Item 1
THE FRANCHISOR AND ANY
PARENTS, ITS PREDECESSORS AND AFFILIATES
To simplify the language in
this Disclosure Document, "Big Boy" means Big Boy Franchise
Management LLC, the franchisor. "You" means the person or legal
entity that buys the franchise. If the franchisee is a corporation, partnership
or other legal entity, "you" also includes the franchisee''s owners.
Big Boy, Its
Predecessors. Parents and Affiliates
Big Boy is a Michigan limited
liability company organized on December 1, 2000. Its principal business address
is One Big Boy Drive, Warren, Michigan 48091-1799. Big Boy''s
predecessor-in-interest was Elias Brothers Restaurants, Inc.
("Elias"), a Michigan corporation incorporated on February 28, 1963.
Elias was preceded-in-interest by Dixie Drive-In Restaurants
("Dixie"), a Michigan co-partnership with its principal business
address at 1621 E. Eight Mile Road, Hazel Park, Michigan. Big Boy''s agent for
service of process is disclosed in Exhibit A.
Robert C. Wian Enterprises,
Inc. ("Wian") founded the Big Boy Restaurant System in 1936. In 1967,
Wian sold the Big Boy Restaurants it operated and assigned its rights under all
of the Big Boy Restaurant Franchise Agreements to the Marriott Corporation
("Marriott"). In 1987, Marriott assigned to Elias all of its Big Boy
Restaurant Franchise Agreements. In December 2000, Elias assigned to Big Boy
all of its Big Boy Restaurant Franchise Agreements. Big Boy has been the
franchisor of Big Boy Restaurants since December 2000.
Big Boy is a wholly-owned
subsidiary of Big Boy Restaurants International LLC
("International"), a Michigan limited liability company with the same
principal place of business at One Big Boy Drive, Warren, Michigan 48091. Big Boy''s sister company, Big Boy Food Group LLC ("Big Boy Food Group"), a
Michigan limited liability company wholly-owned by International, operates a
food processing and manufacturing facility in Warren, Michigan that supplies
food and supplies for the Big Boy Restaurant System. Otherwise, no affiliates
of Big Boy provide products or services to Big Boy''s franchisees. Its sister
company, Big Boy Event Services LLC ("Event Services"), a Michigan
limited liability company wholly-owned by International, together with CBBI,
LLC d/b/a Splendid Plates ("Splendid Plates"), a Michigan limited
liability company the majority of which is owned by Event Services, is the
concessionaire and caterer for various concession operations and special
events. In addition, Big Boy''s sister company, Big Boy Restaurant Management
LLC, a Michigan limited liability company wholly-owned by International, owns
and operates company-owned Big Boy Restaurants in Michigan and Ohio. The Big Boy Restaurants that Big Boy Restaurant Management LLC owns and operates are
referred to as "Company-Owned Big Boy Restaurants" in this Franchise
Disclosure Document.
Pursuant to a separate and
distinct Franchise Disclosure Document, Big Boy also offers franchises to
develop, own and operate "CafiS-style Big Boy Restaurants" that sell to the
public Big Boy� signature items, including the "Original Double
Decker�" hamburger, specialty sandwiches baked in a hearth oven, specialty
coffee, as well as a selection of breakfast, lunch and certain dinner items.
Cafe-style Big Boy Restaurants generally will not have salad or breakfast or
dinner bars and are smaller than the Big Boy Restaurants described in this
Franchise Disclosure Document ranging in size from 2,700 to 3,500.
As of December 31, 2007 there were
128 franchised Big Boy Restaurants worldwide, and 25 Company-Owned Big Boy
Restaurants and no franchised or company-owned Cafe-style Big Boy Restaurants
(see
Item 20). Neither Big Boy nor
any of its predecessors or affiliates has offered franchises in other lines of
business.
Big Bov
Restaurant Franchise
As described in this Franchise
Disclosure Document, Big Boy offers franchises to develop, own and operate
"Big Boy Restaurants" that sell to the public Big Boy� signature
items, including the "Original Double Decker�" hamburger, specialty
sandwiches, as well as a selection of breakfast, lunch and dinner items. The
franchise being offered also grants the right to use the Big Boy System, the
distinguishing features of which include the name "Big Boy�";
specially designed buildings, fixtures, equipment, point-of-sale systems,
containers and other items used in serving and dispensing food products; signs,
emblems, trade names, trademarks and service marks; distinctive food products
and their formulas and quality standards; and instructional materials and
training courses.
The restaurant industry is
highly competitive and can be affected by many factors, including changes in
local, regional or national economic conditions, changes in consumer tastes,
and increases in the number of, and particular location of, competing
restaurants. Your direct competitors will include all family-style restaurants
with sit-down table service.
Area
Development Agreement
If you meet Big Boy''s
qualifications, you may enter into an Area Development Agreement for the
development of Big Boy Restaurants in a designated geographic area called a
"Territory." Under the Area Development Agreement, you must develop
an agreed upon number of Big Boy Restaurants within an agreed upon period of
time. You must sign a separate Franchise Agreement for each Big Boy Restaurant
you develop under an Area Development Agreement.
Regulation of
Restaurant Industry
The restaurant industry is
heavily regulated. Many of the laws, rules and regulations that apply to
businesses generally have particular applicability to restaurants, especially
restaurants that serve alcoholic beverages. All Big Boy Restaurants must comply
with federal, state and local laws applicable to the operation and licensing of
a restaurant business, including obtaining all applicable health permits and/or
inspections and approvals by municipal, county or state health departments that
regulate food and liquor service operations. Your Big Boy Restaurant must also
meet applicable municipal, county, state and federal building codes and
handicap access codes. You should consider these laws and regulations when evaluating
your purchase of the franchise.
You must have Big Boy''s
written approval and obtain a liquor license before you can sell alcoholic
beverages at your restaurant. The difficulty and cost of obtaining a liquor
license, and the steps for securing a liquor license, vary greatly from area to
area. There is also wide variation in state and local laws, rules and
regulations that govern the sale of alcoholic beverages. In addition, state
dram shop laws give rise to potential liability of a restaurant for injuries
that are directly or indirectly related to the sale and consumption of alcohol.
The U.S. Food and Drug
Administration, the U.S. Department of Agriculture and state and local health
departments administer and enforce regulations that govern foods and food
preparation and service and restaurant sanitary conditions. State and local
agencies inspect restaurants to ensure that they comply with these laws and
regulations.
The Federal Clean Air Act and
various state laws require certain state and local areas to meet national air
quality standards limiting emissions of ozone, carbon monoxide and particles,
including caps on emissions from commercial food preparation. Some state and
local governments also regulate indoor air quality, including limiting the use
of tobacco products in public places, such as restaurants.
