Pipes Café
Date of Incorporation: 2001
Franchising Since: 2001
Headquarters: California
Business and Description: Pipes Café Licensing Company Inc. was formed to become the sole franchisor of the "Pipes Cafe" franchises. Each Pipes Cafe features a wide variety of hand-prepared; breakfast dishes and the special "Pipes Potatoes,” a popular selection of lunch sandwiches and salads for dine-in and take-out. The typical hours of operation will be from 6 AM or 7 AM until 3 PM, seven days a week, unless otherwise indicated.
Franchise Offer: Each franchise relationship is offered by Pipes Café Licensing Company Inc. based on a-single franchise agreement under which the Franchisee will own and operate one Café at a specific mutually agreed location.
Financial Assistance: Pipes Café Licensing Company Inc. does not offer any direst or indirect financing nor do they guarantee any note, lease or obligation. Pipes Café Licensing Company Inc. reserves the right to finance the initial franchise fee for employees of Pipes Café Licensing Company Inc.
Training and Assistance: Initial training by Pipes Café Licensing Company Inc. includes training the franchisee or the Operating Manager and up to one designated management employee. The training program shall be given prior to the opening of the Cafe for a period of 2 weeks and is composed of on-the-job and classroom training in the operations of a Pipes Café. 2 weeks of on-site training at the Franchisees’ Café will be provided. Pipes Café Licensing Company Inc. will provide training in on-site food, preparation, hiring and training employees, customer service, procedures, management techniques, general accounting, bookkeeping and business procedures.
Territory: The Franchisee will receive an exclusive territory based on a population base of at least 20,000 people, and a typical mileage radius of three to five miles or more. Pipes Café Licensing Company Inc. will not operate nor grant additional franchises to operate a Cafe within the territory. The Franchisee may sell outside their territory but may not establish another Cafe in their territory.
Renewal and Termination: The term of the Franchise Agreement is 10 years. If the Franchisee is not in default they can renew the franchise for unlimited sequential terms of five years each. The renewal fee is $1,000. The agreement will be terminated by the franchisee if the café ceases to operate continuously for a 30 day period, without Pipes Café Licensing Company Inc.'s approval. Pipes Café Licensing Company Inc. can not terminate the agreement without cause.
Obligations and Restrictions: In order to ensure the uniformity and high-quality, the Franchise Agreement provides that the Franchisee will only sell or offer for sale products and menu items as (i) will serve to establish the Cafe as a Pipes Cafe, (ii) will meet Pipes Café Licensing Company Inc.'s standards of quality and quantity and (iii) have been prepared in accordance with Pipes Café Licensing Company Inc.'s methods and techniques. Pipes Café Licensing Company Inc. requires that all stock be purchased exclusively, through Pipes Café Licensing Company Inc.'s approved suppliers, throughout the continuing operation of the Cafe.
Total Number of Company Owned Units for 2006: 1
Total Number of Company Owned Units Opened for 2006: 0
Total Number of Company Owned Units Closed for 2006: 0
Total Number of Franchised Units for 2006: 1
Total Number of Franchised Units Opened for 2006: 0
Total Number of Franchised Units Closed for 2006: 0
Investment Table:
Estimated Initial Investment for a Single Unit Franchise:
| Name of Fee |
Low |
High |
|---|---|---|
| Franchise Fee |
$20,000 |
$20,000 |
| Architectural Planning |
$1,000 |
$2,000 |
| Lease Deposits |
$2,000 | $4,000 |
| Insurance |
$1,000 |
$3,000 |
| Permits |
$1,000 |
$2,000 |
| Leasehold Improvements |
$50,000 |
$85,000 |
| Furniture, Fixtures and Equipment |
$75,000 |
$100,000 |
| Signs |
$5,000 |
$10,000 |
| Travel and Living Costs while Training |
$2,000 |
$3,000 |
| Opening Inventory and Services |
$4,000 |
$5,000 |
| Promotional and Pre-Opening Expenses |
$10,000 |
$15,000 |
| Working Capital |
$20,000 |
$25,000 |
| Total |
$191,000 |
$274,000 |
Ongoing Costs for Single Unit Franchise:
| Name of Fee | Amount |
|---|---|
| Site Evaluation Costs | All of Pipes Café Licensing Company’s reasonable costs and expenses |
| Insurance | Premiums vary depending on location. |
| Training | $1,000 per person, if more than two require mgmt. training, or upon transfer to new owner. |
| Royalty | 4% of Gross Sales |
| Local Advertising | 2% of Gross Sales |
| Advertising Fund | 1% of gross sales |
| Interest | 18% or maximum rate, whichever is less. |
| Audit | Cost of Audit 1.5% interest per month of unpaid balance due. |
| Relocation | $1,000 |
| Renewal | $1,000 |
| Transfer | $1,000 |
| Legal | Actual legal fees and related expenses |
The above information has been taken from the UFOC/FDD of Pipes Café Licensing Company Inc.
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