Cheese Steak
Date Incorporation: 2002
Franchising Since: 2002
Headquarters: California
Description: Cheese Steak Shop restaurants feature various types of cheese steaks and other products such as french fries and Italian style sandwiches in a wholesome family restaurant setting. Cheese Steak Shops include customer seating as an integral part of their design in addition to their pick-up style service.
Franchise Offer: 3 types of franchise:
i.) Traditional Shop - The franchisee may operate a Cheese Steak Shop restaurant in a wholesome family setting.
ii.) Non-Traditional Shop - a franchisee will operate a Cheese Steak Shop restaurant in a non-traditional location such as an airport, hotel, convention center, sports arena or stadium, college campus, amusement park, within the premises of another business or in a similar venue.
iii.) Area Development Agreement – franchisee may develop a number of Cheese Steak Shops in a geographic area.
Financial Assistance: The Company does not offer direct or indirect financing to franchisees.
Training and Assistance: The training course lasts four weeks and takes place at the company's corporate office in San Pablo, California and at a Cheese Steak Shop restaurant that has been certified as a training restaurant. The franchisee and any designated manager or representative must complete training to the company's satisfaction before opening the restaurant.
Territory: The franchisee will receive the exclusive right to operate a Cheese Steak Shop restaurant within a one mile radius of the restaurant, except as outlined below. The company will not grant this right in metropolitan areas in which the population during any 24 hour period exceeds 50,000 persons per square mile, or if the restaurant will be located in a non-traditional location.
Term of Agreement and Renewal: The length of the franchise term is 10 years, with an option for renew for 10 years.
Obligations and Restrictions: The franchise shall at all times be under the direct, on-premises supervision of the franchisee or its designated manager, who is required to devote full time energy to the management and operation of the franchise. The franchisor recommends on-premises supervision and participation in the franchise by the franchisee.
Total Number of Units: 22 outlets at the end of 2007
Total Number of franchises Units: 13 franchised outlets at the end of 2007
Investment Tables:
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| INITIAL FRANCHISE FEE | $15,000 | $15,000 |
| TRAVEL & LIVING EXPENSES WHILE TRAINING | $3,500 | $3,500 |
| REAL ESTATE & IMPROVEMENT | $ 79,000 | $114,500 |
| EQUIPMENT | $ 75,000 | $125,000 |
| POINT OF SALE EQUIPMENT | $10,000 | $10,000 |
OPENING INVENTORY & SMALLWARES |
$8,500 | $8,500 |
| UNIFORMS | $ 500 | $ 500 |
| INSURANCE | $3,000 | $7,500 |
| ADDITIONAL FUNDS - 3 MONTHS | $7,500 | $15,000 |
| TOTAL | $ 199,500 | $ 299,500 |
Ongoing fees:
| Name of Fee | Amount |
|---|---|
| Periodic Franchise Fee | Greater of 5% of adjusted gross sales or $750 per month: may vary for non-traditional locations |
| Periodic Advertising Fee | 1% of adjusted gross sales; may vary for non-traditional locations |
| Relocation fee | Company's cost up to $7,500 |
| Certification Re-Examination Fee | Company's expenses |
| Audit Fee | Cost of audit, plus late charges on amount due |
| Transfer Fee | $7,500 or $12,500 or Company's cost |
| Renewal Fee | $2,500 ($7,500 for non-traditional locations) |
| Late Fee | Currently 19.99% |
| Reimbursement of Costs | Company's cost |
| Indemnification | Company's cost |
| Cost of Acquiring Property | Company's cost |
| Costs of Enforcement | Company's cost |
Date of FDD:
The above information has been taken from the UFOC/FDD of Cheese Steak
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