The Coffee Beanery
Date of Incorporation:1976
Franchising Since: 1985
Headquarters: Michigan
Business and Description: The Coffee Beanery Ltd is wholly owned by a company called The Shaw Coffee Company which is a Michigan corporation incorporated on June 29, 1983 and has a sister company called Shaw Services, Inc. which is also a Michigan corporation incorporated on November 6, 1970 and is also wholly owned by The Shaw Coffee Company. The Coffee Beanery franchises offer for sale espresso based and other specialty beverages, fresh-brewed coffee, coffee beans, bakery items, tea, related products such as mugs and coffee makers.
Franchise Offer: The Coffee Beanery Ltd offers six types of franchise arrangements.
• Franchise Agreement: A single Coffee Beanery Store.
• Conversion Owner: For existing independent businesses that provide coffee and coffee related services to the public to convert their businesses to Coffee Beanery stores.
• Area Agreement: offers to certain franchisees the right to become an Area Franchisee under an area franchise agreement.
• Development: offers the right to become a Developer under an area development agreement which grants the right to establish and operate a certain number of Stores in a specified area.
• Co-Branded Addendum: allows a franchisee to sell The Coffee Beanery products along with other products or service subject to approval, but is otherwise identical to the routine franchising program.
• The Coffee Beanery Ltd may enter into license or similar agreements with the operators of unique venues such as airport concessions or sports and entertainment venues
The initial franchise fee for the second and each subsequent Store operated by a Franchisee is twenty five percent (25%) of the then current initial franchise fee.
Financial Assistance: The Coffee Beanery Ltd does not offer any direct or indirect finance nor do they guarantee any note, lease or obligation.
Training and Assistance: The training is provided without any charge. Orientation training consists of between 1 to 3 days which is intended to assist the franchisee in becoming familiar with the system requirements, basic business planning. Operations training consist of between 7 – 28 days. Training will cover among other things: equipment set up, merchandising set up, daily operational procedures, preventive maintenance of equipment, service fulfillment and local marketing.
Territory: The Franchise Agreement designates the Approved Location for the Store. The franchisor may establish other franchised or company-owned Stores that may compete with the franchisees’ Store in any area without restriction.
Renewal and Termination: The term of franchise is 15 years. The franchisee may renew for terms of 15 years if certain requirements are satisfied and on completion of a renewal application. There is a renewal fee of $1,500. By written notice to the franchisor, the franchisee may terminate if there is no Approved Location 1 year after executing Franchise Agreement. The Coffee Beanery Ltd will not terminate without cause.
Obligations and Restrictions: The franchisee has the responsibility of finding a location for the Store. The franchisee must obtain the approval of The Coffee Beanery Ltd for this location. The franchisee must operate the Store in strict conformity with the methods, standards, and specifications that are set forth in the Operating Manual or otherwise in writing. Unless the franchisor approve in writing, the franchisee and their designated Store manager, must devote full-time and best efforts to the management and operation of the Store.
Total Number of Company Owned Units for 2007: 2
Total Number of Company Owned Units Opened for 2007: 0
Total Number of Company Owned Units Closed for 2007: 0
Total Number of Franchised Units for 2007: 90
Total Number of Franchised Units Opened for 2007: 13
Total Number of Franchised Units Closed for 2007: 24
Investment Table:
Estimated Initial Investment for a Single Unit Franchise:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $27,500 | $27,500 |
| Opening Inventory and Supplies | $5,000 | $30,000 |
| Equipment Fixtures, Signage & Leasehold Improvements | $20,000 | $375,000 |
| Grand Opening Advertising | $7,500 | $7.500 |
| First Month’s Rent & Security Deposit | $43,000 | $150,000 |
| Training Expenses | $3,110 | $5,000 |
| Miscellaneous Opening Costs | $3,000 | $5,000 |
| Additional Funds-Working Capital | $50,000 | $75,000 |
| Total estimated Investment | $355,500 | $519,000 |
Ongoing Costs for Single Unit Franchise:
| Name of Fee | Amount |
|---|---|
| Royalty | 6% of the gross sales of the Store. |
| Brand building fund | 2% of gross sales. |
| Grand Opening | $2,500 to $7,500 |
| Cooperative Advertising | Amount to be established by local cooperative but the franchisor may require up to 2% to be paid to local cooperative without vote. |
| Warehouse purchases | Will vary under circumstances. |
| Training | Reasonable Charge |
| National Convention | $200 |
| Transfer to New or Existing Franchisee | Reasonable expenses not to exceed 25% of the then initial Franchise Fee |
| Renewal | $1,500 |
| Marketing Fee (Sale of Franchise) | 2.5% of gross sales price, less inventory |
| Minimum Inventory | Will vary under circumstances |
| Maintenance of Store and Insurance | Reasonable Charge |
| Reinstatement Fee | $2,500 |
| Costs and Attorneys Fees | Will vary under circumstances |
| Audit | Cost of audit understatement plus interest |
| Interest | Lesser of 1.5% per month or highest contract rate of interest allowed by law |
| Indemnification | Will vary under circumstance |
| Will vary under circumstance Advertising and promotional materials |
Reasonable costs |
| Leaseholds and Rental | As provided by the sublease |
The above information has been taken from the UFOC/FDD of The Coffee Beanery Ltd.
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