9.4 (390)- Final Project: Establish Statutory Agreements Required to Operate a Franchise Business

Partial FDD Information:

Franchise Description: American Brain Freeze Dessert Corporation (ABFD), the

Franchisor, offers a single unit and multiple unit franchises for the operation of Brain

Freeze Dessert restaurants at authorized locations. An ABFD restaurant is a quick-

service food takeout restaurant with seating from which franchisees will sell the full line

of approved Dessert and beverage menu items.

Training Overview: There are currently four required components to initial Training:

1. The Management Operation Protocols Training (MOPT)

2. 3STAR SERVSAFE – certification

3. ABFD’s training program (three phases): Phase 1, Product and Equipment

Training; Phase 2, Systems & Management Training; Phase 3, People, 3STAR,

and “MO-MONEY” bottom-line Training.

4. A “Dessert Prep&dec” and certification course

The franchise’s designated manager and two assistant managers are required

attendees for the first three components. Only the Chef is required to attend the

Dessert Prep&dec certification course. Before attending the Franchisor’s training

program, the required attendees must pass the MOPT, which administered at a location

designated by the Franchisor. The MOPT measures leadership, customer service,

decision-making, prioritizing, and business math, which may be modified by the

Franchisor at any time. The required attendees must also have current 3STAR

certification, which will only be recognized by the Franchisor if received through a

course that is part of or equivalent to the National Restaurant Association’s 3STAR-

SERVSAFE program. Before the opening of the restaurant, at least one of the

restaurant employees must become a “Dessert Prep&dec” by attending and

completing a Dessert preparation certification course. The franchise’s controlling owner

(as defined in the franchise agreement) must, at the Franchisee’s expense, attend all

meetings the Franchisor holds or sponsors in their area or region including all DMA or

other marketing area meetings, and all meetings relating to new products or product

preparation procedures, new ABFD system programs, new operational procedures or

programs, Training, restaurant management, financial management, sales or sales

promotion, or similar topics.

Territory Granted: Where a franchisee enters into a franchise agreement and

Franchisor has granted and consented in writing, the Franchisee is permitted to operate

a Store at that authorized location. Under the Agreement, there is no grant to

Franchisees of any minimum area of territory. The Franchisor does not grant exclusive

territories to any franchisee under the terms of a franchise agreement.

Obligations and Restrictions: Franchisees are required to operate their ABFD

location under their active and continuous supervision. If the Franchisee is a business

entity, the Franchisee is required to have one owner who is responsible for overseeing

the general management of the day-to-day operations of the location. The Franchisor

requires franchisees to offer and sell only those goods and services that it has

approved. Also, franchisees may offer and sell these approved goods and services only

from their restaurant. Franchisees must carry the required menu items that the

Franchisor designates for their business.

Term of Agreement and Renewal: The length of the initial franchise term is ten years.

Renewal is for one additional Term for the shorter of 10 years or the remaining Term of

the lease, where Franchisee meets all requirements.

Financial Assistance: The Franchisor and its affiliates do not offer financing

arrangements or similar assistance to franchisees. The Franchisor periodically arranges

with third-party finance companies or banks to make financing programs available to

franchisees. These arrangements ordinarily involve no more than arranging to put

franchisees in contact with sources of financing available. There is no assurance that

financing will be available in any particular instance. The Franchisor nor any of its

affiliates receive any payments in exchange for referrals or the placement of any

funding.