UFOC
Sample UFOC
FRANCHISE OFFERING CIRCULAR
Bubbies Homemade Ice Cream &
Desserts Inc.
a Hawaii corporation
99-1267 Waiua Place, Suite B
Aiea, Hawaii 96701-3277
Telephone No. (808) 487-7218
The franchise offered is an ice cream and dessert parlor operating as Bubbies Homemade Ice Cream & Desserts and selling ice cream, baked goods, refreshments and other dessert items.
The initial franchise fee is $20,000. The estimated initial investment required, including the initial franchise fee, is $174,000 to $216,500. This sum does not represent Franchisees total investment in connection with the Bubbies Homemade Ice Cream & Desserts franchise. Items 5 through 7, inclusive, of this offering circular, beginning at page 4, should be consulted for further explanation regarding the total investment.
RISK FACTORS:
1. THE FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO SUE BUBBIES ONLY IN HAWAII. OUT-OF-STATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE BUBBIES IN HAWAII THAN IN YOUR HOME STATE.
2. THE FRANCHISE AGREEMENT STATES THAT HAWAII LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.
3. THE FRANCHISE AGREEMENT STATES THAT IF A CLAIM IS ASSERTED BY OTHERS OF A PRIOR USE OF ANY TRADEMARKS, SERVICES MARKS OR TRADE NAMES, BUBBIES MAY REQUIRE YOU TO DEFEND SUCH CLAIMS.
34. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Information comparing franchisors is available. Call the California Department of Corporations 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 anything in the offering circular is untrue, contact the Federal Trade Commission and California Department of Corporations.
EFFECTIVE DATE:
INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY FEDERAL TRADE COMMISSION
To protect you, we've required your Franchisor to give you this information. We haven't checked it. and don't know if it is correct. It should help you make up your mind. Study it carefully. While it includes some information about your contract, do not rely on it alone to understand your contract. Read all of your 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's 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.
Effective Date:
Federal Trade Commission Washington. D.C. 20580
1
TABLE OF CONTENTS
1. THE FRANCHISOR. ITS PREDECESSORS AND AFFILIATES .................1
2. IDENTITY AND BUSINESS EXPERIENCE OF PERSONS AFFILIATED WITH BUBBIES HOMEMADE ICE CREAM & DESSERTS. INC.; FRANCHISE BROKERS
......................................................................3
3. LITIGATION.................'..........................................3
4. BANKRUPTCY ........................................................4
5. FRANCHISEE'S INITIAL FRANCHISE FEE OR OTHER INITIAL PAYMENT.....4
6. OTHER FEES ..........................................................5
7. FRANCHISEE'S INITIAL INVESTMENT ...................................7
8. RESTRICTIONS ON SOURCES OF PRODUCTS OR SERVICES...............II
9. FRANCHISEE'S OBLIGATIONS .........................................12
10. FINANCING ARRANGEMENTS .........................................15
11. OBLIGATIONS OF BUBBIES; OTHER SUPERVISION. ASSISTANCE OR SERVICES............................................................15
12. EXCLUSIVE AREA OR TERRITORY.....................................27
13. TRADEMARKS. SERVICE MARKS. TRADE NAMES. LOGOTYPES AND COMMERCIAL SYMBOLS..............................................28
14. PATENTS AND COPYRIGHTS ..........................................29
15. OBLIGATION OF THE FRANCHISEE TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS.............................30
16. RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL..................30
17. RENEWAL. TERMINATION. TRANSFER. DISPUTE RESOLUTION AND RELATED INFORMATION..............................................30
18. ARRANGEMENTS WITH PUBLIC FIGURES...............................36
li
19. EARNINGS CLAIMS...................................................36
20. LIST OF OUTLETS ....................................................36
21. FINANCIAL STATEMENTS.............................................37
[22. CONTRACTS ........................................................3?|
RECEIPT..................................................................38^;
''""It
appendix...............................................................e&W;
EXHIBITS
A. FINANCIAL STATEMENTS
B. BUBBIES HOMEMADE ICE CREAM & DESSERTS INC. FRANCHISE AGREEMENT
i'ii ' ?* ."■ ii i
1. THE FRANCHISOR. ITS PREDECESSORS AND AFFILIATES
Bubbies Homemade Ice Cream & Desserts, Inc.:
Bubbies Homemade Ice Cream & Desserts, Inc. (referred to as "Bubbic&''"Bubbies'T) is a Hawaii corporation, incorporated September 5, 1984, and doing business as Bubbies Homemade Ice Cream & Desserts. Bubbies has also registered with the State of Hawaii the trade name ^'Tutu's Homemade Ice Cream,11^ which in 1998 was used for the first time, in connection with a Hawaiian sherbet confection. Its principal business address is 99-1267 Waiua Place, Suite B, Aiea, Hawaii 96701-3277. Bubbies' agent for service of process in the State of California is the Commissioner of the State of California Department of Corporations. In Hawaii, the agent for service of process is Keith B. Robbins, president of Bubbies.
To simplify the language in this offering circular, "vou'^voin means the franchisee - that is, the person or entity who buys the franchise. If the franchisee is a corporation, partnership or other entity, "you" includes the franchisee's owners.
Predecessors and Affiliates:
There are no predecessor entities related to Bubbies.
Bubbies Homemade Ice Cream & Desserts. Inc.'s Business:
Bubbies is a dessert manufacturing and sales company, and a franchising company which sells franchises for the operation of retail ice cream and dessert parlors operating under the Bubbies Homemade Ice Cream & Desserts name. Bubbies presently owns and operates one retail ice cream and dessert parlor. All frozen and baked dessert items are prepared at Bubbies' factory located at 99-1267 Waiau Place, Suite B, Aiea, Hawaii 96701-3277. Bubbies also sells ice cream and baked goods on a wholesale basis to customers such as hotels and restaurants. Since January 2, 1987, Bubbies' wholesaling operations have accounted for approximately fifty percent (50%) of Bubbies' gross sales. Bubbies is also the sole supplier of the frozen desserts offered for sale at the franchised ice cream and dessert parlors. The market for ice cream and frozen dessert products is developed. Products are sold across the demographic spectrum, although families with children and young adults (teenage through mid-twenties) comprise a substantial portion of the likely market. Sales are seasonal to some extent, with typically stronger sales during warm weather months.
1
Bubbies Homemade Ice Cream & Desserts Franchise:
The franchised ice cream and dessert parlor is a retail establishment devoted to the sale of ice cream, sherbet, sorbet, ice cream novelties, baked goods, and similar dessert items. The ice cream and other frozen dessert items are manufactured by Bubbies and sold to you for resale at the ice cream and dessert parlor. You may seek from independent suppliers your inventory of syrups, toppings, refreshments and similar products which are sold in conjunction with the frozen dessert items supplied by Bubbies, as well as baked goods and beverages. The ice cream and dessert parlors are furnished with antique items designed to project a warm and casual atmosphere. Although patrons are served at a service counter, the typical franchised store will provide seating for patrons who wish to eat on the premises. The ice cream flavors and variety of other desserts offered at any given time will change regularly.
The franchised business also sells articles of clothing (including cotton T-shirts and hats) and novelty ceramic ice cream containers (for example, in the shape of a bathtub) bearing Bubbies' distinctive service mark.
You will have to compete with other existing retail ice cream and frozen yogurt shops, and other shops providing frozen desserts. This includes other franchise programs specializing in frozen dessert items. Bubbies' franchises are subject to all regulations that apply to food service businesses, including food handling and other health and safety laws.
Bubbies Prior Business Experience:
Bubbies has operated ice cream and dessert parlors since March 1985. Its first retail shop is located at 1010 University Avenue, #B-4, Honolulu, Hawaii. (The ice cream and dessert parlor at this location was forced to close as a result of fire damage, caused by a fire originating at adjoining premises, from September 2, 1986 through January 1, 1987.) The existing ice cream and dessert parlor is company-owned and substantially similar to the franchises currently being offered by Bubbies. A second retail shop was opened in 1995 at the Kahala Mall Shopping Center, Honolulu, Hawaii. Bubbies sold its ongoing retail operations at Kahala Mall as a franchised business in April 1996 and may also sell its ongoing retail operations at University Avenue as a franchised business.
In April 1989, Bubbies moved its ice cream manufacturing and baking operation to a factory located at 99-930 Iwaena Street, Room B102, Aiea, Hawaii 96701. In June 1997, Bubbies commenced manufacturing and baking operations at a new factory located at 99-1267 Waiau Place, Suite B, Aiea, Hawaii 96701. Frozen and baked goods are delivered from the factory to the retail outlets and to wholesale accounts in Hawaii via a freezer truck owned and operated by Bubbies. Ice cream and other frozen dessert items are
2
shipped to off-island, U.S. mainland and foreign destinations principally via freezer containers on marine vessels. Where expedited delivery has been required, Bubbles has shipped product via air freight. Bubbies began offering franchises in Hawaii as of December 18, 1995. Four franchises have been sold by Bubbies - (1) the retail ice cream and dessert parlor originally located at Kahala Mall Shopping Center in Honolulu, Hawaii, which was sold as a franchise in April 1996, and moved to Koko Marina in 2001, (2) a franchise that opened on June 1, 1998 at 2424 Kalakaua Avenue, Honolulu, Hawaii (terminated in September 1998), (3) a franchise that opened in the fall of 2000 in Mililani, Hawaii, and (4) a franchise to open in 2002be located in Kapolei, Hawaii. Bubbies has also entered into a license agreement with a party in Singapore that owns and operates a retail ice cream and dessert parlor that may be construed as establishing a franchise under U.S. law.. Bubbies has not offered franchises in other lines of business.
IDENTITY AND BUSINESS EXPERIENCE OF PERSONS AFFILIATED WITH BUBBIES HOMEMADE ICE CREAM & DESSERTS. INC.: FRANCHISE BROKERS
President and Treasurer. Director: Keith B. Robbins
Mr. Robbins is a nutritionist, and has earned a Masters degree in Public Health from the University of Hawaii. He has been the President and Treasurer, and a Director of Bubbies since its formation in 1984, and has personally managed all phases of the existing Bubbies ice cream and dessert parlor since that time, including the past five years, as well as all other aspects of Bubbies' business. Prior to the formation of Bubbies, he was a nutritionist for Kokua Kalihi Health Center.
Vice President. Secretary. Director: Gertrude Robbins
Mrs. Robbins is the mother of Bubbies' President, Keith B. Robbins. She is a retired homemaker, and is engaged in volunteer work in her community in Connecticut. She is not actively involved in the day-to-day management of Bubbies, but serves in an advisory capacity, and has served in such capacity for the past five years. She has served as Secretary and a Director of Bubbies since 1984, and as Vice President since 2002.
There are no franchise brokers in connection with the sale of the Bubbies franchise.
LITIGATION
No litigation is required to be disclosed in this offering circular.
3
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.
5. FRANCHISEE'S INITIAL FRANCHISE FEE OR OTHER INITIAL PAYMENT
An initial franchise fee of $20,000.00 is due and payable in a lump sum by you upon execution of the Franchise Agreement by all parties.
The $20,000.00 franchise fee is uniform in all cases.
Proceeds from the initial franchise fee are, in part, profit to Bubbies and, in part, used to pay some of the following expenses of Bubbies:
(1) Assistance and supervision provided by Bubbies for the design, furnishing and opening of your ice cream and dessert parlor;
(2) Your training in connection with the operation of the ice cream and dessert parlor;
(3) Legal fees, accounting fees and compliance with federal, state and other laws;
(4) Employees' salaries and benefits;
(5) Enforcement and protection of all Bubbies' trademarks, trade names and commercial symbols;
(6) Research and development relating to products and methods used by Bubbies and the ice cream and dessert parlors;
(7) Selling, general and administrative expenses;
(8) Costs associated with the review and approval of your lease, title to property, construction and/or improvement plans, insurance coverage and other approvals provided for in the Franchise Agreement.
The initial franchise fee will be refunded, subject to the following charges, if for any reason you have not opened the ice cream and dessert parlor within 180 days after the, premises are available for your possession and Bubbies elects to terminate the Franchise Agreement pursuant to Paragraph 23 of the Agreement. Bubbies may, in any event, deduct those costs and expenses incurred prior to such termination, including travel,
4
living expenses and reasonable compensation for Bubbles' agents and employees and legal fees and other professional fees in connection with Bubbies' efforts pursuant to the Franchise Agreement. The amount deducted for such costs and expenses will not be less than $5,000.00 or more than $20,000. The initial franchise fee is not refundable in whole or in part under any other circumstances.
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6. OTHER FEES |
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|
DescriotionCl) |
Amount |
Due Date |
Remarks |
|
Royalty |
3% of gross |
Payable |
See Note 2 |
|
receipts |
monthly on Tenth (10th) day after end of preceding month |
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|
Group Advertising |
Greater of |
Same as |
See Note 3 |
|
$250/mo or |
Royalty Fee |
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|
1-1/2% of monthly |
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|
gross receipts |
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|
Additional Training |
$500 per week |
Upon completion of additional training |
See Item 11 |
|
Additional |
Not to exceed |
14 days after |
See Item 11 |
|
Assistance |
$25.00 per hour |
billing |
|
|
Audit |
Cost of audit |
30 days after |
See Note 4 |
|
plus 12% |
billing |
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|
interest (or highest |
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|
rate allowed by law |
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|
if less than 12%) on |
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|
underpayment |
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|
Transfer |
Greater of |
Prior to |
See Items 5 |
|
$5,000 or 25% |
consummation |
and 17 |
|
|
of franchise |
of transfer |
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|
fee charged at |
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|
time of transfer |
5
Renewal Not to exceed
25% of franchise fee charged at time of renewal
NOTES:
(1) All fees are imposed by and are payable to Bubbies. All fees are not refundable.
(2) You are required to pay a royalty to Bubbies in an amount equal to three percent (3%) of your gross receipts. Gross receipts include the total of all sales and all business transacted in, on, upon and from your business premises whether payment is received in cash, services, merchandise or in kind, less general excise tax or sales tax.
(3) Bubbies has reserved the right to require that you pay to Bubbies an advertising fee not to exceed the greater of $250.00 per month or one and one-half percent (1 !/2%) of your total monthly gross receipts. Gross receipts are defined in Note 2 above. The advertising fee will be uniform as to all persons currently acquiring a franchise and such fee will be nonrefundable. The fee will be used to defray the cost of advertising, and Bubbies may prepare the advertising itself or purchase the advertising and promotional materials from nonaffiliated third parties.
(4) You are required by the Franchise Agreement to submit monthly reports. In addition, quarterly profit and loss statements (unaudited) and annual financial statements are required, such financial statements to be audited every other year. Bubbies will have the right to audit or cause to be audited all of your records and tax returns. In the event such audit discloses an understatement of the gross receipts of your ice cream and dessert parlor for any period or periods, you are obligated to pay to Bubbies, upon receipt of the audit report, the applicable royalty fee and advertising fee on the amount of such understatement, plus interest at the rate of twelve percent (12%) per annum from the date the payments originally were due; provided, however, the interest charged will not exceed the highest interest rate allowed by law.
The audits will be conducted at the expense of Bubbies, provided that if an audit discloses an understatement of annual gross receipts of Four Thousand and no/100 dollars ($4,000.00) or more of your gross receipts for any period or periods, you are required to reimburse Bubbies for the cost of such audit including, without limitation, travel, lodging and wage expenses, and reasonable accounting and legal fees.
Prior to See Items 5
renewal and 17
6
7.
FRANCHISEE'S INITIAL INVESTMENT
|
Franchisee's |
. Estimated Initial Investment and Other Financial Obligations: |
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|
Amount |
Method of Pavment |
When Due |
To Whom Payment Is to be Made |
|
|
Initial Franchise Fee |
$20,000 |
Lump Sum |
Upon execution of Franchise Agreement |
Bubbies |
|
Travel and Living Expenses |
$2,500 -$5,000 |
As Incurred |
During training |
Airlines, Hotels & Restaurants |
|
Equipment |
$44,300 |
Lump Sum (Note 1) |
Prior to Opening |
Suppliers |
|
Opening Inventory |
$10,500 |
Lump Sum (Note 2) |
Prior to Opening |
Bubbies and Suppliers |
|
Real Estate Costs |
$ 7,000 |
(Note 3) |
(Note 3) |
(Note 3) |
|
Leasehold Improvements, Remodeling, Decorating Costs |
$75,000 to $115,000 |
Lump Sum (Note 4) |
Prior to Opening |
Contractors and Suppliers |
|
Additional Funds - 3 months |
$ 15,000 |
As Incurred |
As Incurred |
Employees, Suppliers, Uti and Tradesme |
|
Legal Fees |
(Note 5) |
(Note 5) |
(Note 5) |
(Note 5) |
|
TOTAL |
$174,000 to $216,500 |
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NOTES:
(1) Equipment is shown at list price and with discounts that may be available from certain vendors. Costs do not include applicable taxes or freight charges.
|
OUANTITY |
ITEM |
LIST PRICE |
COST |
TOTAL |
|
Tempering Cabinet Nelson BD14 |
$5,600.00 |
$2,768.00 |
$2,768.00 |
|
|
Flavor Rail 8FR |
$4,736.00 |
$2,426.00 |
$2,426.00 |
|
|
2 |
Display Cabinet FPD 3 |
$6,120.00 |
$3,134.00 |
$6,268.00 |
|
1 Door Hardening T30 |
$9,614.00 |
$2,363.00 |
$2,363.00 |
|
|
2 Door Refer True T-49 |
$4,414.00 |
$2,200.00 |
$2,200.00 |
|
|
Mochi Upfront Freezer Nelson BD4 $2,600.00 |
$1,242.00 |
$1,242.00 |
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|
2 Door Under Counter Refer |
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|
w/4" Casters Randell |
$3,300.00 |
$1,595.00 |
$1,595.00 |
|
|
Dipperwell |
$303.00 |
$125.00 |
$125.00 |
|
|
Dipping Cabinets KDC 87 |
$5,779.00 |
$2,959.00 |
$2,959.00 |
|
|
4 |
Can Clamps Sets |
$254.00 |
$130.00 Each $520.00 |
|
|
6x8 Backup Freezer (20 Degrees) |
$8,800.00 |
$5,375.00 |
$5,375.00 |
|
|
6x8 Backup Freezer shelving |
$1,149.00 |
$762.00 |
$762.00 |
|
|
(8 - 74" Posts, 5 - 24" shelf, |
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|
5-30" Shelf) |
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|
2 - 3202 Scales Edlund |
$95.00 |
$60.00 |
$60.00 |
|
|
2 Compact Fudge Warmer |
$465.00 |
$290.00 |
$290.00 |
|
|
3 Compartment sink |
$1,800.00 |
$1,200.00 |
$1,200.00 |
|
|
(5 - 7" In overall length) |
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|
Hand Sink - Front |
$130.00 |
$130.00 |
||
|
Microwave |
$350.00 |
$350.00 |
||
|
Prince Castle Multi-mixer Hard |
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|
Ice Cream |
$1,200.00 |
$730.00 |
$730.00 |
|
|
1 |
Shelving |
$600.00 |
$600.00 |
|
|
2 |
Hamilton Beach Commercial |
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|
Blender |
$95.00 Each |
$190.00 |
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|
2 |
Brewing Pitchers |
$3.50 Each |
$7.00 |
|
|
2 |
Toledo Scales #8433 |
$550.00 |
$390.00 |
$780.00 |
|
Creamer |
$4.50 |
$4.50 |
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|
Espresso Machine |
$6,100.00 |
$5,100.00 |
$5,100.00 |
|
|
Knox Box |
$17.00 |
$17.00 |
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|
Pot Scrubber Bristles |
$8.00 |
$8.00 |
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|
Semi-Automatic Coffee Grinder |
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|
2 |
Steaming Pitcher |
$15.00 Each |
$30.00 |
|
|
3 |
#16 Ice cream Scoops |
$19.00 |
$12.00 Each |
$36.00 |
|
1 |
8" Chef Knife |
$20.00 |
$20.00 |
|
|
1 |
8" Spatula - Decoration |
$10.00 |
$10.00 |
|
1 |
Can Opener |
$5.00 |
$5.00 |
|
1 |
Cutting Board |
$10.00 |
$10.00 |
|
1 |
Decorating Bag #12 |
$10.00 |
$10.00 |
|
2 |
Measuring Cups |
$4.00 Each |
$8.00 |
|
2 |
Napkin Holder |
$23.00 |
$46.00 |
|
1 |
Open Sign |
$20.00 ■ |
$20.00 |
|
1 |
Hours Sign |
$30.00 |
$30.00 |
|
2 |
Rubbermaid Scrapper - 9 Vi" |
$2.00 |
$4.00 |
|
2 |
Ice Cream Spades |
$19.00 $12.00 Each |
$24.00 |
|
4 |
Stainless Milk Shake Cups |
$8.00 Each |
$32.00 |
|
1 |
Stereo/CD Player/Speakers |
$500.00 |
$500.00 |
|
1 |
Server Products Model #82600 |
$83.00 |
|
|
1 |
Server Products Model #82550 |
$100.00 |
|
|
7 |
Server Products Model #82559 |
$10.00 Each |
$70.00 |
|
7 |
Server Products Model #82562 |
$8.00 Each |
$56.00 |
|
7 |
Server Products Model #82633 |
$73.00 Each |
$511.00 |
|
1 |
Outside Storefront Sign |
$2,000.00 |
|
|
1 |
Thermometer |
$12.00 |
$12.00 |
|
1 |
Toddy Maker |
$40.00 |
$40.00 |
|
2 |
Topping Shaker |
$2.00 |
$4.00 |
|
24 |
Black Aprons |
$5.00 Each |
$120.00 |
|
1 |
Towels (12) |
$12.00/Dozen $12.00 |
|
|
1 |
Garbage Can (Back) |
$30.00 |
$30.00 |
|
1 |
Refuse Container |
$25.00 Each |
$25.00 |
|
1 |
Broom/Dust Pan |
$12.00 |
$12.00 |
|
1 |
Mop - Mop Bucket |
$90.00 |
$90.00 |
|
1 |
Ice Machine QM 30 |
$1,800.00 $1,109.00 |
$1,109.00 |
|
1 |
Electric Cash Register |
$1,000.00 |
$1,000.00 |
|
2 |
Undercounter Waste Baskets |
$5.00 Each |
$10.00 |
|
20 |
Glass Plates with Platinum Rim |
$70.00 |
$70.00 |
|
Old Pay Phone |
$110.00 |
$110.00 |
|
|
1 |
Desk |
$300.00 |
$300.00 |
|
1 |
Bubbies Sign |
$650.00 |
$650.00 |
|
1 |
Clock |
$150.00 |
$150.00 |
|
12 |
Canisters for Cookies and |
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|
Toppings |
$12.00 |
$144.00 |
|
|
1 |
Hot Water Heater |
$250.00 |
$250.00 |
|
5 |
Menu Holders (clear plastic) |
$10.00 Each |
$50.00 |
|
6 |
Espresso Cups |
$2.50 |
$15.00 |
|
6 |
Cappuccino Cups |
$2.50 |
$15.00 |
|
Miscellaneous |
$1,000.00 |
||
|
GRAND TOTAL |
$46,916.50 |
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(2) Opening inventory will include paper products, ice cream and sherbet, baked goods, toppings, soda, cones, cleaning products, boxes and t-shirts and other clothing items. The opening inventory cost is based on 30 to 60 days of operation. You may choose to purchase more opening inventory to save on freight charges from Hawaii. A 20 foot freezer container fully loaded with tubs of Bubbles ice cream costs approximately $38,000 for product and freight charges. You must pay Bubbies one-half ('A) of the amount due for products supplied by Bubbies not less than five (5) days prior to shipment for orders exceeding $10,000, and the balance within seven (7) days after receipt of the product or the invoice date, whichever is later. Orders under $10,000 must be paid within seven (7) days of Bubbies' invoice date.
(3) If you do not own adequate space, you will need to lease the land and building for the ice cream and dessert parlor. The typical location for a Bubbies franchise would be in a commercial area, including business and shopping areas, and shopping malls. The typical Bubbies franchise will have from 900 to 1200 square feet, depending on the amount of space allotted for customer seating. Assuming base monthly rent of $3.00 to $4.00 per square foot, the annual rent obligation would range from $32,400.00 to $57,600.00. Such factors as size, condition and location of the leased premises will affect the actual cost. The estimated initial investment is calculated based upon 1,000 square feet of space at a base monthly rent of $3.50 per square foot - i.e., one month's base rent equals $3,500 - plus a damage deposit equal to one month's base rent, or a total of $7,000. If the franchised business is located in a major shopping mall (such as Ala Moana Shopping Center or Kahala Mall, both located in Honolulu, Hawaii) the base monthly rent will be significantly higher -- approximately $12.00 to $13.00 per square foot.
(4) The range in cost estimates for leasehold improvements is based principally upon the existing condition of the leased space (e.g., walls, electricity, air conditioning and plumbing). The cost of the antique decorative items, signs, customer seating and other such furnishings are in addition to the basic leasehold improvements and equipment, and are estimated to cost from $7,500 to $9,500, depending principally upon the size of the leased space.
(5) In the event that a claim is asserted by others of a prior use of any trademarks, service marks or trade names, Bubbies may require you to defend such claims. Legal fees connected with such claims will depend on the cost of the attorney retained, the length and complexity of any resulting litigation, and other factors.
(6) You are required to procure insurance from an insurance company with a Bests Triple A rating (or equivalent).
10
Bubbies does not offer, either directly or indirectly, financing to you for any items.
THERE ARE NO OTHER DIRECT OR INDIRECT PAYMENTS IN CONJUNCTION WITH THE PURCHASE OF THE FRANCHISE.
8. RESTRICTIONS ON SOURCES OF PRODUCTS OR SERVICES
The goods, services, supplies, fixtures, equipment or inventory listed below must be purchased by you from Bubbies or other sources designated by Bubbies:
All ice cream, ice milk, sherbet and other frozen dessert products.
Bubbies will derive revenue from the sale of the required purchases listed in the paragraph above. It is estimated that required purchases from Bubbies are 2 percent to 3 percent of the cost to establish a Franchise and approximately 45 percent to 65 percent of total operating expenses thereafter. In the fiscal year ending September 30, 200+2, Bubbies revenues from the sale of these products to franchisees (including the retail location in Singapore) was approximately $216,325.18$ *?-4,fafe% j, or approximately 2*%' >*% of Bubbies' total revenues.
The following items are to be purchased in accordance with Bubbies' specifications or from sources approved by Bubbies, and Bubbies shall have the right, but not the obligation, to procure such items and sell them to you at your request:
(1) Baked goods;
(2) Syrups, toppings, flavorings and refreshments;
(3) Ice cream cones;
(4) Paper products used in serving desserts;
(5) Clothing items with the Bubbies service mark.
The following items are to be purchased or leased in accordance with Bubbies' specifications:
(1) Equipment used for food storage, refrigeration and preparation;
(2) Fixtures, furnishings and decorative items.
11
Bubbies has approved suppliers of these items not previously approved by Bubbies at the request of franchisees. If you would like to purchase these items from a supplier not previously approved by Bubbies, you may submit a written request for such approval to Bubbies, describing the supplier, product and proposed use. Bubbies will review the request based upon the supplier's business reputation and performance, and the product's quality, taste (food items), price, availability, consistency with products featured at other Bubbies' franchises and other criteria. A list of criteria for approval is not made available to suppliers or franchisees. Bubbies will negotiate purchase arrangements with suppliers (including price terms) for your benefit if requested to do so. There are currently no purchasing or distribution cooperatives.
Bubbies reserves the right to modify the standards of operation in any manner it deems reasonable, provided that, to the extent possible, such modifications are applied to all franchisees. The confidential operating manual also may be unilaterally modified or amended from time to time by Bubbies in its sole discretion, as is reasonably necessary to enhance the successful operation of the franchised business or protect any names or marks.
Bubbies is an approved supplier of baked goods (which it manufactures) and may also obtain from third parties, for sale to you, syrups, toppings, flavorings, refreshments, cones and paper products.
Supplies, fixtures, equipment or inventory which must be purchased or leased in accordance with Bubbies' specifications, or from suppliers approved by Bubbies, and which are purchased directly from the supplying source, will not result in any income to Bubbies. In the event any such goods are purchased from Bubbies, whether manufactured by Bubbies or by a third party, Bubbies may, in its discretion, derive income from such sales, not to exceed 15% of the gross price paid by Bubbies.
You are required to procure insurance from an insurance company with a Bests Triple A rating (or equivalent).
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 Item in
Agreement Offering Circular
12
Site selection and acquisition /lease
Pre-opening purchases/leases
Site development and other pre-opening requirements
Initial and ongoing training
Opening
Fees
Compliance with standards and policies/Operating Manual
Para. 5
of Franchise
Agreement
Paras. 7, 11 of Franchise Agreement
Paras. 5, 7, II of Franchise Agreement
Para. 10 and 14 of Franchise Agreement
Paras. 5, 8 of Franchise Agreement
Paras. 3, 5, 7, 11 12, 13 of Franchise Agreement
Paras. 1,7,8, 11, 15 of Franchise Agreement
Item 11
Items 7, 8
Items 6, 7, 11
Item 11
Item 11
Items 5, 6, 7
Item 11
Trademarks and
proprietary
information
Restrictions on
products/services
offered
Warranty and customer service requirements
Para. 4, 9, 10 of Franchise Agreement
Para. 11 of Franchise Agreement
None
Items 13, 14
Items 8, 16
None
13
m.
Territorial development and sales quotas
Ongoing product/ service purchases
Maintenance, appearance and remodeling requirements
None
Para. 11 of Franchise Agreement
Paras. 5, 7 of Franchise Agreement
None
Item 8
Item 11
n.
Insurance
o. Advertising
p. Indemnification
q. Owner's par-
ti cipation/manage-ment/staffing
r. Records/reports
s. Inspections/audits
Para. 16 of Franchise Agreement
Para. 12(b), 13 of the Franchise Agreement
Para. 4(e), 17 of the Franchise Agreement
Para. 18
of the Franchise
Agreement
Para. 21
of the Franchise
Agreement
Paras. 15,21 of the Franchise Agreement
Items 6, 8
Item 6
Item 13
Items 11, 15
Item 6
Item 6
Transfer
Paras. 25,27 of the Franchise Agreement
Item 17
14
u. Renewal Para. 22 Item 17
of the Franchise Agreement
v. Post-termination Para. 25 Item 17
obligations of the Franchise
Agreement
w. Non-competition Paras. 19,25 Item 17
x. Dispute Resolution Paras. 32,33 Item 17
There are no performance quotas or minimum royalty amounts that you must meet in order to retain your franchise.
Specific payment terms for products supplied by Bubbies are set forth in paragraph 11 (g) of the Franchise Agreement. You must pay for all products supplied by Franchisor promptly, in most cases within seven (7) days of Bubbies' invoice date. In the case of any order exceeding Ten Thousand Dollars ($10,000) based on Franchisee's cost, you must pay one-half (!4) the amount due to Bubbies not less than five (5) days prior to shipment, and the balance within seven (7) days after your receipt of the product or the invoice date, whichever is later.
10. FINANCING ARRANGEMENTS
There are no financing arrangements offered directly or indirectly by Bubbies, its agents or any affiliated company.
11. OBLIGATIONS OF BUBBIES: OTHER SUPERVISION. ASSISTANCE OR SERVICES
Except as listed below, Bubbies need not provide any assistance to you.
The obligations to be performed by Bubbies prior to the opening of the franchise business are:
(1) Bubbies shall approve or disapprove the proposed site for the ice cream and dessert parlor within 30 days after submission of such proposed site (Franchise Agreement - paragraph 5(c)).
(2) Bubbies shall approve or disapprove any proposed lease to be entered into by you within a reasonable period of time, not to exceed 30 days (Franchise Agreement -paragraph 5(d)).
15
(3) Bubbles shall deliver to you such plans, drawings and specifications for construction of the premises, if any, as are necessary to ensure compliance with the Franchise System (Franchise Agreement - paragraph 5(e)).
(4) Bubbies shall designate an exclusive territory for you, and Bubbies shall not locate, operate or grant a franchise for another ice cream and dessert parlor within the Franchise Area (Franchise Agreement - paragraph 6).
(5) Bubbies shall assist you, as requested, in your efforts to acquire such furnishings and fixtures as are required by Bubbies' specifications (Franchise Agreement -paragraph 7).
(6) Bubbies agrees to train you with regard to preparation and sale of Bubbies' products, and the operation of the ice cream and dessert parlor, as more fully described below (Franchise Agreement - paragraph 10).
TRAINING PROGRAM: DAY ONE
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Origins of Bubbies |
11:00 a.m. |
Handout |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
The Menu and The Origins of our Name |
12:00 p.m. |
Handout |
lHour |
Keith Robbins/ Samantha Kauai |
|
|
What makes the quality of our ice cream outstanding |
1:00 p.m. |
Handout |
lHour |
Keith Robbins/ Samantha Kauai |
|
|
Equipment in Store |
2:00 p.m. |
Equipment in Store |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Company Policies - Your First Day |
3:00 p.m. |
Operating Manual |
2 Hours |
Keith Robbins/ Samantha Kauai |
16
TRAINING PROGRAM: DAY TWO
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Review of Company Policies |
10:00 a.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Critical Details for Immediate Attention |
11:00 a.m. |
Operating Manual |
Yi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Health Department Requirements |
11:30 a.m. |
Operating Manual - Handouts |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Fire Department/ Wastewater Management Requirements |
12:30 p.m. |
Operating Manual - Handouts |
Yi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Utilities and Services |
2:00 p.m. |
Operating Manual - Handouts |
lHour |
Keith Robbins/ Samantha Kauai |
|
|
Monies: Bank Accounts, Petty Cash, Cash Register |
2:30 p.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Payroll Services, Accounting System, ASCAP |
3:30 p.m. |
Operating Manual |
lHour |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY THREE
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Quick Review of Day 2 |
9:00 a.m. |
'A Hour |
Keith Robbins/ Samantha Kauai |
||
|
Personal Selection |
9:30 a.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Personal Job Description |
10:30 a.m. |
Operating Manual |
1 Yi Hours |
Keith Robbins/ Samantha Kauai |
|
|
Store Manager - Job Description |
1:00 p.m. |
Operating Manual |
lHour |
Keith Robbins/ Samantha Kauai |
|
|
Shift Leader - Job Description |
2:00 p.m. |
Operating Manual |
lHour |
Keith Robbins/ Samantha Kauai |
17
|
Opening Duties |
2:30 p.m. |
Operating Manual |
45 Minutes |
Keith Robbins/ Samantha Kauai |
|
|
Duties During Operating Hours |
3:15 p.m. |
Operating Manual |
45 Minutes |
Keith Robbins/ Samantha Kauai |
|
|
Closing Duties |
4:00 p.m. |
Operating Manual |
45 Minutes |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY FOUR
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Review of Duties for Store |
9:30 a.m. |
'/a Hour |
Keith Robbins/ Samantha Kauai |
||
|
Open Store |
10:00 a.m. |
2 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Review of Menu |
12:30 p.m. |
Store |
Vi Hour |
Keith Robbins/ Samantha Kauai |
|
|
By the Scoop - Scooping Ice Cream |
1:00 p.m. |
Store |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Sundae's |
2:00 p.m. |
Store |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Working with Customers -Scoops and Sundae's |
3:00 p.m. |
Store |
2 Hours |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY FIVE
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Opening Store |
9:30 a.m. |
2 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Fountain Creations |
12:00 p.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Cakes and Pies |
1:00 p.m. |
Operating Manual |
lHour |
Keith Robbins/ Samantha Kauai |
18
|
Working Store |
2:00 p.m. |
Operating Manual |
3 Hours |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY SIX
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Review Cakes and Pies |
9:00 a.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Open Store |
10:00 a.m. |
1 Vi Hours |
Keith Robbins/ Samantha Kauai |
||
|
Coffee and Beverages |
12:00 p.m. |
Operating Manual |
45 Minutes |
Keith Robbins/ Samantha Kauai |
|
|
Work with Customers |
1:00 p.m. |
Operating Manual |
3 Hours |
Keith Robbins/ Samantha Kauai |
|
|
Review of Scoops -Fountain Creations |
4:00 p.m. |
Operating Manual - Handouts |
1 Hour |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY SEVEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Test on Cakes and Pies |
9:00 a.m. |
Written Test |
Vi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Test on Weights of Ice Cream |
9:30 a.m. |
Written Test |
Y2 Hour |
Keith Robbins/ Samantha Kauai |
|
|
Open Store |
10:00 a.m. |
1 Vi Hour |
Keith Robbins/ Samantha Kauai |
||
|
Work Store |
12:00 p.m. |
4 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Closing Duties |
4:00 p.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
19
TRAINING PROGRAM: DAY EIGHT
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Review Closing Procedures |
9:00 a.m. |
Operating Manual |
lHour |
Keith Robbins/ Samantha Kauai |
|
|
Open Store Duties |
10:00 a.m. |
1 Yi Hours |
Keith Robbins/ Samantha Kauai |
||
|
Open Store/Work Store |
12:00 p.m. |
3 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Food Specifications |
3:00 p.m. |
Operating Manual |
1 Yi Hours |
Keith Robbins/ Samantha Kauai |
|
|
Review Menu Items |
4:30 p.m. |
Operating Manual |
Yi Hour |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY NINE
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Packing Ice Cream |
4:00 p.m. |
Operating Manual |
Yi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Store Appearance |
4:30 p.m. |
Operating Manual |
Yj Hour |
Keith Robbins/ Samantha Kauai |
|
|
Guest Relations |
5:00 p.m. |
Operating Manual |
Yi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Safety Programs |
5:30 p.m. |
Operating Manual |
Yi Hour |
Keith Robbins/ Samantha Kauai |
|
|
Work Store on Night Shift |
6:00 p.m. |
6 Hours |
Keith Robbins/ Samantha Kauai |
20
TRAINING PROGRAM: DAY TEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Work Store Night Shift |
4:00 p.m. |
8 Hours |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY ELEVEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Financial Controls |
4:00 p.m. |
Operating Manual - Handouts |
2 Hours |
Keith Robbins/ Samantha Kauai |
|
|
Work Store at Night |
6:30 p.m. |
6 Hours |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY TWELVE
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Questions and Answers |
12:00 p.m. |
2 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Financial Controls -Inventory |
2:00 p.m. |
Operating Manual |
2 Hours |
Keith Robbins/ Samantha Kauai |
|
|
Work Store |
8 p.m. |
4 Hours |
Keith Robbins/ Samantha Kauai |
TRAINING PROGRAM: DAY THIRTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Work Store |
4:00 p.m. |
7 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Closing Duties |
11 p.m. |
Operating Manual |
1 Hour |
Keith Robbins/ Samantha Kauai |
21
TRAINING PROGRAM: DAY FOURTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Coffee Related Test |
11:00 a.m. |
Handout |
45 Minutes |
Keith Robbins |
|
|
Cakes and Pies Test |
11:45 a.m. |
Handout |
45 Minutes |
Keith Robbins |
|
|
Scoops and Sundaes Fountain Test |
1:00 p.m. |
Handout |
45 Minutes |
Keith Robbins |
|
|
Equipment Maintenance/Equipment Emergencies |
2:00 p.m. |
Operating Manual - Handout |
30 Minutes |
Keith Robbins |
|
|
Menu Items Suggestions -Happy Hour - Special Orders |
2:30 p.m. |
Operating Manual |
30 Minutes |
Keith Robbins |
|
|
Ice Cream Terms -Ingredients |
3:00 p.m. |
Operating Manual - Handout |
30 Minutes |
Keith Robbins |
|
|
Store Security -Confidentiality of Operations |
3:30 p.m. |
Operating Manual - Handout |
30 Minutes |
Keith Robbins |
|
|
Sexual Harassment - Other Liabilities |
4:00 p.m. |
Operating Manual - Handout |
45 Minutes |
Keith Robbins |
TRAINING PROGRAM: DAY FIFTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Financial Controls |
9:00 a.m. |
Operating Manual - Handout |
1 !/2 Hours |
Keith Robbins |
|
|
Opening Store |
10:30 a.m. |
1 Y2 Hours |
Keith Robbins/ Samantha Kauai |
||
|
Work Store |
12:00 p.m. |
6 Hours |
Samantha Kauai/Staff |
22
TRAINING PROGRAM: DAY SIXTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Questions and Answers |
10:00 a.m. |
2 Hours |
Keith Robbins |
||
|
Work Store |
6:00 p.m. |
6 Hours |
Samantha Kauai/Staff |
TRAINING PROGRAM: DAY SEVENTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF CLASSROOM TRAINING |
HOURS OF ON THE JOB TRAINING |
INSTRUCTOR |
|
Financial Controls -Test/Review |
12:00 p.m. |
Handout |
lHour |
Keith Robbins |
|
|
Customers/Staffing Review |
1:00 p.m. |
Handout |
lHour |
Keith Robbins |
|
|
Questions and Answers Am I Ready? |
2:00 p.m. |
2 Hours |
Keith Robbins |
||
|
Work Store |
8:00 p.m. |
4 Hours |
Samantha Kauai/Staff |
TRAINING PROGRAM: DAY EIGHTEEN
|
SUBJECT |
TIME BEGUN |
INSTRUCTION MATERIAL |
HOURS OF < |