ITEM 1. THE FRANCHISOR AND ANY PARENTS.
PREDECESSORS AND AFFILIATES
The purpose of this AQj5�!p^rjjlojument is to Aqive
youA important legal and business information about Charo
Chicken Systems, Inc., a ACaiifornia corporation. andA the
franchise we offer. AWe will refer to ourselves as "Charo
Chicken," "we" or "us." We will call the person or
company to which we grant a franchise "you." The word "you"
does not include your owners. We will call them your "Related
Parties."
We were incorporated in California on June 20, 1997. AOur principal business address is 2134 Main Street, Suite 220, Huntington Beach, California 92648. The name and address of
our agent for service of process in this state are stated in Exhibit A-2 to
this
^■disclosure document.
We have been offering ACHARO
CHICKEN� franchises since March 1997.
We have never offered any other franchise. We have never operated a business
that is similar to the franchise that we offer but our management, as described
in Item 2, has extensive experience in operating chicken restaurants. We have
no other business.
The business you will operate
under the franchise agreement is a casual restaurant featuring chicken that is
fire grilled according to an original recipe. The food appeals to members of
the general public, particularly those who are concerned with the health
advantages of this naturally delicious food. The market for small neighborhood
restaurants like ACHARO CHICKEN� is growing as two-worker
families proliferate. Service is very quick and the chain features home and
office delivery. Most of our restaurants are located in in-line shops or end
caps in shopping centers. Although each restaurant has seating for about 20 to
30 people, approximately 75% of the business is take-out or delivery business.
Your principal competitors
will be other chicken restaurants, including El Polio Loco, Church''s Fried
Chicken, Kentucky Fried Chicken, Popeye''s, Boston Market and Koo Koo Roo.
To provide for our assistance
while you are seeking a site for your Arestaurant and to compensate
us for reviewing your proposed site or sites, you must sign a prefranchise
agreement and pay us a prefranchise fee unless you are an area developer. A
prefranchise agreement does not convey any territorial rights. If you later
enter into a
-1�franchise agreement, we will
apply the entire prefranchise fee against the initial franchise fee.
If you meet our
qualifications, you may enter into an area development agreement under which
you will have the exclusive right and obligation to develop and operate
multiple Restaurants under individual franchise agreements within a specified
Development Area. When you sign an area development agreement, you must pay a
development fee of $25,000 for the first franchise plus $10,000 multiplied by
the number of additional Restaurants you have agreed to develop within the
Development Area. The development fee may be incrementally applied against
these initial franchise fees as you sign each franchise agreement.
We do not know of any laws or
regulations specifically relating to the franchised business other than state
and local health and safety laws and regulations that are generally applicable
to eating establishments.
