ITS A GRIND-IAG COFFEE - FDD UFOC ITEM 1 Detail

ITEM I

THE FRANCHISOR, ITS-AND ANY PARENTS, PREDECESSORS AND AFFILIATES

To simplify the language in this Offering CircularDisclosure Document, "the Company", "we", "us" or "our" means IAG Coffee Franchise, LLC, the franchisor; such terms do not include or refer to our officers, directors, shareholders, partners or members. "You" means the entity that executes the Franchise Agreement with us and each individual who has any ownership in that entity.

We are a California limited liability company that was formed on October 27, 2000 to franchise the It''s A Grind concept developed by Marty Cox and Louise Montgomery. We do business under our corporate name and the trade name "It''s A Grind." Our principal business address is 6272 East Pacific Coast Highway, Suite E, Long Beach, California 90803. Except as noted below, we have no predecessors or affiliates.

Our agents for service of process in those states requiring franchise registration are disclosed in Exhibit B to this Disclosure DocumentOffeftng-Gifsulaf.

We franchise the right to operate retail specialty coffee beverage stores offering fresh roasted specialty whole bean coffees, traditional and espresso-based coffee drinks, iced and blended coffee drinks, tea and tea-based drinks, fruit smoothies, breakfast items, sandwiches, salads and assorted bakery products. The franchise generally described in this Disclosure DocumentOffering Circular is a license to develop and operate a single It''s A Grind� store (the "It''s A Grind Store") at a designated location (the "Authorized Location"), which is usually located in a shopping center or a free-standing building. In some instances and when we consider appropriate, we can grant a franchise for the operation of an It''s A Grind Store in a non-traditional location, such as an airport, sports and/or entertainment venue, a tourist area, a kiosk site, or inside a supermarket or bookstore. Franchisees locating in a site that we determine to be non-traditional will sign an addendum to their Franchise Agreement, which reflects non-traditional aspects of the site/operation (Refer to Exhibit Q of the Disclosure Document�TOG, the Non-Traditional Authorized Location Addendum).

Your Franchise Agreement authorizes you to use the "It''s A Grind" trade name and service mark in connection with your operation of an It''s A Grind Store and permits you to operate your It''s A Grind Store under a format and system specified by us (the "System"). We and It''s A Grind, Inc. created and developed the System for the efficient management and operation of clean, attractive, distinctive, high quality, retail, specialty coffee stores. You must pay certain fees and make certain investments. Other material aspects of the franchise are described in this Disclosure DocumentOffering Cifs-ulaf and in the Franchise Agreement and other agreements included as exhibits to this Disclosure DocumentOffering Circular, which will govern the relationship between you and us.

In addition to offering franchises for individual stores, we offer Multi-Unit Franchise Agreements (the "Multi-Unit Franchise Agreement") to persons that we consider to be qualified financially, operationally and organizationally, in terms of experience, and otherwise to develop and operate 3 or more stores. Under the Multi-Unit Franchise Agreement, you agree to open a specified number of It''s A Grind Stores within a defined geographic area in accordance with an agreed upon development schedule. You will sign a then-current Franchise Agreement for each It''s A Grind Store you develop. The number of It''s A Grind Stores, development area and schedule must be agreed upon by us prior to execution of a Multi-Unit Franchise Agreement. Before the execution of each Franchise Agreement, we wili deliver to you an Offering Circular-Disclosure Document describing the terms of our then-current Franchise Agreement and provide you with other relevant information. The Multi-Unit Franchise Agreement you will sign will be in the form attached as Exhibit L to this Disclosure DocumentOffering Circular-.

The original concept for the System was developed by Marty Cox and Louise Montgomery, who formed It''s A Grind Inc., a California corporation, in June 1994 to own and operate "It''s A Grind Coffee Stores." It''s A Grind, Inc. opened its first It''s A Grind Coffee Store in Long Beach, California in July 1995 and currently owns and operates 6-3| It''s A Grind Coffee Stores as of the date of this Disclosure Document, (one of which is a smaller unit located in on office building complox, which is not typical of the standard It''s A Grind store configuration. We acquired It''s A Grind, Inc., including its 4 of its It''s A Grind Store operations, on August 1, 2005. These It''s A Grind Store locations will continue to be operated through It''s A Grind, Inc. and It''s A Grind, Inc. Stores may participate in It''s A Grind franchise programs, as we consider appropriate.

lAG Lakewood, Inc., in which Marty Cox, our prosidont, owns a 75% interest, also operates an It''s A Grind Store in Lakewood California. IAG Lakowood, Inc. was granted an It''s a Grind Franchise on October 12, 2005. IAG Lakewood, Inc. has consonted-te our use of the store promises and operations for training purposes from time to time, and the terms of its Franchise Agroomont are materially different from and, in some ways more favorable economicaHy and otherwise, than the agreement offered under this Offering Circular. As an example, IAG Lakewood, Inc. did not pay an Initial Franchise Fee and is not required to pay us royalty fees.

We were formod-en-Oetober 27, 2000, under�the limited liability cofnaany-laws-of California to franchise-the-lfe A Grind coneeof-developed-by-Marty Gox-and-Louise Montgomery. It''s A Grind, Inc. and wo have executed a Trademark License Agreement through which wo were granted rights to use the "It''s A Grind" trademark and to franchise tho It''s A Grind concept throughout the United States.�(See Item 13 of this Offering Circular). We acquired IAG, Inc. in August 2005, as noted above.

We began offering It''s A Grind franchises in the State of California as of May 2001. in addition to tho 4 stores acquired through tho purchase of It''o A Grind, Inc., we currently operate 2 company ownod It''s A Grind Stores in Rosovillo, CA and Peoria, AZ.�We have not offered and do not now offer franchises in any other line of business, but we reserve the right to do so in the future. We own and operate two It''s A Grind Stores in the Phoenix, AZ market as of the date of this Disclosure Document.

The market in which you will operate is well established and highly competitive. You will engage in the retail sale of fresh roasted specialty whole bean coffees, traditional and espresso-based coffee drinks, iced and blended coffee drinks, tea and tea-based drinks, fruit smoothies, breakfast items, sandwiches, salads and assorted bakery products to the general public. There is a significant amount of competition in the retail coffee beverage business, and you should expect to compete with other national, regional and local coffee beverage stores, restaurants, and other businesses offering competitive products and services, including members of established national or regional chains and franchise systems, some of which are older, larger and better financed than we are.

We are not aware of any regulations specific to the operation of a retail coffee beverage store; however, in addition to laws, regulations and ordinances applicable to businesses generally, such as the Americans With Disabilities Act of 1990 (the "ADA"), the Federal and State Wage and Hour Laws and other laws related to employment rights and the Occupational Safety and Health Act of 1970, you may have to comply with certain federal, state and local health and sanitation regulations concerning the operation of your It''s A Grind Store and state and local zoning and building code requirements governing the construction of the It''s A Grind Store. Many states and municipalities require food service handlers to be licensed. There may be other laws applicable to your business and we urge you to make further inquires about these laws. You are responsible for knowing and complying with all laws and licensing requirements related to the operation of your It''s A Grind Store.

This Offering-Gir-eulafDisclosure Document describes the terms and conditions on which we currently offer It''s A Grind franchises in this state. We have the rightreserve the right, in our solo discretion, to award, or not award, It''s A Grind franchises to any prospective franchisee, regardless of the stage of the franchise award process, costs expended by the prospective franchisee or otherwise. We may offer It''s A Grind franchises on economic and/or other terms that differ from those offered by this Disclosure DocumentOfforing Gifeutar. There also may be instances in which we have varied, or will vary, the terms upon which we offer franchises to suit the circumstances of a particular transaction, to the extent we are lawfully permitted. We strongly urge you to carefully review all documents, including a comparison to any prior Franchise Agreement, if a renewal or transfer of an existing Franchise Agreement is involved, as well as this Disclosure DocumentOffefing-Circular, with independent advisors who can provide you with legal, business and/or economic guidance, such as a lawyer and/or an accountant.

A fundamental requirement of you joining and remaining part of tho It''s A Grind System will bo your commitment to the operation of your It''s A Grind Store in accordance with the then current System standards. During the term of the Franchise Agreement, you must at all times develop and oporoto your It''s A Grind Storo in compliance with tho System, as wo may modify it in tho futuro.

This Disclosure DocumentQftering-dfeulaf contains a summary of various provisions of our program and the Franchise Agreement and other documents. We have summarized above the main features of our program and further information appears at appropriate points throughout this Disclosure DocumentOfforing Circular. Of course, the descriptions in this Disclosure Document Offering Circular-are required to be brief and are for general informational purposes only. In many cases, the Disclosure DocumentOfforing Circular contains only excerpts or summaries of other documents. The actual provisions of these documents will control in any case and you should refer to the Franchise Agreement, Non-Refundable Option Agreement, Multi-Unit Franchise Agreement, and other documents for more complete information.

The establishment of any new business, including an It''s A Grind Store, involves substantial business risks, which can never be completely eliminated. Those risks may be greater for a relatively young franchise concept and with a franchisor that has limited experience, such as we do. Significant investment beyond that outlined in this Disclosure DocumentOfforing Circular may be required to succeed. Any potential profit and possible success are primarily dependent upon your personal business judgment, your general business ability and efforts as an independent business operator, your financial management, marketing and other skills, as well as your consistent use of the It''s A Grind System. We cannot and do not guarantee your success.