UFOC

Sample UFOC

INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED BY FEDERAL TRADE COMMISSION

JUICE HEAVEN FRANCHISE CORPORATION

TO PROTECT YOU, WE'VE REQUIRED YOUR FRANCHISOR TO GIVE YOU THIS INFORMATION. WE HAVEN'T CHECKED IT. AND DON'T KNOW IF IT'S 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 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: A                             . 2006.

FEDERAL TRADE COMMISSION Washington, D.C.

CALIFORNIA

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FRANCHISE OFFERING CIRCULAR

Juice Heaven Franchise Corporation

a California Corporation

17834 Burbank Blvd., Suite 229

Encino, California 91316

(818)668-8488

www.juiceheaven.net

You will operate a "Juice Heaven" store featuring fruit and vegetable juices, smoothies, snacks and other food items and products, which may include juicing equipment, books, cups, hats, shirts and novelty items. The initial franchise fee is $20,000. The estimated initial investment required ranges from $88,800 to $194,100.

Risk Factors:

SUBJECT TO APPLICABLE LAW TO THE CONTRARY, THE FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO SUE JUICE HEAVEN ONLY IN CALIFORNIA. OUT OF STATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE JUICE HEAVEN IN CALIFORNIA THAN IN YOUR HOME STATE.

THE FRANCHISE AGREEMENT STATES THAT CALIFORNIA LAW GOVERNS MOST OF THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.

THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

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

Registration of this franchise with the 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 agency listed in Exhibit "G".

Effective Date: A                             - 2006.

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Table of Contents

Page

1.         THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES.............................................................1

2.         BUSINESS EXPERIENCE..................................................................................................................................................................2

3.         LITIGATION..............................................................................................................................................................................................2

4.         BANKRUPTCY..............................................................................................................................................................................................2

5.         INITIAL FRANCHISE FEE...............................................................................................................................................................3

6.         OTHER FEES.............................................................................................................................................................................................3

7.         INITIAL INVESTMENT.........................................................................................................................................................................6

8.         RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES...................................................9

9.         FRANCHISEE'S OBLIGATIONS.............................................................................................................................................13

10.       FINANCING......................................................................................................................................................................................................15

11.       FRANCHISOR'S OBLIGATIONS............................................................................................................................................15

12.       TERRITORY....................................................................................................................................................................................................20

13.       TRADEMARKS...........................................................................................................................................................................................21

14.       PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION................................................22

15.       OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF

THE FRANCHISE BUSINESS.....................................................................................................................................................23

16.       RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL.............................................................23

17.       RENEWAL, TERMINATION, TRANSFER AND DISPUTE

RESOLUTION...............................................................................................................................................................................................24

18.       PUBLIC FIGURES.....................................................................................................................................................................................29

19.       EARNINGS CLAIMS.............................................................................................................................................................................29

20.       LIST OF OUTLETS.................................................................................................................................................................................30

21.       FINANCIAL STATEMENTS.........................................................................................................................................................31

22.       CONTRACTS..................................................................................................................................................................................................31

23.       RECEIPT............................................................................................................................................................................................................31

EXHIBITS

A.      FRANCHISE AGREEMENT

A-l.   SB A ADDENDUM TO FRANCHISE AGREEMENT

B.      GUARANTY

C.      GENERAL RELEASE

D.      FINANCIAL STATEMENTS

E.       LIST OF FRANCHISEES AND CERTAIN FORMER FRANCHISEES

F.       TABLE OF CONTENTS OF OPERATING MANUAL

G.      LIST OF STATE REGULATORY AGENCIES AND ADMINISTRATORS H.      ACKNOWLEDGMENT OF RECEIPT

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1.

THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES

To simplify the language in this offering circular the words "Juice Heaven," "we," "our" and "us" refer to Juice Heaven Franchise Corporation, the franchisor. "You" means the person or entity who buys the franchise, and also includes your officers, directors, shareholders and members if you are a limited liability company or a corporation, and your partners, general and limited, if you are a partnership.

As required by law, this offering circular has been prepared in "plain English." To fully understand all of your and our rights and obligations to each other, you must still carefully review the actual agreements that you will sign. These will control if there is any dispute between us.

The Business

Juice Heaven Stores offer for general consumption fruit, juices, smoothies, snacks and other food items and products, which may include juicing equipment, books, cups, hats, shirts and novelty items. You will sign a Franchise Agreement (see Exhibit "A"), to operate a single Juice Heaven Store (the "Juice Heaven Store") at a location which you choose and which we approve. If you, or an affiliated person or entity, has a currently effective franchise agreement with Juice Heaven, you and each affiliated person or entity must sign a General Release (see Exhibit "C"), as a condition to entering into the new Franchise Agreement.

Juice Heaven believes that the market for fruit, juices, smoothies, snacks and other food items is growing and highly competitive. You must compete with other juice bars, carts and stores, fast food and non-fast food restaurants, cafes, nationwide chains and other food vendors. Most Juice Heaven Stores will be operated year round, although sales may fluctuate during the year. You will offer Authorized Juice Heaven products for sale to the general public. A Juice Heaven Store may be located in in-line stores, free standing buildings, shopping malls and other typical fast food locations. As with all retail food service businesses, your choice of location is critical to your success, no matter how good the concept.

The Franchisor and its Affiliate

Juice Heaven Franchise Corporation was incorporated in California on May 24, 2001. We do business under the "Juice Heaven" name and our corporate name and do not do business under any other name. We have offered franchises for businesses similar to the business we are offering pursuant to this Offering Circular since May 2004. We have not offered franchises for any other line of business. We do not operate any Juice Heaven Stores. Our affiliate, Mizrahi Brothers, Inc. ("Mizrahi Brothers"), which was incorporated in California on January 10, 1996, operated Juice Heaven Stores similar to the type offered in this offering circular from May 3, 1999 until September 2003. It has not offered franchises in this or any other line of business.

The principal place of business for Juice Heaven and Mizrahi Brothers is 17834 Burbank Blvd., Suite 229, Encino, California 91316.

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Special Industry Regulation

California and other states and local jurisdictions have enacted laws, rules, regulations and ordinances which may apply to the operation of your Juice Heaven Store, including those which (a) establish general standards, specifications and requirements for the construction, design and maintenance of the Juice Heaven Store; (b) regulate matters affecting the health, safety and welfare of your customers, such as general health and sanitation requirements for restaurants; the use of certain food additives and ingredients; employee practices concerning the storage, handling, cooking and preparation of food; special health, food service and frozen dessert machine licensing requirements; restrictions on smoking and exposure to tobacco smoke or other carcinogens or reproductive toxicants and saccharin; availability of and requirements for public accommodations, including restrooms; (c) set standards pertaining to employee health and safety; (d) set standards and requirements for fire safety and general emergency preparedness, (e) govern the use of vending machines, (f) regulate the proper use, storage and disposal of waste, insecticides, and other hazardous materials, (g) establish general requirements or restrictions on advertising containing false or misleading claims, or health and nutrient claims on menus or otherwise, such as "low calorie" or "fat free," and (h) establish requirements concerning withholdings and employee reporting of taxes on tips.

Agent for Service of Process

Our agent for service of process in this state is Motty Mizrahi, 17834 Burbank Blvd., Suite 229, CA 91316.

2. BUSINESS EXPERIENCE

Motty Mizrahi - President. Chief Financial Officer. Secretary and Director

Mr. Mizrahi has served as President, Chief Financial Officer, Secretary and a Director of Juice Heaven since May 24, 2001. Mr. Mizrahi has been Vice President and director of Mizrahi Brothers since January 10, 1996.

3. LITIGATION

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

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.

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5. INITIAL FRANCHISE FEE

Initial Franchise Fee. You must pay Juice Heaven an initial franchise fee of $20,000, payable when you sign the Franchise Agreement. The initial franchise fee is fully earned by us when paid and is not refundable under any circumstances. The initial franchise fee is uniform to all franchises currently being offered in this state.

6. OTHER FEES

Name of Fee

Amount

Due Date

Remarks

Continuing Royalty1

The greater of (i) $500; or (ii) 5% of total Gross Sales

Payable monthly on the 10th day of the next month. You must provide us with pre-authorized checks to be used by us if you fail to pay your Royalty on a timely basis. If you fail to submit your sales report on a timely basis, we will estimate the amount due to us and transfer the funds from your account.

Gross Sales includes all revenue from your Juice Heaven Store. Gross Sales does not include sales tax or use tax.

Advertising Fee1

2% of gross sales

Same as Royalty fee

You must contribute an amount we decide, up to 2% of Gross Sales. The Advertising Fee is in addition to any co-op advertising expenditures you must make.

Cooperative Advertising

As determined by each Co-op Advertising Region.

Established by Juice Heaven

If Juice Heaven forms a regional advertising co-op, you must contribute to the co-op. Any amount you contribute to a Co-op Advertising Region will be credited against the 2% of Gross Sales which you must spend on local advertising under Section 9.2 of your Franchise Agreement, but is in addition to any Advertising Fee payments.

Initial Training'

$2,000

At least 5 business days before training begins

The Initial Training fee covers the initial training program for up to 4 persons designated by you, as the general manager and assistant manager(s) of your Juice Heaven Store. The initial training includes qualification of your initial trainees as Certified Trainers, authorized to train additional general managers, assistant managers and staff for your Juice Heaven Store. You will be charged for training additional managers or

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Name of Fee

Amount

Due Date

Remarks

replacement managers for any person who fails to complete our initial program to our satisfaction, at our then current standard training fee and certification fee plus our direct and indirect costs and expenses for wages, lodging, subsistence and travel of our personnel.

Additional Training Courses'

Our then-current fee (currently $200 per day)

On demand

We may charge a fee for optional and/or mandatory training courses which we may periodically offer, in our sole discretion.

Additional Assistance at your Juice Heaven Store'

Our then current fee (currently $200 per day), plus our out-of-pocket expenses, including

transportation, food, lodging and similar costs and expenses to send a representative to your Store. Our out-of-pocket expenses (excluding transportation) are typically between $ 150 and $200 per day.

Upon demand

We may, in our discretion, send a representative to your Store for advice, consultation and training. Ifwesenda representative to your Store at your request, we may charge our then-current fee (currently $200 per day), and , at our request, you must reimburse us for our out-of-pocket expenses.

Certification Fee1

$500 for each trainee

At least 5 business days before the certification program begins

Payable for certification of each general manager or assistant manager trained by your Certified Trainer in lieu of attending Juice Heaven's initial training program.

Insurance3

Amount of unpaid premiums

Upon demand

Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you.

Renewal1

One-half of the then current initial fee

Payable when your sign your renewal Franchise Agreement

Payable only if you renew your

franchise.

Transfer'

A $700 Review Fee plus a $2,000 Transfer Fee

You must pay the Review fee with your request for a transfer. You must pay the Transfer Fee when we approve the proposed transfer.

The Review Fee is nonrefundable. The Transfer Fee is refundable only if the transfer does not close.

Audit1

Cost of audit plus 15% interest or the highest rate allowed by law on underpayment2 We estimate these costs are currently between

Upon demand

Payable only if audit shows an understatement of at least 5% of gross sales for any month.

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Name of Fee

Amount

Due Date

Remarks

$1,500 and $2,000.

Fines if You Default

Up to $250 per violation

Upon demand

We may impose a fine, not to exceed $250 per violation, if you violate the Franchise Agreement or the Manuals.

Default Reimbursement

Our costs and expenses arising from your default. If limited to bank "NSF" charges and internal administrative costs, we estimate these costs are typically between $100 and $200.

Within 5 days after you cure your default

Payable only if you default and payable in addition to any fine.

Interest and Late Charge for Late Payments'

1-1/2% per month or the highest rate allowed by law for each month the payment remains delinquent.

Continues to accrue until paid

Payable only if any sums due Juice Heaven are not paid promptly when due

Charges for unpaid checks, drafts or electronic payments

The greater of $30.00 or our costs and expenses arising from the returned payment

Upon demand

Payable only if any check, draft, electronic or other payment is unpaid because of insufficient

funds or otherwise

Approval of Suppliers

You or your proposed Supplier must pay our costs to review a new supplier, including inspection of the supplier's facilities, equipment, product testing, etc. Our costs are difficult to predict and depend on the supplier and the item(s) proposed to be supplied. We expect that, exclusive of transportation expenses and fees by third party consultants, our costs to approve a new supplier would typically be between $1,000 and $2,000.

Upon demand

You or your proposed Supplier pay only if you request us to approve a new supplier.

Notes:

Fee is imposed by and payable to Juice Heaven. Except as otherwise noted, all fees are non-refundable.

Interest begins from the date of the underpayment.

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You must maintain insurance of the types and minimum amounts (naming us as an additional insured) that we specify in your Franchise Agreement (See Section 18.1), the Manuals, or in supplementary notices. You may obtain additional insurance as you may desire. Insurance policies may not be subject to amendment or cancellation without at least 30 days prior written notice to us. You must provide certificates of insurance evidencing coverage on an ongoing basis.

7. INITIAL INVESTMENT

NATURE OF INVESTMENT

AMOUNT

METHOD OF PAYMENT

WHEN DUE

TO WHOM PAID

LOW

HIGH

Initial Franchise Fee

$ 20,000

$ 20,000

Lump Sum

When you sign the

Franchise

Agreement

Juice Heaven

Pre-paid Store Rent (1)

$ 1,800

S 3,600

Lump Sum

Before Opening

Landlord

Leasehold Improvements (2)

SI 0,000

$70,000

As Arranged

As Incurred

Contractor

Equipment

$25,500

$34,000

As Arranged

As Arranged

Manufacturer, Distributor, Vendor

Fixtures and Signage

$10,000

$15,000

As Arranged

As Arranged

Various Vendors

Other Fixed Assets

$ 1,500

$ 3,000

As Arranged

As Arranged

Various Vendors

Initial Inventory (3)

S 3,000

$ 5,000

As Arranged

As Incurred

Various Vendors

Permits, Licenses, Security Deposits and other prepaid expenses (1), (4)

$ 4,000

$ 8,000

As Arranged

As Incurred

Government Agencies, Landlord, Utility Companies and Various Services

Insurance (Initial Deposit) (5)

$500

$1,500

As Arranged

As Incurred (Annual)

Insurance Company

Initial Training Fees and Expenses(6)

$ 2,500

$ 4,000

Lump Sum

Before Opening

Juice Heaven; Hotels, Restaurants, and Air Lines

Additional Funds (7)

S 10,000

$ 30,000

As Incurred

As Incurred

Suppliers, Utilities, and Employees' Salaries

TOTAL

S 88,800

$ 194,100

NOTES:

(1)     A typical Juice Heaven Store will generally be located in leased premises ranging from 600 - 1200 square feet in size, with rent ranging from $1,800 to $3,600 per month. Your may have to pre-pay one month's rent, and to pay a lease security deposit equal to one month's rent, though some lessors may require more. These amounts will vary according to your area, type of location (enclosed mall, strip center, or free standing building) and various other factors. Additionally, in certain lease transactions, you, or if you are a corporate franchisee, you and your controlling stockholders, may have to personally guarantee the lease.

(2)     In order to convert a leased location into a Juice Heaven Store, you must renovate the approved location in accordance with our specifications. We will provide standard decor and

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layout plans to be modified and conformed to the approved Location by your architect or contractor at your expense. The construction and renovation costs are paid for directly by you, to an independent construction company hired by you, for the performance of the construction work. It is possible that these costs may be greater if there are unusual renovation requirements for your location. If you decide to finance any part of your equipment or construction costs, the financing, interest and repayment terms will be solely dependent upon your financial net worth. Financing can range from interest only loans to fixed repayment loans, repayable within one to ten years, at interest rates that range from the then current prime rate to the highest rate allowable by applicable state law. If you are signing your Franchise Agreement to renew your franchise, at our request, you must renovate or modernize your Juice Heaven Store to comply with our then-current standards for a new Juice Heaven Store. At the present time, we estimate that your remodeling costs will not exceed $10,000. It is possible that these costs may be greater if there are unusual renovation requirements for your location. At any time during the term of your agreement, as determined by us in our sole discretion, you must upgrade and remodel your Juice Heaven Store to comply with standards then in effect for new Juice Heaven Stores in order to maintain a positive and current public image.

(3)     Your initial inventory may be purchased from us, designated product suppliers or any supplier approved in accordance with the Franchise Agreement. Initial inventory consists of various food products, beverages, paper products, cleaning supplies, small wares and other supplies utilized in the operation of the Juice Heaven Store as well as other merchandise or products sold at the Juice Heaven Store. The initial inventory expenditure will vary according to anticipated sales volume and current market prices for supplies.

(4)     Security deposits or prepaid expenses are generally encountered for real property and personal property leases, insurance requirements and utilities arrangements. Generally, the amount of each security deposit or prepaid expense is determined by the leases you enter into and the suppliers of utility, telephone and insurance services, and the security deposits and prepaid expenses are held by the respective suppliers and sometimes refunded under the terms of the agreements or as regulated by law. Real property security deposits are typically equal to one month's rent. The lease security deposit may be non-refundable and is paid directly to the landlord of the location. Typically, you may obtain a bond in lieu of delivering the amount of the required prepaid expenses such as state sales taxes and utilities.

(5)     Under the Franchise Agreement, you must obtain workers' compensation insurance as required by applicable law, business interruption insurance including Continuing Royalty coverage for 12 months after casualty in an amount equal to at least $150,000, comprehensive general public liability insurance, including products liability, with a minimum coverage of $2,000,000 - $4,000,000 combined single limit, property damage insurance in the amount of $100,000, and windstorm, fire, and extended coverage insurance, covering the construction of improvements and the completed Juice Heaven Store for its full replacement value. All policies must name Juice Heaven as an additional insured.

You will pay insurance premiums either to your insurance broker or directly to the insurance company issuing the specific policy. These premiums are generally refundable to the extent that coverage has not yet expired. Juice Heaven cannot estimate these insurance costs because insurance premiums are dependent upon, among other items, the insurance company

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issuing the policy, the experience of the insurance company in the type of coverage requested, and the specific location of the proposed Juice Heaven Store.

(6)     You must pay Juice Heaven an initial training fee of $2,000. You must make arrangements for and pay the expenses of persons attending the training program including transportation, lodging, meals and wages. The amount expended will depend, in part, on the distance you must travel and the type of accommodation you choose. The estimate provided contemplates the $2,000 training fee plus costs ranging between $500 to $2,000 for 4 people attending training for 1 week.

(7)     These amounts are the minimum recommended levels to cover operating expenses, including employee's salaries for 3 months. However, we cannot guarantee that this amount will be sufficient. You may need additional working capital if sales are low or fixed costs are high. The disclosure laws require us to include this estimate of all costs and expenses to operate your franchise during the "initial phase" of your business, which is defined as 3 months or a longer period if "reasonable for the industry". We are not aware of any established longer "reasonable period" for our industry, so our disclosures cover a 3 month period.

GENERAL

We have prepared these estimates based on our experience. Except as expressly indicated otherwise in the charts above, these estimates describe your initial cash investment up to the opening of your Juice Heaven Store. They do not provide for your cash needs to cover any financing incurred by you or your other expenses. You should not plan to draw income from the operation during the start-up and development stage of your Juice Heaven Store, the actual duration of which will vary materially from store to store and cannot be predicted by us for your Juice Heaven Store (and which may extend for longer than the 3 month "initial phase" described in Note 7 of the above chart). You must have additional sums available, whether in cash or through a bank line of credit, or have other assets which you may liquidate or against which you may borrow, to cover other expenses and any operating losses you may sustain, whether during your start-up and development stage, or beyond. The amount of necessary reserves will vary greatly from franchisee to franchisee and will depend upon many factors, including the rate of growth and success of your Juice Heaven Store, which in turn will depend upon factors such as the demographics and economic conditions in the area in which your Juice Heaven Store is located, the presence of other Juice Heaven Stores or other public awareness of our juice bars and Marks within the general vicinity of your Juice Heaven Store, your ability to operate efficiently and in conformance with our recommended methods of doing business, and competition. Because the exact amount of reserves will vary from operation to operation and cannot be meaningfully estimated by us, we urge you to retain the services of an experienced accountant or financial advisor to develop a business plan and financial projections for your particular operation.

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8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

A. Goods. Services. Supplies. Fixtures. Equipment. Inventory. Real Estate to Establish or Operate the Franchised Business:

Real Estate. If you do not already have a location, you must purchase or lease a site for your Juice Heaven Store (the "Location") promptly after you sign the Franchise Agreement. You must locate a site for your Juice Heaven Store, subject to our written acceptance. In determining whether a specific Location is acceptable, we consider demographics, vehicle and pedestrian traffic, availability of parking, etc. If we do not approve your site within 30 days, your site is deemed disapproved. If your Juice Heaven Store has not yet been constructed, or does not meet our current standards for new Juice Heaven Store you must cause the Juice Heaven Store to be constructed, equipped and improved in compliance with our specifications set forth in the Manuals. You may not relocate your Juice Heaven Store without our prior written consent.

You must submit your proposed lease to us for approval at least 15 days before you sign it, and provide a fully signed copy promptly after it is signed. We will use commercially reasonable efforts to complete our review within the 15 day period, and will notify you if we need additional time to complete our review. Until the lease is reviewed and approved by us, you may not sign it. The lease must be for a term at least as long as the term of your Franchise Agreement, unless we agree, in writing, to a shorter term. Your lease must not (a) obligate us in any manner, (b) grant any rights to your landlord against us, or (c) contain any provision inconsistent with your Franchise Agreement. In addition, your lease must contain satisfactory language providing for the following: (a) that we will have an option, without cost or expense to us, to assume your lease upon termination or expiration of your Franchise Agreement for any reason; (b) that the landlord must notify us, in writing, of any default or non-renewal of the lease at least 15 days before it expires or is terminated, (c) that we have the right, but not the obligation, to cure any default by you and succeed your rights under the lease, (d) that the lease may not be assigned, subleased or modified without our prior written consent, and (e) that upon expiration or termination of the lease for any reason, you must remove all Juice Heaven trademarks and modify the decor of the Location so that it no longer resembles a Juice Heaven Store.

Goods. Supplies. Inventory and Services.

You must serve all and only the products we authorize. You must purchase and maintain in inventory Authorized Juice Heaven Products as needed to meet reasonably anticipated consumer demand. You must purchase all products which bear any of our trademarks ("Juice Heaven Brand Products"), solely and exclusively from Juice Heaven or from a producer, manufacturer or supplier ("Supplier") we designate. You must prepare Juice Heaven Brand Product menu items in strict compliance with our recipes and formulas using ingredients purchased from Juice Heaven or our designated or approved suppliers. You may sell Juice Heaven Brand Products only on a retail basis at a Juice Heaven Store.

We may specify certain proprietary ingredients, baked goods and other food, products, beverages, condiments and other products, which are grown, produced or manufactured in

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accordance with our proprietary recipes, specifications and/or formulas ("Proprietary Products"). You may buy Proprietary Products only from us (if we sell them) or our designated manufacturer or supplier. We will not be obligated to reveal the recipes, specifications and/or formulas of Proprietary Products to you or any third party. You must purchase, use, and maintain in stock Proprietary Products in quantities needed to meet reasonably anticipated consumer demand.

We may designate certain non-proprietary ingredients, baked goods and other food products, condiments, beverages, raw materials, paper goods, fixtures, furnishings, equipment, and other items which you may or must use or sell at your Juice Heaven Store ("Non-Proprietary Products"). You may use, offer or sell only those Non-Proprietary Products that we expressly authorize. You may purchase them from (i) Juice Heaven; (ii) Suppliers we designate, or (iii) Suppliers you select that we approve in advance in writing. Each Supplier we designate or approve must comply with our usual and customary requirements regarding insurance, indemnification, and non-disclosure, and satisfy us that it will supply products meeting our specifications (which may include particular brand names and models, and meet other criteria), reliably deliver consistent quality products and services, and provide products at a competitive price.

Before you open your Juice Heaven Store to the public, we will provide you with our operations Manuals that will contain the specifications, standards and restrictions on your purchase of products and services, which we may periodically update by written notice to you. Upon request, we will furnish to you an approved list of suppliers which we may update periodically. You must prepare Juice Heaven Brand Product menu items in strict compliance with our instructions, recipes and formulas specified in the Manuals using ingredients purchased from Juice Heaven or our designated or approved suppliers. You may use any operational service providers such as exterminators, refrigeration service companies, refuse removal companies, etc. from any qualified entity that you may select.

Equipment & Fixtures. You must purchase and install, at your expense, all fixtures, furnishings, equipment (including point-of-sale cash collection system), decor, and signs as we direct. You may not install on or about your Juice Heaven Store any fixtures, furnishings, equipment, decor, signs, or other items not previously approved as meeting our standards and specifications without our prior written consent. You may purchase these items from a Juice Heaven-approved seller. You may purchase these items from any approved seller. You must use specific brands of equipment, and in some situations certain comparable brands of equipment may be acceptable, subject to our prior written approval.

Computer Equipment. As more fully described in Item 11, you must use a point of sale cash collection system, which may include a computer/file server, touch screen, cash register, register tape, printers, magnetic stripe reader and cash drawer, of the type and quality approved by us (the "POS System"), together with any specified computer hardware and/or software. You must electronically connect the POS System to your telephone (or other communications medium which we specify) allowing us to poll your POS system, at any time, with or without notice 24 hours a day, 7 days a week, via modem or other communications equipment and collect sales, sales mix, usage and operations information. If we designate any Juice Heaven proprietary software in the future, you must sign our then-current form of software license agreement.

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Advertising. You may not use any promotional materials and advertising until it has been submitted to and approved by us. If we have not notified you of disapproval within 10 business days after your submission for approval, the materials will be considered disapproved. You may not use our Marks on any computer medium or electronic medium, including the Internet, without our prior written consent, and then only in accordance with our policies and procedures.

Records. All of your bookkeeping and accounting records, financial statements, and all reports you submit to us must conform to our requirements.

Insurance. You must maintain suitable insurance coverage and minimum amounts specified in the Franchise Agreement, Manuals or by written notice. If you fail to obtain insurance, we may purchase it on your behalf at your expense. You may obtain additional insurance coverage as you feel necessary. You may purchase your insurance from any supplier.

B. Approval Process.

If you wish to procure authorized Non-Proprietary Products from a Supplier other than Juice Heaven or one we have previously approved or designated, you must deliver written notice seeking approval of the Supplier, which notice must (i) identify the name and address of the Supplier, (ii) contain the information we request or require to be provided in the Manuals (e.g. financial, operational and economic information regarding its business ), and (iii) identify the authorized item you seek to purchase from the Supplier. We will upon request furnish you with specifications for the Non-Proprietary Products if they are not in the Manuals. The proposed Supplier must at our request furnish at no cost product samples, specifications and other information, and allow us or our representatives to inspect the proposed Supplier's facilities and establish economic terms, delivery, service and other requirements consistent with our other distribution relationships for other Juice Heaven Stores.

We will use our good faith efforts to notify you of our decision within 90 days after we receive your request for approval and all requested back-up information.

Among the other factors we may consider in deciding whether to approve a proposed Supplier, we may consider the affect that the approval may have on our and our franchisees' ability to obtain the lowest distribution costs with the quality and uniformity of product offered system-wide by Juice Heaven franchisees. We may also require a Supplier to agree in writing: (i) to provide us free samples on request of any Non-Proprietary Product it intends to supply, (ii) to faithfully comply with our specifications, (iii) to sell any product bearing our trademarks only to our franchisees and only pursuant to a Trademark License Agreement in form we provide (which may require payment of a royalty), and (iv) to provide to us duplicate purchase invoices for our records and inspection.

You or your proposed Supplier must pay us in advance our reasonably anticipated costs to review the Supplier's application and all current and future reasonable costs and expenses, to inspect and audit the Suppliers' facilities, equipment, and food products, and all product testing costs paid by Franchisor to third parties.

We may negotiate purchase arrangements with distributors and manufacturers, including price terms for the benefit of franchisees. We do not provide or withhold material benefits to you

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based on your use of designated or approved suppliers, but we may terminate your Franchise Agreement if you purchase from unapproved sources in violation of your agreement,

We may establish a regional purchasing programs for the purchase of certain raw materials at reduced prices. If regional purchasing program is established for the region where your Juice Heaven Store is located, you must participate in the program.

C.         Modifications.

We may modify specifications of the product line items in Juice Heaven Stores at any time, on a regional or national basis, by amendments to the Manuals or by written notice to you. For example, we may determine that modifications of specifications are necessary based on an analysis of the cost structure and quality of each item, the contents, and yield of each category of product, a modification of the contents of the products due to inflationary pressures, supply and demand problems, or the development of new and better products or other material reason for these changes. You must add, modify or delete any product from your menu as specified at your expense. Modifications to the Manuals are effective immediately upon your receipt.

D.         Categories of goods and services that Juice Heaven is the only approved supplier.

There are presently no products or services for which we or our affiliates are the sole approved source.

E.         Precise basis by which Juice Heaven will or may derive revenue or other material consideration as a result of required purchases or leases.

Juice Heaven is an approved supplier of goods and will derive revenue or other material consideration as a result of required purchases or leases. We presently expect to receive a payment equal to 5% of all inventory purchased by you from our designated suppliers. We had no revenue from franchisee purchases during A2QQ5^

As to the POS System discussed in Item 11 of this offering circular, you must maintain membership in a designated third party network (such as MSN, Worldnet, etc.) for the purpose of implementing software, transmitting and receiving data, accessing the internet for ordering and maintaining the POS System. Juice Heaven will derive no direct or indirect revenue from your membership in these third party networks. You must upon our request apply for and maintain debit cards, credit cards or other non-cash systems existing or to be developed in the future to enable customers to purchase authorized products through these procedures. Juice Heaven does not intend to derive any revenues from the use of these systems.

F.         The estimated proportion of required purchases and leases to all purchases and leases by the franchisee of goods and services in establishing and operating the franchise business.

We estimate that substantially all of your expenditures for leases and purchases in establishing your Juice Heaven Store and on an ongoing basis will be for goods and services which are subject to sourcing restrictions (that is, for which suppliers must be approved by us, or which must meet our standards or specifications).

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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 Franchise Agreement

Item in Offering Circular

a. Site selection and acquisition/lease

Section 5

Item 11

b. Pre-opening purchases/leases

Section 5

Item 8

c. Site development and other pre-opening requirements

Section 5.4

Items 6, 7 and 11

d. Initial and ongoing training

Section 6

Item 11

e. Opening

Section 8.6

Item 11

f. Fees

Section 4

Items 5 and 6

g. Compliance with standards and policies/Operating Manual

Section 8

Item 11

h. Trademarks and proprietary information

Section 12

Items 13 and 14

I. Restrictions on products/ services offered

Sections 8.6, 8.10 and 8.11

Item 16

j. Warranty and customer service requirements

None

N/A

k. Territorial development and sales quotas

None

Item 12

1. Ongoing product/service purchases

Section 10

Item 8

m. Maintenance, appearance and remodeling requirements

Section 5.5

Item 11

n. Insurance

Section 18

Items 6 and 8

o. Advertising

Section 9

Items 6 and 11

p. Indemnification

Section 19.2

Item 6

q. Owner's participation/ management/staffing

Section 6.1.1

Items 11 and 15

r. Records/reports

Section 11.1

Item 6

s. Inspections/audits

Sections 11.2 and 11.3

Items 6 and 11

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Obligation

Section in Franchise Agreement

Item in Offering Circular

t. Transfer

Section 15

Item 17

u. Renewal

Section 3.2

Item 17

v. Post-termination obligations

Section 17

Item 17

w. Non-competition covenants

Sections 13 and 14

Item 17

x. Dispute resolution

Sections 21.6 and 21.13

Item 17

10. FINANCING

We do not offer any direct or indirect financing, and we do not guarantee your debts or obligations. Juice Heaven franchisees are eligible for expedited and streamlined SBA loan processing through the SBA's Franchise Registry Program, www.franchiseregistry.com. If you obtain financing through the SBA, you must sign the SBA Addendum to Franchise Agreement, attached as Exhibit A-l.

11. FRANCHISOR'S OBLIGATIONS

Except as listed below, Juice Heaven need not provide any assistance to you:

Pre-Opening Obligations. We have the following obligations to you before you open your Juice Heaven Store for business:

1.       If the Location of your Store has not been determined when you sign the Franchise Agreement, you must promptly (in any event, within 3 months) purchase or lease a site for your Store, which we will review and either accept or disapprove. (Franchise Agreement, Section 5.1) You must select the site of your Store, though we may, without obligation, assist you in locating a site. You may not construe any assistance we may provide, or our approval as a guarantee or other assurance that the site will necessarily be successful. The factors we consider in approving Store locations include general location and neighborhood, traffic patterns, parking, size, physical characteristics of existing buildings and lease terms. (Franchise Agreement, Section 5.2) After you have located a site for your Juice Heaven Store, you will submit information concerning the site to us for our acceptance. You may not sign a lease for the site until you have received our written acceptance of the location. (Franchise Agreement, Section 5.1) You must submit your proposed lease to us for approval at least 15 days before you sign it, and provide a fully signed copy promptly after it is signed. (Franchise Agreement, Section 5.3)

2.       We will provide standard decor and layout plans to be modified and conformed to the approved Location by your architect or contractor at your expense. You must pay all costs of construction and remodeling. (Franchise Agreement, Section 7.1.2)

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3.       We provide an initial training program as described below. (Franchise Agreement, Section 6.1)

4.       We will loan to you one copy of our confidential Manuals to use during the term of the Franchise Agreement. The Manuals contain our standard operational procedures, policies, rules and regulations with which you must comply. (Franchise Agreement, Section 7.1.3) The Table of Contents of our Manuals are is attached as Exhibit "F".

Post-Opening Obligations. We have the following obligations to you during the operation of your business:

1.       If you reasonably request, we will furnish additional assistance and advice concerning your performance under the Franchise Agreement and the operation of your Juice Heaven Store. In our sole discretion, we may send a representative to your Juice Heaven Store to discuss the operation of your Juice Heaven Store with you. If we send a representative to your Juice Heaven Store at your request, you must, at our request, pay our standard training charge then in effect and reimburse us for all our out-of-pocket expenses, including transportation, food, lodging and similar costs and expenses. (Franchise Agreement, Section 6.5)

2.       We will periodically designate Juice Heaven Brand Products, Proprietary Products and Non-Proprietary Products which you may or must stock and promote. (Franchise Agreement, Sections 10.1-10.3) ■

Cooperative Advertising

As of the date of this offering circular, Juice Heaven has not established any local or regional advertising cooperatives ("Co-op"). If it does so in the future, you must participate in any advertising Co-op for the region in which your Juice Heaven Store is located. We will contribute a like percentage of sales to the applicable Co-op, if any, within which any company or affiliate-owned Juice Heaven Store is located. Juice Heaven may change, dissolve, or merge Co-ops in its sole discretion. You must contribute to the Co-op as determined by the members of the Co-op, not to exceed 2% of your Gross Sales as determined by vote of the Co-op members. (Franchise Agreement, Section 9.3) There is no advertising council at the present time.

Advertising Program

You must pay us an Advertising Fee that we determine, not to exceed 2% of your Gross Sales. We will administer the Advertising Program to promote and enhance the image, identify or patronage of Juice Heaven Stores owned by us or our affiliates and by franchisees. The sums you and other franchisees pay to us as an Advertising Fee will be deposited in our general operating account, segregated administratively on our books, but commingled with our general operating revenues. When we establish an Advertising Program we will allocate for each Juice Heaven Store operated by Juice Heaven or any affiliate the amount that would be required to be contributed to the Advertising Program if it were a franchised Juice Heaven Store. If we spend less than the total of all contributions to the Advertising Program during any fiscal year, we may accumulate those sums for use in later years. If we advance money to the Advertising Program

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beyond what we contribute on account of our company or affiliate-owned Juice Heaven Stores, we will be entitled to reimbursement, plus reasonable interest.

At your request, we will furnish to you within 120 days after the end of each of our fiscal years, an unaudited report certified as correct by a Juice Heaven officer showing the Advertising Program balance at the beginning of the year, the total amount contributed by franchisees and allocated by us on behalf of our company or affiliate-owned Juice Heaven Stores, and the amount actually expended for the year, and remaining balance or deficit in the Advertising Program at the end of the fiscal year end.

We must spend Advertising Program revenue for national, regional or local advertising, public relations and promotional campaigns, typically in media such as direct mail advertising, newspapers, radio, and cable and local television. This sum may also be spent for other items including conducting marketing studies; and the production and purchase of advertising art, commercials, musical jingles, print advertisements, point of sale materials, media advertising, outdoor advertising art, and direct mail pamphlets and literature, and may also be allocated to reimburse us or our affiliates for internal expenses of operating an advertising department and administration of our advertising program. We determine, in our discretion, exercised in good faith, all matters relating to advertising, public relations and promotional campaigns and we are not required to allocate or expend Advertising Program contributions for the benefit of any particular franchisee or group of franchisees on a pro rata or proportional basis. (Franchise Agreement, Section 9.4)

We presently anticipate that at least initially our advertising programs will be primarily developed by us. The Advertising Program was not in effect as of the date of this offering circular.

No Advertising Program contributions will be used for advertising to solicit new franchisees, although we may include a reference that franchises are available in advertising directed to the public generally, and include information on our web site about our franchise program.

Local Advertising

You must spend a minimum of 2% percent of your Gross Sales on local advertising. Any amount you must contribute to an Advertising Co-op Region will be credited against the 2% of Gross Sales which you must spend on local advertising. (Franchise Agreement, Section 9.2) Local advertising and Co-Op advertising region contributions are in addition to any amount you must contribute to any Advertising Program. (Franchise Agreement, Section 4.3)

The format, content and media of all of your advertising must meet our specifications as set forth in our Manuals. You must submit to Juice Heaven before use samples of all local advertising materials, and descriptions of all local advertising programs, not prepared or previously approved by us, for our approval. You may not use any advertising material or program that we disapprove. If you do not receive written approval of any submission to Juice Heaven within 10 business days, the submission will be considered disapproved. (Franchise Agreement, Section 9.1)

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Telephone Numbers and Directories

You must maintain, at your own expense, one or more telephone numbers which must be listed in the white pages of one or more telephone directories which we designate servicing your exclusive territory and any adjacent or nearby areas. You must conduct all telephone directory advertising under our then-current standards and specifications, as stated in the Manuals, and all advertising, including telephone directory advertising, is subject to our prior written approval. (Franchise Agreement, Section 9.4)

Promotional Campaigns

We may periodically conduct promotional campaigns on a national or regional basis to promote products or marketing themes. You must participate in all promotional campaigns which we may establish for the region in which your Juice Heaven Store is located. (Franchise Agreement, Section 9.6)

Training

One person who has attended and completed our initial training course to our satisfaction, or who has been trained by a trainer certified by us and who is then certified by us, must be working at your Juice Heaven Store at all times while your Juice Heaven Store is open to the public. Our initial training course is approximately 1 week long and is held at our corporate headquarters in California, at a company-owned or franchised Juice Heaven Store, at your Juice Heaven Store, or at some other location we may designate. There is a training fee (current $2,000) for up to 4 persons selected by you for this training. In addition, all expenses of you and your personnel incurred while attending or obtaining training will be bome entirely by you. Your general manager, if applicable, must complete training to our sole, subjective satisfaction, exercised in good faith. If the general manager you select is unable to complete our training program to our satisfaction, you must select a substitute general manager. We plan to hold training on an as-needed basis as we determine appropriate. Your initial training will begin approximately 2-4 weeks before the date your Juice Heaven Store is scheduled to open. The training program is directed by the Motty Mizrahi and will be conducted by Motty or Sassi Mizrahi. Sassi is one of the founders of Juice Heaven.

The following chart outlines the training Juice Heaven provides pursuant to the Franchise Agreement.

Subject

Instructional Material

Hours of

Classroom

Training

Hours of

On-the-job

Training

Instructor

Store Development

Manual

up to 5 hrs.

up to 5 hrs.

Sassi or Motty Mizrahi

Store Operations

Manual

up to 2 hrs.

up to 18 hrs.

Sassi or Motty Mizrahi

Store Management

Manual

up to 3 hrs.

up to 3 hrs.

Sassi or Motty Mizrahi

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Subject

Instructional Material

Hours of

Classroom

Training

Hours of

On-the-Job

Training

Instructor

Franchise Management

Manual

up to 2 hrs.

up to 2 hrs.

Sassi orMotty Mizrahi

Total Hours

up to 12 hrs.

up to 28 hrs.

We may periodically offer additional training programs to you, your designated franchisee representative or your general manager covering, for example, new products or procedures, cooking techniques, new recipes, marketing, bookkeeping, accounting and general operating procedures and the establishment, development and improvement of computer systems. Attendance by you or your general manager may be mandatory or optional, at our discretion. Mandatory and optional training programs will be held on an as-needed basis, as determined in our sole discretion, will typically be held in Southern California, and we presently expect they will typically last approximately 2 days. We may establish charges applicable to all franchisees similarly situated for mandatory or optional training courses. In addition, all expenses of you and your personnel incurred while attending or obtaining all training will be borne entirely by you.

Electronic Point of Sale and Computer Systems

You must purchase and maintain an approved electronic point of sale cash collection and data processing system (the "POS System") to record gross sales and transaction data (such as item ordered, price and date of sale). The system must include a computer/file server, touch screen, cash register, register tape, printers, magnetic stripe reader and cash drawer, of the type and quality approved by us (the "POS System"), together with any specified computer hardware and/or software. You must electronically connect the POS System to your telephone (or other communications medium which we specify) via modem or other communications equipment which will telecommunicate sales, sales mix, usage and operations information to us at any time, with or without notice, 24 hours per day, 7 days per week. (Franchise Agreement, Section 8.4)

Currently, the computer hardware used is the Javelin point of sale touchscreen terminals with customized Aloha software and Epson Thermal Printers. You must also purchase a computer/file server and modem which must be connected to a telephone tile (or other communications medium which we specify) and be capable of accessing the internet via a designated third party network (such as MSN, Worldnet, etc.) for the purpose of accessing the internet for the purpose of implementing software, transmitting and receiving data, accessing the internet for ordering and maintaining the POS System. There are no contractual limitations on the frequency or cost of required upgrades. We will have the ability to access the system, and reserve the right to change and upgrade the POS System. Since computer technology is evolving rapidly, it is difficult to predict the extent of required upgrades or your estimated costs. If any upgrade, update or replacement of your POS System costs more than $5,000, we will give you 6 months to complete the upgrade, and we will not require another upgrade to your POS System for at least 3 years.

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Within a reasonable time after written notice to you, you must apply for and maintain debit cards, credit cards or other non-cash systems currently existing or to be developed in the future to enable your customers to purchase products using these procedures. (Section 8.4)

Length of Time to Open Franchised Business

We estimate the typical length of time between signing a Franchise Agreement and opening a Juice Heaven Store is between 3 and 4 months, assuming that a location can be obtained and leased within one month after you sign the Franchise Agreement.

12. TERRITORY

You will be permitted to operate your Juice Heaven Store at a specific location which we accept, as described in the Franchise Agreement. Our acceptance will be based upon a variety of factors which may include the viability of the current location and demographics, including number of households, household income, vehicular traffic, and number of Juice Heaven Stores near the proposed new location. You may not relocate your Juice Heaven Store to any other location without our prior written consent.

Your Protected Territory will be described in Exhibit "A" to your Franchise Agreement. The Protected Territory will generally be (a) a 2 mile radius surrounding your store, or (b) a geographic area described by attaching a map, or by reference to streets, natural boundaries or zip codes as solely determined by Juice Heaven. During the term of your Franchise Agreement, we will not operate or grant a license or franchise to any other person to operate a Juice Heaven Store at any site within your Protected Territory, other than a site within another primary business or in conjunction with other businesses or at an institutional setting, such as schools, colleges and universities, military and other governmental facilities, hospitals, airports, toll roads, office or in-plant food facilities, shopping malls, supermarkets, grocery stores or convenience stores, some of which may be other fast-food type operations such as food courts, or any location operated by a master concessionaire or contract food service provider ("Non-Traditional Venues").

We expressly reserve the exclusive, unrestricted right, in our sole and absolute discretion, directly and indirectly: (a) to own or operate, and to license others (which may include our affiliates) to own or operate (i) Juice Heaven Stores at any location outside your Protected Territory, (ii) Juice Heaven Stores at Non-Traditional Venues at any location, and of any type or category whatsoever, regardless of its proximity to your Stores and (iii) stores, including juice bars, operating under names other than Juice Heaven at any location, and of any type or category whatsoever, regardless of its proximity to your Juice Heaven Store; and (b) to produce, license, distribute and market products (whether or not they bear the Juice Heaven Marks), including prepackaged food, snacks and beverage products; books, juicers, clothing; souvenirs and novelty items; through any outlet (regardless of its proximity to your Juice Heaven Store), including grocery stores, supermarkets and convenience stores and through any distribution channel, at wholesale or retail, including by means of the internet, mail order catalogs, direct mail advertising and other distribution methods.

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No restrictions exist on us or any of our franchisees as to the customers (including those outside their Protected Territories) which they may solicit or from which they accept business and we and all of our franchisees are free to advertise or solicit business from any area desired, subject to the general controls on advertising contained in the Franchise Agreement. No compensation must be paid if we or a franchisee solicits or accepts business from within another franchisee's Protected Territory.

Under the Franchise Agreement, continuation of your location rights does not depend upon the volume of sales generated nor on your penetration of the market potential. You do not have the right to acquire additional franchises, although you may apply for the right to operate additional Juice Heaven Stores pursuant to separate franchise agreements.

13. TRADEMARKS

Our affiliate, Mizrahi Brothers registered the following Juice Heaven Marks in California and at the United States Patent and Trademark Office ("USPTO). Mizrahi Brothers assigned the marks to us as of March 1, 2002.

APPLICATION/

REGISTRATION

NUMBER

DESCRIPTION OF

MARK

PRINCIPAL/OR

SUPPLEMENTAL

REGISTER

REGISTRATION DATE

52,152

Juice Heaven Logo and design

California

September 22, 1999

52,153

Juice Heaven

California

September 22, 1999

2,735,261

Juice Heaven

USPTO/Principal

July 8, 2003

We or Mizrahi Brothers have filed all required affidavits for these marks. Determinations

No presently effective determinations of the United States Patent and Trademark Office or any trademark administrator of any state or any court proceedings limit or restrict our right to use or license the use of the Marks which are relevant to your use of said trademarks for your business.

Agreements

No agreements limit our rights to use or license the use of the Marks.

Trademark Protection

If you learn of any alleged infringement of the Marks or challenge to your use of the Marks under the terms of the Franchise Agreement, you must notify us immediately. We will take whatever appropriate action we deem necessary, at our discretion. You may participate at your own expense in defense or settlement, but our decisions about the matter will be final. You may not settle or compromise any trademark claim without our prior written consent. We have

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the right to defend, compromise or settle these claims at our and our affiliate's sole cost and expense, using attorneys of our own choosing and you must cooperate fully with us in the defense of this claim. You may participate at your own expense in defense or settlement, but our decisions about the matter will be final.

Both during the term of the Franchise Agreement and afterwards you must not directly or indirectly contest, derogate, disparage or impugn any of our Marks.

Common Law Rights

We also have common law rights in the Marks by virtue of using them in interstate commerce. We may have the right, as a matter of common law, to exclude other users from using the same or confusingly similar marks for similar products or services within the area of geographical influence of our company and/or our franchisees. The specific legal rights which you and we have in a particular dispute would depend upon all the facts and circumstances surrounding the dispute.

Infringing Uses

As of the date of this offering circular, we know of no infringing uses which would materially affect your use of the Marks.

Modification

Periodically, in the Operations Manual or in directives or supplemental bulletins, we may add to, delete, or modify any or all of the Marks. You must modify or discontinue the use of a Mark, at your expense, if we modify or discontinue it. We will not compensate you for any modification or discontinuation of the Marks. You must adopt any new Mark we adopt.

14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

There are no patents or copyrights material to the franchise. However, you must operate your business in accordance with our standards, specifications, policies and procedures as set forth in the Manuals or otherwise communicated to you. You must treat the information contained in the Manuals and any other manuals or supplemental material supplied by us as confidential. The Manuals are our property and you may not duplicate, copy, disclose or disseminate the contents of the Manuals at any time, without our prior written consent. We may modify or supplement the Manuals upon notice or delivery to you. You must keep the Manuals current at all times, and upon the termination or non-renewal of your franchise return all Manuals to us.

You may not communicate, divulge or use any confidential information concerning our methods or procedures during or after the term of the Franchise Agreement. Information we make available to you may not be divulged to any person other than your employees or financial advisors who reasonably require access to this information for purposes of fulfilling their

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employment or contractual responsibilities. You must inform your employees to whom the information, or any of it, is made available of this obligation of confidence.

Information which: (a) is disclosed to you which has entered the public domain or was known to you prior to our disclosure to you of this information, other than by breach of an obligation of confidentiality owed (by anyone) to us; (b) becomes known to you from a source other than us and other than by the breach of an obligation of confidentiality owed (by anyone) to us; or (c) was independently developed by you without the use or benefit of our Trade Secrets will not be considered confidential information. The burden of proving that any of the foregoing exceptions apply to you resides with you.

15.

OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION

OF THE FRANCHISE BUSINESS

You do not need to personally supervise your Juice Heaven Store, however, at least one certified general manager or one or more certified assistant managers must be working at your Juice Heaven Store at all times your Store is open to the public and while preparing the Store for opening and closing each day.

If you are a corporation, limited liability company or limited partnership, your shareholders, members and limited partners who own 10% or more of your equity must sign a Guaranty (Exhibit "B"). By signing the Guaranty, the shareholders, members or limited partners unconditionally guarantee your full performance of all of your obligations under all agreements between you and Juice Heaven.

16. RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You must offer and sell all, and only, those goods and services that we have approved (See Item 8). Authorized products may vary at Juice Heaven stores depending on the operating season and the geographic location of your Juice Heaven Store or other factors. You must use the approved menu and menu format in your Juice Heaven Store, which may include requirements concerning graphics, product descriptions and illustrations. To the extent permitted by law, we may establish maximum retail prices for each authorized product. You must discontinue use of any old menu format(s) and implement the use of any new menu format(s) within a reasonable time, but not longer than 60 days, after you receive written notice. We may add, delete, and change menu items that you may or must offer, in our unrestricted discretion, for which you may need to purchase additional equipment. You must add new products within the time specified in our written notice to you, You must cease selling any previously approved or discontinued products within 30 days after your receive written notice that the product is no longer approved.

You may serve customers only from your Juice Heaven Store. You may not operate any permanent or temporary mobile vending vehicle, grab 'n go case, cart, kiosk or any other form of distribution without our prior written consent.

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At our request, you must make available for sale at the Juice Heaven Store a line of souvenir and novelty items, such as sweat shirts, pins, watches, T-shirts, jackets, caps, glasses, and similar items. However, you may not sell these or any other souvenir and novelty items at your Juice Heaven Store without our prior approval.

At our request, you must test market products and/or services at your Juice Heaven Store. You must cooperate with us in conducting these test marketing programs and must comply with all rules and regulations established by us.

No vending, gaming or other mechanical device are permitted in your Juice Heaven Store without our prior written consent.

17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

This table lists important provisions of the franchise agreement. You should read these provisions in the agreement attached to this offering circular.

Provision

Section in Franchise Agreement

Summary

a. Term of the franchise

Section 3.1

10 years.

b. Renewal or

extension of the term

Section 3.2

If you are in good standing, you can renew for one additional 10 year term.

c. Requirements for you to renew or extend

Section 3.3-3.4

You must have complied with your obligations during the Term; must, at our request, renovate or modernize your Juice Heaven Store to comply with our then-current standards for a new Juice Heaven Store; must sign a new Franchise Agreement; and must sign a general release.

d. Termination by you

None

e. Termination by Juice Heaven without cause

None

f. Termination by Juice Heaven with cause

Section 16.1

Juice Heaven can terminate only if you default.

g. "Cause" defined - defaults which can be cured

Section 16.4

You have 5 days to cure non-payment of fees, 10 days to cure non-compliance with laws and defaults not listed in Sections 16.2 and 16.3

h. "Cause" defined - defaults which

Sections 16.2 and 16.3

Non curable defaults: bankruptcy; foreclosure; insolvency; abandonment;

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Provision

Section in Franchise Agreement

Summary

cannot be cured

unapproved transfers; repeated defaults, even if cured; misrepresentations in acquiring your franchise; violations of law which are not cured within 10 days; health or safety violations which endanger the public; knowingly understating your Gross Sales; trademark misuse; conviction of a felony; any breach relating to unfair competition described in Section 13.1; if you or any of your affiliates is a party to any other Franchise Agreement with Juice Heaven and that agreement is terminated due to your default (after any applicable right to cure).

i. Your

obligations on

termination/non

renewal

Section 17.1

You must cease use of our trademarks, de-identify, pay all amounts due to us, return the Manuals to us, and cancel or assign to us any internet and website home pages, domain name listings and registrations which contain our Marks. We may, at our option, assume all telephone numbers relating to your Juice Heaven Store. See also "r" below.

j. Assignment of contract by Juice Heaven

Section 15.1

No restriction on our right to assign.

k. "Transfer" by you - definition

Section 15.2

Includes transfer of the agreement or change in ownership of the entity which owns it.

1. Juice Heaven's approval of transfer by franchisee

Section 15.2

Transfers require our prior written consent.

m. Conditions for Juice Heaven's approval of transfer

Section 15.2

New franchisee: must qualify, assume your obligations under the Franchise Agreement, complete training, sign new Franchise Agreement, pay a training fee and certification fee (if applicable). You must pay a review fee and transfer fee, provide us with an estoppel agreement and a list of all persons having an interest in the Franchise Agreement or in the Franchisee, and sign a general release (See also "r" below).

n. Juice Heaven's right of first refusal to

Section 15.2.4

We can match any offer for your business.

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Provision

Section in Franchise Agreement

Summary

acquire your business

o. Juice Heaven's option to purchase your business

None

p. Your death or disability

Section 16.3.2

Same requirements as for transfer in "m" above, except there is no initial fee or transfer fee and we do not have right of first refusal. If your interest is not transferred within 6 months following your (or a major member, partner or shareholder's) death or legal incapacity, your Franchise Agreement will be automatically terminated.

q. Noncompetition covenants during the term of the franchise

Sections 13.1.1 and 14.1

Unless we agree otherwise in writing, no involvement in the any business that engages in the sale at retail or wholesale of anyjuice or smoothie product, or any other food products featured by Juice Heaven Stores.

You may not induce, contract, solicit to employ or employ any person currently employed, or employed during the prior 6 months, by Juice Heaven its affiliates or its franchisees.

r. Noncompetition covenants after the franchise is terminated or expires

Section 13.1.2

Unless we agree otherwise in writing, no involvement in any business that engages in the sale at retail or wholesale of anyjuice or smoothie product, or any other food products featured by Juice Heaven Stores (a) within the County in which any Juice Heaven Store operated by you is or was located or (b) within 10 miles from the location of any then existing Juice Heaven Store for 24 months after termination, expiration or assignment of your Franchise Agreement.

You may not induce, contract, solicit to employ or employ any person currently employed, or employed during the prior 6 months, by Juice Heaven, its affiliates or franchisees for one year after termination, expiration or assignment of your Franchise

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Provision

Section in Franchise Agreement

Summary

Agreement.

s. Modification of the agreement

Section 8.5

The Manuals are subject to change. Modifications become effective upon delivery of written notice to you, unless the notice specifies a longer period.

t. Integration/ merger clause

Section 22.8

All agreements between the parties are in the Franchise Agreement and its exhibits.

u. Dispute

resolution by arbitration or mediation

Section 21

Except as prohibited by law, and except for certain claims, all disputes must be arbitrated in Los Angeles, California.

v. Choice of forum

Section 21

Except as prohibited by law, and except for certain claims, all disputes must be arbitrated in Los Angeles, California.

w. Choice of law

Section 22.7

California law applies, except for the provisions respecting Non-Competition, which are governed by local law.

The regulations of the California Department of Corporations require that the following information concerning provisions of the Franchise Agreement be disclosed to you:

California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.

The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).

The Franchise Agreement requires binding arbitration. The arbitration will occur at Los Angeles, California with the costs being borne by the losing party. This provision may not be enforceable under California law. Rule 310.114.l(c)5.B(iv).

The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the Franchise. This provision may not be enforceable under California law.

You must sign a general release of claims upon renewal or transfer of the franchise agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order is void. Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 31000-31516). Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000-20043).

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Under California Corporations Code, Section 31125, Juice Heaven must give you a disclosure document, approved by the Department of Corporations prior to a solicitation of a proposed material modification of an existing franchise.

The franchise agreement contains a liquidated damage clause, under Civil Code, Section 1671, certain liquidated damage clauses are unenforceable.

Under the California Franchise Investment law, a copy of all proposed agreements relating to the franchise must be delivered together with the offering circular.

Neither Juice Heaven, nor any person in Item 2 of this Offering Circular is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et. seq., suspending or expelling these persons from membership in the association or exchange.

These states have statutes which may supersede the Franchise Agreement in your relationship with Juice Heaven, including the areas of termination and renewal of your franchise: ARKANSAS (Stat. Section 70-807), CALIFORNIA (Bus. & Prof Code Sections 20000-20043), CONNECTICUT (Gen. Stat. Section 42-133e et seq.), DELAWARE (Code, tit,), HAW An (Rev. Stat. Section 482E-1), ILLINOIS (815 ILCS 705/19 and 705/20), INDIANA (Stat. Section 23-2-2.7), IOWA (Code Section 523H. 1-523H.17), MICHIGAN (Stat. Section 19.854(27)), MINNESOTA (Stat. Section 80C.14), MISSISSIPPI (Code Section 75-24-51), MISSOURI (Stat. Section 407.400), NEBRASKA (Rev. Stat. Section 87-401), NEW JERSEY (Stat. Section 56:10-1), SOUTH DAKOTA (Codified Laws Section 37-5A-51), VIRGINIA (Code 13.1-517 - 13.1-574), WASHINGTON (Code Section 19.100.180) WISCONSIN (Stat. Section 135.03). These and other state court decisions may supersede the Franchise Agreement in your relationship with Juice Heaven including the areas of termination and renewal of your franchise, but we reserve the right to challenge the applicability and enforceability of these laws.

18. PUBLIC FIGURES

We do not use any public figure to promote our franchise, nor is there any public figure involved in any respect with the actual management or control of Juice Heaven. There is no investment in any respect of any public figure in Juice Heaven.

You are not prohibited from using the name of a public figure or celebrity in your promotional efforts or advertising; however, all advertising must be approved by us. Additionally, we will not be responsible for any expenses, costs or charges for this use.

19. EARNINGS CLAIMS

Juice Heaven does not furnish or authorize its salespersons to furnish any oral or written information concerning the actual or potential sales, costs, income or profits of a Juice Heaven Store. Actual results vary from store to store and Juice Heaven cannot estimate the results of any particular franchise.

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20. LIST OF OUTLETS

CHART I

FRANCHISED JUICE HEAVEN STORE

STATUS SUMMARY

FOR FISCAL YEARS ENDING DECEMBER 31, A2003/2004^005

State

Transfers

Canceled or Terminated

Not Renewed

Reacquired By Juice Heaven

Uftthe System -Other

Total from Left Columns

Franchises Operating At Year End

TOTAL

0/0/0

CHART II

STATUS OF COMPANY-OWNED AND AFFILIATE-OWNED JUICE HEAVEN STORES FOR FISCAL YEARS ENDING DECEMBER 31, A2003/2004/M)

State

Juice Heaven Stores Closed During Year

Juice Heaven Stores Opened During Year

Juice Heaven Stores Operating At Year End

California

nl/M)

"0/0/0

TOTAL

Ai/pio

0/0/0

aq/o/o

CHART III

PROJECTED OPENINGS FOR FISCAL YEAR ENDING DECEMBER 31, A,

State

Franchise Agreements Signed

But Juice Heaven

Store Not Open

Projected Franchised New

Juice Heaven Stores

in the Next Fiscal Year

Projected Company-Owned

and Affiliate-Owned Openings in Next Fiscal Year

California

2

Florida

1

A2

Georgia

1

1

TOTALS

2

A,;;

0

Attached as Exhibit "E" is a list of the names, addresses and telephone numbers of all Juice Heaven Stores as of December 31, A2005. There were no franchisees who have had a franchise terminated, canceled, or not renewed, or otherwise voluntarily or involuntarily had ceased to do business under a Franchise Agreement during our last fiscal year, or have failed to communicate with us within 10 weeks of the date of this offering circular.

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21. FINANCIAL STATEMENTS

Attached as Exhibit "D" are the audited Financial Statements of Juice Heaven as of December 31, A2003. December 31, A2fiM and December 31, A2005.

22. CONTRACTS

Attached as Exhibit "A" is a copy of our current form of Franchise Agreement. The following are the other contracts that you must sign, if applicable:

Exhibit "A-l"                     SB A Addendum to Franchise Agreement

Exhibit "B"             Guaranty

Exhibit "C"             General Release

23. RECEIPT

Two copies of an acknowledgment of your receipt of this offering circular appear as Exhibit "H". Please return one copy to Juice Heaven and retain the other for your records.

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