EINSTEIN BROTHERS BAGELS - FDD UFOC ITEM 1 Detail

ITEM 1

THE FRANC HI S0Ri4TS AND ANY PARENTS. PREDECESSORS. AND AFFILIATES The Franchisor

Einstein and Noah Corp. ("us^ "our_A" or "we") is the franchisor.

We maintain our principal place of business at 1687 Cole Boulevard, Golden555 Zang Street. Suite 300. Lakewood, Colorado 8040430228 (303/568-8000). We do not maintain sales offices at any location other than our principal place of business. We do not use any sales brokers or other sales organizations. We conduct business under the name and mark "Einstein Bros.", and under the "Noah''s New York Bagels" and "Noah''s Bagels" names and marks. We do not conduct business under any other name.

We are a Delaware corporation, and were originally incorporated on May 11, 2001 as "Einstein Acquisition Corp." We changed our name to Einstein and Noah Corp. on November 2, 2001.

We franchise the right to operate an "Einstein Bros." restaurant (the "Restaurant"). We have offered franchises for Restaurants since 2006. Although we also operate "Noah''s New York Bagel" and "Noah''s Bagel" restaurants, we do not offer franchises using the "Noah''s" name. Since June 19, 2001, we have operated "Einstein Bros." and "Noah''s New York Bagel" restaurants. We also operate a bagel dough manufacturing facility and commissary facilities that sell products to our company-owned, franchised and licensed restaurants, as well as third parties. We do not offer any franchise other than as described in this offering circulardisclosure document, and we do not engage in any business activity other than such franchising activities and the operation of restaurants using the "Einstein Bros." and "Noah''s" names and marks,. bagel dough production and wholesale product sales. As of January 2, 20071. 2008 (which was the end of last fiscal year), there were 2five franchised, 94116 licensed, and 344337 company-owned "Einstein Bros." retail stores, and 3three licensed and 7377 company-owned "Noah''s New York Bagels" and-or "Noah''s Bagels" retail stores.

Our agents for service of process are listed in Exhibit D to this disclosure document. Our Corporate Parent

Our corporate parent company is New WorldEinstein Noah Restaurant Group, Inc. ("NWRENRG"), a Delaware corporation, whose principal place of business is also at 1687 Cole Boulevard. Golden555 Zang Street, Suite 300. Lakewood. Colorado �040480228 (303.568.8000). NWRENRG was incorporated on October 21, 1992 as World Coffee, Inc. Later, NWR''sENRG''s name was changed to New World Coffee, Inc., New World Coffee & Bagels, Inc., then-to-New World Coffee-Manhattan Bagel, Inc., and, lastly, to New World Restaurant Group, \r\c-.�NWR^ and, in 2007, to Einstein Noah Restaurant Group. Inc. ENRG has never offered franchises other than for ""New World Coffee & Bagel" restaurants, as explained below in this Item 1.

Later this year, we oxpect that NWR will change itsln addition to owning our company, our corporate name fromparent, ENRG also owns, franchises, and operates directly and indirectly company-owned, franchised and licensed retail restaurants. Its retail locations operate under tradenames and trademarks other than ours, including "Manhattan Bagel Company", "Chesapeake Bagel Bakery", and "New World Coffee".

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(PK4475PK7080.3) (March 30-2007426. 2008)

As of January 1, 2008. there were 69 franchised and one company-owned "Manhattan Bagel" retail stores, two franchised and no company-owned "Chesapeake Bagel Bakery" or "Chesapeake Bagel" restaurants, and one franchised and one company-owned "New World Restaurant Group, Inc." to "Einstein Noah Restaurant Group, inc." We also expeGtCoffee" stores. (This disclosure document does not provide for the offer of franchises under those names, marks, and franchise systems. Information about those systems, to the extent that as of approximately June A, 2007, our-^pofate-off4Ges-and-tf>Q6e of NWR-(as-we+i-as our other-affiliates) wt�^move-fr-Qm-the-Go�e Boulevard location in Golden, Colorado to new offices at 555 Zang Street, Lakewood^-Colorado 8022Q-

Our agents for service of process are listed in Exhibit D to this offering cireulafthev are currently engaged in the offer and sale of franchises, can be found in other disclosure documents for these systems, which we will make available to vou upon request.) In addition, ENRG may directly and indirectly sell products under the names "Manhattan Bagels", "Chesapeake Bagels", and "New World Coffee" in other settings such as supermarkets and over the internet. Until October 2004, ENRG also owned and operated four Willoughbv''s Coffee & Tea restaurants and a coffee roasting facility in Connecticut; ENRG sold those operations in October 2004.

Predecessors and History of Operations

Einstein/Noah Bagel Corp. ("ENBC") and its affiliates, Einstein/Noah Bagel Partners, L.P. ("ENBP") and Einstein/Noah Bagel Partners, Inc. ("ENBPI"), were the predecessor entities that owned the marks and restaurants that operated using the "Einstein Bros.", "Noah''s New York Bagel" and "Noah''s Bagels" names (together, the "Einstein and Noah Restaurant System").

NWRENRG formed us (as Einstein Acquisition Corp.) and an affiliated entity, Greenlight New World, LLC, for the purpose of seeking to acquire the Einstein and Noah Restaurant System from ENBC, ENBP and ENBPI. In connection with the Acquisition, described below, Greenlight New World, LLC, assigned to us all of its acquisition-related rights with respect to the Einstein and Noah Restaurant System.

On June 19, 2001, Einstein Acquisition Corp. successfully completed its acquisition of the Einstein and Noah Restaurant System (the "Acquisition"). As explained above, we (Einstein Acquisition Corp.) changed our name to "Einstein and Noah Corp." on November 2, 2001.

Before the Acquisition, the Einstein and Noah Restaurant System was operated by ENBC, ENBP and ENBPI, and their respective predecessors, dating back to before 1995. ENBC operated "Einstein Bros." restaurants from August 1995 through June 19, 2001. In 1996, ENBC acquired the rights to operate other restaurants, including those in the States of California and Washington under the name "Noah''s New York Bagels". In December 1997, ENBC licensed and granted development rights to ENBP to operate the restaurants which comprised the Einstein and Noah Restaurant System. ENBC offered franchises for Einstein Bros. Restaurants and for Noah''s New York Bagel Restaurants from 1995 to 1997, but did not engage in any other line of business.

Among the assets that we acquired in the Acquisition were the rights to the name "Einstein Bros." and the related intellectual property. We also acquired ENBC''s rights under a co�existence agreement that it had entered into with the Estate of Albert Einstein, which in turn is owned by the Hebrew University of Jerusalem ("HUJ") (the "HUJ Co-Existence Agreement"). Under the HUJ Co-Existence Agreement, ENBC and HUJ agreed on the terms under which ENBC (and now, us) could use the name Einstein Bros, and the terms under which HUJ could

ENC � REDLINE FDD (10)

use the name and likenesses associated with the Estate of Albert Einstein (see Item 13 for more details).

We have operated the restaurants comprising the Einstein and Noah Restaurant System since the date of the Acquisition, June 19, 2001.

Our Corporate Parent

In addition to owning our company, our corporate parent, NWR also owns, franchisee, and operates directly and indirectly other bagel dough facilities and manufacturing operations, as well as selling products and operating/franchising retail restaurants. Its retail locations operate under tradenames and traderrafks-other�tlw)-GW-s,--+nG^ "New World Coffee".

As of January 2, 2007, thoro were 80 franchised and no company owned "Manhattan Bagel" retail stores, 4-fraflGhised and no company-owned "Chesapeake Bagel Bakery" or"Ghesapeake-Bage^estawafttgr and-2-toK5hised-and-2-�ompany-owned "New Wofld Coffee" &^^^-(^\&-Q^f\f^-&K�i\a(-4oQ&-f�Qt provide for the offer of franchises under those namos, marks, and franchiso systems. Information about those systems, to tho oxtont that thoy are currently engaged in the offer and sale of franchises, can bo found in other offering circulars for these systems, which wo will make available to you upon request,) In addition, NWR may directly and indirectly sell products under the names "Manhattan Bagels", "Chesapeake Bagels", and "New World Coffee" in other settings such as supermarkets and over the internet. Until October 2004, NWR also owned and operated four Willoughby''s Coffee & Tea restaurants and a coffee roasting facility in Connecticut; NWR sold those operations in October 2004.

Our Affiliates

Our affiliates are described below. All of these affiliates (except for "Noah''s New York Bagels, which operates from our offices in QoktenLakewood, Colorado and through a satellite office in Walnut Creek, California) operate from NWR^sENRG''s corporate offices. We do not offer franchises for our affiliates'' other concepts. Additional information concerning those systems may be available from NWR^ENRG''s corporate offices or through a separate offering sirsulafdisclosure document.

Manhattan Bagel Company, Inc. NWRENRG owns all of the stock of Manhattan Bagel Company, Inc. ("MBC"), a New Jersey corporation. MBC in turn owns and franchises restaurants under the "Manhattan Bagel" marks and franchise system. NWRENRG acquired the MBC stock and its assets on November 24, 1998. MBC has operated, and offered franchises to others to operate, "Manhattan Bagel" restaurants since 1987. "Manhattan Bagel" restaurants feature bagels and cream cheese, coffee, soups, salads, sandwiches, sweets, and related menu items as part of their core menu offerings.

Chesapeake Bagel Franchise Corp. NWRENRG owns all of the stock of Chesapeake Bagel Franchise Corp. ("CBFC"), formerly known as CBB Acquisition Corp. CBB Acquisition Corp., a New Jersey corporation, was formed on July 16, 1999 for the purpose of acquiring from AFC Enterprises, Inc. ("AFC") the "Chesapeake Bagel" marks and franchise system. Through CBB Acquisition Corp., now known as CBFC, NWRENRG acquired the Chesapeake Bagel marks and franchise system from AFC on August 31, 1999. AFC operated, and offered franchises to others to operate, "Chesapeake Bagel Bakery" restaurants from May 1997 to August 1999. CBFC operated, and offered franchises to others to operate, "Chesapeake Bagel" restaurants from August 1999 through December 2005. CBFC is not currently offering franchises. "Chesapeake Bagel" restaurants feature bagels and cream cheese, coffee, and related menu items as part of their core menu offerings.

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New World Coffee & Bagel. NWRENRG operates, and has offered franchises to others to operate, "New World Coffee & Bagel" restaurants from 1992 to 2005. J''New World Coffee" and "New World Coffee & Bagel" restaurants feature coffee and related menu items as part of their core menu offerings.

Noah''s New York Bagel. As discussed above, we also operate restaurants under the "Noah''s New York Bagel" and "Noah''s Bagel" marks and system.

The Franchise Offered

We offer franchises for the operation of Restaurants at agreed-upon locations. We principally offer area development agreements, which are described below.

Under an area development agreement, the developer is granted the right (and accepts the obligation) to establish multiple Restaurants within a specific area. The developer will sign a Franchise Agreement for each Restaurant, which will set out the area under which that Restaurant will be operated. Typically, the Franchise Agreement will be signed after the developer secures an approved site for the Restaurant (such as by lease or sublease).

Area Development Agreement

We offer to qualified individuals and companies (a "Developer" or "you") the right {and the Developer accepts the obligation) to develop an agreed-upon number of Restaurants within a specific geographic area ("Development Area") under our area development agreement (the "Area Development Agreement") (a copy can be found at Exhibit B-4 to this UFQGdisclosure document). Under an Area Development Agreement, you will be required to establish an agreed-upon number of Restaurants within the Development Area, at specific locations (to be specified in separate Franchise Agreements) (as explained below). An important part of the Area Development Agreement is a development schedule (the "Development Schedule"), which spells out the number of Restaurants that you agree to have established by certain benchmark dates.

Franchise Agreement

We offer to enter into franchise agreements ("Franchise Agreements") with qualified individuals and companies ("you") that wish to establish and operate Restaurants. (In this offering circulardisclosure document, "you" means the person or legal entity with whom we enter into an agreement. The term "you" also refers to the direct and indirect owners of a corporation, partnership, limited liability company, limited liability partnership, or other entity that signs a Franchise Agreement as the "franchisee^" or an Area Development Agreement as the "developer.")

Under a Franchise Agreement, we will grant you the right (and you will accept the obligation) to operate one Restaurant at an agreed-upon specified location (the "Approved Location").

Deposit Agreement

If we do not sign a Development Agreement, then before we enter into a Franchise Agreement with you, we will ask you to enter into a Deposit Agreement and provide us with a deposit. Under a Deposit Agreement, we will agree with you on a specific area within which you can look for a site at which to develop a Restaurant. You will have to provide us with a $10,000 deposit,

which we will fully credit against your initial franchise fee if and when you sign the Franchise Agreement. If we sign a Deposit Agreement, neither you nor we will be obligated to sign a Franchise Agreement. If, during the term of the Deposit Agreement, you do not find a site for the Restaurant that is acceptable to us, if for any other reason (other than our failure to evaluate a proposed site) you cannot find an approved site for a Restaurant, or if at any time you choose to terminate the Deposit Agreement and notify us in writing, then the Deposit Agreement will terminate, and we will refund the deposit to you less our actual out-of-pocket costs (up to $5,000). If, during the term of the Deposit Agreement, we terminate the Deposit Agreement for any reason, then the Deposit Agreement will terminate, and we will refund your entire deposit. The limited area that is described under the Deposit Agreement will not have any relationship to any protected territory that you may have under a Franchise Agreement.

Einstein Bros. Restaurants

Restaurants are characterized by our system (the "System"). Some of the features of our System are a specially-designed building or facility, with specially developed equipment, equipment layouts, signage, distinctive interior and exterior design and accessories, Products, procedures for operations; quality and uniformity of products and services offered; procedures for management and inventory control; training and assistance; and marketing and promotional programs. We may periodically change, update, improve, and even eliminate parts of the System.

Restaurants operate in a building that bears our trade dress (interior, exterior, or both). A Restaurant specializes in the sale of Proprietary Items, including fresh-baked bagels, cream cheese and other spreads, specialty coffees and teas, sweets, and creative soups, salads and sandwiches, and other additional products that we may occasionally specify, as well as non-proprietary Items (like sandwiches, salads, soups, and other beverage items for on-premises and carry-out consumption) (all together, the "Products").

You must operate your Restaurant in accordance with our standards and procedures, as set out in our Confidential Operating Manual (the "Manual"). We will lend you a copy of the Manual for the duration of the Franchise Agreement. In addition, we will grant you the right to use our marks, including the mark "Einstein Bros." and any other trade names and marks that we designate in writing for use with the System (the "Proprietary Marks").

Restaurants will be operated from an indoor structure that need not be free-standing, that is approximately 2,300 to 2,700 square feet in size, and that is decorated to meet our specifications (including the use of our trade dress, trademark, and design).

In the past, we also have offered (and we will continue to offer) licenses to institutional parties to establish and operate Restaurants in institutional settings. These might include a military base, college or university, hospital, sports arena, airport, toll road, or another captive market setting. While institutional Restaurants are conceptually typically similar to traditional franchised Restaurants, institutional Restaurants are different in that they are often operated in smaller-sized locations, sometimes in a multi-brand environment, and in a setting where the needs of the institutional customer may have a substantial impact upon the operation of the unit. Institutional Restaurants therefore tend to operate in a different way than traditional franchised Restaurants.

Industry-Specific Regulations

You must comply with all local, state, and federal laws that apply to your Restaurant operations, including, for example, zoning, building code, health, sanitation, no-smoking, EEOC, OSHA, discrimination, employment, sexual harassment, and tax laws. The Americans with Disability Act of 1990 and state equivalents require readily accessible accommodation for disabled persons and therefore may affect your building construction, site elements, entrance ramps, doors, seating, bathrooms, drinking facilities, etc. For example, you must obtain permits for your building, construction, outdoor patio, and zoning, as well as operational licenses. There are also regulations that pertain to sanitation, food labeling, food preparation, food handling, food content (e.g., on transfats), and food service. You must comply with all applicable federal, state, and local laws and regulations during the operation of your Restaurant. You should consult with your attorney concerning those and other local laws and ordinances that may affect your Restaurant''s operation.

Competition

You can expect to compete in your market with locally-owned businesses, as well as with national and regional chains that offer bagels, coffee, breads, sandwiches, breakfast items, lunch items, and related products, and which may compete with the products offered at a Restaurant. The market for these items is-well-established and very highly competitive. Bagel and coffee restaurants, and breakfast and lunch businesses, compete on the basis of many factors, such as price, service, location, product offerings and quality, speed of service, hospitality, customer experience, and store promotions and marketing programs. These businesses are often affected by other factors as well, such as changes in consumer taste, economic conditions, seasonal population fluctuation, and traffic patterns. To the extent that customers may be able to buy "Einstein Bros." brand products from other sources (for example, from other restaurants, our website, club stores, supermarkets), and to the extent that other restaurants operating under the System deliver products in your area, you may appear to, or actually, compete with other sellers of those branded products. In addition, to the extent that customers may be able to buy bagels, coffee, and other products under the "Noah''s", "Chesapeake Bagel", "Manhattan Bagel", and "New World Coffee" names, you may appear to, or actually, compete with sellers of these products.