Tully’s Coffee
Date of Incorporation: 1992
Franchising Since: 1997
Headquarters: Washington
Business and Description: Tully’s Coffee Corporation offer a franchise to sell at retail a menu of specialty espresso and coffee drinks, teas, baked goods, ice cream products, other complementary food and beverage items and related accessories and supplies, operating under their Marks and following their System. Tully’s Coffee Corporation have operated businesses of the type the franchisee will be operating since 1992
Franchise Offer: The single franchise offers the opportunity to own and operate a retail store under the name “Tully’s”. The franchisee will offer the public specialty espresso and coffee drinks, teas, baked goods, ice cream products, other complementary food and beverage items and related accessories and supplies. The initial franchise fee is $20,000. Tully’s Coffee Corporation also offers the opportunity to enter into an area development agreement.
Financial Assistance: Tully’s Coffee Corporation does not provide any financial assistance nor do they guarantee any note, lease or obligation.
Training and Assistance: The franchisor will provide training for the franchisee and 1 manager. Tully’s Coffee Corporation does not charge for the training however the franchisee must pay the living and travel expenses. All training occurs at the Seattle, Washington training center and/or at one or more operating Tully's businesses. Tully’s Coffee Corporation will decide whether the franchisee has successfully completed the initial training program based upon knowledge test results and the franchisors observations of the franchisees ability to use the knowledge effectively.
Territory: Tully’s Coffee Corporation will grant the franchisee a geographic territory. The franchisor will not locate or open a competitive business under the Marks and using the System in the Territory, either company-owned or franchised, during the term of the Franchise Agreement. The franchisee is permitted to operate the Licensed Business only at one location and only within the Territory. There are no restrictions on where the franchisee, franchisor or other franchisees may advertise.
Renewal and Termination: The term of the franchise agreement is 5 years. If the franchisee is in good standing there is an opportunity is renew for an additional 5 years under the then current franchise agreement. The renewal fee is not more than 2/3 of the then-current Initial Fee.
Obligations and Restrictions: The franchisee must either devote their full time and effort to managing and operating the Licensed Business or delegate its management or operation to a responsible person. The franchisee must reserve and exercise ultimate authority and responsibility over operation and management of the Licensed Business. The franchisee may offer for sale only products and services Tully’s Coffee Corporation approves. The franchisee must offer and sell only coffee products that are obtained from the franchisor or their approved or designated supplier(s). The normal minimum hours of operation are from 6:00 a.m. to 8:00 p.m., Monday through Saturday and 6:00 a.m. to 6:00 p.m. on Sundays.
Total Number of Company Owned Units for 2007: 90
Total Number of Company Owned Units Opened for 2007: 6
Total Number of Company Owned Units Closed for 2007: 4
Total Number of Franchised Units for 2007: 38
Total Number of Franchised Units Opened for 2007: 15
Total Number of Franchised Units Closed for 2007: 0
Investment Table:
Estimated Initial Investment for Single Unit Franchise:
| Name of Fee | Low | High |
|---|---|---|
| Initial Fee | $20,000 | $20,000 |
| Travel & Living Expenses While Training | $100 | $2,000 |
| Real Estate & Improvements | $10,000 | $50,000 |
| Leasehold Improvements | $60,000 | $250,000 |
| Equipment | $100,000 | $120,000 |
| Signs | $15,000 | $40,000 |
| Training Expense after initial | $250 | $4,000 |
| Licenses | $200 | $600 |
| Grand Opening | $1,000 | $3,000 |
| Marketing & Marketing Fee (3 months) | $500 | $1,000 |
| Insurance | $1,500 | $4,000 |
| Legal Fees | $1,000 | $5,000 |
| Opening Inventory of Supplies | $2,000 | $4,500 |
| Additional Funds (3 months) | $20,000 | $40,000 |
| Miscellaneous Opening Costs | $20,000 | $30,000 |
| Total | $251,550 | $574,100 |
Ongoing Costs for Single Unit Franchise:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | 5% of Gross Revenues, or $300.00 per week. |
| Marketing Fee | 2% of Gross Revenues or $125.00 per week, if greater. |
| Local Marketing | 1% of Gross Revenues. |
| Additional Training | Approximately $25.00 to $300.00 per program per person. In addition, the franchisee is solely responsible for all compensation, salaries, benefits and travel-related expenses for themselves or any employees. |
| Transfer | $5,000 |
| Audit (less than 3% under reporting) | 1.5% per month interest on amount of underpayment plus the amount of the underpayment |
| Audit (3% or more under reporting) | 1.5% per month interest on amount of underpayment plus the cost of the audit plus the amount of the underpayment. |
| Vendor Review | Reasonable Fee to review proposed vendor or supplier. |
| Renewal | Up to 2/3 of the then-current Initial Fee. |
| Profits on gift card and loyalty reward processing | Variable. |
| Profits on supplies or equipment | Variable. |
The above information has been taken from the UFOC/FDD of Tully’s Coffee Corporation.
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