UFOC
The original documents were scanned as an image. The original file can be downloaded at the link above.
Sample UFOC
®
FRANCHISE OFFERING CIRCULAR
YOUR DOLLAR STORE WITH MORE, INC., a Washington corporation
7503 NE 163rd Ave
Vancouver, WA 98682
United States of America
(360) 260-7499
102,1626 Richter Street
Kelowna, British Columbia V1Y 2M3
CANADA
(250) 860-4225
You will develop and operate a YOUR DOLLAR STORE WITH MORE retail store, offering for sale a constantly changing list of items, the majority of which usually range in price from $1.00 to $5.00.
The initial franchise fee is U.S. $17,000. There are no other initial payments to us. The estimated total initial investment, inclusive of the initial fee, for a startup ranges from $66,500 to $232,500. See Items 5, 6, and 7 below. ALL AMOUNTS ARE EXPRESSED IN U.S. DOLLARS, EXCEPT AS OTHERWISE STATED.
Risk Factors:
1. THE FRANCHISE AGREEMENT REQUIRES THAT ALL DISAGREEMENTS BE SETTLED BY MEDIATION OR ARBITRATION IN WASHINGTON STATE FOR MEDIATION, AND THE CITY OF FRANCHISOR'S U.S. HEADQUARTERS, CURRENTLY VANCOUVER, WASHINGTON, FOR ARBITRATION. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. THESE PROVISIONS MAY BE SUPERSEDED BY CERTAIN STATE LAWS. IT ALSO MAY COST MORE TO MEDIATE AND ARBITRATE WITH US IN WASHINGTON THAN IN YOUR HOME STATE.
2. EVEN THOUGH THE FRANCHISE AGREEMENT PROVIDES THAT WASHINGTON LAW APPLIES, LOCAL LAW MAY SUPERSEDE IT IN YOUR STATE. PLEASE REFER TO THE STATE ADDENDA ATTACHED AS EXHIBIT F FOR DETAILS. THE STATES OF CONNECTICUT, MICHIGAN, AND CERTAIN OTHER STATES PROHIBIT CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. SEE STATE ADDENDA IN EXHIBIT F FOR A SUMMARY OF SOME OF THESE LAWS.
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3.
WE ARE IN THE DEVELOPMENT STAGE, AND ARE DEPENDENT UPON THE SALE OF FRANCHISES.
YOU WILL RECEIVE EXCLUSIVE TERRITORY RIGHTS, WITHIN WHICH WE WILL NOT LOCATE ANOTHER STORE, WITHIN ONE MILE FROM A LOCATION WITHIN AN ENCLOSED SHOPPING CENTER, AND TWO MILES FROM OTHER LOCATIONS, INCLUDING A LOCATION IN A STRIP MALL OR IN LINE FACING A STREET OR OUTDOOR WALKWAY. THE EXCEPTIONS TO THIS ARE THAT WE AND OUR AFFILIATES MAY ESTABLISH OTHER FRANCHISED OR COMPANY OWNED LOCATIONS AND OTHER CHANNELS OF DISTRIBUTION AND MAY SELL OR DISTRIBUTE ANY PRODUCT OR SERVICE TO THE GENERAL PUBLIC IN COMPETITION WITH YOUR FRANCHISE.
THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE. READ ITEM 1 CONCERNING COMPETITION AND RISKS, AND OTHER ITEMS BELOW.
Information comparing franchisors is available. Call the state administrators listed in Exhibit D 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 State or Provincial authority listed in Exhibit D.
Issuance Date (as most recently amended) for states not requiring registration: August 8, 2003
Effective Dates for Registration States:
California:
Florida:
Hawaii:
Illinois:
Indiana:
Kentucky:
Michigan:
Minnesota:
Nebraska:
September 17,2001 September 17,2002
September 17, 2001
New York: North Dakota: Rhode Island: South Dakota: Texas: Utah:
Washington: Wisconsin
September 17,2001 August 29, 2002
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TABLE OF CONTENTS
ITEM PAGE
1. The Franchisor, its Predecessors and Affiliates.....................................................................1
2. Business Experience.............................................................................................................2
3. Litigation..............................................................................................................................6
4. Bankruptcy...........................................................................................................................6
5. Initial Franchise Fee..............................................................................................................6
6. Other Fees.............................................................................................................................7
7. Initial Investment..................................................................................................................9
8. Restrictions on Sources of Products and Services...............................................................11
9. Franchisee's Obligations.....................................................................................................13
10. Financing............................................................................................................................15
11. Franchisor's Obligations......................................................................................................15
12. Territory..............................................................................................................................20
13. Trademarks.........................................................................................................................20
14. Patents, Copyrights and Proprietary Information.................................................................21
15. Obligation to Participate in the Actual Operation of the Franchised Business.....................22
16. Restrictions on What the Franchisee May Sell....................................................................22
17. Renewal, Termination, Transfer and Dispute Resolution....................................................23
18. Public Figures.....................................................................................................................25
19. Earnings Claims..................................................................................................................26
20. List of Outlets.....................................................................................................................26
21. Financial Statements...........................................................................................................29
22. Contracts.............................................................................................................................30
23. Receipt................................................................................................................................30
EXHIBITS
Exhibit A Financial Statements
Exhibit B Franchise Agreement
Exhibit C List of Franchisees and Certain Former Franchisees
Exhibit D List of Certain State or Provincial Franchise Authorities (Government Offices) and
Registered Agents in Certain States
Exhibit E Summary of Special Laws and Regulations Pertaining to the Franchised Business
Exhibit F State and Provincial Addenda
Exhibit G Manual Table of Contents (See Also Item 11)
Exhibit H Earnings Claims
Exhibit I Acknowledgment of Receipt of Completed Agreements
Exhibit J Receipt
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IV
YOUR DOLLAR STORE WITH MORE, INC.
Iteml THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
To simplify the language in this offering circular "YOUR DOLLAR STORE", "we," "us," or "our" means Your Dollar Store With More, Inc., the franchisor. "You" means the person or persons, including legal entities and their owners, which buy the franchise.
Franchisor's Name, Business Form, Predecessors, and Affiliates. YOUR DOLLAR STORE is a Washington corporation incorporated on May 8, 2001. Our affiliate and predecessor is Your Dollar Store With More Inc., a corporation incorporated on April 17, 1998 under the Business Corporations Act of British Columbia ("YDSWM"). YDSWM provided us access to its expertise and assets, and applied for registration of our U.S. trademark as described in Item 13. Our affiliate, YDS Holdings, Inc., is a Washington corporation incorporated on April 23, 2002 ("YDS Holdings") for the purpose of owning YOUR DOLLAR STORE WITH MORE retail stores. There are no other predecessors or other affiliates required to be disclosed.
Business Name, Address. Agents for Service. We do business under the name of Your Dollar Store With More, and under our entity name. Our principal business addresses and the principal business addresses of our affiliates are:
Your Dollar Store With More, Inc. 7503 NE 163rd Ave Vancouver, WA 98682
Your Dollar Store With More, Inc. 102, 1626 Richter Street Kelowna, British Columbia V1Y2M3 CANADA
YDS Holdings, Inc. 7503 NE 163rd Ave Vancouver, WA 98682
The principal business address of YDSWM is the same as ours.
Our agents for service of process are listed in Exhibit D.
YOUR DOLLAR STORE'S Business and Franchises to be Offered. We franchise a specialized system to establish, develop, and operate a YOUR DOLLAR STORE WITH MORE retail store offering for sale a constantly changing list of items the majority of which usually range in price from $1.00 to $5.00. You will offer for sale new retail items such as cards, gift bags, wraps, candles, candle holders, giftware, sunglasses, postcards, cleaning supplies, balloons, party supplies, paper products, crafts, house wares, hardware, picture frames, sewing supplies, bath products, cosmetics, shoe laces, batteries, hair accessories, toys, candy, pop, spices, and may more
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items. You will operate a YOUR DOLLAR STORE WITH MORE retail store under a license to use our business system, know-how, and trademarks. We operated two businesses of the type being franchised in Vancouver, Washington until April 2002, when one was acquired by YDS Holdings and the other was acquired by a franchisee. YDSWM operates a business of the type being franchised in Kelowna, British Columbia, Canada, and has since 1998. YDS Holdings operates businesses of the type being franchised in Vancouver, Washington, and has since April 2002. We and our affiliates do not engage in any other business activities.
The market for your retail store is developed and competitive. You may have to compete with national and local businesses offering similar products. There are no guarantees of your success as there exist both typical and special business risk factors, including: changing market conditions; competition; cost of supplies, equipment, real estate and improvements, capital and labor; your health and continuity of your management; continuation of sources of supply; quality and availability of labor; availability of financing; recession or depression locally, nationally, or internationally; wars; strikes; emergencies; natural and manmade disasters; litigation; and liability and casualty losses.
Other risks could have an adverse effect on your business. These include industry developments, such as pricing policies of competitors, and supply and demand. Our ability to fulfil our obligations under our franchise agreement depends in part upon our present and future financial condition. Litigation risks may exist also, including future litigation that may not be foreseeable. See Item 3 of this offering circular for certain past and present litigation.
Exhibit E to this Offering Circular summarizes certain special laws or regulations applicable to this franchise.
We and our affiliates have not offered franchises in other lines of business, and do not presently intend to do so.
There have not been any other predecessors or other affiliates that have offered franchises for the same or similar businesses or for other lines of business or who intend to do so.
Item 2 BUSINESS EXPERIENCE
President and Director: Claude Uzelman
Mr. Uzelman has been our President and a Director since our incorporation in May 2001. From 1992 to the present, Mr. Uzelman has also been one of the principal shareholders and an operating partner in Michael Anthony Restaurants Ltd., a company in Kelowna, B.C., Canada, operating of up to 6 A&W franchise restaurants. (A&W in Canada is the second largest fast food franchise in the country with over 500 outlets.)
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Secretary and Vice President of Operations and Director:
Stan Taylor
Mr. Taylor has been our Secretary and Vice President of Operations and a Director since May 2001. From 1999 to 2001, Mr. Taylor, through his wholly owned company 515723 British Columbia Ltd., owned and operated 2 Your Dollar Store With More franchise outlets in Princeton and Osoyoos, B.C. Canada, and was an operating partner in a 3 outlet in Fort St. John, B.C., Canada. From 1997 to 2000, Mr. Taylor, through 515723 British Columbia Ltd., owned and operated Edgewood Manufactured Home Park in Fort St. John, British Columbia. From 1994 to 1996, Mr. Taylor was Sales Supervisor with London Drugs in Calgary, Alberta.
Executive Vice President and Director: Michael Clem
Mr. Clem has been our Executive Vice President and a Director since February 2003. He is also Executive Vice President and a Director of our affiliate, YDS Holdings. From June 2001 to February 2003, Mr. Clem was Real Estate Manager with Winn Dixie Supermarkets in Charlotte, North Carolina. Mr. Clem worked in various positions for Dollar General in Charlotte, North Carolina from 1990 to February 2000, and was Regional Director of Real Estate from January 1996 to February 2000. Cumulative, Mr. Clem has more than 15 years of corporate retail experience. He played a significant role in helping Dollar General become one of the fastest growing retailers in America.
Supplier Relations Administrator Tricia Elliott
Ms. Elliott Joined Your Dollar Store as our Supplier Relations Administrator in August 2001. From September 1996 to July 2001, Ms. Elliott was a Reconciling Clerk with Home Base in Vancouver, Washington.
Director: David Uzelman
Mr. Uzelman has been a Director since our incorporation. He has been the President and sole Director of YDSWM since June 1998. From 1983 to 1998, Mr. Uzelman was the President of Michael Anthony Restaurants LTD in Penticton, B.C. Canada. In this capacity, he was a franchisee and operated an A&W franchise, and ultimately six A&W stores in British Columbia and two in Alberta, Canada.
Accountant: Judi Munro
Judi Munro has been Accountant for YDSWM since May 2000. From April 1995 to May 2000, she was an accountant with White Kennedy, Chartered Accountants, in Penticton, BC Canada.
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Area Representative: Duane Habuza
(Territory does not include the States of Illinois, New York or Washington)
Duane Habuza is currently an area franchisor of YDSWM. He joined YDSWM as a single unit franchisee in 1999. Four months later Duane was approved as an Area Franchisee. To date, Duane has opened 23 Your Dollar Store With More outlets in Southern Alberta, Canada. He was employed as Construction Foreman by Moduline Industries Ltd. in Penticton, B.C., Canada from 1993 to 1999.
Area Representatives: Steven and Cathy Baker
(Territory is limited to State of Utah)
Steven and Cathy Baker were approved as Area Representatives for the State of Utah on January 18, 2002. Before joining Your Dollar Store, since May 1993 Mr. Baker has been and continues to be employed at Albertsons Inc. in Salt Lake City, Utah. His current position is Director Resource Management. Cathy Baker has been a homemaker since 1990.
Area Representative: Beverly Taylor
(Territory is limited to the State of New Mexico)
Beverly Taylor was approved as an Area Representative for the State of New Mexico in December 2002. Since May 2000, Ms. Taylor has been and continues to be an Assistant District Attorney with the State of New Mexico, 13th Judicial District, in Los Lunas, New Mexico. From August 1998 to May 2000, Ms. Taylor was a Criminal Investigator with the State of New Mexico in Albuquerque, New Mexico.
Area Representative: Pat Flanagan
(Territory is limited to the States of North Carolina and South Carolina)
Pat Flanagan has been Vice President of TriState Dollar Development, Inc. in Cary, North Carolina, since April 2003, and President of C. Morell, Inc. in Cary, North Carolina, since October 2002. TriState Dollar Development, Inc. was approved as an Area Representative for the States of North Carolina and South Carolina on April 1, 2003. C. Morell, Inc. was approved as an Area Representative for the State of South Carolina in December 2002. From May 2000 to the present, Mr. Flanagan has been Materials Logistics Manager with Square D Company in Knightdale, North Carolina. From May 1999 to May 2000, he was Production Supervisor with Eaton Corp in Selma, North Carolina. From June 1996 to February 1999, Mr. Flanagan was the Owner of Luna's Pizza in Raleigh, North Carolina.
Area Representative: Randy M. Harris and Wendy L. Harris
(Territory is limited to the State of Florida)
Randy Harris and Wendy Harris have been Owners of Wenloha Enterprises Inc. d/b/a Your Dollar Store with More in Jacksonville, Florida since May 2003. Wenloha Enterprises Inc. was approved as an Area Representative for the Counties of Nassau, Duval, Clay, Baker, Bradford,
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Union & S. Johns in the State of Florida on May 16, 2002. From August 1990 to December 2001, Mr. Harris was Managing Supervisor of Industrial Water Services in Jacksonville, Florida. From October 1987 to June 2002, Ms. Harris was self employed as the owner of Harris Family Day Care in Jax Beach, Florida.
Area Representative: Carole M. Cox
(Territory is limited to the States of North Carolina and South Carolina)
Ms. Cox has been Vice President of C. Morell, Inc., in Cary North Carolina, since August
2002, and President of TriState Dollar Development, Inc., in Cary, North Carolina, since April
2003. C. Morell, Inc. was approved as an Area Representative for the State of South Carolina in December 2002, and TriState Dollar Development, Inc. was approved as an Area Representative for the States of North Carolina and South Carolina on April 1, 2003. From July 2001 to March 2002, Ms. Cox was District Manager for Hardee's Foods (CKE, Inc.) in Spartanburg, South Carolina. From February 2000 to June 2000, she was Regional Consultant for Interstate Dairy Queen in South Carolina. From August 1994 to January 1999, Ms Cox was President of Subway Sandwich, Morell Ent, Inc. in Greenville, South Carolina.
Area Representative: Terry Dudley
(Territory is limited to the State of Iowa)
Mr. Dudley has been President of Thrifty Dollar Stores, Inc. in Greenfield, Iowa since November 2002. Thrifty Dollar Stores, Inc. was approved as an Area Representative for the State of Iowa in February 2003. From January 1985 to October 2002, Mr. Dudley was the Owner of Dudley Sales Co. in Corydon, Iowa.
Area Representative: Pamela K. Mills
(Territory is limited to the State of Indiana)
Ms. Mills was approved as an Area Representative for the State of Indiana in March 2003. From January 2003 to the present, Ms. Mills has been a franchisee of YDSWM in Waveland, Indiana. From September 1999 to January 2003, Ms. Mills was a homemaker in Waveland, Indiana. From 1989 to September 1999, she was a Respiratory Therapist with various Indianapolis, Indiana hospitals, including Wishard Memorial Hospital.
Retail Consultant: Russ Meszaros
(Territory does not include the States of Illinois, New York or Washington)
Russ Meszaros has been a Shareholder, Vice President and a Director of YDSWM since February 2002. Before this, Mr. Meszaros was a Management Consultant, employed by Deja Vous Enterprises Inc. of Kelowna, B.C., Canada, from November 1998 to February 2002. Deja Vous Enterprises Inc. provided management consulting services to YDSWM under contract. Mr. Meszaros has worked with YDSWM since September 1998, before which, from November 1996 to November 1998, he owned and operated two franchised dollar store outlets in the 100+ outlet Great Canadian Dollar Store franchise chain. The first of these stores was in Westbank, B.C. the second
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in Maple Ridge, B.C. (a suburb of Vancouver). From October 1991 to November 1996, he was employed with Overwaitea of Penticton, B.C., Canada, a major Canadian grocery chain.
Retail Specialist: John Hunsaker
John Hunsaker joined Your Dollar Store as a Retail Specialist in March 2003. Before this Mr. Hunsaker was Manager with Smokeys Pizza in Vancouver, Washington. From January 1999 to December 1999, he was an Inventory Specialist with Washington Inventory in Ontario, Oregon. From July 1997 to November 1998, Mr. Hunsaker was a Laborer with Labor's Union in Ontario, Oregon.
Information Coordinator: Bob Weisbrodt
Bob Weisbrodt joined Your Dollar Store in November 2001, and is currently working as an Information Co-ordinator. Before joining us, from May 1997 to present, Bob worked and continues to work as a Commercial Realtor for Remax in Kelowna, B.C.
Information Coordinator: Donna Craig
Donna Craig joined Your Dollar Store as an Information Co-ordinator in November 2001. Donna has worked as a Realtor in Kelowna B.C. for Realty Executives from October 1998 to the present, for Hoover Realty from June 1996 to October 1998, and for Coldwell Banker from March 1993 to June 1996.
There are no franchise brokers other than as described in this Item 2. The employees of YDSWM, listed above, may provide operational support described in Item 11.
Item 3 LITIGATION
There is no litigation or other dispute resolution to be disclosed in this offering circular.
Item 4 BANKRUPTCY
No person previously identified in Items 1 or 2 of this offering circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code that must be disclosed in this Item.
Item 5 INITIAL FRANCHISE FEE
ALL AMOUNTS STATED ARE IN U.S. DOLLARS.
Initial Fee. The franchise fee is $17,000 for a single retail store franchise. You must pay the franchise fee when you sign the Franchise Agreement. The franchise fee for the second and each additional franchise is currently $8,500, payable when you sign the second or additional
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Franchise Agreement. This reduced multiple initial franchise fee may change upon four months written notice, but will not be increased to more than l/2 of the then current Initial Franchise Fee.
Other Initial Fees and Payments. You must purchase the other items described in Item 7, but there are no other initial fees or payments you must pay to us.
Refundability and Financing (See Item 10 Below"). The initial franchise fee is not refundable and must be paid in full upon signing the Franchise Agreement. However, if you fail to open your store within 180 days after signing the Franchise Agreement, we may terminate your franchise and, if we elect to do so, regardless of our expenses to date, will refund one-half of the initial fee upon your confirmation of your post-termination obligations, including non-disclosure and non-competition. One-half of the initial fee will be retained by us as compensation for the time and expenses we incurred.
Variability. Except as disclosed in this offering circular, we charge an identical imtial franchise fee to all franchisees. In the last fiscal year all franchises sold before October 1, 2002 were at an initial fee of $15,000. Our franchise fee was increased on October 1, 2002, and all franchises sold on or after that date were at an initial fee of $17,000. All subsequent franchises purchased by existing franchisees were granted at one-half of the initial franchise fee.
Item 6 OTHER FEES OR PAYMENTS
|
Name of Fee or Payment |
Amount |
Due Date |
Remarks |
|
Royalty |
4% of Gross Sales |
Weekly by Wednesday for the week ending the previous Sunday |
See Note 1 |
|
Advertising Fee |
0.5% |
Weekly by Wednesday for the week ending the previous Sunday |
See Note 2 |
|
Interest and Late Charges |
1% per month |
Upon due date of fees |
See Note 3 |
|
Audit Fees |
Cost of Audit |
Upon billing after audit |
Payable only if reports not submitted or audit shows an understatement of 5% or more |
|
Transfer fees |
$5,000 |
On approval of transfer |
A condition of transfer |
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Name of Fee or Payment |
AmountJ |
Due Date |
Remarks |
|
Renewal Fee |
$2,000 |
On renewal |
A condition of renewal |
|
Fees on Default and Indemnity |
Our costs and damages |
Upon demand |
As incurred. See Note 4 |
|
Insurance |
Varies |
Before commencing franchise |
Payable to third parties. See Note 5 |
|
Payments for Goods or Services |
See Items 7,8,11 |
Upon purchase or billing |
See Items 7,8,11 |
|
Equipment and information system Upgrades and Updates |
$0 to $1,000 per year |
At time of purchase or billing |
Payable to us or third parties. See Items 8 and 11, and Note 6 |
|
Financial Statements |
Cost of accountant |
As incurred |
Only if requested by us. Payable to third parties. See Note 7 |
|
Store Supervisor Training Fee |
Not to exceed $350 per day, plus expenses |
As incurred |
Only if you request training from us for a full time replacement supervisor for your store. See Item 15 |
Except as stated above, you pay all fees to us. All fees above paid to us are nonrefundable.
Note 1: Gross Sales is defined in the Franchise Agreement as including the entire amount of the actual sales price and all other consideration, receipts and receivables received or earned in connection with the Store and related activity. Extending credit to your customers is not part of our system and is not recommended. Therefore, there shall be no deductions allowed for uncollected or uncollectable credit accounts and no allowances shall be made for bad debts. Gross Sales shall not include any tax imposed by the government or any refund or credit given or any goods returned or exchanged by a customer.
The royalty begins the first day that you begin business and continues throughout the duration of the franchise. The royalty is currently payable weekly each Wednesday on Gross Sales for the week ending the previous Sunday. We can change the time and the manner of payment. The current requirement is by electronic payment debited from your account.
Note 2: One-half of one percent of your gross revenues are paid for advertising, marketing and public relations and other development costs. (See Item 11).
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Note 3: Interest begins to accrue from the due date of payment at 1% per month. This rate can change with 30 days written notice but we can change this rate only if the prime rate charged by U.S. Bank to its best commercial customers in Seattle, Washington USA, or closest equivalent, increases 3% or more and in an amount equal to the increase, above current prime. The current prime rate of U.S. Bank at Seattle is 6.75%.
Note 4: You must protect, indemnify and hold us harmless against any claims or losses arising out of the operation of the franchise business. If you default under the Agreement you must pay all our damages and costs to the extent permitted by law.
Note 5: You must procure and maintain any insurance as may be required pursuant to the Lease or Sub-Lease for the premises of your YOUR DOLLAR STORE WITH MORE store. You also must procure and maintain any other insurance as we may reasonably require including, product liability insurance, fire and extended coverage insurance on your equipment, leasehold improvements and your stock, and public liability and indemnity insurance in the amounts as we may require, fully protecting as the named insureds us and you against loss or damage occurring in connection with the operation of your YOUR DOLLAR STORE WITH MORE store.
Note 6: All cash registers, equipment and information system updates and upgrades will be made available to you by us or from third party vendors through the term of your franchise. All upgrades will be made available to all franchisees at the same cost. Costs will be competitive and fair. Costs will vary depending if the upgrade is an equipment, software or outside service upgrade and will vary from $0 per year (in the case of no updates) to approximately $1,000 (in the case of a major upgrade in that year).
Note 7: We may require you to submit to us within 90 days of your fiscal year end, an unaudited financial statement prepared by an independent accounting firm.
Item 7 INITIAL INVESTMENT
|
. To Whom |
||||
|
Method of |
, |
Payment is |
||
|
Cateeorv |
Estimated Amount |
Payment |
When Due |
to be made |
|
Initial Franchise Fee |
$17,000 for first franchise; $8,500 for second and additional outlet franchises (Note 1) |
All cash |
On signing Franchise Agreement |
Us |
|
Real Estate, |
Approx. $0 to |
As requested by |
As requested |
Contractor, |
|
Leasehold |
$48,000 (Note 2) |
contractors |
by contractors |
Architects, |
|
Improvements, |
Suppliers |
|||
|
Fixtures |
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|
J Cateeorv |
Estimated Amount |
Method of . Payment |
When Due |
To Whom Payment is to be made |
|
Equipment and Signs |
Approx. $3,000 to $10,500 (Note 3) |
Cash or in accordance with financing |
Before opening |
Suppliers |
|
Shelving |
Approx. $9,000 to $30,000 (Note 4) |
Cash or in accordance with financing |
Before opening |
Suppliers |
|
Inventory and Supplies |
Approx. $37,500 to $120,000 (Note 4) |
Cash, or negotiated terms with "preferred suppliers" or financing |
Approx. 35% before opening. Balance 30-60 days after opening |
Suppliers |
|
Additional Funds and Miscellaneous |
$2,000 to $7,000 (Note 5) |
As incurred |
Expended over approximately the first 4 weeks before opening to three months of operation |
Employees, utilities, suppliers, etc. |
|
TOTAL |
$66,500 to $232,500 |
oes not include Real Estate Costs)
(1) The initial franchise fee is $17,000 for one franchise. The franchise fee is reduced to $8,500
for the second and additional franchises. See Item 5 for refundability and financing if applicable. See Item 6 for transfer fees paid by transferees of an existing franchise.
(2) You may choose to spend more for leasehold improvements, but this is not normally recommended. These sums do not include any sums for purchase of real property, as it is not anticipated that you will purchase real property, since you will normally rent. The typical YOUR DOLLAR STORE WITH MORE store has approximately 3,500 up to 74,000+ square feet of space, and is usually located in a strip mall or other leased location.
(3) This category includes Equipment of $2,000 - $3,000, the cash registers) and computer, information processing and communications system and fax machine described in Item 11, signs of $1,000 - $7,500. The total depends upon the size and configuration of the store and the product selection desired.
(4) The total depends upon the size and configuration of the store and the product selection desired. Terms we have negotiated with our "preferred suppliers" may allow you to defer
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payment on approximately 50% of the inventory purchases for 30 to 60 days. (approximately $20,000 to $90,000 of inventory costs). See Item 8.
(5) This estimates your initial 4 weeks pre opening to three months post opening miscellaneous start-up expenses, not including salary or personal expenses for you. These figures are just estimates and we cannot guarantee that you will not have higher costs, or that you will ever achieve profitability. Competitive conditions described in Item 1 above affect these costs. This also includes miscellaneous startup costs, such as: incorporation and business licenses, general liability and workmen's compensation insurance payments (if any); tax deposits and license fees (if any); prepaid expenses and deposits (e.g. utilities and rent), initial legal and accounting fees (if any); transportation, lodging and meals during training; employee costs before opening and during training (if any); initial advertising; and other miscellaneous costs. If we assist you in negotiating the lease or negotiating our required option to assume the lease, we may charge you up to $2,000 of our fees. This amount is included in this Item 7 estimate.
These amounts are estimates only, and specific amounts will vary depending upon local market conditions. We relied on YDSWM's experience in this business with numerous recent outlet start-ups and our two corporate start ups in Vancouver Washington to compile these estimates. You should review the figures carefully with a business advisor before making any decision to purchase the franchise.
We are SBA approved but do not offer financing to you, directly or indirectly. The availability and terms of third-party financing depend on a number of factors including availability of financing generally, your creditworthiness and available collateral, lending institutions' policies concerning the type of business you operate, and other comparable elements. We are not able to estimate your loan repayments to third parties. See Item 10.
Except as noted, none of the payments to us are refundable by us.
Item 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Purchase or Lease of Goods, Services, Supplies, Fixtures. Equipment, Inventory, Computer Software or Hardware and Real Property and Other Items. To maintain uniform standards of quality, appearance, and marketing, it is essential that you conform to our standards and specifications. You will manage your own operations and employees.
We encourage you to purchase inventory and supplies through our "preferred supplier" program, but except for certain branded products and mandatory items, you may purchase inventory and other products from any supplier you choose. Occasionally or on branded products, we may require you to purchase certain supplies and inventory from us or from a designated approved supplier. For the benefit of all franchisees, we encourage you to communicate to us good buys, hot products that really sell and the names of suppliers that provide exemplary service, etc. so that we may pass these company names on to all the franchisees in the chain. You must not sell products communicated to
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you as unapproved. The majority of your products must be sold for one dollar to five dollars currently.
You must participate in and cooperate with multi-area marketing programs, including national accounts programs, multi-area customer, Internet, yellow pages, directory, affinity, and co-branding programs that we develop in the future. These programs may require your cooperation (including refraining from certain channels of marketing and distribution), participation (including payment of commissions or referral fees), and adherence to maximum pricing to the extent permitted by law, other marketing and promotional programs, and follow franchisor requirements and guidelines.
You must follow our trademark and copyright usage directions.
We must approve your location and lease and floor plan, and fixtures, shelving, signage and equipment.
You must acquire from sources of your choice and at your expense, a Sharp ES440 cash register or the current standard register. You must acquire from sources of your choice and at your expense, a computer, a fax machine, software and Internet access that we may specify, if you do not already have these items. (See Item 11.)
On branded products we may require you to do business with us or purchase supplies from us or from any designated approved supplier. We may charge a reasonable mark up on supplies we provide, consistent with the industry standards based on competition for similar products, product lines, volumes, or other factors. For example, we may wish to purchase a large volume of a specific item(s) to secure a better price than you could purchase the same item for, from the same or alternate sources. We would then offer these product(s) to you at a competitive price, part of which may be our mark up for services provided. Our business plan also calls for branding of specific products which you could be required to purchase from us or the supplier of the branded product and offer for sale. Branded items may change.
We do not require you to do business with us or purchase supplies from us or from any designated source other than as we describe above.
How We Issue Specifications or Supplier Approvals. We search the market for suppliers and issue preferred supplier status to companies that exceed our discretionary expectations in terms of variety, pricing, quality, value and appearance. There are no written criteria for preferred supplier status. We will provide to you a list of preferred suppliers, but we do not limit you to this list. To become a preferred supplier, we may require suppliers to provide certain information, sign a nondisclosure agreement, agree to guarantee our level of quality, and produce sufficient samples to allow us to test the sample. There is no fee to you for supplier approval. We may issue specifications in manuals or directives, in writing or electronically, and we may modify them at any time. We will respond to a written request to approve a supplier for preferred status within a reasonable time, normally 14 days of its receipt.
YOUR DOLLAR STORE or Affiliates as an Approved Supplier. We may offer or designate others to offer certain supplies or services, and our affiliates or we may become approved
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suppliers or the only approved suppliers) for other goods and services. These supplies or services may include branded products, printed material, promotional material, computer systems or software, Internet access, marketing, and usage programs. We may become an approved supplier or the only approved supplier for other goods and services under the same scrutiny and guidelines of competitiveness, quality, and service as is applied to all suppliers.
YDSWM or We May Derive Revenue Based on Purchases or Leases. YDSWM or we may derive revenue through reasonable markups consistent within our industry of the prices charged to you for goods or services we supply. We may derive revenue through license fees, commissions, promotional fees, advertising allowances, rebates or other monies paid by suppliers. We will retain and take into general revenues one-half all vendor rebate payments received and one-half will be passed on to you via an annual refund check, with interest.
In the fiscal year ended April 30, 2003, our total revenue from franchisee purchases and leases was $29,855 , which was approximately 4.0% of our total revenue of $756,064, as reported in our attached audited financial statements.
In YDSWM's fiscal year ended October 31, 2002, it did not derive revenue from purchases or leases from U.S. franchisees.
YDS Holdings did not derive revenue from franchise purchases or leases in the fiscal year ended April 30, 2003.
Extent of Required Purchases. We estimate that your initial expenditures from us or to YDSWM, or that we specify or approve, will be 0 - 5% of your total initial purchases. During the operation of the franchised business, required purchases or leases from us or YDSWM, or that we specify or approve are estimated to total 0 - 5% of your annual operating expenses. The majority of these required purchases will be from third parties that we specify or approve.
We do not provide material benefits (for example renewal or additional franchises) to you based solely on your use of designated or approved sources, other than the intangible benefit of uniform quality standards.
Item 9 FRANCHISEE'S OBLIGATIONS
THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND OTHER AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR. REFERENCES ARE TO THE FRANCHISE AGREEMENT UNLESS OTHERWISE SPECIFIED.
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Obligation |
Section in Franchise or Other Agreement |
Item in Offering Circular |
|
|
a. |
Site selection and acquisition/lease |
Sections 1.01 and 3.01 |
Items 6, 7, 8,11 & 12 |
|
b. |
Pre-opening purchases/leases |
Sections 1.01,3.01,3.02, 5.11 |
Item 7, 8 |
|
c. |
Site development and other pre-opening requirements |
Sections 3.02 and 3.03, |
Items 6, 7 and 11 |
|
d. |
Initial and ongoing training |
Sections 3.03 and 5.05 |
Item 11 |
|
e. |
Opening |
Sections 2.01, 2.03 and 3.04 |
Item 11 |
|
f. |
Fees |
Sections 2.02, 2.03,4, 10.02 and 10.03 |
Items 5, 6 and 11 |
|
g- |
Compliance with standards and policies/ Manual |
Sections 2.02, 3.06, 5, 6 and 9.02 |
Item 8,11,16 |
|
h. |
Trademarks and proprietary information |
Section 7 |
Items 13 and 14 |
|
i. |
Restrictions on products/services offered |
Sections 5.01-5.04 |
Item 8 and 16 |
|
J- |
Warranty and customer service requirements |
Section 11.05 |
Item 11 and 16 |
|
k. |
Territorial development and sales quotas |
None |
Item 12 |
|
1. |
Ongoing product/service purchases |
Sections 5.01-5.04 |
Item 8 |
|
m. |
Maintenance, appearance and remodeling requirements |
Section 3.06 |
Item 11 |
|
n. |
Insurance |
Section 5.11 |
Item 6 |
|
0. |
Advertising |
Sections 3.05 and 9.03 |
Items 6 and 11 |
|
P- |
Indemni fication |
Section 11.02 and 11.05 |
Item 6 |
|
q- |
Owner's participation/ management/staffing |
Sections 8.01 and 8.02 |
Items 11 and 15 |
|
r. |
Records/reports |
Sections 5.08-5.10, 6.02 and 9.02 |
Item 6 |
|
s. |
Inspections/audits |
Sections 6.01 and 6.02 |
Items 6 and 11 |
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|
Obligation |
Section in Franchise or Other Agreementj |
Item in Offering Circular |
|
|
t. |
Transfer |
Section 10 |
Item 17 |
|
u. |
Renewal |
Section 2.02 |
Item 17 |
|
V. |
Post-termination obligations |
Sections 7.03 and 9.03 |
Item 17 |
|
w. |
Non-competition covenants |
Section 8.02 and 8.03 |
Item 17 |
|
X. |
Dispute resolution |
None |
Item 17 |
Item 10 FINANCING
We are SBA approved and listed in the SBA Registry. Financing may be accessible for you through the SBA program. We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation. We do not represent that you will be able to secure financing for the franchised business, nor do we make any representations as to the possible terms for the financing.
Item 11 FRANCHISORS OBLIGATIONS
Except as listed below, we need not provide any assistance to you.
Our Obligations Before You Open. Before you open your business, we will:
1) Assist you in selecting and leasing your store location by reviewing drawings or visiting the site, gathering demographics and sales information and assisting you in preparing a proforma for the site; and approve the location if it meets our criteria. (Section 3.01, Franchise Agreement).
2) Assist you in choosing a floor plan, and approve your floor plan if it meets our criteria. (Section 3.02, Franchise Agreement).
3) Train you in the training program. (Section 3.03, Franchise Agreement.) Also, see this Item 11 below for information on the training program.
4) Provide you a complete and detailed store opening checklist. (Section 17, Franchise Agreement.)
5) Lend you a Manual (printed or electronic), which will assist you in developing and using, on an ongoing basis in the operation of your business, controls, policies, procedures, sales, marketing, supplies, and lend you our Methods of Operation. (Section 7.08, Franchise Agreement.) This Manual is confidential and remains our property, and we may modify
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it at any time. The Table of Contents of the Manual with the number of pages for each section as of our latest fiscal year-end (unless another date is stated) is attached as Exhibit G.
Our Obligations During Your Operation of the Franchised Business. After you open your business, we will, at no additional charge, except as described in Item 6 or below:
1) Continue to consult with you concerning marketing, merchandising and general business operations. (Section 3.05, Franchise Agreement.)
2) Lend you any amendments, supplements or replacements, at no charge, to the confidential Manual (as described in this Item 11 above). (Sections l.F and 7.08, Franchise Agreement.).
3) Administer the advertising fund. We will expend the advertising fund on development of advertising and promotion, as described below in this Item 11. We may charge the fund a reasonable fee to administer the fund and for our overhead costs.
We may delegate our responsibilities to provide training and other services to an area representative , who may be an independent contractor.
Marketing and Advertising Fund. You will also pay us an Advertising Fee equal to 0.5% of your Gross Sales. See Section 4.02 of the Franchise Agreement. For the term of your franchise we may not raise but may discontinue or reduce your Advertising Fee. We may raise, discontinue or reduce advertising fees, contributions, and expenditures in our new or revised franchise documents as they may be updated. You pay the Advertising Fee at the same time and under the same terms as the royalty. See Item 6. We will not place the Advertising Fee in a separate bank account. We may not provide accounting or financial statements for the fund. We may use the Advertising Fee for marketing, research and development; regional, national or international advertising; advertising related administration expenses and any media or agency costs. We will not pay our salaries, accounting, collection, legal and other related expenses from the Advertising fund except our administrative fee described above. We make the expenditures at our discretion. We make no representations that any particular level of expenditure will be made for particular programs or to benefit particular franchisees or franchised locations.
The Advertising Fee is described as follows:
a. The media where advertising may be disseminated may be print, mail, telephone, radio, television, computer, Internet, or any other media.
b. Coverage of the media may be local, regional, or national.
c. The advertising may be produced by in-house advertising department or a national or local advertising agency.
d. You may use your own advertising material, but subject to our review and approval.
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e. There is no advertising council or cooperative yet formed to advise us on advertising policies. If one is formed, we will have the power to select and approve the members and to form, change, dissolve or merge the advertising council.
f. All franchisees contribute the Advertising Fee. We administer the Advertising Fee fund, which is not audited, and no financial statements will be prepared. In our last fiscal year ended April 30, 2003, the Advertising Fee fund was expended as follows:
Production/Television Documentary 41 %
Media Placement/Direct Advertising 21%
Administrative Expenses 38% Other (including R&D) 0%
Total 100%
*By other, we mean printed promotional material and internet
Neither our affiliates nor we receive payment for providing goods or services to the Advertising Fee fund, other than the administrative expenses described above.
g. Our company-owned stores, if any, in a local council region, if any, will pay into the Advertising Fee fund and vote in the same manner as you.
h. If all fees paid into the Advertising Fee fund are not spent in the fiscal year
when they accrue, we can use the remaining amounts for the same purposes in future years. We are not required to spend any amount on advertising in the area or territory where you are located.
i. The Advertising Fee will not be spent for activities that are principally a
solicitation for the sale of franchises.
We may disallow use of our trademarks in any media (including Internet or electronic media) without our prior review and written approval, except when using materials approved by us. Except for promotional programs approved for funding or partial funding through the Advertising Fee, you must pay for all expenses incurred for this independent advertising. You must follow our trademark and copyright usage directions, and cooperate with any multi-area marketing program approved by us.
Computer and Communications Systems. You must acquire, if you do not already have, and maintain operational and current, a computer with Windows based operating system (Windows 98 version or newer), software including Excel and Word, an Internet connection (high speed is recommended), and a fax machine. You must also purchase a point of sale system consisting of one, two or three, (depending on the size of the store) Sharp ER/A320 sales registers). The cost for these purchases is described in Item 7, above.
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The original documents were scanned as an image. The original file can be downloaded at the link above.