Kelly's Coffee & Fudge Factory
Date of Incorporation: 2003
Franchising Since: 2005
Headquarters: California
Business and Description: Kelly's Coffee & Fudge Factory INC, offers to franchise a store that features coffee, tea, fudge, blended drinks, confections, baked goods, sandwiches, salads, soups and gelato.
Franchise Offer: Kelly’s Coffee and Fudge Factory offer two different franchises: (1) Kelly's Coffee & Fudge Factory store franchises, and (2) regional manager franchises. A Kelly's Coffee & Fudge Factory store is generally between 800 and 150 sq feet.
Financial Assistance: Kelly’s Coffee and Fudge Factory do not offer direct or indirect financing, nor do they guarantee any obligations with third parties.
Training and Assistance: Kelly's Coffee & Fudge Factory store, provide Phase 1 Training, which presently consists of up to 7 days of administrative and operational instruction. Subjects that are addressed in the Phase 1 Training include food handling and preparation; inventory control; store operations basics; employee hiring, training etc. Phase 2 Training consists of on-site training by equipment vendors once equipment is installed at franchisee’s store. Phase 3 Training consists of 3 consecutive days of on-site training at store on the day before, the day of and the day after the franchise first opens for business.
Territory: Kelly's Coffee & Fudge Factory Store Franchisee Owners are granted very limited territorial rights.
Renewal and Termination: The term of the franchise is 10 years with the option of 2 consecutive renewals for 5 years each. The franchisee may terminate the franchise agreement if the franchisor materially breaches the franchise agreement. The renewal fee is 25% of the then current initial franchise fee.
Obligations and Restrictions: Kelly’s Coffee and Fudge Factory does not require that the franchisee personally oversees the business but a member of senior management must take up these duties. The franchisee may operate Kelly's Coffee & Fudge Factory store only at the location that has been approved and nowhere else, except with prior written approval. The franchisee must offer and sell only the products and services that are designated as part of the Kelly's Coffee & Fudge Factory System.
Total Number of Company Owned Units for 2006: 0
Total Number of Franchised Units for 2006: 14
Total Number of Franchised Units Opened for 2006: 9
Total Number of Franchised Units Closed for 2006: 2
Investment Table:
Estimated Initial Investment for Single Unit Franchise:
| Name of Fee |
Low |
High |
|---|---|---|
| Initial Franchise Fee |
$20,000 |
$20,000 |
| Initial Training Program expenses, including travel, room and board |
$3,000 |
$5,000 |
| Leasehold improvements |
$125,000 | $200,000 |
| Furniture. Fixtures and Equipment |
$40,000 |
$60,000 |
| Signs/Decor/ Printing |
$10,000 |
$15,000 |
| Professional Fees |
$19,000 |
$25,000 |
| Security Deposits, Utility Deposits and Business Licenses | $12,000 |
$20,000 |
| Small wares and supplies |
$3,000 |
$5,000 |
| Opening Inventory |
$15,000 |
$20,000 |
| Grand opening advertising |
$2,500 |
$2,500 |
| Miscellaneous costs to begin operations and Additional Funds (working capital) for first 3 months of operations |
$36,000 |
$60,000 |
| Total |
$285,500 |
$432,500 |
Ongoing Costs for Single Unit Franchise:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | $700 per month |
| Local Advertising Expenditures | 1 % of Gross Sales must be spent on local promotion and advertising in the area where the store is located. |
| Advertising Fees | 1% of Gross Sales must be paid to the franchisor as Advertising Fees. |
| Late Charge and Interest. | Late charge: $35 per late payment Interest: 1.5% per month not to exceed the maximum legal rate of interest. |
| Insurance | Service charge equal to 25% of the annual cost of new insurance, plus the actual annual cost of new required insurance. |
| Renewal Fee | The renewal fee is 25% of the then-current Initial Franchise Fee at the time when the franchisee renews. |
| Transfer fee | $2,500 |
| Employee Uniforms | Current price plus shipping and handling |
| The Initial Training Program consists of 3 phases: Phase 1 Training, Phase 2 Training and Phase 3 Training; Additional Training. | The fee for Phase 1 Training is published in the Manual, which presently is $1,500. Phase 2 Training is provided by the franchisee’s equipment vendors and the fees may vary. The fee for Phase 3 training is $1,500. The franchisee must pay all expenses that they or their employees incur during any training program that the franchisor provides, including travel costs, room and board expenses and employee salaries. After the initial training program, if the franchisor provides training in a Kelly's Coffee & Fudge Factory® store or another location, the franchisee must reimburse them for their employee's expenses, including travel, room and board. |
| Indemnification and Defense | All costs including attorneys' fees; amount will vary under the circumstances. |
| Cost and Attorneys' Fees | Will vary under the circumstances |
The above information has been taken from the UFOC/FDD of Kelly's Coffee & Fudge Factory INC.
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