ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND
AFFILIATES
To simplify the language in
this disclosure document, "we" or "us" means Paciugo Franchising LP, the
franchisor. "You" means the person or entity to whom we grant a
franchise, as franchisee. If you are a corporation, partnership or other legal
entity, "you" may also include your owners, depending on the context.
"You" also includes the person or entity with whom we enter into a
development agreement, and the entity''s owners, depending on the context.
The Franchisor
We were formed in Texas on July 17, 2001. Our principal business address is 1215 Viceroy Drive, Dallas, Texas 75247. Before January 2008, our business address was 9761 Clifford Drive, Suite
170, Dallas, Texas 75220. We do not do business under any other name. We
began offering franchises as described in this disclosure document in August
2004, and have never offered franchises in any other line of business. We do
not own or operate any business which is similar to the business being
franchised, and we do not engage in any other business. Our agents for service
of process are listed in Exhibit B.
Our Predecessor and Affiliates
Our affiliate, Authentic Gelato LP ("Authentic Gelato"), has operated one or more
retail outlets making and selling gelato, and other specialty food items, beverage items, and
other products since 2000. Authentic Gelato has its principal business address at 1215 Viceroy Drive, Dallas, Texas 75247. Before January 2008, its business address was 9761 Clifford Drive, Suite 170, Dallas, Texas 75220. It was originally formed as a Texas limited liability company on April 5, 2000, and then converted to a Texas limited
partnership on July 25, 2001, and then reconverted into a limited liability
company on June 30, 2007. Authentic Gelato''s units are similar to the
franchised business we offer under this disclosure document. We have no
affiliates which offer (or have ever offered) franchises in any line of
business.
Our affiliate, Paciugo Supply Co. LP ("Paciugo Supply"), supplies certain
products and services to our franchisees. Paciugo Supply is a Texas limited partnership formed in July
2001 with its principal business address at 1215 Viceroy Drive, Dallas, Texas
75247. Before January 2008, our business address was 9761 Clifford Drive, Suite
170, Dallas, Texas 75220. We have no other affiliates which supply products
and services to our franchisees. Paciugo Supply has never owned or operated any business which
is similar to the business being franchised.
Another affiliate, Paciugo Properties LP ("Paciugo Properties"), a Delaware
limited partnership with its principal business address at 1215 Viceroy Drive,
Dallas, Texas 75247, owns the trademarks, trade names, service marks, recipes,
know how and other intellectual property relating to the operation of Authentic Gelato units, the Paciugo Supply kiosks and the
Franchised Businesses. Paciugo Properties has licensed Authentic Gelato, Paciugo Supply and us to use this
intellectual property. See Item 13. Paciugo Properties has never owned or operated any business
which is similar to the business being franchised.
Our Parent Companies
Our parent companies are
Adastra Holding, LP and Paciugo Management LLC, both of which have their business
address at 1215 Viceroy Drive, Dallas, Texas 75247. Neither of our parent
companies has ever owned any business which is similar to th� business being franchised.
Since 2001, Paciugo Management LLC has been involved in the operation of
our affiliate-owned Units as a result of its partial ownership and management
of Authentic Gelato LP. Neither of our parent companies has ever offered
franchises in any line of business.
The Franchised Business
We award franchises for the
operation of retail gelato outlets which use the trade names, service marks,
trademarks, logos, emblems and indicia of origin licensed to us by Paciugo Properties (collectively, the
"Marks") and operate under distinctive operating procedures and
standards we specify (the "System"). A retail business operated under
the System and Marks is referred to in this disclosure document as the
"Franchised Business" or "Unit." There are 2 types of Units
available - stand-alone Units and kiosk Units. Stand-alone Units and kiosk
Units will make and sell high-quality gelato and other specialty food items and beverage items,
and sell related products. Stand-alone Units and kiosk Units may also offer
authorized gelato catering services.
If we approve your franchise
application, you will have the right to sign a franchise agreement
("Franchise Agreement"), as franchisee, with us for the establishment
and operation of a single Unit at a specific location. Our standard form
Franchise Agreement applicable to both stand-alone Units and kiosk Units is
attached to this disclosure document as Exhibit C.
We also offer to qualified
individuals and entities a development opportunity for the right to open a
certain number of Units, at the times and geographic areas described in the
development schedule included in the development agreement ("Development
Agreement"). Our standard form Development Agreement is attached to this
disclosure document as Exhibit E. If you are a developer, you will sign a separate
Franchise Agreement for each Unit you open.��� Unless otherwise noted, the
terms of the development opportunity are the same as the franchise opportunity,
and "you" will refer to developers, as well as franchisees.
General Market and
Competition
The primary market for the
services and products offered by the Franchised Business are customers who
appreciate authentic, high-quality gelato. Typically, stand-alone Units are
located in multi-tenant retail locations to take advantage of existing customer
traffic; however, virtually any type of retail structure could be suitable for
a stand-alone Unit, subject to our site-selection criteria. Kiosk units are
typically located within established retail stores or other commercial
locations that meet our site-selection criteria.
The frozen dessert market, as a
whole, is highly competitive, and includes retail units and kiosks selling ice
cream, frozen yogurt, shaved ice, industrial and freshly-made gelato and smoothies. In some
locations - primarily in certain parts of major metropolitan areas - the frozen
dessert market appears to have reached saturation. You may have to compete with
numerous other independent and chain-affiliated businesses, some of which may
be franchised, Many ice cream and frozen yogurt franchise systems, in
particular, have already established national and international brand
recognition. Additionally, many grocery stores, convenience stores, and other
types of retail locations sell individual servings of ice cream, sherbet,
sorbet, slurpies, industrial gelato and other frozen desserts.
The gelato segment of the
frozen dessert market is not well-developed in the United States. In fact, many
potential customers who regularly eat ice cream and frozen yogurt have never
tried gelato. Indeed, many may have never even heard of gelato. You should
consider the Franchised Business as a developing business in a general market
segment with many well-established competitors.
Industry-Specific Laws and
Regulations
You must comply with all
local, state, and federal laws and regulations that apply to your Franchised
Business operations. In addition to the statutes, regulations and ordinances
applicable to businesses generally, such as the Americans with Disabilities
Act, Federal Wage and Hour Laws, and the Occupational Safety and Health Act,
you should be aware that certain aspects of the food and beverage service
business are heavily regulated by federal, state and local statutes, rules and
ordinances. The U.S. Food and Drug Administration, the U.S. Department of
Agriculture, and state and local departments of health, and other agencies have
statutes, regulations and ordinances concerning the preparation of foods and
beverages, and the sanitary condition of Unit facilities. State and local
agencies routinely conduct inspections for compliance with these requirements.
You should consult with an attorney or business advisor about the laws,
regulations and ordinances that may affect operation of your Unit.
