ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND
AFFILIATES
The Franchisor is ShelfGenie
Franchise Systems, LLC, a Georgia limited liability company. For ease of
reference, ShelfGenie Franchise Systems, LLC will be referred to as
"us," "we", "our", the "Company" or
"SHELFGENIE." When we use "you" or "your" in this
disclosure document, it means the person, partnership, limited liability
company or corporation who buys the Franchise. If you are a corporation,
partnership, or limited liability company, this disclosure document also
applies to your shareholders, partners, members and owners and their spouses.
If you are an individual, this disclosure document also applies to your spouse.
The Company only does business
under the name "ShelfGenie Franchise Systems, LLC". The Company has
no predecessor. The Company has a right, through a license with Cabinet
Essentials Group L.L.C. ("CEG"), to grant franchises using the trade
name and service mark "SHELFGENIE". The Company''s principal business
address is 1642 Powers Ferry Road SE, Suite 200, Marietta, Georgia 30067 and its agents for service of process are listed in Exhibit D to this
disclosure document.
CEG is a Virginia limited
liability company. CEG is an affiliate of SHELFGENIE and is the member of
Manufacturing (as defined below), Cabinet Essentials Atlanta LLC, and Cabinet
Essentials of Chicago LLC ("CEC"). CEG does not grant any franchises.
CEG''s principal business address is 1642 Powers Ferry Road SE, Suite 200, Marietta, Georgia 30067. CEG owns the service mark "SHELFGENIE" and on February
5, 2008, granted a world-wide, non-exclusive, perpetual license to SHELFGENIE
to grant franchises using that trade name and service mark.
In April 2007, CEG purchased
the membership interests of G-0 Manufacturing, L.L.C, a Virginia limited
liability company formed in July 2001, from a group of members. In September
2007, G-0 Manufacturing, L.L.C. merged into a new Virginia limited liability
company. This new Virginia limited liability company was considered the survivor
and took on the name of the original entity "G-0 Manufacturing,
L.L.C." ("Manufacturing"). Manufacturing is a fully owned
subsidiary of CEG and an affiliate of SHELFGENIE. Manufacturing only does
business under the name "G-0 Manufacturing L.L.C." Manufacturing''s
principal business address is 10116 Leadbetter Place, Ashland, Virginia 23005. Manufacturing manufactures and distributes the customized shelving
solutions, including Shelf Conversions and Glide-Outs�, and accessories that
will be used by our franchisees. Each of our franchisees will be required to
enter into a supply agreement with Manufacturing. Manufacturing does not grant
any franchises, although they are permitted to sell certain products directly
to dealers.
CEC is a Virginia limited
liability company. CEC is an affiliate of SHELFGENIE that operates a business
similar to those that will be operated by franchisees of SHELFGENIE. CEC has no
predecessor. CEC''s principal business address is 1642 Powers Ferry Road SE,
Suite 200, Marietta, Georgia 30067.
Cabinet Essentials Atlanta, LLC
("CEA") is an affiliate of SHELFGENIE that operates a business
similar to those that will be operated by franchisees of SHELFGENIE. CEA has no
predecessor. CEA''s principal business address is 1642 Powers Ferry Road SE,
Suite 200, Marietta, Georgia 30067. CEA does not grant any franchises.
The franchise being offered is
for a business that markets, designs, sells and installs customized solutions
for new and existing cabinets identified by the trade name and service mark
"SHELFGENIE". Each SHELFGENIE Business will be operated in accordance
with the terms and conditions of the Franchise Agreement which you will be
required to sign if you qualify as a franchisee and decide to become one of our
franchisees. A copy of the Franchise Agreement is attached as Exhibit A
to this disclosure document. A separate Franchise Agreement must be entered
into for each SHELFGENIE Business you operate. We do not currently operate any
SHELFGENIE Businesses but we may do so in the future. Our affiliate CEC
operates a business similar to SHELFGENIE Businesses. CEC began operating a
business similar to a SHELFGENIE Business in August 2006.
If you qualify, you will be
granted a non-exclusive license to use the "SHELFGENIE" trade name
and service mark, the logos adopted for that name and mark and any other trade
names, service marks, trademarks and logos as we may now or in the future
require you to use in connection with your SHELFGENIE Business (collectively,
the "Proprietary
Marks").
SHELFGENIE, as the result of
the expenditure of time, skill, effort and money, has developed and owns a
unique system relating to the management and operation of a business that
markets, sells and installs products customized and built around homeowners''
needs to convert new or existing shelving in kitchen cabinets, pantries,
bathroom cabinets, closets and other structures into moving shelving solutions,
including Glide-Outs�, under the Proprietary Marks (the "System"). The distinguishing
characteristics of the System include, but are not limited to the following:
uniform standards and procedures for business operations; training in
operations and management; advertising and promotional programs; customer
development and service techniques; centralized business support center; web
based proprietary business system and other technical assistance, all of which
may be changed, improved or otherwise developed by us from time to time.
You may also sign a Multi-unit
Development Agreement, a copy of which is attached hereto as Exhibit B.
to open multiple SHELFGENIE Businesses. A separate Franchise Agreement must be
signed for each SHELFGENIE Business you open or operate pursuant to the
Multi-unit Development Agreement.
Franchises will be subject to
local, county and state regulations and local, county and state licensing
regulations for the operation of businesses generally. As a franchisee, you
must comply with all laws and regulations which are currently in existence and
which may later be adopted. You should consult with your own legal counsel to
determine the applicability of these and other laws and regulations to the
operation of your SHELFGENIE Business. You are responsible for knowing and
complying with all laws and licensing requirements related to the operation of
your SHELFGENIE Business. You are also required to consult with your own legal
counsel or accountant regarding your obligations to collect sales or use tax
and the practices or systems you must have in place for this purpose.
The general market will
primarily include owners of existing homes. The market is established but is
still developing as more and more individuals come to desire organizational
solutions such as moving shelving. There are numerous direct and indirect
competitors in this market. Your competitors will include (a) other regional
and local chains, which provide similar services, (b) kits provided at hardware
stores for the do-it-yourself homeowners, (c) other businesses operated or
franchised by us which do not use any of the Proprietary Marks (if we choose to
open any in the future), and (d) other businesses or franchises operated or
franchised by us using the Proprietary Marks, but only outside of your Assigned
Territory. We believe that competition will continue in this industry.
The Company has offered
franchises for SHELFGENIE Businesses since May, 2008. Neither the Company nor
its owners have ever offered franchises in any other line of business.
Manufacturing, CEG and CEC do not offer franchises. Manufacturing has offered
dealerships throughout the United States under the name "Shelf
Conversions". These dealerships distribute goods similar to those to be
offered by our franchisees. Manufacturing currently has approximately thirty
(30) dealers with signed dealership agreements, of which about fifteen (15) are
considered active. The Company intends to approach some of the active dealers
with a plan to convert into SHELFGENIE Businesses. Our dealers do not receive
all the benefits of a franchisee owner of a SHELFGENIE Business offered under
this franchise disclosure document and also are not subject to all the same
restrictions and obligations. Our dealers are not granted assigned territories.
They do not have protected territories. However, they also are not restricted
to sales within a specified territory, Consequently, our dealers could sell
within your Assigned Territory (as defined in Item 12).
