and guidelines and your account charts must be in the form that we require as set forth in the Operations Manual.

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We may develop certain products for use in the Blendz® Stores which are prepared from highly confidential secret recipes and menu items and that are our trade secrets. Because of the importance of quality and uniformity of production and the significance of the use of the products in the Blendz® Stores, we will require you to use only our secret recipe products and purchase these and other items solely from us or a designated supplier.

To ensure that you maintain the highest degree of quality and service, you must operate your Blendz® Store, in strict conformity with the methods, standards and specifications which comprise the System, that we require in our Operations Manual or that we require otherwise in writing. You must maintain in sufficient supply and use and sell at all times only the food and beverage items, ingredients, products, materials, supplies and paper goods that conform to our standards and specifications. You must prepare all menu items in accordance with the recipes and procedures specified in the Operations Manuals or other written materials. You must not deviate from these standards and specifications nor use or offer any non-conforming item or differing amounts of any item, without obtaining our written consent first. You must sell and offer for sale only those menu items, products and services that we have expressly approved for sale in writing. You must sell and offer for sale all products and services required by us in the manner and style we require, including the sale of pre-packaged food products. You must not deviate from our standards and specifications without obtaining our written consent first. You must discontinue selling and offering for sale any items, products and services we may disapprove in writing at any time. We can, and expect to, modify our standards and specifications, as we deem necessary. We will provide you notice of any changes as they occur.

You must permit us and our agents, at any reasonable time, to remove a reasonable number of samples of food or non-food items from your inventory or from the Blendz® Store, free of charge for testing by us or by an independent laboratory, to determine whether the samples meet our then-current standards and specifications. Besides any other remedies we may have, we may require you to pay for the testing if we have not previously approved the supplier ofthe item (See ITEM 61.

We do not currently, but reserve the right to negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of the System that will be made available to you. There are currently no purchasing or distribution cooperatives.

We or an Affiliate of ours are an approved supplier for paper products. We reserve the right to become an approved supplier (or appoint an Affiliate as an approved supplier) of other goods and services in the future. We estimate that the purchase of the items for us or our designated or approved sources, or those meeting our standards and specifications will be approximately 40% to 80% of your total cost to establish a Blendz® Store, if any, and 30% to 40% of your total cost of operating a Blendz® Store (not including amortization, depreciation or replacement of worn or obsolete improvements, equipment or fixtures).

We do not have any purchasing or distribution co-operatives as of the date of this Offering Circular. We may negotiate purchase arrangements with suppliers and distributors of approved products for the benefit of our franchisees in the future and we reserve the right to receive rebates on volume discounts from our purchase of products that we may re-sell to you. We do not undertake any obligation to negotiate proportional price reductions for products sold

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to you, as each supplier has its own position on granting (and tracking/accounting for) price reductions versus rebates. We do not provide material benefits, such as renewing or granting additional franchises to franchisees based on their use of designated or approved suppliers.

We reserve the right to require you to purchase specific computer, information or communications systems, cameras and wireless equipment which meet our criteria for design, function and compatibilities, and to require you to utilize specific Internet service providers or communications software, and other information technology including back office administrative programs ("Computer System"). (SEE ITEM 11 for more information regarding the Computer System).

We have not sold any franchises since our fiscal year ended December 31, 2005 and did not collect any Initial Franchise Fees, Express Unit Fees, Initial Training, Site Selection and Architectural Design and Marketing Fund Contributions, Area Development Fees, Royalties or income from products.

ITEM 9 FRANCHISEE'S OBLIGATIONS

THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND OTHER AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

OBLIGATION	SECTION IN AGREEMENT	ITEM IN OFFERING CIRCULAR
Site selection and acquisition/lease	Section 2 of Franchise Agreement and Attachment A	ITEMS 8 and 11
Pre-opening purchases/leases	Sections 6, 7 and 8 of Franchise Agreement	ITEMS 5, 7, 8 and 11
Site development and other pre-opening requirements	Sections 2 and 5 of Franchise Agreement	ITEMS 6, 7, 8 and 11
Initial and on-going training	Section 6 of Franchise Agreement	ITEMS 6 and 11
Opening '	Section 6 of Franchise Agreement	ITEMS 7 and 11
Fees	Sections 4 and 8 of Franchise Agreement and Section 2 of Area Development Agreement	ITEMS 5 and 6
Compliance with standards and policies/Operating Manual	Sections 2, 3, 6, 7, 8, 9, 10, 11 and 12 of Franchise Agreement	ITEMS 11 and 14
Trademarks and proprietary information	Sections 9 and 10 and Attachment D of Franchise Agreement, Attachment B to the Area Development Agreement	ITEMS 11, 13 and 14
Restrictions on products/services offered	Section 7 of Franchise Agreement	ITEMS 8 and 16
Warranty and customer service requirements	Section 7 of Franchise Agreement	ITEM 8
Territorial development and sales quotas	Section 7 of the Franchise Agreement and Section 3 of Area Development Agreement	ITEM 12
On-going product/service purchases	Section 7 of Franchise Agreement	ITEMS 6 and 8
Maintenance, appearance and remodeling requirements	Sections 2,7 and 14 of Franchise Agreement	ITEMS 8 and 11
Insurance	Section 12 of Franchise Agreement	ITEMS 7 and 8
Advertising	Sections 7 and 8 of Franchise Agreement	ITEMS 6, 8 and 11

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Indemnification	Section 15 of Franchise Agreement and Section 9 of Area Development Agreement	ITEM 6
Owner's participation/management/ staffing	Sections 6, 14, 16 and 19 of Franchise Agreement and Section 5 of Area Development Agreement	ITEMS 1, 11 and 15
Records/reports	Sections 4, 7 and 11 of Franchise Agreement	ITEM 6
Inspections/audits	Sections 2, 7, and 11 of Franchise Agreement	ITEMS 6, 8 and 11
Transfer	Section 14 of Franchise Agreement and Section 7 of Area Development Agreement	ITEMS 6 and 17
Renewal	Section 3 of Franchise Agreement	ITEMS 6 and 17
Post-termination obligations	Section 18 of Franchise Agreement and Section 6 of Area Development Agreement	ITEMS 6 and 17
Non-competition covenants	Section 10 and Attachment D of Franchise Agreement and Section 8 of Area Development Agreement and Attachment B	ITEM 17
Dispute resolution	Section 19 of Franchise Agreement and Section 14 of Area Development Agreement	ITEMS 6 and 17

ITEM 10 FINANCING

Neither we, nor any agent or affiliate of ours, offers direct or indirect financing, although we reserve the right to do so in the future. We do not guarantee your note, lease or other obligation. We do not currently place financing with anyone and do not receive any payment for placement of financing, although we reserve the right to do so in the future. We do not have any past or present practice or intention to sell, assign or discount to any third party, in whole or in part, any financing arrangements.

ITEM 11 FRANCHISOR'S OBLIGATIONS

Except as listed below, we need not provide any assistance to you.

Pre-Opening Obligations

Before you open your Blendz® Store, we, or our designee, will provide the following services:

1. Designate your Site Selection Area, Authorized Territory and Local Area (See Franchise Agreement, Section 5.2(a).)

2. Provide you with home-study materials ("Home-Study Materials") (See Franchise Agreement, Section 5.2(i).)

3. Assist you in your site selection process by providing site selection guidelines and criteria, providing approval for a site for your Blendz® Store and such other site selection assistance as we deem appropriate, in our sole discretion. There is an additional fee for this service (See ITEM 7 for more information on the Initial Training, Site Selection and Architectural Design and Marketing Fee and Franchise Agreement, Section 5.2(b) and (c).)

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4. Approve the lease for your Blendz® Store. (See Franchise Agreement, Section 5.2(d).)

5. Provide you, on loan, a copy of the standards and specifications for the construction of a typical Blendz® Store, including interior and exterior design, layout, floor plans, signs, color decor, equipment and fixtures. (See Franchise Agreement, Section 5.2(e).)

6. Provide you with a preliminary design meeting, guidance and assistance on submitting permits and provide copies of architectural plans for your Blendz® Store site. This does not include paying any government fees or architectural and engineering requirements or fees. There is an additional fee for this service (See ITEM 7 for more information on the Initial Training, Site Selection and Architectural Design and Marketing Fee and Franchise Agreement, Section 5.2(e).)

7. Provide you, on loan, a copy of our confidential and proprietary Operations Manual. The table of contents for the Operations Manual is attached as Exhibit D. Our Operations Manual contains approximately 250 pages (See Franchise Agreement, Section 5.2(h).)

8. Provide you a list of our approved suppliers, vendors and contractors for the build-out of your Blendz® Store (as described in,Section 7 of the Franchise Agreement), as revised by us from time to time. (See Franchise Agreement, Section 5.2(f).)

9. Conduct an initial training program for you, or if you are not an individual, your Designated Store Manager or Operating Principal and 1 other person (for a total of 2 individuals) in Campbell, California or other location designated by us prior to opening your Blendz® Store. We will pay for airfare, hotels and some meals for 2 people. You are responsible for all other expenses. There is an additional fee for this service (See ITEM 7 for more information on the Initial Training, Site Selection and Architectural Design and Marketing Fee). (See Franchise Agreement, Section 5.2(j).)

10. At our sole discretion, we may conduct a pre-opening inspection and provide pre-opening assistance of the type we determine, in our sole discretion. (See Franchise Agreement, Section 5.2 (g).)

11. At our sole discretion, attend your grand opening. (See Franchise Agreement, Section 5.2(k).)

12. Provide the initial marketing materials for use in advertising and promotional programs for the Blendz® Store. (See Franchise Agreement, Section 5.2(n).) You will pay an additional fee for this service. (See ITEM 7 for more information on the Initial Training, Site Selection and Architectural and Marketing Fee.)

13. Provide you with an initial set of branded supplies, which may include in our discretion, branded paper products, menus, event tent, event tent signage, uniforms and gift cards. (See Franchise Agreement, Section 5.2(o) and See ITEM 7 for more information on the Initial Training, Site Selection and Architectural and Marketing Fee.)

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14. Consultation regarding selection and installation of the Computer System. (See Franchise Agreement, Section 5.2(m).)

15. If you execute an Area Development Agreement, we designate your Development Territory and Development Schedule within which you may develop a specified number of Blendz® Stores.

We are not required to provide any other service or assistance to you before the opening of the Blendz® Store.

Post-Opening Obligations

We, or our designee, are obligated by the Franchise Agreement to provide the following services after the opening of the Blendz® Store:

1. Make a representative reasonably available to you on the telephone or via e-mail during our normal business hours, as we determine is necessary to discuss your operational and marketing issues. (See Franchise Agreement, Section 5.2(a).)

2. Provide guidance on advertising, marketing, hiring techniques, and pricing and develop advertising and promotional materials for use in marketing and conducting Local Advertising for the Blendz® Stores. (See Franchise Agreement, Section 5.3(c).)

3. Provide you, in our sole discretion, with advertising materials. You will pay us or our Affiliate for such advertising materials. (See Franchise Agreement, Section 5.3(b).)

4. Inform you of mandatory specifications, equipment, fixtures, furnishings, signs, promotions, products, materials, supplies, standards, recipes, and procedures for the operations of your Blendz® Store including new developments and improvements in equipment, food products, packaging and preparation as they are developed (See Franchise Agreement, Section 5.3(f) and ITEM 8). We will provide this guidance through Operations Manuals, bulletins, video or audiocassette tapes, computer diskettes, written materials, reports and recommendations, other materials and intangibles, refresher training programs and/or telephonic consultations at our offices or at your Blendz® Store, in our discretion.

5. Maintain the Marketing Fund (See Franchise Agreement, Section 5.3(e).)

6. Establish local advertising cooperatives and, at our discretion, placement of a Yellow Page and other business listings at your cost, or the cost of any applicable cooperative. (See Franchise Agreement, Section 5.3(d).)

7. Provide additional assistance or remedial training in our determination. If we provide additional assistance at your request or remedial training in our discretion, we may charge you a fee. The estimated range of charges for the additional assistance and remedial training is $250 -$300 per day plus travel expenses. The estimated range of costs for travel is $500-$2,500. (See Franchise Agreement, Section 5.3(g).)

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8. We may choose to provide you with continuing national, regional or local workshops and seminars, which we hold in our discretion. (See Franchise Agreement, Section 5.3(h).)

We are not required to provide any other service or assistance to you for the continuing operation of the Blendz® Store. We reserve the right, in our discretion, to delegate some or all of our pre-opening and continuing obligations under the Franchise Agreement to an Area Director with regional responsibility over the geographic area in which you operate your Blendz® Store. These obligations may include, but are not limited to, initial and ongoing training, site selection assistance, inspections and operations support.

Advertising

Local Advertising

You should plan to spend a minimum of $1,500 on your pre-opening advertising at least 30 days before your grand-opening of your Blendz® Store. You should also plan to spend a minimum of $2,500 on your grand opening. Thereafter, we require that you spend, each month, the greater of 3% of Gross Sales or $450 ("Minimum Local Advertising Expense"). The Minimum Local Advertising Expense will be used for local advertising, to be selected and placed by you, within the appropriate boundaries of a local area, determined in our sole discretion ("Local Area"). The Minimum Local Advertising Expense is reserved only for marketing, promotions and advertising of your Blendz® Store. You may not advertise outside your Local Area without our approval, which may be withheld in our sole discretion. You must provide us with monthly reports showing your Minimum Local Advertising Expense.

All advertising and promotions you use must be conducted in a dignified manner and must conform to the standards and requirements that we state in the Operations Manual or otherwise. You must first obtain our approval of all advertising and promotional plans and materials before your use of them if the plans and materials have not been prepared by us or previously approved by us during the 6 months before their proposed use. We reserve the right to direct your local advertising. You must submit all unapproved plans and materials to us for our approval. You may not use any unapproved plans or materials. You must promptly discontinue use of any advertising or promotional plans or materials, whether or not previously approved, on notice from us. All use of any of the Marks included in the System must meet all standards and requirements.

All advertising and promotional materials, signs, decorations, paper goods (including menus and all forms and stationery used in the Blendz® Store) and other items we designate must bear the Marks (See ITEM 13) in the form, color, location and manner we prescribe. You may not use our logos, Marks and other name identification materials on items to be sold or products to be provided without our prior written approval. If we approve of promotional items or products that will be sold in your Blendz® Store, those items must be included in your regular sales and will be subject to Royalties, Minimum Local Advertising Expense, Marketing Fund Contribution and Local Advertising Cooperative Contribution, if any.

You must also pay your pro rata share of the cost of a Yellow Pages advertisement or other business listings to be placed by us for all Blendz® Stores in the local market area, as

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determined by us. If you operate the only Blendz® Store under the System in the local market area, you will be responsible for full payment of the Yellow Pages advertising or other business listing, unless we determine, in our discretion, that placement of a Yellow Pages advertisement or other business listings for the local market area is not economically justified. Any amount you pay for the Yellow Pages listing or other business listings will apply toward satisfaction of your Minimum Local Advertising Expense requirement.

Costs and expenditures you incur for any of the following are not to be included in your expenditures on Minimum Local Advertising Expense, unless approved in advance by us in writing:

1. Salaries and expenses of any of your employees, including salaries or expenses for attendance at advertising meetings or activities.

2. In-store materials consisting of fixtures or equipment.

3. Seminar and educational costs and expenses of your employees.

Marketing Fund

You must pay us a Marketing Fund Contribution of 1 % of your Gross Sales at the same time you pay your Royalty. The Marketing Fund Contribution will be posted to the Marketing Fund ("Marketing Fund"). The Marketing Fund will be maintained in a separate or segregated account at a bank or other financial institution. TheMarketing Fund is administered by us, in our discretion and we may use a professional advertising agency or media buyer to assist us. Any unused funds in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Marketing Fund on any terms we deem reasonable. We also reserve the right to borrow excess funds from the Marketing Fund periodically in our discretion to support other efforts to develop the System. The Marketing Fund is not audited. We will make available to you once a year, upon request, an annual accounting for the Marketing Fund that shows how the Marketing Fund proceeds have been spent for the previous year within 120 days after our fiscal year end. We do not provide a periodic accounting of how the Marketing Fund Contributions are spent. Your contribution to the Marketing Fund will be in addition to all other advertising fees set out in this ITEM 11.

We may use the Marketing Fund Contributions we collect from franchisees to (i) create marketing materials relating to the System and the products sold by Blendz® Stores; (ii) pay for public relations projects intended to enhance the goodwill and public image of the System; (iii) assist franchisees in developing local marketing programs; (iv) undertake any other marketing efforts we deem necessary or beneficial to the System, in our discretion; (v) reimburse us or our Affiliates for salaries and overhead expenses related to the marketing services provided to franchisees; and (vi) reimburse ourselves, our authorized representatives or our Affiliates for administrative costs, independent audits, reasonable accounting, bookkeeping, reporting and legal expenses, taxes and all other reasonable direct or indirect expenses that may be incurred by us or our authorized representatives and associated with the programs funded by the Marketing Fund. We assume no other direct or indirect liability or obligation to collect amounts due to the Marketing Fund or to maintain, direct or administer the Marketing Fund. We reserve the right to

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allocate Marketing Fund Contributions to various permitted uses as we see fit. We do not guarantee that advertising expenditures from the Marketing Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. Affiliate owned Blendz® Stores will also contribute to the Marketing Fund. Neither we nor our affiliates receive payment for providing goods or services to the Marketing Fund, except for reimbursement of expenses as described above.

We do not currently have or administer a Marketing Fund to advertise the System on a national basis but we reserve the right and intend to do so. As of our last fiscal year ended December 31, 2005, we did not collect any Marketing Fund Contributions. We have not yet collected any Marketing Fund Contributions so we have not spent any of the Marketing Fund on media placement, market research, administrative expenses, or on any other expenses. We will not use Marketing Fund Contributions to solicit franchisees in our current fiscal year.

Local Advertising Cooperative

We also may designate any geographic area in which 2 or more Blendz® Stores are located as a region for establishing a local advertising cooperative ("Local Advertising Cooperative"). The members of the Local Advertising Cooperative for any area will consist of all Blendz® Stores whether franchised or operated by us or our Affiliates. We will determine in advance how each Local Advertising Cooperative will be organized and governed and when it must start operation. Each Local Advertising Cooperative will be organized for the sole purposes of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in the Local Advertising Cooperative. If a Local Advertising Cooperative has been established for a geographic area where your Blendz® Store is located when the Franchise Agreement is signed, or if any Local Advertising Cooperative is established during the term of the Franchise Agreement, you must become a member of the Local Advertising Cooperative and abide by the rules of the Local Advertising Cooperative. We reserve the right to form, change, dissolve or merge any Local Advertising Cooperative.

If we establish a Local Advertising Cooperative for your area, you must contribute to the Local Advertising Cooperative the amounts required by its governing documents. Your contribution to the Local Advertising Cooperative will not be less than 1% of Gross Sales. Your contributions to the Local Advertising Cooperative, if any, may be credited against your Local Advertising Expense obligation, up to 3%. Your total contributions to the Local Advertising Cooperative and Local Advertising Expense will not exceed 3% of your Gross Sales unless the members of the Local Advertising Cooperative vote to increase the amount the members contribute to the Local Advertising Cooperative. In no event will your Local Advertising Cooperative Contribution be more than 6% of your Gross Sales. You will be obligated by the Franchise Agreement to pay such increased contributions even if you vote against the increase. All contributions to the Local Advertising Cooperative will be maintained and administered per the documents governing the Local Advertising Cooperative. The Local Advertising Cooperative will be operated solely as a conduit for collecting and spending cooperative fees for the purposes outlined above. The Local Advertising Cooperative may not use any advertising or promotional plans or materials without our prior approval.

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The amount of contribution to the Local Advertising Cooperative will be determined by the members of the Local Advertising Cooperative, subject to our approval. We anticipate that each member will have 1 vote for each Blendz® Store operated by the member within the geographic area subject to the Local Advertising Cooperative. Each Local Advertising Cooperative will have to prepare an annual financial statement reporting its expenditures for the previous year to its members. If a Local Advertising Cooperative is established, we will provide you with a copy of the governing documents.

Except as described above, we are not obligated to spend any amount on advertising in the area where your Blendz® Store is located.

We retain the sole right to market on the Internet, including all use of websites, domain names, URL's, linking, advertising, and co-branding arrangements. You may not independently use a website, web page or otherwise market on the Internet.

Training Program

At least 7 weeks prior to the date before you open your Blendz® Store, you or your Designated Store Manager or Operating Principal and 1 additional person must attend (and complete to our satisfaction) our initial training program. We will provide instructors and training materials for our initial training program for those persons listed above for the Initial Training, Site Development and Architectural and Marketing Fee. We will also pay for up to 2 attendees' airfare, lodging and some meals. You must pay all other expenses incurred by the attendees.

The initial training program, which is described in more detail in the chart below, includes home-study training, classroom training, instruction at designated training facilities/stores and on the job training in an operating Blendz® Store. T he initial training program lasts approximately 5 weeks. The first week consists of home-study using the Home Study Materials. The remaining 4 weeks consists of classroom and on-site training at a Blendz® Store location in Campbell, California, our corporate headquarters or elsewhere in the future in our discretion. One week of the initial training program will take place at our headquarters in Campbell, California or elsewhere in the future in our discretion. We reserve the right, in our sole discretion, to also provide on-site training at your Blendz® Store.

At your request, we will provide all or part of the initial training program to the additional personnel you designate, subject to space availability in our regularly scheduled training classes and/or availability of our training personnel. You will pay us, prior to the date the initial training program is scheduled to begin, $2,000 per additional person. You are also responsible for travel, lodging, meals and other expenses incurred by such additional attendees.

If the Designated Store Manager or Operating Principal, as the case may be, is replaced, you must designate a new Designated Store Manager or Operating Principal, as the case may be, who must successfully complete our initial training program within 45 days after the termination of the initial Designated Store Manager or Operating Principal, as the case may be, unless we do not hold an initial training program during that 45-day period in which case the replacement Designated Store Manager or Operating Principal, as the case may be, must attend and

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successfully complete the first available initial training program held by us. You may be charged a training fee for a replacement Designated Store Manager or Operating Principal, as the case may be, in the amount of $1,300 and you must also pay the costs for airfare, ground transportation, lodging, meals, and the Designated Store Manager's or the Operating Principal's salary and benefits.

We reserve the right to charge a training fee and to be reimbursed for all travel expenses incurred for any additional or remedial training programs we provide (See ITEM 6). This fee will include the cost of travel, lodging and meals of our representative(s) if on-site additional or remedial training is provided. You also will be responsible for all expenses you and your trainees incur for any training program; including costs of travel, lodging, meals and wages (See ITEM 6).

The instruction materials used in our initial training program consists of 1 or more manuals covering standard operating procedures, management, menu and products, equipment, security and loss prevention, financial management, front and back of the house, marketing, safety and sanitation, and required forms. We also may use various classroom modules and videos to supplement these materials and the Operations Manual.

The subjects covered, hours of classroom instruction, on-the-job training and location of the training included in our Training Program are described below:

Subject	Hours of Classroom Training	Hours of on the Job Training	Location on-Site or Company Headquarters	Instructor
Home Study	0	0	N/A	Self-Study
Blendz 101/102/POS Modules	20	20	Corporate Headquarters & Flagship Store	Kim Torres
HR for Franchise Partners	8	0	Corporate Headquarters	Kim Torres
Operational Excellence	8	0	Corporate Headquarters	Kim Torres
Blendz is in the Details	8	0	Corporate Headquarters	Kim Torres
The Bottom Line: Financial Analysis and Performance	8	0	Corporate Headquarters	Matt Phipps
Marketing, Advertising, Events and Promotions	8	■ 0	Corporate Headquarters	Kim Torres, Matt Phipps
Food & Production Management	8	0	Corporate Headquarters	Kim Torres
Establishing Vendor Relationships	8	0	Corporate Headquarters	Kim Torres
Managing Risk (Safety & Security)	8	0	Corporate Headquarters	Kim Torres
Timeline and Countdown to Opening and Beyond	8	0	Corporate Headquarters	Kim Torres
Catering	8	0	Corporate Headquarters	Kim Torres
Train the Trainer Blendz 101/102	8	0	Corporate Headquarters	Kim Torres
Food Preparation	8	16	Corporate Headquarters & Flagship Store	Kim Torres

The initial training program and other on-going training will be conducted by training personnel under the direction of Matt Phipps, Denise Phipps and Kim Torres. Their backgrounds

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are described in ITEM 2. We may change or substitute training personnel as necessary, and we may delegate our duties and share our responsibilities with regard to training.

We may present seminars, conventions or continuing development programs for the benefit of franchisees. Your attendance at most of these seminars is voluntary. However, you or your Designated Store Manager or Operating Principal must attend any mandatory seminar, convention, or program we may offer. You or your Designated Store Manager or Operating Principal will not be required to attend any mandatory seminar, convention or program more than 1 time per year at a location we determine. We will give you at least 30 days prior written notice of any seminar, convention or program, which is considered mandatory. You must pay for your travel and living expenses incurred in attending any mandatory or voluntary seminar as well as any convention or training fees at our then current published rate.

We may also periodically offer additional or refresher training programs to your future Designated Store Managers or Operating Principal at rates and times to be determined by us. There is no schedule for additional or refresher training. We may provide programs when we think it is appropriate.

Site Selection

You must select the site for the Blendz® Store subject to our consent. You may not relocate the Blendz® Store without our prior written consent. Before leasing or purchasing the site for the Blendz® Store, you must submit to us, in the form we specify, a description of the site, together with other information and materials that we may reasonably require, including a letter of intent or other evidence that confirms your favorable prospects for obtaining the site. (See ITEM 6). You must submit the information and materials for the proposed site to us no later than 60 days after the mutual execution of the Franchise Agreement. If you fail to do so, we may terminate the Franchise Agreement. We will have 10 days after we receive this information and materials to evaluate the proposed site. If we approve your site, you must purchase or lease, at your expense, the site for the Blendz® Store within 30 days after our evaluation. You must submit for review any sale or lease contract before you sign it (See ITEM 8) and you must obtain our approval of any sale or lease contract before you sign. We will have 10 days after we receive the sale or lease contract to provide our approval or disapproval.

Factors that we may consider when reviewing your site include demographic studies of the area, zoning requirements, access and exits to and from the site, competitor activity, traffic patterns of the area as well as specific size of the site, parking and other physical characteristics of the proposed site itself, area population and market conditions. We will also identify a Site Selection Area within which you may select a site (See ITEM 12). You must receive our approval for any alternate site. If we do not provide you with approval for your alternate site, we may, at our sole discretion, extend your opening deadline while you continue to look for another alternate site or terminate the Franchise Agreement. We may also extend the construction period of your Blendz® Store to accommodate delays in selecting and obtaining our approval of a site or alternate site.

You must purchase or lease, at your expense, the site for the Blendz® Store and obtain permits, and zoning approval, comply with all other state and local requirements for the site and

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build-out the site within 6 months after receipt of our approval. Although your site is subject to our approval, you have the ultimate responsibility in choosing, obtaining and developing the site for your Blendz® Store. Our consultation and approval is not a promise or guarantee that the Blendz® Store operated at your site will be successful.

Approval of Lease or Purchase Agreement

We must approve the lease or purchase agreement for your site in writing before you sign any lease agreement or purchase agreement for your Blendz® Store. Any lease for your Blendz® Store will, at our option: (a) provide for notice to us of, and our right to cure, your default under any lease or sublease; (b) provide for your right to assign your interest under any lease or sublease to us without the lessor's or sublessor's consent; (c) include a right to reassign to us or our designee without landlord consent; (d) provide that the premises shall be used exclusively for the operation of the Blendz® Store; (e) provide that the lessor consents to the use of such Marks and signs, decor, color scheme and related components of the System as we may prescribe for the Blendz® Store; (f) provide that you may not sublease or assign all or any part of your occupancy rights, or extend the term of or renew the lease, without our prior written consent, which shall not be unreasonably withheld; (g) provide that you and lessor shall not amend or otherwise modify the lease in any manner that would materially affect any of these requirements without our prior written consent; (h) provide that the lessor acknowledges and agrees that any furniture, fixtures, equipment or personal property maintained by you on the premises, whether leased or owned by you, are not the property of lessor and shall be subject to our purchase option provided for in the Area Development Agreement or in the Franchise Agreement for the Blendz® Store in the event of your default under the lease, the Area Development Agreement or such Franchise Agreement, and may be removed at expiration or termination of the lease, so long as such removal is accomplished without damage to the premises; and (i) any other reasonable terms that we may require. Any lease submitted for our review must contain a rider to the lease, prepared by us, that is signed by you, by us and by the landlord. This rider is attached to the Franchise Agreement as Attachment C. The rider as written satisfies all the above conditions.

You must deliver a copy of the signed lease or sublease or purchase agreement to us within 15 days of signing. You must also agree that you will not sign or agree to any modification of the lease or sublease without our prior written approval.

Schedule for Opening

We estimate that the time from the signing of the Franchise Agreement to the opening of the Blendz® Store will be approximately 4 to 8 months. This time may be significantly shorter or longer depending upon the time necessary to obtain a site, to obtain financing, and to obtain the permits and licenses for the construction and operation of the Blendz® Store. Additional time may be needed to complete construction or remodeling as it may be affected by weather conditions, shortages, delivery schedules and other similar factors, to complete the interior and exterior of the Blendz® Store, including decorating, purchasing and installing fixtures, equipment and signs, and to complete preparation for operating the Blendz® Store, including purchasing inventory and supplies. The Franchise Agreement requires you to open the Blendz® Store and begin business within 8 months after executing the Franchise Agreement, unless you

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obtain a written extension of this time period from us. If you do not obtain a site or fail to construct the Blendz® Store within the time period required, we may terminate the Franchise Agreement.

You must order your fixtures, non-perishable inventory, and Computer System before your Blendz® Store is scheduled to open and have these items delivered at least 4 weeks before the date your Blendz® Store is scheduled to open.

All leasehold improvements must comply with our plans and specifications. You must comply with all applicable ordinances, building codes and permit requirements and with lease requirements and restrictions. You must submit construction plans or build-out plans and specifications to us for our approval before construction of the Blendz® Store begins, and you must submit all revised plans and specifications to us for our approval during construction.

You may not open your Blendz® Store for business until: (1) we notify you in writing that all of your development obligations have been fulfilled, including but not limited to, satisfactorily completing, in our sole discretion, our initial training program; (2) pre-opening training of personnel has been completed to our satisfaction; (3) all amounts due to us have been paid; (4) we have been furnished with copies of all insurance policies, permits, certificates of occupancy and other certificates required by the Franchise Agreement, or other documentation of insurance coverage, permits and payment of premiums that we request; (5) you notify us that all approvals and conditions set forth in the Franchise Agreement have been met; and (6) you have ordered, received and installed your fixtures, equipment, furniture, supplies, inventory and Computer System. You must be prepared to begin operating your Blendz® Store immediately after we state that your Blendz® Store is ready for opening.

Computer Equipment and Software

You must obtain and maintain a computerized or electronic point-of-sale cash register system that meets our specifications. You must use our approved hardware. Currently we are approving the following POS systems for new installation and use: Posiflex, Digital Dining Software and Samsung receipt printer. You must allow us to establish and maintain communication with your electronic point-of-sale cash register and computer system via a modem, dedicated data transmission line, or similar telecommunications means to retrieve information regarding, but not limited to, sales data, financial data, and POS configuration information. There is no contractual limitation on our right to receive information through the electronic point-of-sale recording systems. We may have independent access to this information and data. This equipment and related software must be purchased and installed in accordance with our specifications. The hardware and software is not proprietary to us and may be purchased from any third party supplier approved by us. The cost is usually between $9,000 and $12,000, and is included in ITEM 7. The cost for the Computer System may be higher if more than one POS systems is used in the Blendz® Store.

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You must also obtain office equipment for use in the back office. This office equipment includes:

HARDWARE

Brand	Quantity	Type	Function
Various	1	Computer	CPU, Keyboard, Mouse, Monitor
Various	1	Printer	Printing
Various	1	Plain Paper Facsimile Machine	Faxing

SOFTWARE

Brand

Quantit

Type

Function

Microsoft Office

Current MS Operating System

Operating System

QuickBooks

Current QuickBooks System

Accounting

We reserve the right to revise our specifications at any time in our discretion. You must maintain, upgrade and update hardware, software, and Internet service providers or other communications system during the term of the franchise, as we determine without limitation, at your expense. The cost is summarized in ITEM 6. We reserve the right to reasonably specify computer, information and communications systems, and to require you to utilize specified Internet service providers or communications software. You are solely responsible for protecting yourself from viruses, computer hackers, and other computer-related problems, and you may not sue us for any harm caused by such computer-related problems. You must also purchase and maintain camera equipment and wireless equipment and service as set forth in the Operations Manual. We will have access to your camera, POS and wireless equipment.

You are solely responsible for protecting yourself from viruses, computer hackers, and other communications and computer-related problems, and you may not sue us for any harm caused by such communications and computer-related problems.

ITEM 12 TERRITORY

Site Selection Area, Authorized Territory and Local Area

We will designate a geographic area ("Site Selection Area") in which a site will be located for your Blendz® Store and your territory ("Authorized Territory") will be determined. The Site Selection Area is a general geographic area designated solely to select a proposed suitable general location and Authorized Territory for the Blendz® Store and does not give you any exclusive rights to the Site Selection Area nor imply any other territorial rights either before or after execution of a Franchise Agreement. The specific site or address of your Blendz Store®

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is your "Franchisee! Location", which will be located in your Site Selection Area. You must operate the Blendz® Store only at the Franchised Location that we approve and may not relocate the Blendz® Store without first obtaining our written consent. You may not establish or operate another Blendz® Store unless you enter into a separate Franchise Agreement.

Your Authorized Territory is based on the demographics and other characteristics of the Site Selection Area, including population density, average income and other characteristics of the surrounding area, natural boundaries, extent of competition and the amount and size of urban, suburban and rural areas within the Site Selection Area. Except as provided below, the Authorized Territory is exclusive to you unless you fail to comply with your obligations under this agreement or the Franchise Agreement. Your Authorized Territory is not dependent upon sales volume or market penetration.

After your selection of an approved Franchised Location for your Blendz® Store, we will also assign your Local Area and your Authorized Territory, which will be set forth in Attachment A to the Franchise Agreement. You will make all commercially reasonable efforts to advertise and promote the Blendz® Store in your Local Area in accordance with Section 7 of the Franchise Agreement. (See ITEM 11 for more information on your Local Area). Your Local Area will not be exclusive for any purpose.

Except for Express Units described below, we will not operate locations or grant franchises for Blendz® Stores within your Authorized Territory unless you do not meet your sales quota ("Sales Quota") in any quarter. Beginning 6 months after you open your Blendz® Store, the Sales Quota for each quarter is $45,000 in Gross Sales. These Sales Quotas are not, and should not be considered, earnings claims for your Blendz® Store. We do not furnish or authorize our sales persons to furnish any oral or written information concerning the actual or potential sales, costs, income or profits of a Blendz® Store. Actual results vary from unit to unit and we cannot estimate the results of any particular franchise. Failure to achieve these Sales Quotas is a material breach of the Franchise Agreement. If you fail to meet your Sales Quota, we have the right to grant additional franchises within the Authorized Territory, reduce the size of your Authorized Territory or terminate your franchise upon 30 days' written notice.

Catering

After operating your Blendz® Store for 4 months, if you are a franchisee in good standing, you may apply to us for approval to offer catering services from your Blendz® Store. We reserve the right to make this determination in our discretion. We will consider a variety of factors and decide each request on a case-by-case basis. If we approve your request, in our sole discretion, to offer catering services we will designate a non-exclusive geographic area in which you may offer such catering services ("Catering Service Area"). The Catering Service Area will be based on the location of the Franchised Location, traffic patterns, demographics and other characteristics of the Catering Service Area including population density and natural boundaries. All sales from catering are subject to Royalty payments and advertising allocations. You must own 100% of any entity offering catering that we authorize you to operate. You must operate the catering service pursuant to the Operations Manual and our other guidelines. Your Gross Sales generated from catering will not be included in your Sales Quota requirements. In the event that we approve your request to provide catering, you must obtain an appropriate vehicle, catering

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equipment, insurance and supplies such as catering menus in accordance with our criteria set out in the Operations Manual. (See ITEM 6 for more information on catering services).

Express Unit

If you are already operating a Blendz® Store, in some cases we allow you to establish an Express Unit ("Express Unit"). An Express Unit is a business location, which due to a number of possible reasons, does not offer a full menu and cannot support itself without the support of a commissary or Blendz® Store. There are no exclusive territories associated with any Express Unit you may open and we reserve the right to own, franchise or operate other Express Units or Blendz® Stores regardless of proximity to your Express Unit. We also reserve the right to operate or franchise other Express Units regardless of proximity to your Franchised Location, including within your Authorized Territory. If you are a Franchisee in good standing, you may request authorization to open an Express Unit. We will consider a variety of factors and decide each request on a case-by-case basis. We reserve the right to make this determination in our discretion. If you operate a Franchise and you are authorized to operate an Express Unit, you will be charged an Express Unit Fee of $10,000 for the right to operate the Express Unit and an Initial Training, Site Development and Architectural Design and Marketing Fee in the amount of $25,000 (See ITEM 7 for more information on Express Units). All sales from the Express Unit are subject to Royalty payments and advertising allocations. You must own 100% of any Express Unit that we authorize you to operate. Express Units are not transferable under any circumstances without receiving prior written approval from us. You must operate the Express Unit pursuant to the Operations Manual and our other guidelines. Your Gross Sales generated from the Express Unit will not be included in your Sales Quota requirements.

We reserve the right, among others to:

1. advertise and promote the System and fill customer orders by providing catering, take-out and delivery services to customers who reside or work in or near your Blendz® Store or Express Unit, including in your Authorized Territory and by marketing ancillary products, gift cards and other merchandise via the Internet, catalogues, phone solicitation and other direct-selling techniques to customers who reside or work in or near your Blendz® Store or Express Unit;

2. offer and sell collateral and ancillary products under the Marks, at or from any location, including pre-packaged food and beverage products and Blendz® branded memorabilia that may be similar to those offered by your Blendz® Store or Express Unit, if any;

3. offer and sell products and services under the Marks through alternative distribution sites including but not limited to supermarkets, convenience stores, specialty markets and other locations where food and beverages may be sold;

4. offer and sell any products and services under any other names and marks;

5. establish and operate a Blendz® Store or Express Unit, anywhere outside of your Authorized Territory, regardless of proximity to your Blendz® Store or Express Unit;

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6. purchase, or be purchased by, or merge or combine with any other business, including a business that competes directly with your Blendz® Store or Express Unit, wherever located; and

7. implement multi-area marketing programs which may allow us or others to solicit or sell to customers anywhere. We reserve the right to issue mandatory policies to coordinate such multi-area marketing programs.

Area Development Agreement

Under the Area Development Agreement, you are assigned a Development Territory in which you must develop one or more Blendz® Stores. If you comply fully with the operational, financial, legal and ownership conditions contained in the Area Development Agreement, you will have the right to develop additional Blendz® Stores in that Development Area, based on a specified Development Schedule which will be listed in Section 3.B of your Area Development Agreement. The following conditions must be met before you will have the right to develop each additional Blendz® Store:

1. Operational. You must be in compliance with the Development Schedule, the Area Development Agreement and Franchise Agreements. You and your affiliates (an affiliate of a person or entity is any entity that is controlled by, controlling or under common control with that person or entity) must be in compliance with any other Area Development Agreement between you and your affiliates and us and our affiliates. You must be operating your existing Blendz® Store(s), if any, and must be capable of operating the proposed Blendz® Store, (a) in accordance with the terms and conditions of the Area Development Agreement, (b) in accordance with the provisions of the respective Franchise Agreements, and (c) in accordance with the standards, specifications, and procedures described in the Operations Manual (as amended periodically by us in our discretion), or otherwise provided in writing.

2. Financial. You and your Controlling Principals must satisfy our then-current financial criteria for area developers and controlling principals of Blendz® Stores for your operation of your existing Blendz® Stores, if any, and the proposed Blendz® Store. You and your Controlling Principals must have been and must be faithfully performing all terms and conditions under each of the existing Franchise Agreements with us. You must not be in default, and must not have been in default during the 12 months preceding your request for financial approval, of any monetary obligations owed to us under any Franchise Agreement or other agreement between you or any of your affiliates and us. You must acknowledge and agree in the Franchise Agreement that is vital to our interest that you are financially sound to avoid failure of a Blendz® Store and that the failure would adversely affect our reputation and good name and the System.

3. Legal. You must submit to us, in a timely manner, all information and documents we request before and as a basis for our issuing individual franchises or under any right granted to you by the Area Development Agreement or by any Franchise Agreement between you and us. You must also have taken any additional actions related to the above that we may request.

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4. Ownership, Neither you nor any of your Controlling Principals (as applicable) may have transferred a Controlling Interest in you (as defined in Section 8.G. of the Area Development Agreement). You and the Controlling Principals, on whom we have relied to perform the duties under the Area Development Agreement, must continue to own and exercise control over a Controlling Interest in you. Neither you nor any of Controlling Principals (as applicable) may have transferred any interest in a Franchise Agreement before the completion and opening of the applicable Blendz® Store for business to the public.

The rights granted under the Area Development Agreement relate only to the development of the Blendz® Stores identified in the Area Development Agreement. Except as provided in the Area Development Agreement, and subject to your full compliance with the Area Development Agreement and any other agreement among you or any of your affiliates and us or any of our affiliates, neither we nor our affiliates will establish or authorize any other person or entity, other than you, to establish a Blendz® Store in your Development Territory during the term of the Area Development Agreement. However, we, our affiliates, and any other authorized person or entity (including any other Blendz franchisee) may, at any time conduct any other type of activities within your Development Territory that we are permitted to conduct under the Franchise Agreement.

During any of the development periods ("Development Periods") stated in the Development Schedule, subject to the terms and conditions of the Area Development Agreement, you, after obtaining our written consent, may develop more than the total minimum number of Blendz® Stores which you must develop during that Development Period. However, you may not open or operate more than the cumulative total number of Blendz® Stores you are obligated to develop under the Area Development Agreement as provided in the Development Schedule. Any Blendz® Stores you develop during a Development Period in excess of the minimum number of Blendz® Stores required to be developed on expiration of that Development Period will be applied to satisfy your development obligations during the next succeeding Development Period, if any.

If during the term of the Area Development Agreement, you cease to operate any Blendz® Store developed under the Area Development Agreement for any reason, you must develop a replacement Blendz® Store to fulfill your obligation to have open and in operation the required number of Blendz® Stores on the expiration of each Development Period. The replacement Blendz® Store must be developed within a reasonable time that you and we agree on after you cease to operate the Blendz® Store to be replaced. If during the term of the Area Development Agreement, you, in compliance with the terms of any Franchise Agreement for a Blendz® Store developed under the Area Development Agreement, transfer your interest in the Blendz® Store with our advanced written permission, the transferred Blendz® Store will continue to be counted in determining whether you have complied with the Development Schedule if it continues to be operated as a Blendz® Store. If the transferred Blendz® Store ceases to be operated as a Blendz® Store during the term of the Area Development Agreement, you must develop a replacement Blendz® Store within a reasonable time to be agreed on after the transferred Blendz® Store ceases to be operated as a Blendz® Store. In either case, the reasonable time period will apply to the development of the replacement Blendz® Store only, and, in our discretion, extend the term of the applicable Development Period to the end of the mutually agreed on time period. The time period, however, will not exceed 1 year.

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Your failure to adhere to the Development Schedule (including any extensions approved by us in writing) or to any time period for developing replacement Blendz® Stores will constitute a material event of default under the Area Development Agreement, for which we may, among other things: (i) terminate the Area Development Agreement; (ii) modify your territorial rights, including but not limited to, terminating any exclusivity or granting exclusivity to the Development Territory to another party; (iii) reduce the area of any territorial rights; (iv) reduce the number of Blendz® Stores which you may establish; (v) permit you to extend the Development Schedule; (vi) terminate or modify any right of first refusal we granted to you; or (vii) pursue any other remedy we may have at law or in equity, including but not limited to a suit for non-performance.

If you have complied with the terms and conditions of the Area Development Agreement, including developing each and every Blendz® Store in accordance with the Development Schedule, before developing, or authorizing any other person or entity to develop, any Blendz® Store in your Development Territory, we may, but are not required to, offer to you the right to develop the additional Blendz® Store that may be developed within the Development Territory. We may offer you an option to extend the Area Development Agreement to develop additional Blendz® Stores within your Development Territory. We will provide written notice to you of the number of Blendz® Stores to be developed and the terms of the Development Schedule. You will have 30 days after receiving our written notice to exercise this right by providing written notice to us. In order to exercise the right, you must pay to us the then-current Area Development Fee we charge for similar development rights. The extension will contain a new Development Schedule describing the number and the time period for development of each Blendz® Store.

The size of the Development Territory may be a single or multi-city area, single county area or some other area, and will be described in Attachment D of your Area Development Agreement. We will determine the Development Territory before you sign the Area Development Agreement based on various market and economic factors, including those described above regarding the Authorized Territory.

The rights granted to you under the Franchise Agreement or the Area Development Agreement are not dependent on your achievement of a certain sales volume, market penetration or other contingency and your Development Territory may not be altered before the Area Development Agreement expires or terminates, except as stated above regarding your compliance with the Development Schedule. Also, except as stated above, we generally do not grant rights of first refusal.

ITEM 13 TRADEMARKS

The Franchise Agreement grants you the nonexclusive right to use our Marks, including the trademark "BLENDZ®" and various designs and logo types associated with our products and services. You may also use our other current or future Marks as we may designate to operate your Blendz® Store. You must indicate, as required in the Franchise Agreement and specified in the Operations Manual, that you are an independent operator of the Blendz® Store and you shall use only the appropriate and authorized Marks as indicated by us.

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The Marks are owned by BE and are licensed exclusively to us and our Affiliates. BE has granted us an exclusive, royalty-free license ("Trademark License") to use the Marks for purposes of franchising the System around the world. The Trademark License extends for 40 years, commencing July 2005, but it will automatically renew for subsequent 40 year periods provided we are not in default or do not materially breach the Trademark License by engaging in any activity which damages the Marks or the goodwill of the System. In the event the Trademark License is terminated, BE has agreed to license the use of the Marks directly to our franchisees until such time as each Franchise Agreement expires or is otherwise terminated.

BE has registered or applied for registration of the following principal Marks with the United States Patent and Trademark Office ("USPTO") on the Principal Register:

Mark	Application Filing or Registration Date	Status	Serial No.	Registration No.
BLENDZ® (Restaurant Services)	July 14, 1998	Registered Live	75/303,119	2,172,840
BLENDZ (Frozen Smoothies)	October 25, 2005	Pending	78/740,242	N/A
BLENDZ (Franchise Services)	November 16, 2005	Pending	78/755,474	N/A

You must follow our rules when you use our Marks. You may not use any of the Marks alone or with modifying words, designs or symbols as part of a corporate or business name or in any form on the Internet, including but not limited to URLS, domain names, e-mail addresses, locators, links, metatags or search techniques. You must get our prior written approval of your company name before you file any registration documents. Guidelines regarding proper trademark use and notices are in the Operations Manual and will be updated periodically in our discretion.

You may not use our Marks with an unauthorized product or service, or in a manner not authorized in writing by us. You may not use our Marks with any collateral service provided by you, whether or not the collateral service has been approved by us.

There are no currently effective material determinations of the USPTO, the Trademark Trial and Appeal Board, the trademark administrator of any state or any court, any pending infringement, opposition or cancellation proceedings or any pending material litigation involving any of our Marks which are relevant to the use of these Marks. No currently effective litigation affects our use or ownership rights in any Mark. Except as described above, no currently effective agreement limits our right to use or license the use of our Marks.

You must notify us within 3 days of when you learn about an infringement of or challenge to your use of our Marks. We will take the action necessary, in our sole discretion, to

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protect the unauthorized use of our Marks, which may include payment of reasonable costs associated with the action.

You must modify or discontinue the use of a Mark if we modify or discontinue its use. If this happens, we will reimburse you for your tangible cost of compliance (for example, changing signs) up to $5,000. You must not directly or indirectly contest our right to our Marks, trade secrets or business techniques that are part of our business or the System.

You should understand that there are other businesses using trademarks, trade names, or other commercial symbols similar to our Marks that may be superior rights to our rights. Before opening your Blendz® Store, you should research this possibility, using telephone directories, trade directories, Internet directories, or otherwise in order to avoid the possibility of having to change your Blendz® Store name.

ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

The information contained in the Operations Manual is proprietary and is protected by copyright and other laws. The Operations Manual and the limitations of the use of it by you and your employees are described in ITEM 11. The designs contained in the Marks, the layout of our advertising materials, the content and format of our recipes, as well as any other writings or recordings in print or electronic form are also protected by copyright and other laws. Although we have not filed an application for copyright registration for the Operations Manual, the Marks, the advertising materials, the content and format of our recipes, and other writings and recordings, we claim common law and federal copyrights and trade secret rights in these items. We grant you the right to use this proprietary and copyrighted information ("Copyright Works") and trade secrets in connection with your operation of your Blendz® Store, but such copyrights and trade secrets remain our sole property.

You must notify us within 3 days after you learn about another's use of language, a visual image, a recording of any kind, or recipes that you perceive to be identical or substantially similar to one of our Copyright Works or trade secrets or if someone challenges your use of our Copyright Works or trade secrets. We will take whatever action we deem appropriate, in our sole and absolute discretion, to protect our rights in and to the Copyright Works or trade secrets, which may include payment of reasonable costs associated with the action.

You must add, modify, or discontinue the use of a Copyright Work or trade secrets if we instruct you to do so. If this happens, we will reimburse you for your tangible cost of compliance up to $5,000. You must not directly or indirectly contest our rights to any of our Copyright Works or trade secrets that are part of our business or the System.

Our Operations Manual, electronic information and communications, sales and promotional materials, the development and use of our recipes, and other related materials are proprietary and confidential and are considered to be our property to be used by you only as described in the Franchise Agreement or the Operations Manual. Where appropriate, certain information has also been identified as trade secrets ("Trade Secrets"). You must maintain the confidentiality of our information and adopt reasonable procedures to prevent unauthorized

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disclosure of our Trade Secrets and confidential information. We reserve the right to convert the Operations Manual into an exclusively electronic format and to require you to access either document through the Internet or through an intranet created and supported by us.

No patents are material to us at this time.

We own all records with respect to the customers, suppliers, and other services providers of, and related in any way to, your Blendz® Store. This includes, without limitation, all databases (whether in print, electronic, or other form), including, among other things, all names, addresses, phone numbers, e-mail addresses, and customer purchase records. We may use or transfer the records in any way we wish, both before and after any termination, expiration, repurchase, transfer or otherwise. We may contact any or all of your customers, suppliers, and other service providers for quality control, market research, and such other purposes, as we deem appropriate, in our sole discretion.

You must have your Designated Store Manager, or Operating Principal and any of your other personnel who receive or will have access to confidential information and Trade Secrets agree to maintain the information in confidence and sign non-disclosure agreements. The covenants will be substantially as provided in Attachment E to the Franchise Agreement and Attachment B to the Area Development Agreement. Your Controlling Principals, and any other of your principals who must sign the Franchise Agreement and Area Development Agreement, also must sign these covenants.

If you, your Designated Store Manager, Operating Principals or your Controlling Principals develop any new concept, process, product, recipe or improvement in operating or promoting the Blendz® Store, you must promptly notify us and give us all necessary information, free of charge. You and your Designated Store Manager or Operating Principal and Controlling Principals must acknowledge that any of these concepts, processes, products, recipes or improvements will become our property and we may give the information to other franchisees without providing compensation to you of any kind.

ITEM 15 OBLIGATIONS OF FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION

OF THE FRANCHISED BUSINESS

Under the Area Development Agreement and the Franchise Agreement ("Agreements"), we have characterized certain parties as "Developer's Principals" or "Franchisee's Principals". We refer to those persons or entities as "your Principals" in this Offering Circular. The Agreements are signed by us, by you, and by those of your Principals whom you choose to designate as Controlling Principals. In most instances, your principal equity owners and executive officers are your Controlling Principals. Your Principals would include your spouse (if you are an individual rather than an entity); the Designated Store Manager or Operating Principal, and all general partners, officers and directors (if you conduct business as a corporation or partnership), and managers (if you operate as a limited liability company). If you conduct business as a corporation, partnership, or limited liability company, all 10% or greater equity owners (and possibly a smaller percentage if we decide to reduce the percentage) must jointly and severally guarantee the performance under and bind themselves to the terms of the

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agreements, unless the entity is a publicly traded corporation. By signing the Agreements, your Controlling Principals agree to be individually bound by certain obligations in the Agreements, including covenants concerning confidentiality and non-competition, and to personally guarantee your performance under the Agreements (See ITEM 15).

You must also designate a "Designated Store Manager" or Operating Principal. Your Designated Store Manager or Operating Principal will be the individual primarily responsible for your business. You, or your managing shareholder or partner, are not obligated to participate personally in the direct operation of your Blendz® Store so long as a Designated Store Manager or an Operating Principal, who has completed our initial training program, does so. If you are a legal or business entity, your Designated Store Manager need not own an equity interest in the entity; however, your Operating Principal will own an equity interest in the entity. You or your Designated Store Manager or Operating or Operating Principal must devote full time and best efforts to the management and operation of the Blendz® Store. You or, if applicable, your Designated Store Manager or an Operating Principal, must successfully complete our mandatory initial training program by demonstrating to us appropriate levels of competence in the subject matters taught in the initial training program, in our discretion. If your Designated Store Manager or Operating Principal is replaced, you must designate a new Designated Store Manager or Operating Principal who must successfully complete our initial training program within 45 days after the initial Designated Store Manager or Operating Principal is replaced, unless we do not hold an initial training program during that 45-day period, in which case the replacement Designated Store Manager or Operating Principal must attend and successfully complete the first available initial training program held by us.

If you are a legal or business entity, we may require that your Designated Store Manager or Operating Principal and each of your officers, directors, partners, shareholders or members (and, if you are an individual, immediate family members) execute our standard Guaranty and Assumption of Franchisee's Obligations. (See Franchise Agreement Attachment G, and our Nondisclosure and Noncompetition Agreement attached to Franchise Agreement, Attachment E) Your spouse must also sign the Franchise Agreement.

In signing the Franchise Agreement, you acknowledge that the risks, financial and otherwise, which are inherent with the beginning of any new business, are yours alone. We, as a matter of policy, will not assist you in any decision-making process that may affect the operations of your Blendz® Store. The success or failure of the franchise as a business enterprise is dependent on your efforts. The purchase of this franchise should not be considered by anyone who is unfamiliar with standard business practices or is unwilling to accept the responsibilities associated with running a small business.

ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You must comply with all of our standards and specifications (including brand specifications) relating to the purchase of all food, food products and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including electronic cash register, computer hardware and software), and other products used or sold at the Blendz® Store

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(See ITEM 8). You must comply with all applicable laws and regulations and obtain all appropriate governmental approvals relating to the Blendz® Store.

To ensure that the highest degree of quality and service is maintained, you must operate the Blendz® Store in strict conformity with the methods, standards and specifications in the Operations Manual and as we may otherwise require in writing. You must sell all menu items, food products, and other products and services we require, in the manner and style we require, only as we expressly authorize in writing in the Operations Manual. You must sell only the menu items, and other products and services that we have expressly approved in writing. You must not deviate from our standards and specifications without first obtaining our written consent. You must discontinue selling and offering for sale any menu items, products or services that we disapprove in writing at any time. We have the right to change the types of menu items, products and services you offer at the Blendz® Store, at any time, and there are no limits on our right to make those changes. You must in some instances obtain items, products and services only from approved suppliers or must obtain our approval for any supplier not currently approved. Any supplier who can meet our standards for quality, specifications, quantity and service may be added to our list of approved suppliers after submission to our office of a request by you, provision of the information we may reasonably request of such supplier and our satisfaction that our standards can be met by such supplier.

You must maintain in sufficient supply and use and sell only the food and beverage items, ingredients, products, materials, supplies, and paper goods that conform to our standards and specifications, including products specified by name or brand. You must prepare all menu items with our recipes and procedures for preparation contained in the Operations Manual or other written instructions, including the measurements of ingredients. You must not deviate from our standards and specifications by using or offering nonconforming items or differing amounts of any items, without first obtaining our written consent, such consent to be in our sole and absolute discretion.

You must maintain the Blendz® Store, to our cleanliness standards and keep it in good repair and condition. You must make any additions, alterations, repairs and replacements to the Blendz® Store, that we require for that purpose, including periodic repainting or replacement of obsolete signs, furnishings, equipment (including, electric POS systems or computer hardware and software systems), and decor as we may reasonably direct. You must obtain and pay for any new or additional equipment, including electronic pos systems, computer hardware and software, fixtures, supplies and other products and materials that we require you to have to offer and sell new menu items from the Blendz® Store. Except as may be expressly provided in the Operations Manual, you may not make any alterations or improvements or changes of any kind in design, equipment, signs, interior or exterior decor items, fixtures or furnishings to the Blendz® Store, without obtaining our written approval first.

We may ask you to make other improvements to modernize the Blendz® Store location, equipment (including electronic POS systems, computer hardware and software), signs, interior and exterior decor items, fixtures, furnishings, supplies and other products and materials required to operate the Blendz® Store location, to our then-current standards and specifications. You must, at our request, make the capital improvements or modifications described in the Franchise Agreement on the earlier of: (i) on or before the 5 year anniversary of the date you opened the

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Blendz® Store, or (ii) at any time during the term of the Franchise Agreement, when the majority of the Blendz® Stores that we or our Affiliates operate have made or are using their best efforts to make the improvements or modifications.

You must maintain a competent, conscientious and trained staff to operate the Blendz® Store in accordance with the Franchise Agreement and the Operations Manual and take the steps necessary to ensure that your employees preserve good customer relations, and comply with our dress codes.

We and our affiliates have and may develop certain products for use in the System that are prepared from confidential recipes and that are trade secrets of ours and certain products that bear our Marks. Because of the importance of quality and uniformity of production and the significance of the secret recipe and trademarked products in the System, it is to our and your benefit that we closely control the production and distribution of the products. You must use our secret recipe products. You must purchase and use all of the requirements for these proprietary products only from us or from sources we designate.

All advertising and promotional materials, signs, decorations, paper goods you use (including menus, all forms and stationery used in the Blendz® Store, and on any catering vehicles (if any)) and other items that we may designate must bear the Marks in the form, color, location and manner we require.

You have discretion over the prices you charge to your customers for the sale of any menu items, products, merchandise or services. However, we reserve the right to set maximum resale prices for any products sold from your Blendz® Store, in connection with any national, regional, or multi-area marketing program developed and implemented by us for the System.

ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

THIS TABLE LISTS CERTAIN IMPORTANT PROVISIONS OF THE FRANCHISE AND RELATED AGREEMENTS. YOU SHOULD READ THESE PROVISIONS IN THE AGREEMENTS ATTACHED TO THIS OFFERING CIRCULAR.

Category	Section in Agreement	Summary
a. Length of the term of the franchise	Section 3.1 of the Franchise Agreement	Term continues for 10 years from the opening date unless terminated earlier.
b. Renewal or extension of the term	Section 3.2 of the Franchise Agreement	You may extend your rights to operate the Blendz® Store for 1 additional 10-year term.
c. Requirements for Franchisee to renew or extend	Section 3.2(a)-(0 of the Franchise Agreement	Requirements include, among others: You must give at least 7 months notice, repair and update equipment and Franchised Location, not be in breach of any agreement with us or our affiliates, have the right to remain in possession of the Franchised Location, have satisfied all monetary obligations to us and our affiliates, pay Subsequent Franchise Fee ("See ITEM 6), sign current franchise agreement and general release, and comply with current qualification and training requirements.
d. Termination by Franchisee	Not Applicable	Not Applicable.

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Category	Section in Agreement	Summary
e. Termination by Franchisor without "cause"	Not Applicable	Not Applicable.
f. Termination by Franchisor with "cause"	Section 17.1 of the Franchise Agreement	Each of your obligations under the Franchise Agreement is a material and essential obligation, the breach of which may result in termination.
g. "Cause" defined -curable defaults	Section 17.2 of the Franchise Agreement	Curable defaults include, among others: If you or your affiliates fail to pay any money owed to us or our affiliates and do not cure within 5 days after notice (or other period provided), fail to obtain execution of the covenants and related agreements required in the Franchise Agreement within 30 days after a request, fail to procure and maintain required insurance within 7 days after notice, use the Marks in an unauthorized manner and fail to cure within 24 hours after notice, fail to cure any other default that is susceptible of cure within 30 days after notice or any longer period as applicable law may require.
h. "Cause" defined -defaults which cannot be cured	Sections 17.1 and (3) of the Franchise Agreement	Noncurable defaults include, among others: If you become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against you under federal bankruptcy laws, have outstanding judgments against you for over 90 days, are adjudicated bankrupt or insolvent, or execution has been levied against you, or suit to foreclose any lien or mortgage against the premises or equipment has been instituted and not dismissed within 30 days, sell unauthorized products or services, fail to comply with the covenants and related agreements required in the Franchise Agreement, disclose or divulge any confidential information, fail to acquire an approved location within time required, fail to construct or remodel when required, fail to open Blendz® Store when required, abandon or lose right to the Franchised Location, are convicted or a felony or other crime that may have an adverse affect on the System or Marks, breach any of the representations, warranties and covenants contained in the Franchise Agreement, transfer any interest without our consent or maintain false books or records, fail to comply with any term and condition of any sublease or related agreement and have not cured the default within the given cure period, or a threat to health or safety results from your operation of the Blendz® Store.
i. Franchisee's obligations on termination/ nonrenewal	Section 18 of the Franchise Agreement	Obligations include, among others: You must cease operating the Blendz® Store and using the Marks and System and completely de-identify the business, pay all amounts due to us or our affiliates, return all Operations Manuals and software and other proprietary materials, comply with confidentiality requirements, and at our option, sell or assign to us your rights in the Franchised Location and the equipment of fixtures used in the business.
j. Assignment of contract by Franchisor	Section 14.1 of the Franchise Agreement	We have the right to transfer or assign the Franchise Agreement to any person or entity without restriction.
k. "Transfer" by Franchisee - defined	Section 14.2 of the Franchise Agreement	Includes sale, assignment, conveyance, pledge, mortgage or other encumbrance of any interest in the Franchise Agreement, the Blendz® Store or you (if you are not a natural person).
1. Franchisor approval of transfer by Franchisee	Section 14.2(b) of the Franchise Agreement	You must obtain our consent, which shall not be unreasonably withheld, before transferring any interest in the assets of the Blendz® Store, the Franchise Agreement, or in you (if you are not a natural person).

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Category	Section in Agreement	Summary
m. Conditions for Franchisor approval of transfer	Section 14.2(b) of the Franchise Agreement	Conditions include, among others: You must pay all amounts due us or our affiliates, not otherwise be in default, sign a general release, and pay a transfer fee. Transferee must meet our criteria, assume all obligations, attend training, renovate or modernize Blendz® Store, and sign current Franchise Agreement.
n. Franchisor's right of first refusal to acquire Franchisee's business	Section 14.4 of the Franchise Agreement	Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions.
o. Franchisor's option to purchase Franchisee's business	Section 14.4 and 18.2 of the Franchise Agreement	Other than assets on termination, nonrenewal or right of first refusal, we have no right or obligation to purchase your business.
p. Death or disability of Franchisee	Section 14.5 of the Franchise Agreement	If you or a Controlling Principal is a natural person, on death or permanent disability, distributee must be approved by us, or interests must be transferred to someone approved by us within 12 months after death or 6 months after notice of permanent disability. If you or the Controlling Principal has substantial control, we may operate the Blendz® Store during the 12 or 6 month interim period.
q. Non-competition covenants during the term of the franchise	Section 10.3 of the Franchise Agreement	You are prohibited from operating or having an interest in a similar business in the U.S., or anywhere else we have used, registered or sought to register the Marks or where we operate or license others.
r. Non-competition covenants after the franchise is terminated or expires	Section 10.3 of the Franchise Agreement	Covenants include, among others: You and your Controlling Principals are prohibited from operating or having an interest in a similar business which is located, or is intended to be located within a 10-mile radius of any Blendz® Store in existence, under construction, where land has been purchased or a lease has been executed as of the earlier of (i) the expiration or termination of, or the transfer of all of your interest in, the Franchise Agreement or (ii) the time a Controlling Principal ceases to satisfy the definition of a Controlling Principal, as applicable.
s. Modification of the agreement	Sections 10.1(e), 10.3(b)(iv),andl9.2of the Franchise Agreement	You must comply with the Operations Manual as amended. The Franchise Agreement may not be modified unless mutually agreed to in writing, except as we may reduce scope of covenants.
t. Integration/merger clause	Section 19.2 of the Franchise Agreement	Only the terms of the Franchise Agreement and other related written agreements are binding (subject to applicable state law). No other representations or promises will be binding unless mutually agreed to.
u. Dispute resolution by arbitration or mediation	Sections 19.8 and 19.9 of the Franchise Agreement	Except for actions brought by us for money owed, injunctive or extraordinary relief, antitrust claims, or actions involving our Marks or the Blendz® Store premises, all disputes must be arbitrated in San Jose, California.
v. Choice of forum	Sections 19.7	The venue for all proceedings related to or existing out of the Agreement in San Jose, California, unless otherwise required by state law (See State Offering Circular Addendum including State Amendments to the Franchise and Area Development Agreement).
w. Choice of law	Sections 19.7 of the Franchise Agreement	The Franchise Agreement is to be governed and enforced under California law (except for California choice of law rules). (See State Offering Circular Addendum including State Amendments to the Franchise and Area Development Agreement).

104848.2

THIS TABLE LISTS CERTAIN IMPORTANT PROVISIONS OF THE AREA DEVELOPMENT AND RELATED AGREEMENTS. YOU SHOULD READ THESE PROVISIONS IN THE AGREEMENTS ATTACHED TO THIS OFFERING CIRCULAR.

Category	Section in Agreement	Summary
a. Length of the term	Section 2 of Area Development Agreement	Term continues until you have completed your development obligations in accordance with the Development Schedule.
b. Renewal or extension of the term	Sections 4.2 and 4.3 of Area Development Agreement	We may extend the term of the Area Development Agreement to allow you to develop a replacement or additional Blendz® Stores.
c. Requirements for Developer to renew or extend	Section 4.2 of Area Development Agreement	You must develop the replacement Blendz® Store. To obtain the rights to develop additional Blendz® Stores, you must have complied with the terms of the Area Development Agreement and exercised your option within 30 days after we have provided you with notice.
d. Termination by Developer	Not Applicable	Not Applicable.
e. Termination by Franchisor without cause	Not Applicable	Not Applicable.
f. Termination by Franchisor with "cause"	Section 7 of Area Development Agreement	Each of your obligations under the Area Development Agreement is a material and essential obligation, the breach of which may result in termination.
g. "Cause" defined -curable defaults	Section 7 of the Area Development Agreement	Curable defaults include, among others: if you fail to obtain execution of the covenants contained in the Agreement within 30 days after a request.
h. "Cause" defined -defaults which cannot be cured	Sections 7 of the Area Development Agreement	Non-curable defaults include, among others: If you become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against you under federal bankruptcy laws or similar laws, are adjudicated bankrupt or insolvent, have outstanding judgments against you for over 30 days, fail to comply with the covenants and related agreements required in the Area Development Agreement, are convicted of a felony or other crime that may have an adverse affect on the System or Marks, breach any of the representations, warranties and covenants contained in the Area Development Agreement, transfer or attempt to transfer any interest without our consent, or execution has been levied against you, or suit to foreclose any lien or mortgage against the premises or equipment has been instituted and not dismissed within 30 days.
i. Developer's obligations on termination/ nonrenewal	Section 7 of Area Development Agreement	Obligations include, among others: You must cease developing Blendz® Stores or, on a partial termination or development rights, must continue to develop only in accordance with any modified Development Schedule or Supplemental Development Schedule, and must comply with all applicable confidentiality and non-competition covenants.
j. Assignment of contract by Franchisor	Section 8.1 of Area Development Agreement	We have the right to transfer or assign the Area Development Agreement to any person or entity without restriction.
k. "Transfer" by Developer - defined	Section 8.2 of Area Development Agreement	Includes sale, assignment, transfer, conveyance, gift, pledge, mortgage or other disposal or encumbrance of any direct or indirect interest in the Agreement or you (if you are not a natural person).
1. Franchisor approval of transfer by Developer	Section 8.2 of Area Development Agreement	You must obtain our consent before transferring any interest in the Area Development Agreement or you (if you are not a natural person), without prior written consent.
m. Conditions for Franchisor approval of transfer	Section 8.2 of Area Development Agreement	Conditions include, among others: You must pay all amounts due us and our affiliates, not otherwise be in default, sign a general release, remain liable for pre-transfer obligations, and pay a transfer fee. Transferee must meet our criteria, assume post-transfer obligations, sign our then standard Agreement and attend training.

104848.2

Category	Section in Agreement	Summary
n. Franchisor's right of first refusal to acquire Developer's business	Section 8.2 of Area Development Agreement	Within 30 days after notice, we have the option to purchase the transferred interest on the same terms and conditions offered by a third party.
o. Franchisor's option to purchase Franchisee business	Section 8.2 of Area Development Agreement	Other than assets on termination, non-renewal or right of first refusal, we have no right or obligation to purchase your business.
p. Death or disability of Developer	Section 8 of Area Development Agreement	If you or a Controlling Principal is a natural person, on death or permanent disability, distributee must be approved by us, or interest must be transferred to someone approved by us within 12 months after death or 6 months after notice of permanent disability.
q. Non-competition covenants during the term of the Area Development Agreement	Section 11 of Area Development Agreement	Except for Blendz® Stores you operate under Franchise Agreements with us, you and your Controlling Principals are prohibited from operating or having an interest in a similar business within 50 miles of the Development Territory, or anywhere else we have used, registered or sought to register the Marks or where we operate or license others.
r. Non-competition covenants after the Area Development Agreement is terminated or expires	Section 11 of Area Development Agreement	Covenants include, among others: Except for Blendz® Stores you operate under Franchise Agreements with us, you and your Controlling Principals are prohibited from operating or having an interest in a similar business which is located or is intended to be located within a 10-mile radius of any Blendz® Stores or food service facility in existence, under construction, where land has been purchased or a lease has been executed as of the earlier of (i) the expiration, termination, or the transfer of all of your interest in the Agreement or (ii) the time a Controlling Principal ceases to satisfy the definition of a Controlling Principal, as applicable.
s. Modification of the agreement	Sections 11 and 12 of Area Development Agreement	Area Development Agreement may not be modified unless mutually agreed to in writing, except as we may reduce scope of covenants.
t. Integration/merger clause	Section 12 of Area Development Agreement	Only the terms of the Agreement and other related written agreements are binding (subject to applicable state law). No other representations or promises will be binding.
u. Dispute resolution by arbitration or mediation	Section 12 of Area Development Agreement	Except for actions brought by us for money owed, injunctive or extraordinary relief, antitrust claims, or actions involving our Marks or the Blendz® Store premises, all disputes must be arbitrated at our principal place of business.
v. Choice of forum	Sections 21 of Area Development Agreement	The venue for all proceedings related to or arising out of the Agreement is where our principal place of business is located, unless otherwise brought by us (See State Offering Circular Addendum including State Amendments to the Franchise and Area Development Agreement).
w. Choice of law	Section 18 of Area Development Agreement	The Agreement is to be governed and enforced under California law (except for California choice of law rules). ("See State Offering Circular Addendum including State Amendments to the Franchise and Area Development Agreement.)

ITEM 18 PUBLIC FIGURES

We do not currently use any public figures to promote our Franchise.

104848.2

ITEM 19 EARNINGS CLAIMS

YOU OR ANY OTHER FRANCHISE OWNER SHOULD NOT CONSIDER THE FOLLOWING DATA AS THE ACTUAL, POTENTIAL OR PROBABLE MONTHLY AVERAGE NET SALES OR COST PERCENTAGES THAT WILL BE REALIZED. WE DO NOT REPRESENT THAT YOU CAN EXPECT TO ATTAIN THIS AVERAGE NET SALES OR COST PERCENTAGES OR ANY INCOME OR PROFIT THAT COULD RESULT FROM THE OPERATION OF A BLENDZ® STORE. YOUR FINANCIAL RESULTS ARE LIKELY TO DIFFER FROM THE FIGURES PRESENTED. YOU SHOULD CAREFULLY REVIEW THE ATTACHED EXPLANATORY NOTES.

ACTUAL RESULTS MAY VARY AMONG FRANCHISE OWNERS AND DEPEND UPON A VARIETY OF INTERNAL AND EXTERNAL FACTORS, MANY OF WHICH NEITHER WE NOR ANY PROSPECTIVE FRANCHISE OWNER CAN ESTIMATE, SUCH AS COMPETITION, ECONOMIC CLIMATE, DEMOGRAPHICS, AND CHANGING CONSUMER DEMANDS AND TASTES. YOUR ABILITY TO ACHIEVE ANY PARTICULAR AVERAGE NET SALES, COST PERCENTAGES REVENUE LEVEL, OR NET INCOME WILL DEPEND ON THESE FACTORS AND OTHERS, INCLUDING YOUR LEVEL OF EXPERTISE, NONE OF WHICH ARE WITHIN OUR CONTROL. ACCORDINGLY, WE CANNOT, AND DO NOT, ESTIMATE THE RESULTS OF ANY PARTICULAR FRANCHISE.

The following table shows the monthly average gross sales from March 2005 through February 2006 for the Affiliate owned Blendz® Store, the average monthly percentage of cost of goods and the average monthly percentage of cost of labor.

Average Monthly Net Sales (2)	$26,000
Average Monthly Costs of Goods (3)	32%
Average Monthly Costs of Labor (4)	26%
Gross Margin (5)	42%

ASSUMPTION NOTES

(1) During the 12 months ended February 2006 there was 1 Affiliate owned Blendz® Store.

(2) Average Monthly Net Sales are defined to include all receipts from all business conducted at the Blendz® Store. The Average Monthly Net Sales also includes catering from the Affiliate owned Blendz® Store. Net Sales exclude sales taxes, promotional and discount sale coupons, and gratuities. Average Monthly Net Sales were determined by the average of the 12 month period beginning June 2004 and ending July 30, 2005.

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(3) The sales of Smoothies represent 25% of the Average Monthly Net Sales and the sale of Food represents 75% of the Average Monthly Net Sales.

(4) Cost of Goods includes food, beverage and paper costs.

(5) Costs of Labor include Designated Store Manager salary and hourly wages for Blendz® Store staff. Costs of Labor does not include bonuses, payroll taxes, health insurance, workers compensation insurance or any other employee benefit costs.

(6) Gross Margin consists of Average Monthly Net Sales less Cost of Goods and Costs of Labor as previously defined. The Gross Margin represents the amount available to pay for employee payroll taxes and benefits, bonuses, utilities, maintenance, advertising, franchise fees, occupancy costs, administrative costs and any other costs associated with the operation of the Blendz® Store. Such costs will vary depending on your Blendz® Store location, market demographics, weather, seasonality, work force characteristics and economic conditions.

Substantiation for this data is available for inspection at our corporate headquarters and will be provided upon the reasonable request of a prospective franchisee. Franchisees, licensees or former franchisees listed in the offering circular, may be one source of information.

EXCEPT FOR THE INFORMATION IN THIS ITEM, WE DO NOT MAKE ANY REPRESENTATIONS OR STATEMENTS OF ACTUAL, AVERAGE, PROJECTED, FORECASTED OR POTENTIAL PURCHASES, SALES, COSTS, INCOME OR PROFITS TO YOU. WE DO NOT FURNISH OR MAKE, OR AUTHORIZE OUR SALES PERSONNEL, AGENTS, OFFICERS OR EMPLOYEES TO FURNISH OR MAKE ANY OTHER ORAL OR WRITTEN INFORMATION CONCERNING THE ACTUAL, AVERAGE, PROJECTED, FORECASTED OR POTENTIAL PURCHASES, SALES, COSTS, INCOME OR PROFITS OF A FRANCHISE OR PROSPECTS OR CHANCES OF SUCCESS THAT YOU CAN EXPECT OR THAT PRESENT OR PAST FRANCHISEES HAVE HAD, OTHER THAN AS IDENTIFIED THIS ITEM. WE SPECIFICALLY INSTRUCT OUR SALES PERSONNEL, AGENTS, OFFICERS OR EMPLOYEES THAT THEY ARE NOT PERMITTED TO FURNISH OR MAKE ANY OTHER ORAL OR WRITTEN INFORMATION CONCERNING THE ACTUAL, AVERAGE, PROJECTED, FORECASTED OR POTENTIAL PURCHASES, SALES, COSTS, INCOME OR PROFITS OF A FRANCHISE OR PROSPECTS OR CHANCES OF SUCCESS THAT YOU CAN EXPECT OR THAT PRESENT OR PAST FRANCHISEES HAVE HAD, OTHER THAN AS IDENTIFIED THIS ITEM. WE RECOMMEND THAT YOU MAKE YOUR OWN INDEPENDENT INVESTIGATION TO DETERMINE WHETHER OR NOT A BLENDZ® STORE MAY BE PROFITABLE. WE RECOMMEND THAT YOU CONSULT WITH PROFESSIONAL ADVISORS BEFORE EXECUTING ANY AGREEMENT.

104848 2

ITEM 20

LIST OF OUTLETS

STATUS OF AFFILIATE OWNED STORES*

FOR FISCAL YEARS 2003/2004/2005

State	Stores Closed During Period	Stores Opened During Period	Stores Operating at End of Period
California	0/0/0	2/1/0	2/3/0
TOTAL	0/0/0	2/1/0	2/3/0

* Our Affiliate, BL, operates Blendz® Stores. We do not operate any Blendz® Stores.

FRANCHISED BLENDZ® STORE STATUS SUMMARY FOR FISCAL YEARS 2004/2005

State

(1)

Transfers

Canceled

Terminated

Not Renewed

Reacquired By

Franchisor

Left the System (Other)

Total From

Left

Columns

Franchises Operating at Period End

Total

0/0

0/0

Attached to this Offering Circular as Exhibit G are the List of Franchisees and Area Developers currently operating under Franchise and Area Development Agreements with us.

LICENSED STORE STATUS SUMMARY FOR FISCAL YEARS 2003/2004/2005

State (1)

Transfers

Canceled or Terminated

Not Renewed

Reacquired

Franchisor

Left the System (Other)

Total From

Left

Columns

Licensees Operating at Period End

0/0/0

0/0/0

0/0/0

0/0/0

0/0/1

Total

0/0/0

0/0/1

PROJECTED OPENINGS IN 2006

State

Franchised Blendz® Stores Under

Area Development and Franchise

Agreements but Not Yet Open as of

2006

Projected

Franchised

Blendz® Store

Openings in 2006

Projected Affiliate-Owned Store Openings in 2006

California

Total

Since we have not yet sold any franchises or area development rights, no franchisee or area developer has had a Franchise Agreement or Area Development Agreement terminated, cancelled, or not renewed by us or otherwise voluntarily or involuntarily ceased to do business during our last fiscal year, or who have not communicated with us within 10 weeks of this Offering Circular or the date of our application for registration of this Offering Circular.

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ITEM 21 FINANCIAL STATEMENTS

The audited financial statements listed below are attached to this Offering Circular as Exhibit A. Our audited opening balance sheet as of May 23, 2005 and audited financial statements for fiscal year ended December 31, 2005, with the independent auditor's report attached.

ITEM 22 CONTRACTS

The following agreements are attached as exhibits to this Offering Circular:

1. Franchise Agreement (Exhibit B).

2. Area Development Agreement (Exhibit C).

3. State Addenda (Exhibit H).

ITEM 23 RECEIPT

On the last 2 pages of this Offering Circular (Exhibit J), you will find two copies of the Receipt page. You must sign, date, and deliver the copy of the Receipt page labeled BLENDZ to us for our records.

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