ITEM 1
THE FRANCHISOR, AND ANY
PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language in
this franchise disclosure document ("Franchise Disclosure Document"),
"Blendz Franchise", "Blendz", "us" or "we" means Blendz Franchise System,
Inc., the Franchisor. We will refer to the person, corporation or partnership
that buys the franchise as "Franchisee" or "you". If the Franchisee is a legal
business entity, certain terms of the Franchise Agreement also apply to the
owners of the entity and will be noted.
The Franchisor, its Affiliates
and Predecessors
Blendz is a California
corporation. We currently maintain our principal business office at 267 E. Campbell Avenue, Suite 200, Campbell, California 95008 and conduct business under our
corporate name. We began offering franchises for Blendz� Stores in August 2005.
We do not operate any Blendz� Stores and we do not engage in any other business
activities.
We do not have any parents,
however, we have 1 predecessor ("Predecessor") and 1 affiliate ("Affiliate"). Our Predecessor, Blendz, LLC ("BL") operates 4 Blendz� Stores in Campbell, Saratoga and Santa Clara, California since September 2002. Our Affiliate, Blendz
Enterprises, Inc. ("BE") does not engage in any line of business. Our
Affiliates do not provide products or services to franchisees. BL and BE do not
offer franchises in this or any other line of business. We share an address
with BL and BE.
Our agent for service of
process in California is Matt Phipps and our address in California for service
of process is 267 E. Campbell Avenue, Suite 200, Campbell, California 95008. Our agents for service of process for the rest of the states are disclosed on Exhibit E.
The Franchise
We offer franchises for the
use of the trademark BLENDZ� and our other trademarks, tradenames, service
marks and logos ("Marks") for the operation of Blendz� Stores. The franchise is
operated under a business format per a unique system, including or valuable
know-how, information, trade secrets, methods, Operations Manual, standards,
designs, methods of trademark usage, copyrights, sources and specifications, confidential
electronic and other communications, methods of Internet usage, marketing
programs, and research and development connected with the operation and
promotion of Blendz� Stores ("System"). We reserve the right to change
or otherwise modify the System at any time in our sole discretion.
Each Blendz� Store offers the
public a variety of fresh food products, including tossed-to-order salads,
grilled Panini sandwiches, blended smoothies, gourmet soups and, upon our
approval, specialty coffees and espresso. Blendz� Stores are typically located
in strip shopping centers, suburban power centers, downtowns, business centers,
office parks and malls. Blendz� Stores may also be placed in a permanent,
temporary or seasonal food service facility (e.g., a kiosk, concession, and
multi-brand facility) and may be placed in a variety of settings, such as food
courts, transportation facilities (e.g., airports, train stations, bus
terminals and port authorities), hospitals, military facilities, festivals,
health care facilities, cafeterias, commissaries, schools, automobile
dealerships, hotels, sports and entertainment facilities (e.g., stadiums,
ballparks and convention centers), and other mass gathering locations or
events.
You must operate
your Blendz� Store per our standard business operating practices and sign our
standard franchise agreement ("Franchise Agreement"). Your Blendz� Store must offer
authorized products. We reserve the right to add, modify or delete any product
that you
must offer or sell at your
Blendz� Store at any time in our sole discretion. You must also obtain all
necessary permits, licenses and approvals to operate your Blendz� Store.
We offer a standard franchise ("Franchise"). As a Franchise operator you
may operate 1 Blendz� Store per Franchise Agreement that you sign with us. We
also offer to select qualified persons already operating a Blendz� Store the
opportunity to operate an Express Unit. (See Items 7 and 12).
Market and Competition
The restaurant and food
service industry is highly competitive and fragmented. There are numerous
restaurants and other food service operations that compete directly and
indirectly with Blendz� Stores. In addition to other restaurant companies,
Blendz� Stores compete with numerous other retail businesses for suitable
locations. Investing in a Blendz� Store is a speculative risk and there is no
guaranty that you will be successful. You will also face normal business risks
that could have an adverse affect on your Blendz� Store. These include industry
developments, such as pricing policies of competitors, supply and demand and
changing consumer tastes. Another risk factor is our dependence on key
personnel, the loss of whom could have an adverse affect on us. Our ability to
fulfill our obligations under our Franchise Agreement depends in part on our
present and future financial condition. Litigation risks also exist, including
product liability litigation against you or us because of food-related
illnesses, and future litigation which may not be foreseeable.
The restaurant industry is
affected by changes in consumer tastes. In addition, the restaurant industry
may be adversely affected by discretionary spending priorities, national,
regional or local economic conditions, demographic trends, consumer confidence
in the economy, traffic patterns, weather conditions, employee availability and
the type, number and location of competing restaurants. Changes in any of these
factors could adversely affect a Blendz� Store. In addition, factors like
inflation and increased food, labor and other costs could adversely affect a
Blendz� Store.
Regulations
There are no regulations
specific to the quick serve casual dining industry in which our Blendz� Stores
operate, although you will be required to comply with all local, state and
federal laws and regulations that apply to restaurant operations, including
health, sanitation, smoking restrictions, EEOC, OSHA, discrimination,
employment and wage and hour statutes, Family Medical Leave Act, and the
federal Americans with Disability Act. (See Exhibit H). There may be more. You should
consult with your attorney to determine what federal, state and local laws may
affect your Blendz� Store operations. We also require your compliance with all
provisions of the USA Patriot Act and Executive Order 13224. You should talk to
an advisor or your attorney regarding compliance with these laws.
