ITEM 1
�������������� THE FRANCHISOR. EFSANI) ANY PARENTS.
PREDECESSORS AND
AFFILIATES
TheUs
(the Franchisor) and Our Affiliates
To simplify the language
in this franchise disclosure document ("disclosure
document""), "we" or "us" means Little Caesar Enterprises,
Inc. ("Little
Caesars,"
"we" or "us") was incorporated in
the State of Michigan in 1962 and maintains its, the franchisor. "You" means the person or entity
that buvs the franchise. If the franchisee is a corporation, partnership or
other entity, "vou" also mav mean its owners.
We are a Michigan
corporation incorporated in 1962. Our principal place of
business ataddress is Fox Office Centre, 2211 Woodward Avenue, Detroit, Michigan 48201-3400. We conduct business under our corporate namet as
well as under the names of company owned restaurants offering
the restaurant concept described in this Item 1, as
well as Caesarland and Pizza Stations restaurants. In addition, one of our
corporate divisions conducts business under the name "Blue
Line DJ3tributing.""Little Caesars."
"Caesarlands" and "Pizza Stations." We have no
predecessors.
This offering circular describes one restaurant
concept for which Little Caesars presently
offers�er-�intends�te�offer�franchises.--------------- This�concept�is�known�as�"Little�Caesars
Carryout/Delivery." We
currently own and operate restaurants utilizing
this oonoept. Our first carry out restaurant opened in 1959.�Little
Caesars first offered franchises in 1962 when
it franohised "Little Caesars Carryout." Subsequently,
Little Caesars has (but no longer) offered
franchises for Italian Kitchen and Egg Castle Restaurants.
As of December 31, 2006 we had 1553 United States franohised restaurants in
operation, whioh includes Kmart stores selling
our branded products. Item 20 of this offering circular
provides more details on this subject. Those figures
do not include our international restaurants.
From 1985 to 2003, Little Caesars
offered franchises for a Pizza Stations oonoopt. Since 2001, our affiliate,
LC Trademarks, Inc. has offered franchises in California for the same
restaurant oonoopt as identified in this Offering
Ciroular. LC Trademarks, Inc. does not own or operate any
such restaurants and doos not offer franchises in any other
lino of business. We may also offer
franchises in California under this Offering Circular.
Our agents for service of process are listed in Exhibit
HQ.
Our
Predecessors and Affiliates
From 1982 to February, 1991,
Little Caesars was a wholly owned subsidiary of Little Caesar International,
Inc. Little Caesar International, Inc. has never
offered franchises in any line of business or
provided products or services to Little Caesars franchisees.
As set forth in Item
8, Little Caesars'' division, Blue Lino Distributing, soils producto, ingredients, equipment,
supplies and materials to franchisees.
Except as described
above, Little Caesars has no prodeoossors or affiliates in the United States which offer franchises in
any line of business or provide products or s�nicos to Little Caesars'' franchisees.
Description of Franchises We Offer
We
currently offer both single Little Caesars� restaurant franchises and a
territory reservation agreement that allows vou the opportunity to
develop multiple Little Caesars� restaurant franchises within a reserved
territory under a territory development agreement:
TheSingle Restaurant
Franchise Offered
----------- If approved by
us, you (individuals, partnerships, limited liability companies,
corporations, and the owners
of partnerships, limited liability companies, and corporations will be
referred to as "vou"1If we approve vou for a
single Little Caesars� restaurant franchise, vou will have the right to sign a
franchise agreement ("Franchise Agreement") and/or territory reservation agreement
("Territory
Reservation
Agreement") for the establishment andwith us. A copy
of our current form Franchise Agreement is attached as Exhibit A. Under the
Franchise Agreement, we grant vou the right to operate a single Little
Caesars� restaurant ("Restaurant"'') at a location we approve ("Approved
Location") and within a certain protected territory ("Protected Territory"). Your Restaurant is referred to as "Little Caesars
Carryout Restaurant" or "Restaurant" in the Franchise Agreement.
The primary menu items of Little Caesar� restaurants are pizza,
chicken wings. Crazv Bread� products and other related products.
We own certain trademarks,
service marks, trade names, domain names, logos, emblems and other commercial svmbolsr
including the "Little Caesars" trademark ("marks"). You must operate vour
Restaurant using the marks we designate for the operation of one or
more Little Caesars� restaurants ("restaurant").�If
offered a Territory Reservation Agreement, we will
communicate with you regarding the geographic area
in which you will have the opportunity to develop Little Caesars restaurants
("Reserved Territory"), which will be dosoribod in
the collectively,
the "Proprietary
Marks"). The Proprietary Marks include some marks that are
distinctive to the Little Caesars� restaurant concept, as well other such marks
that are used bv other of our restaurant concepts. See Item 13 for further
information regarding the Proprietary Trademarks.
You must operate vour
Restaurant using our system ("System"), which is described in our
Operational Plans. Our "Operational Plans" consist of the technical
information and expertise we provide to vou relating to the preparation and
production of food products: the use of special spices, sauces
and pizza dough, all of which constitute trade secrets and are identified bv
the public with Little CaooarGour products: special recipes and
menu items: distinctive exterior and interior design, decor, fixtures,
and furnishings: standards and specifications for products and supplies:
service standards: uniform standards, specifications, and procedures for
operations; training and assistance: and advertising and promotional programs,
all of which we mav periodically change, improve or further develop.
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New Little Caesars�
restaurants, including anv Restaurant vou develop, are carrvout only
restaurants and sometimes featuring a drive-thru window. Some of our existing
Little Caesars� restaurants also offer delivery services, but we do not
authorize new Little Caesars� restaurant franchises to offer delivery services.
We mav require existing Little Caesars� restaurants that deliver to cease
delivery and become carrvout only,
Territory Reservation
Agreement (See Item 12). The Territory Reservation Agreement
will provide
We mav provide vou the
opportunity to reserve a territory bv signing a territory reservation agreement
("Territory Reservation Agreement") with us. A copy of our current
form Territory Reservation Agreement is attached as Exhibit B. Under the Territory
Reservation Agreement, we grant you the opportunity to establish more than
one Little Caesars� restaurant ("RestaurantfsV^ at locations approved
bv uswe approve ("Approved Location(s)") within the a
specific geographic area ("Reserved Territory^* according to a
development schedule ("Development Schedule"). The form
Franchise Agreement that we currently offer is
attached as Exhibit A and the formYou do not have to enter
into anv Franchise Agreements at the time vou enter into a Territory
Reservation Agreement is attached as Exhibit B to this Offering
Circular. For. However, for each Little Caesars
restaurantRestaurant you develop in accordance with
the Development Soheduleunder the
Territory Reservation Agreement, you must sign our then-current form of
Franchise Agreement that we offer to new franchisees, the terms and conditions
of which may be substantially different from those contained in the Franchise
Agreement attached to this Offering Ciroulardisclosure
document (including, for example, with respect to higher fees, shorter
term, or other factors more burdensome to you). The size of the Reserved
Territory will vary depending on local market conditions and the number of Little
Caesars restaurantsRestaurants to be developed-^.
See Item 1247 for further information regarding the Territory
Reservation Agreement and Reserved Territory.
------------ Little Caesars Carryout/Delivery
restaurants are oarryout only restaurants, with
occasional on premises
consumption, and sometimes featuring a drive thru window.�Some
of our existing restaurants also offer delivery services, but wo
do not authorize new franchises to offer delivery
services. We may require existing restaurants
that deliver to cease delivery and become oarryout only. The
primary menu items are pizza and Crazy Broad, with
sandwiohcs and salads and other various lunch items also available
in some locations.
For the concept, Little
Caesars provides teohnioal information and expertise relating
to the preparation and production of food produots; the use of special
spices, sauces and pizza dough, all of which constitute trade secrets
and are identified by the publio with Little Caesars
produots; spooial rooipcs and menu items; distinctive exterior
and interior design, deoor, fixtures, and furnishings; standards
and specifications for produots and supplies;
service standards; uniform standards, speoifioations, and
procedures for operations; training and assistance;
and advertising and promotional programs (collectively
"Operational Plans"), all of which may bo changed, improved,
and further developed by Little Caesars from
time to time. The concept will utilize Little Caesars
Operational Plans.�The Operational Plans utilized
by the conoept to be licensed to you is referred
to in this offering circular aa "System."
Little- Caesars identifies
its restaurants by moans of certain trade names,
service marks, trademarks, logos, emblems, and indicia of
origin ("marks"). Eaoh restaurant will bo associated with oertain
marks which are distinctive to the concept as well
as share other such marks whioh are used by other restaurant
concepts. The marks to bo utilized by the speoifio
restaurant concept to bo licensed to you are referred to
in this offering oiroular as "Proprietary Marks."
If you are renewing
your franchise for a Little Caesars Carryout/Delivery
Restaurant, you will sign the then current Franchise Agreement
as well as a Renewal Addendum ("Renewal
Addendum").�The Renewal Addendum will
modify some provisions of the Franchise Agreement to reflect your
status as an existing franchisee. A copy of the Renewal Addendum appears
as Exhibit B in Item 22 of this offering oiroular. Nearly
all of the disclosures in this offering circular will
apply to both new and renewing franchisees. When disclosures refer
only to renewing franchisees, wo will describe them as "Renewing Franchisees."
Our Business and Business of Our Affiliates
As of the issuance date of
this disclosure document, we only offer the Little Caesars� restaurant
franchise described in this disclosure document.
We opened our first
carrv-out restaurant in 1959. We first offered franchises in 1962 when we
franchised "Little Caesars" restaurants. From 1985 to 2003. we
offered franchises for non-traditional Little Caesars� restaurant concepts.
While we no longer offer franchises for this concept, there mav still be some
franchised or companv-owned restaurants operating under it. See below and Item 20. We
first offered Territory Reservation Agreements in 2007.
In the past, we owned and
operated and/or franchised certain other restaurant concepts-including those
for America''s Pizza Cafe". Italiano''s. Parlors. Family Inn. Little Caesars
Italian Kitchen. Italian Kitchen. Egg Castle and Family Fun Center restaurants. We have not offered franchises for these concents for a number of years
and, as of December 31. 2007. there were no franchised or companv-owned
restaurants operating under anv of these concepts.
We signed a franchise
agreement with Kmart to allow Kmart to operate Little Caesars� restaurants
within Kmart stores. We have been in discussions with Kmart about renewal
and/or other possibilities. See Item 20 for further information regarding these
restaurants.
As of December 31. 2007.
we and our affiliate. LC Trademarks fas described below), had 1737 franchised
Little Caesar� restaurants operating in the United States, including Kmart
stores selling our branded products and non-traditional Little Caesars�
restaurants. In addition, as of December 31. 2007. we owned and operated 443
Little Caesars� restaurants similar to the Restaurant described in this
disclosure document, as well as non-traditional Little Caesars� restaurants.
Pizza Station restaurants and Caesarlands restaurants. These
figures do not include our international restaurants. See below and Item 20 for
more information on franchised and companv-owned restaurants.
We intend to offer an
investment program f"Colleague Franchise Program") under which
our employees can create an ownership group among themselves and
acquire a Little Caesars� restaurant franchise from us. Under the terms
of this Program, the ownership group will form a limited liability
company and each employee in the group will purchase an ownership interest
in that company. Each limited liability company participating in the
Colleague Franchise Program will sign a franchise agreement with us and will
appoint an operations manager to operate their Little Caesars�
restaurant.
We or one of our
affiliates mav establish a new business or franchise system or acquire an
existing business or franchise system (which mav be one of vour competitors'')
operating under trademarks, service marks and trade names other than the
Proprietary Marks or marks. We mav require or allow locations in these acquired
businesses or franchise systems to convert to Little Caesars� restaurants operating under the
Proprietary Marks and/or marks. The new or existing business or franchise
system mav compete with vou. In the future, we or an affiliate mav
purchase or develop a manufacturer or other supplier that sells products,
ingredients, equipment. supplies, materials or other items to Blue Line.
From 2001 through December
2007. LC Trademarks. Inc. ("LC Trademarks"! our affiliate, offered
franchises in California for the same Little Caesars� restaurant concept
identified in this disclosure document, and mav continue to provide services to
existing franchisees located in that state. However, we intend to offer new
Little Caesars� restaurant franchises in California under this disclosure
document. LC Trademarks has the same principal business address as us. LC
Trademarks does not own or operate anv Little Caesars� restaurants and does not
offer franchises in anv other line of business.
As further described in
Items 5 and 8. Blue Line Foodservice Distribution. Inc. ("Blue Line"''), our affiliate, will sell
products, ingredients, equipment, supplies, materials and other items to you
and other of our new franchisees, and mav sell some or all of these same items
to our
existing franchisees. Blue Line''s principal business address is 24120
Haggertv. Farmington Hills. Michigan 48335.
As further described in
Item 8. Champion Foods. LLC ("Champion"''), a related entity, sells
certain
products, ingredients and other items to Blue Line, which Blue Line mav in
turn sell to vou and other of our franchisees. Champion''s principal business
address is 23900 Bell Road. New Boston. Michigan 48164.
Blue Line and Champion do
not offer and have never offered franchises of anv kind, and have never owned
or operated a Little Caesars� restaurant. Except as described above, we have no
affiliates in the United States that offer franchises in anv line of business
or provide products or services to our franchisees-Market
The
market for fast food restaurants is very well developed and very competitive.
You will compete with other pizza restaurants, as well as other franchised,
chain, or independent restaurants serving a wide variety of other foods.
Industry-Specific Laws and
Regulations
You must comply with all
local, state, and federal laws that apply to your restaurantRestaurant
operations, including health, sanitation, smoking, United States Department of
Agriculture, Equal Employment Opportunity Commission, and Occupational Safety
and Health� Administration� regulations,� other� food� and� safety�
regulations, discrimination, employment, and sexual harassment laws. The
Americans with Disabilities Act of 1990 requires readily accessible
accommodations for disabled people with disabilities and
therefore may affect some of your operations. You should consult with your
attorney concerning these and other local laws and ordinances that may
affect your restaurantRestaurant operations.
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