Sloan's Ice Cream
BESTABLISHING A SLOAN’S BUSINESSIntroductionB-1Selecting Your Business TypeB-2Your Status as a FranchiseeB-8Countdown-to-Opening ScheduleB-10Required/Recommended Bank AccountsB-11Required Hardware and SoftwareB-13Selecting and Developing Your SiteB-14Obtaining the Franchisor’s Approval of Your SiteB-16Developing Your SiteB-17Site Selection Approval LetterB-18Obtaining the Franchisor’s Approval of the LeaseB-19Required Lease InclusionsB-20BESTABLISHING A SLOAN’S BUSINESSPage 2Required Insurance CoveragesB-23Sloan’s Decor SpecificationsB-25Signage and Logo SpecificationsB-26Logo SpecificationsB-27Special Licenses and PermitsB-29Health Department RegulationsB-31Contracting Utilities and ServicesB-32Selecting the Right Telephone ServiceB-34Approved Music ListB-35Micros POS SystemB-36Micros POS System—Three-Terminal PackageB-37Micros POS System—Four-Terminal PackageB-40Office Equipment and Supplies ListB-43Purchasing Foodservice Equipment and SuppliesB-46Equipment ListB-47Smallwares ListB-78Disposable Paper Goods ListB-84Cleaning and Housekeeping Supplies ListB-85BESTABLISHING A SLOAN’S BUSINESSPage 3Food Purchasing SpecificationsB-86Recommended Initial InventoryB-87Initial Inventory ListB-88Standards of CleanlinessB-89Paying TaxesB-93Federal TaxesB-96State TaxesB-100County or Town TaxesB-102Federal Tax Filing ChecklistB-103Employee TipsB-104Paying Additional FeesB-106INTRODUCTIONBefore opening your Sloan’s franchise, you must attend to a number of general business tasks, as well as specific franchise tasks. Among them are your responsibilities to incorporate your legal business entity, select and develop a site, and purchase required insurance. his section describes the tasks you must complete to open your Sloan’s business according to the standards of Sloan’s Franchise LLC.SELECTING YOUR BUSINESS TYPEOne of the first decisions you will need to make is how you would like to structure your business. The following information will familiarize you with the various business structures available for your Sloan’s store. For most businesses these choices include 1) sole proprietorship; 2) partnership; 3) limited partnership; 4) a corporation; or 5) limited liability corporation (LLC). All of these structures are defined by the laws of the jurisdiction in which it is formed. We provide this discussion for your information only and recommend making any decisions in relation to this matter on the advice of your attorney.PROPRIETORSHIPA proprietorship is a business owned by a single person who has the sole right to manage, is solely entitled to the profits, and is liable for the debts of the business without limitation. It is the least regulated of all businesses as well as the easiest to start. A proprietor makes all the decisions, runs the operation, is the boss, and collects all the profits.The opposite side of the coin is that, as proprietor, your business is legally inseparable from you. Complete control comes with proprietorship. This sole control leaves the proprietor with sole responsibility and a personal liability for all debts, lawsuits, and damages; this can leave not only your business in jeopardy but also your personal possessions. One illustration of this pertains to lease negotiation. As a sole proprietorship, you will undoubtedly be asked by the landlord to sign a personal guarantee for your rent for the duration of the lease.Selecting Your Business Type (continued)The owner of the proprietorship is not an employee. The owner may withdraw money from his/her business, but it is not a wage and cannot be deducted as a business expense. Instead, all profits of the business are taxed directly to the owner, regardless of what was withdrawn and what was left in the company. The proprietorship itself does not file income tax returns, and all income is attributed to the owner.PARTNERSHIPA partnership is the simplest form of organization involving more than one person. It is formed merely by agreement of the partners who share the right to manage and the right to participate in the profits. Each also shares the unlimited obligation to answer personally for all the liabilities of the business. Partnerships offer opportunity for more capital, more ideas, and more expertise. Very often it is the joint venture of an idea person and a money person. Partnerships relieve the responsibility of sole decision-making and sole liability. They also provide the ability to take a vacation without closing your doors. Disadvantages include the loss of sole decision-making and requirement for more paperwork as well as time and tact in interpersonal relations.Although not required by a general partnership, it is probably unwise to enter into a partnership without a written agreement. A written agreement should establish several things:A statement of the basic goals and principles of the business.Selecting Your Business Type (continued)The contribution of each partner in cash, labor, or property. Equal contributions are not required.The division of profits by the partners including how much and when profits are to be withdrawn.An itemization of the specific duties, authorities, and responsibilities of each partner. (This does not reduce the legal responsibilities of each general partner but serves as a basis for management organization.)Provisions for business continuation in the event of death or withdrawal of a partner. (A method of return of capital should be established so that a partner can recoup his/her investment without putting the business in jeopardy.)THE LIMITED PARTNERSHIPA limited partnership is a partnership of two or more persons in which there are one or more general partners who (1) are unlimitedly liable for the debts of the business (2) have general powers of management (3) and one or more limited partners who have no personal liability for the debts of the business (except to the extent of their capital contributions) and very limited powers of management. In order to create a limited partnership, a certificate must be filed with an appropriate state or county official and a fee paid. The limited partnership certificate bears little resemblance to corporate articles of incorporation and the state official who is authorized to accept articles of incorporation. Partnership agreements state that certain people are “limited partners” or that specified persons “are not personally liable for the debts of the business.” To ensure limited liability, a certificate of limited partnership must be filed.Selecting Your Business Type (continued)THE CORPORATIONThe most common interest of small business incorporation is in the area of “limited liability.” A corporation is a separate legal entity from its owners and is taxed as a corporation apart from its owners. As an owner, creditors may not pursue your personal non-business assets for collection or damages in a lawsuit.This “limited liability” is not all encompassing. Corporate officers have “fiduciary” responsibilities that compel them to operate the corporation within the laws governing corporations. They are responsible for any gross negligence, criminal action, or failure in compliance with government regulations. Also, banks lending money to small corporations often require the stock holders or officers to co-sign as personal guarantors of the loan, thus diminishing the “limited liability” of incorporation.As a corporate officer, you may be paid an employee’s salary, taxable to yourself, and deductible as a business expense. The remaining corporate profits not paid out as wages are subject to corporate taxes. Wages paid cannot be in excess of what is deemed “reasonable” by the IRS according to industry standards. If wages are declared “unreasonable” by the IRS, they may be treated as “constructive dividends” and are subject to double tax, once at corporate level and once at the individual level (up to 50 percent on unearned income.)Selecting Your Business Type (continued)LIMITED LIABILITY COMPANYA limited liability company or LLC is a business structure that is becoming increasingly popular. The limited liability company has three main advantages:In general, in a limited liability company, you would receive the liability protection of a corporation. Owners are not liable for the LLCs obligations simply by virtue of their status as owners. Ownership then does not result in personal liability. In an LLC you would also receive the tax benefits of a partnership. You are taxed only once on the income and gains from the business, at owner level, with generally no tax at the company level. Keep in mind, passing all federal tests for partnership tax classification does not necessarily mean that the states will extend a similar exemption from corporate tax.Both of these advantages are then coupled with a unique flexibility in the structuring of management and member relations. Management may be retained by members, delegated to outside managers or structured anywhere between those two alternatives. LLCs may be structured under an agreement by the members or managers involved. This agreement is typically called the Regulations. The Regulations govern the internal affairs of the LLC and the relationship of its members. Selecting Your Business Type (continued)To file for LLC status, you must have Articles of Organization. These Articles, separate from the Regulations, are similar to corporate articles of incorporation or a certificate of limited partnership. These Articles, in a sense document the basic foundation of the limited liability company. They provide information about it, and sometimes establish certain rights and obligations among the owners. To form an LLC, you must file your Articles of Organization with the appropriate state regulatory authority. The LLC provides many advantages. At the same time it is a relatively new organizational structure and so to some degree remains still in its formative stage. Steadily tax treatment is becoming more certain and the concept is receiving growing recognition.SUBCHAPTER “S” CORPORATIONSmall corporations may elect tax treatment under Subchapter “S” of the Internal Revenue Code. In this case, profits and losses of a corporation “flow through” directly to the owners, who are taxed on individual income. There are limitations on the size and the structure of a corporation electing Subchapter “S” status. “Sub S” corporations enjoy most of the benefits of incorporation while eliminating the possibility of double taxation.YOUR STATUS AS A FRANCHISEEWhen you signed the Franchise Agreement, you agreed that you would not represent yourself as either an agent, a partner or an employee of the franchisor, Sloan’s Franchise LLC. Although you are enfranchised to use the name and logo "Sloan’s" in your daily business operations, it must be made clear to the public that your business is a separate and distinct legal entity.The following policies have been designed to direct you in the correct use of the Sloan’s logo and name to indicate your status as a Franchisee, as required by the Franchise Agreement.BUSINESS NAMEWhen you incorporate, you may not use the trademarks of the franchisor as part of your legal business name. You should only use "Sloan’s" when you refer to: (1) the products, (2) the franchisor, or (3) the Sloan’s business opportunity.Business name examples:AcceptableNot AcceptableRobert Smith, Inc.Sloan’s, Inc.d/b/a Sloan’sSloan’s CorporationSloan’s of (insert locale), Inc.Your Status as a Franchisee (continued)CHECKS, STATIONERY, AND BUSINESS FORMSMake sure all of your business forms clearly indicate your independent ownership of the Sloan’s franchise.Sloan’s Franchise LLC has designed a distinctive logo to use on your checks, letterhead, envelopes, and business cards to establish immediate recognition of your status as a Sloan’s franchise owner. However, your personal identification must always be included when you use the Sloan’s name and logo. For example, your business card may read:"Sloan’s,Independently owned and operated by Robert Smith, Inc."or"Sloan’s,Robert Smith, Inc., owner"Remember that all printed materials you develop must be reviewed and approved by Sloan’s Franchise LLC before they are put to use.SIGNAGEPer the Franchise Agreement, you are to post a sign in your store, in public view, which advises your customers that your business is independently owned and operated and that identifies you as a member of the Sloan’s franchise network. Display this sign prominently.COUNTDOWN-TO-OPENING SCHEDULE/GANT CHARTSloan’s Franchise LLC will provide you with a Countdown-to-Opening Schedule/Gant Chart. The Countdown-to-Opening Schedule/Gant Chart is a project management tool that will ensure that you complete all the required pre-opening tasks in an efficient and effective manner.REMEMBER: YOU MUST BE PREPARED TO OPEN AND RUN YOUR BUSINESS WITH 365 DAYS OF SIGNING THE FRANCHISE AGREEMENT. THIS IS A RELATIVELY SHORT AMOUNT OF TIME. AS A RESULT, YOU MUST BE ORGANIZED AND DILIGENT IN PERFORMING YOUR PRE-OPENING TASKS.REQUIRED/RECOMMENDED BANK ACCOUNTSIt is important to develop a good working relationship with a bank in your area. When you make your selection, be sure to go personally to the bank and introduce yourself to its officers. Speak with them directly and honestly, describing your business and your business needs.REQUIRED ACCOUNTS TO OPENOpen a general operating account under your legal business name. We recommend opening an account for which you are charged a flat monthly fee (or, if possible, no fee at all). You and the designated bookkeeper in your office should act as co-signatories on checks. Be sure your checks are clearly imprinted with your business' name and address.Sloan’s Franchise LLC requires that you establish an electronic depository transfer account, to which the franchisor will have access for the purpose of receiving payment from you for all continuing services and royalty fees, advertising contributions, amounts due for purchases you make from the franchisor, and other amounts that you might owe to the franchisor.You must open a merchant account through a merchant account provider in order to accept payments by credit cards, debit cards, gift cards, and other forms of payment cards.Opening a payroll account from which you will draft payroll checks for your employees each pay period is recommended. You may consider utilizing a local bookkeeper or a payroll service like Paychex or ADP.Required/Recommended Bank Accounts (continued)RECOMMENDED ACCOUNT TO OPENOpen a sales tax savings account to deposit sales tax dollars you collect during the collection period. This account will not only help ensure that you have the monies when it is time to remit them to the government, but you can also collect interest on the monies while they are in your possession.In the event that your lease is in a different name than your operating company, you may consider establishing an account for rent payments.REQUIRED HARDWARE AND SOFTWAREHARDWAREDesktop or Laptop running current Microsoft Office SoftwareSOFTWAREMicros POS SystemQuickBooks ProSELECTING AND DEVELOPING YOUR SITEFinding the best location for your Sloan’s franchise is important to the healthy growth of your business. If you need assistance in selecting the best site for your Sloan’s franchise, the franchisor will be available to help you assess the viability of possible locations.In addition, Sloan’s Franchise LLC will provide you with detailed demographics information that will assist you in identifying an acceptable site for your Sloan’s business.SITE CRITERIAIf you have not yet located a site for your Sloan’s store, you must locate a suitable site within the "Designated Area" (as described in Paragraph I of your Franchise Agreement) within 120 days after the execution of the Franchise Agreement.Sloan’s Franchise LLC reserves the right to approve the site you select. Approval will be granted for sites that meet the franchisor's standards for the following:Affluent area that caters to tourists and familiesHeavy foot trafficHigh visibilityAmple parking within walking distanceWithin close proximity (walking distance) to a popular movie theater1700 to 2100 square feetSelecting and Developing Your Site (continued)Although Sloan’s has a unique presentation and a diverse mix of products, it is essential that you gain exclusivity with the landlord as it pertains to the following categories:Ice creamYogurtCustardGelatoFlavored iceOBTAINING THE FRANCHISOR'S APPROVAL OF YOUR SITEBefore you make a binding commitment to lease or purchase any site for use as a Sloan’s store, you must submit a description of the proposed site to Sloan’s Franchise LLC, accompanied by a letter of intent or other evidence satisfactory to us to confirm your favorable prospects for obtaining the proposed site. The Corporate Office will provide you with written approval or rejection of the proposed site within a reasonable time (usually within 30 days) of receiving your written proposal.DEVELOPING YOUR SITEOnce your site has been approved, you will receive a package of basic architectural plans and decor specifications. Your contractor may modify these plans, if necessary, to comply with local codes and ordinances. As you begin to construct your Sloan’s store, you must attend to the following:SPECIAL NOTE: SLOAN’S FRANCHISE LLC HAS SELECTED AN APPROVED NATIONAL CONTRACTOR WITH WHOM WE REQUIRE YOU HIRE IN ORDER TO STREAMLINE THE BUILDOUT PROCESS. THE CONTRACTOR’S INFORMATION IS AS FOLLOWS:CHARGER CONSTRUCTION LLCROCKY AIYASH312-213-4000rockyaiyash@Submit plan modifications to the corporate office for approval before proceeding with the site buildout.Research all zoning, licensing, and permit requirements for your location.Supervise construction, obtaining contractors' waivers of liens.Be ready to open the store within 365 days of signing the Franchise Agreement.SPECIAL NOTE: IN THE EVENT THAT YOU CHOOSE A DIFFERENT GCC, ROCKY AIYASH MUST BE HIRED AS A SUPERVISOR TO OVERSEE DEVELOPMENT AND MAINTAIN THE STANDARDS FOR YOUR STORE.SITE SELECTION APPROVAL LETTER[DATE]Dear Franchisee:The Site Selection Package that you submitted to Sloan’s Franchise LLC on [DATE OF SUBMISSION] for the property located at [ADDRESS OF SITE] has been:APPROVEDREJECTEDReasons noted for disapproval of proposed site (attach additional sheet if necessary):_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Specific instructions for resubmission (attach additional sheet if necessary):________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Sincerely,Sloan’s Franchise LLCOBTAINING THE FRANCHISOR’S APPROVAL OF THE LEASEAfter you find a suitable location and Sloan’s Franchise LLC has approved it, obtain lawful possession of the premises through a lease or a binding agreement to purchase the site. The franchisor must approve any lease of the premises. You must deliver a copy of the proposed lease to us before you sign it.If you intend to purchase the site, you must submit the purchase agreement to us for our written approval.Once you sign the lease, you must give a copy of the signed lease to the franchisor within 15 days after its execution.REQUIRED LEASE INCLUSIONSAfter you find a suitable location and Sloan’s Franchise LLC has approved it, obtain lawful possession of the premises through a lease or a binding agreement to purchase the site.If you are leasing, you must be sure to have included in your lease the following provisions:A provision reserving to Sloan’s Franchise LLC (or its designee) the right, but not the obligation, at Sloan’s Franchise LLC’s election, to receive an assignment of the leasehold interest without payment of any assignment fee or similar charge and without any increase in rent or other fees upon termination or expiration of the Franchise grant. The lease must provide that, before the effective date of any assignment of the lease to Franchisor (or its designee), Franchisee shall be solely responsible for all obligations, debts and payments under the lease.A provision expressly permitting the lessor of the premises to provide Sloan’s Franchise LLC all sales and other information lessor may have obtained or received relating to the operation of the Franchised Store, as Franchisor may request.Required Lease Inclusions (continued)A provision that requires the lessor to concurrently provide Sloan’s Franchise LLC with a copy of any written notice or deficiency or default under the lease sent to Franchisee and which further grants to Sloan’s Franchise LLC, in its sole discretion and sole option, the right (but not the obligation) to cure any deficiency or default under the lease, if Franchisee fails to do so, within fifteen (15) days after the expiration of the period in which Franchisee may cure the default or such shorter period of time mandated by law.A provision requiring the lessor to provide Sloan’s Franchise LLC (at the same time lessor provides to Franchisee) a copy of all lease amendments and assignments, and a copy of all letters and notices lessor sends to Franchisee relating to the lease or the leased premises.A provision permitting Sloan’s Franchise LLC to enter the leased premises to make any modifications or alterations necessary in Sloan’s Franchise LLC’s sole discretion to protect the System and the Marks without being guilty of trespass, or other tort or other crime.A provision allowing Franchisee to display the Marks in accordance with the specifications required by the Confidential Operations Manual, subject only to the provisions of applicable law.Required Lease Inclusions (continued)A provision prohibiting the premises from being used for any purpose other than the operation of the Franchised Store.A provision allowing Sloan’s Franchise LLC, upon expiration and non-renewal or termination of the lease or the Franchise Agreement, to enter the premises and remove any interior and exterior signs containing the Marks and trade fixtures.A provision stating that upon default of the Franchise Agreement, Sloan’s Franchise LLC or its nominee has the right, but not the obligation, to take possession of the Approved Location and operate the Franchised Store.A provision stating that lessor shall not amend or otherwise modify the lease in any manner that would affect any of the foregoing provisions to be included in the lease set forth above without Sloan’s Franchise LLC’s prior written consent.Have your lawyer go over the lease with you so that both you and your landlord understand your respective rights and responsibilities.REQUIRED INSURANCE COVERAGESYour franchise agreement indicates that you must protect both your business and Sloan’s Franchise LLC against liability and loss. Your franchise agreement requires that you purchase the essential coverages listed below. Within 60 days after you have signed the franchise agreement, you must forward a copy of the certificate of insurance to the corporate office. The certificate must state that your policies may not be cancelled or altered without 30 days' prior written notice to Sloan’s Franchise LLC.All insurance policies required to be obtained and maintained by you under the Franchise Agreement must be written by insurance companies licensed in the state in which you operate and having at least an “A” Rating Classification as indicated in the latest issue of A.M. Best’s Key Rating Guide. Although A.M. Best groups “A” and “A-” in the same classification, Sloan’s Franchise LLC demands an “A” rating.“All Risk” property insurance coverage on all assets including inventory, furniture, fixtures, equipment, supplies and other property used in the operation of the Franchised Store. Franchisee’s property insurance policy shall include coverage for fire, vandalism and malicious mischief and must have coverage limits of at least full replacement cost.Workers’ Compensation insurance that complies with the statutory requirements of the state in which the Franchised Store is located and employer liability coverage with a minimum limit of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) or, if higher, the statutory minimum limit as required by state law.Required Insurance Coverages (continued)Comprehensive General Liability insurance against claims for bodily and personal injury, death and property damage caused by, or occurring in conjunction with, the operation of the Franchised Store, or Franchisee’s conduct of business pursuant to this Agreement, with a minimum liability coverage of ONE MILLION DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00) in the aggregate or, if higher, the statutory minimum limit required by state law.Business Interruption insurance in amounts and with terms acceptable to Sloan’s Franchise LLC.Automobile Liability insurance for owned or hired vehicles, with a combined single limit of at least ONE MILLION DOLLARS ($1,000,000.00) or, if higher, the statutory minimum limit required by state law.Occurrence based general liability coverage.FIVE MILLION DOLLARS ($5,000,000) umbrella policy above underlying coverage.Such insurance as necessary to provide coverage under the indemnity provisions set forth in Section 21.3.The types and amounts of insurance listed above represent the absolute minimum for a foodservice business like Sloan’s, in the opinion of the franchisor. If you wish to consider additional insurance coverages as benefits for employees (for example: life, health, and/or disability), discuss them thoroughly with a qualified insurance agent or broker.SLOAN’S DECOR SPECIFICATIONSSloan’s Franchise LLC has developed the distinctive Sloan’s interior design. The unique characteristics of the design, including wall colors and special signage, must be duplicated in your store. You must purchase all furnishings, including tables, chairs, countertops, etc., according to precise Sloan’s specifications. You will receive a complete set of specifications for the build-out of your Sloan’s store when you submit evidence of a binding lease to the corporate office.The Sloan’s Decor Specifications Package will include specifications for:Exterior design, including signageInterior design, including floor plan and signageEquipmentFurnitureDecorating schemes, including wall décor, materials and colorsAppliances, by brand and modelSIGNAGE AND LOGO SPECIFICATIONSAll uses of the trademarks owned by Sloan’s Franchise LLC must be consistent with the official colors and design of the Sloan’s logo, a sample of which follows. This includes its use on all business cards, exterior signage, advertisements, bank checks, sales checks, decals, letterheads, and any other custom-printed forms, labels, envelopes, or papers.The corporate office can provide you with electronic versions of the logo in various sizes. They can be used by your printer to reproduce the proper image on your letterhead and other related business pieces for distribution.LOGO SPECIFICATIONS(Pink)Pantone? - Rhodamine – Red C(Green)Pantone? - 375 CLogo Specifications (continued)SIGN LOGOSPECIAL LICENSES AND PERMITSSince local ordinances vary, check with your municipal and state authorities (particularly your state store association) to determine:The requirements for licenses and/or permits in your areaThe cost of each itemThe time required for approval of eachNOTE: There are often waiting periods involved in obtaining licenses and permits. Be sure to make your investigations well in advance of your proposed opening date.In particular, you will have to obtain a business license from your city/town hall or local government office, and you will have to register with the state to obtain your sales tax I.D. number. In addition to your business license and sales tax I.D. numbers, you will want to inquire about the following building permits and inspections:Construction permits (preliminary and final)Electrical inspections (preliminary and final)Plumbing inspections (preliminary and final)Fire inspections (preliminary and final)Occupancy permitSidewalk permitCertificate of inspectionSign permitsHealth card/food handler's permitNOTE: Some states require that health cards be posted, while others do not. Also, some states require participation in a food handler's class to receive a food handling permit.Special Licenses and Permits (continued)In addition, Sloan’s Franchise LLC requires that at least one person on your staff (usually the manager) successfully complete the ServSafe certification course.Sloan’s Franchise LLC also recommends that you do the following:Join your local hotel and store associationJoin your local chamber of commerceJoin your local Community OrganizationsHEALTH DEPARTMENT REGULATIONSFood establishment operations are governed by federal, state, and local health codes. (In some locales, the Department of Agriculture is the controlling agency.) The various regulations they may impose deal with the care, storage, and preparation of foods, housekeeping requirements, and employee food handling and sanitary procedures--all of which will be addressed in other sections of this manual.It is extremely important that you contact your local health department as soon as you have signed your lease. Be sure you understand all of the regulations and permits required, particularly if you are having any remodeling done. All new construction must comply with local building codes. If possible, obtain as much of the information in writing so you can refer to it later. Finally, apply for all permits as soon as possible. Any problems cited by the health department could delay the opening of your store.FOOD HANDLER'S PERMITSome states require that at least one person working on the premises be a certified food handler, while some communities require that all employees secure a food handler's permit. In most cases, this involves the successful completion of formal coursework and an examination for a food handler's certificate. Since regulations regarding this vary from area to area, contact your local health department and/or the Food and Drug Administration to see if this rule applies to your location.CONTRACTING UTILITIES AND SERVICESMake inquiries about utilities and services well in advance of your proposed opening date. Be sure to ask:1.Is a deposit required? How much it is?2.What advance notice is required for installation, connection, and maintenance schedules?Your store requires the following utilities and services:Utilities:ElectricityGas (not required if power is obtained via electricity)Water and sewerTelephone (two lines: one voice and one fax)High Speed InternetSatellite Music (Muzak)Regular Services:Trash collectionPest controlGrease removalInventory deliveryHVAC and refrigeration maintenanceLinen service for aprons, towels, mats and rugsContracting Utilities and Services (continued)Occasional Services:Glass repairSign maintenanceEquipment repairPlumbingLocksmithSELECTING THE RIGHT TELEPHONE SERVICEThe telephone is one of your most important business tools, and essential to the smooth operation of your store. When looking for the best telephone system for your store, look for a system that can accommodate the following:A Dedicated Voice Line – At least one separate telephone line with voice mail capabilities to accept incoming calls from. You should record a professional message that gives the caller the location and hours of operation of your store.A Dedicated Fax Line – A separate line for receiving facsimiles.CELLULAR TELEPHONEAs the owner/operator of your Sloan’s store, you must be available to your staff at all times. You will need to acquire your own cellular telephone service so that you can be contacted if you are not on the premises.APPROVED MUSIC LISTSloan’s Franchise LLC requires that you subscribe to Muzak, which is a satellite music provider.You must play the following stations at your Sloan’s franchise:Jukebox GoldMICROS POS SYSTEMSloan’s Franchise LLC requires that you utilize the Micros POS System in your Sloan’s business. Depending on the size and location of your store, you may require a three-terminal package or a four-terminal package. The specifications for each package are outlined directly below.MICROS POS SYSTEM—THREE TERMINAL PACKAGECURRENT APPROVED VENDORMICROS?632 S. Military TrailDeerfield Beach, FL 33442Tel: 954.421.3184 Fax: 954.421.3335Account Manager:Dale A. JordanQUANTITYITEM DESCRIPTION1MICROS RES (eS) Power Package 33WS5A, Touchscreen, 15" Active LCD3WS5 Adjustable Stand3TM-T88/5, Thermal Printer, EDG IDN, w/PS180, Char1HP RP5700, Intel E2160 Dual Core, 2GB,2-160GB HDD,2 NIC,56k,DVR-RW,XPPro1HP 17" LCD, LE17111D-Link 8-port Router/Firewall, Broadband86' Ethernet 10BaseT Patch Cable3SmartPower SBP400TBF UPS 400VA/240W1SmartPower UPS, SBP-0600T-B/SPV0600T-BMicros POS System—Three Terminal Package (continued)QUANTITYITEM DESCRIPTION3*3700 RES POS Client Appl (each PCWS)1*3700 RES F2 Software,v4.x (1-9) POS Software includes Cash Management,1*3700 RES Time & Attendance Software, v4.x1*RES 4.x Software Media Kit, CD, Code, USB Key1*RES4 SVC Gift Card Interface1MM eS Activation1MM ASP Subsciption1iCare Gift ASPVALU-PAKS1Toledo Metler Viva 3211 Scale w/int display1USB Flash Drive 8GB Micros Logo3MICROS Branded LS9208 Scanner, Cable, Power Supply1WS4/WS5 Serial Port Converter Dongle, RJ45 to DB93Small Profile Drawer, APG4000, Dual Media Slot, FixedMicros POS System—Three Terminal Package (continued)QUANTITYITEM DESCRIPTION1HP LaserJet P1606 Printer (req's pc cable), HP CE749A1USB Cable, A-B, M-M (req'd w/ HP LaserJet)HARDWARE1*Kit, 3 CA/EDC w/Bravo (Credit Card Auth Software)1Norton Antivirus Single User1*Enterprise Office: Foundation (Incl Activation)1Vigilix File Server Monitoring SoftwareSOFTWARE125 Pack Micros Magnetic Cards1Thermal Paper Rolls, 3 1/8" x 273', 50 Rolls1Bond 1 Ply Paper Rolls, 3" x 150', 50 RollsSUPPLIES13700 Annual Help Desk Telephone Support & SELMICROS POS SYSTEM—FOUR TERMINAL PACKAGECURRENT APPROVED VENDORMICROS?632 S. Military TrailDeerfield Beach, FL 33442Tel: 954.421.3184 Fax: 954.421.3335Account Manager:Dale A. JordanQUANTITYITEM DESCRIPTION1MICROS RES (eS) Power Package 44WS5A, Touchscreen, 15" Active LCD4WS5 Adjustable Stand4TM-T88/5, Thermal Printer, EDG IDN, w/PS180, Char1HP RP5700, Intel E2160 Dual Core, 2GB,2-160GB HDD,2 NIC,56k,DVR-RW,XPPro1HP 17" LCD, LE17111D-Link 8-port Router/Firewall, Broadband106' Ethernet 10BaseT Patch Cable4SmartPower SBP400TBF UPS 400VA/240W1SmartPower UPS, SBP-0600T-B/SPV0600T-BMicros POS System—Four Terminal Package (continued)QUANTITYITEM DESCRIPTION4*3700 RES POS Client Appl (each PCWS)1*3700 RES F2 Software,v4.x (1-9) POS Software includes Cash Management,1*3700 RES Time & Attendance Software, v4.x1*RES 4.x Software Media Kit, CD, Code, USB Key1*RES4 SVC Gift Card Interface1MM eS Activation1MM ASP Subsciption1iCare Gift ASPVALU-PAKS2Toledo Metler Viva 3211 Scale w/int display1USB Flash Drive 8GB Micros Logo4MICROS Branded LS9208 Scanner, Cable, Power Supply2WS4/WS5 Serial Port Converter Dongle, RJ45 to DB94Small Profile Drawer, APG4000, Dual Media Slot, FixedMicros POS System—Four Terminal Package (continued)QUANTITYITEM DESCRIPTION1HP LaserJet P1606 Printer (req's pc cable), HP CE749A1USB Cable, A-B, M-M (req'd w/ HP LaserJet)HARDWARE1*Kit, 3 CA/EDC w/Bravo (Credit Card Auth Software)1Norton Antivirus Single User1*Enterprise Office: Foundation (Incl Activation)1Vigilix File Server Monitoring SoftwareSOFTWARE125 Pack Micros Magnetic Cards1Thermal Paper Rolls, 3 1/8" x 273', 50 Rolls1Bond 1 Ply Paper Rolls, 3" x 150', 50 RollsSUPPLIES13700 Annual Help Desk Telephone Support & SELOFFICE EQUIPMENT AND SUPPLIES LISTYou may purchase the following office equipment and supplies from a local or online vendor.ITEMQUANTITYSPECIFICATIONS/BRANDLocking four-drawer file cabinets1Letter sizeDesk1Chair1Laptop computer1Fax/Scanner/Printer/Copier1Magic Jack Plus1Cordless telephone1Software1QuickBooks ProSoftware1Microsoft OfficeSoftware1Adobe Acrobat ProfessionalSoftware1Internet Explorer 6.0 or higherSafe1Price label maker1ZebraCDsAs neededThumb drivesAs neededOffice Equipment and Supplies List (continued)ITEMQUANTITYPens1 DozenPencils1 DozenPads6Paper2 reamsPaper Clips1 boxStapler1Staples1 boxStaple remover1Ruler1Glue Sticks1 DozenScissors1Tape6Tape Dispenser1Envelope Opener1Bulletin Board1Folders1 BoxHanging Folders1 BoxLabels1 BoxToner2Ink2Large Calendar1Binders6Waste Basket1Calculator1Pencil Sharpener1Marker1 DozenRubber Bands1 PackPush Pins1 PackWhite Out2Office Equipment and Supplies List (continued)ITEMQUANTITYHighlighter2Post-its1 DozenShredder1Business Cards500Envelope1 BoxLetterhead1 BoxPURCHASING FOODSERVICE EQUIPMENT AND SUPPLIESIn our years of experience, Sloan’s Franchise LLC has come to learn that certain types of equipment and supplies are more effective than others in providing the level of performance needed to operate a Sloan’s store. To get the most out of your investment in foodservice equipment and to meet our standards for quality Sloan’s Franchise LLC requires that you purchase your equipment according to the following specifications. By purchasing the equipment and supplies as specified on the following lists, you will be assured of obtaining the quality, reliability, and longevity these items can provide.EQUIPMENT LISTThe primary supplier for Sloan’s equipment is:DEIDennis Braff3908 North 29 AvenueHollywood, Florida 33020Telephone: (954) 920-9499A sample DEI equipment list is included in this section of the Franchise Operations Manual. You will receive a more customized equipment list from Sloan’s Franchise LLC prior to your initial training.Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)In addition to the equipment purchased from DEI, you will also be required to purchase the following equipment from the listed approved vendors:APPROVED VENDOREQUIPMENTQUANTITYCoBatCo, Inc.Peoria, IL 61603Brian Fiddesbfiddes@Telephone: 1-800-426-2282Fax: 1-309-676-2227Model MD-10 Waffle Cone BakerWhen calling reference the Sloan’s packageHilliard’s Chocolate SystemJIMSAN Enterprises, Inc.275 East Center StreetWest Bridge, MA 02379Telephone: 508-587-3666Fax: 508-587-3735Hilliard’s Little Dipper1The Webstaurant Store Double Batch Reddy Apple Cooker—Gold Medal Model #40161Joy Cones Cone Dispenser (Universal 30/40 Counter Top Dispenser)2Equipment List (continued)APPROVED VENDOREQUIPMENTQUANTITYCalico Cottage, Inc.210 New HighwayAmityville, NY 11701-1116Telephone: 631-841-2100Toll Free: 800-645-5345Fax: 631-841-2401Email: info@Fudge Equipment1The Calico Cottage, Inc. profitability sells sheet and proposal are on the pages immediately following this page.Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)The following specifications are for the Coca-Cola Freestyle Machines, which is purchased directly from a local Coca-Cola distributor.Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)Equipment List (continued)SMALLWARES LISTThe primary supplier for Sloan’s smallwares is:DEIDennis Braff3908 North 29 AvenueHollywood, Florida 33020Telephone: (954) 920-9499A sample DEI smallwares list is included in this section of the Franchise Operations Manual. You will receive a more customized smallwares list from Sloan’s Franchise LLC prior to your initial training.Smallwares List (continued)Smallwares List (continued)Smallwares List (continued)Smallwares List (continued)Smallwares List (continued)DISPOSABLE PAPER GOODS LISTSloan’s Franchise LLC will provide you with an up-to-date, comprehensive disposable paper goods list during initial training.CLEANING AND HOUSEKEEPING SUPPLIES LISTSloan’s Franchise LLC will provide you with an up-to-date, comprehensive cleaning and housekeeping supplies list during initial training.FOOD PURCHASING SPECIFICATIONSJust as Sloan’s Franchise LLC has found some foodservice equipment to be superior to others, we have also learned that some brand name products provide a better value in taste, consistency, and cost than others. To make sure the menu items served at your Sloan’s store meet our standards for quality, are consistent throughout the network, and give you the best value, we require that you ONLY purchase from vendor’s that have been approved by Sloan’s Franchise LLCRECOMMENDED INITIAL INVENTORYTo help avoid delay or mishap in the opening of your Sloan’s store, we will provide a recommended initial inventory list. Use the list as you order and set up your inventory for it includes the items you need to prepare all Sloan’s menu items. By having everything you need before your opening, you will be equipped to introduce your customers to the superior-quality products, for which Sloan’s is so well known, from the first day you open for business.INITIAL INVENTORY LISTSloan’s Franchise LLC will provide you with an up-to-date, comprehensive initial inventory list during initial training.STANDARDS OF CLEANLINESSSloan’s Franchise LLC prides itself on having only the cleanest store facilities. This means that the "behind-the-scenes" areas are just as immaculate as the front area of your store. The cleanliness of your unit will make a favorable impression on customers, as well as suppliers and distributors who visit your store, enhancing the good reputation of Sloan’s. This translates into customers frequently returning to your store and encouraging others to visit as well. And this, ultimately, represents the success of your business.By adhering to Sloan’s Franchise LLC's standards of sanitation and cleanliness, you will be protecting your investment in your business. A spotless store also demonstrates your commitment to quality and your responsibility to your community.To assist you in maintaining Sloan’s Franchise LLC standards of cleanliness, we have provided some guidelines that follow. In addition, we have provided some specific cleaning procedures that are outlined in the "Operational Procedures" section of this manual.ENTRANCEThe surrounding parking lot is clean.There is no dirt/debris around the entrance of the store.The windows and glass on doors are spotless—free of fingerprints, smudges, etc.Outdoor furniture (if any) and surrounding area is clean.Standards of Cleanliness (continued)Signs, posters, window coverings, etc., are clean.Signage is in good repair.RESTROOMSRestrooms checked at least three times per day.Fog window is clean and operating properly.Floors and walls are clean.Bowls are clean.Sinks have been wiped down.Mirrors are clean and free of streaks.There is an appropriate supply of soap, paper towels, and toilet tissue.There are no burned out bulbs in light fixture.COUNTER AREACounters are clean.Cases are clean inside and glass is cleaned inside and out.Counters are free from papers and other miscellaneous items.Standards of Cleanliness (continued)Train and ledge are clean and dust free.Chandeliers are clean and dust free.The POS equipment is clean and free of dust, dirt, fingerprints, etc.Food and retail items are properly stocked and neatly displayed.All equipment is properly cleaned.DINING areaFloors are clean.Tables have been wiped with a bleach or sanitizer solution.Table edges have been wiped down.Legs of tables have been wiped down.Trash bins have been cleaned and lined with new liners.Walls have been wiped down.All flat surfaces in the dining room have been wiped clean.The entire dining area floor has been swept and mopped.Standards of Cleanliness (continued)The bottoms of all tables have been cleaned and gum removed.Chandelier is clean and dust free.MERCHANDISE DISPLAYSAll racks are fully stocked and arranged properly.Items are clean and dust free.Shelves are clean and dust free.PAYING TAXESBusinesses and individuals alike must pay both federal and state taxes based on the amount of income they report at the end of the year. However, businesses are required to file reports and pay taxes throughout the year as well. It is necessary to figure and report income taxes, social security taxes, and unemployment taxes. In some cases, self-employment and excise taxes also apply. Payment of such taxes is often made through a system of tax deposits using a "Federal Tax Deposit Coupon Book" (Form 8109) or through an electronic funds transfer payment system. An Employer's Tax Guide (Circular E) and an IRS Tax Calendar can help you file the appropriate taxes on time.EMPLOYER IDENTIFICATION NUMBERYou must have a federal taxpayer identification number so the Internal Revenue Service can process your return. There are two kinds of taxpayer identification numbers: a social security number and an employer identification number.If you are a sole proprietor, you need an employer identification number (EIN) only if you are required to file an excise or employment tax return. Otherwise, use your social security number. You are a sole proprietor if you are self-employed (work for yourself) and are the only owner of your unincorporated business.How to Get an EINTo get an EIN, file Form SS-4, Application for Employer Identification Number, with the Internal Revenue Service Center in your area.Contact Internal Revenue Service or Social Security Administration offices.Paying Taxes (continued)When to ApplyYou should file Form SS-4 early enough so you will have a number by the time you need to file a return or statement or to make a tax deposit. It takes about four weeks for Form SS-4 to be processed.IRS-REQUIRED REPORTSThe three reports required by the IRS concerning payroll taxes are:A Quarterly Federal Tax Return (Form 941), due April 30, July 31, October 31, and January 31An annual withholding statement for individual employees (W2 form), due to the employee by January 31 and to the Social Security Administration by the last day of FebruaryAn annual withholding tax summary (W-3 form), due to the Social Security Administration by the last day of February, which reconciles individual employee withholding taxes (W2 form) with the quarterly returns (Form 941)Because tax deposit and reporting requirements can be complex, you may find you must devote a lot of time to record keeping and tax reporting. Yet, because you are subject to penalties incurred for late payments of taxes, it is essential that your tax collecting methods are established correctly and that appropriate taxes are submitted accurately and on time. Therefore, Sloan’s Franchise LLC recommends that you call your state department of revenue, the IRS, or the local chamber of commerce or small business association in your state when you have questions. Paying Taxes (continued)The Federal Tax Filing Checklist at the end of this discussion may be of assistance. It charts the federal requirements for taxes, forms, and due dates that apply to all types of businesses. (Source: IRS Publication 334, Tax Guide for Small Businesses) You may find that the services of an experienced tax accountant may be well worth the fees charged.The balance of this discussion presents a general overview of the various tax requirements that apply to small businesses. Be aware that other local, state, or federal taxes that are not mentioned here may apply to your operations.FEDERAL TAXESThe type of business you operate determines which federal taxes you must pay and how you pay them. There are five general kinds of federal business taxes:Income taxesSelf-employment taxesSocial security and withheld income taxes for employeesUnemployment taxesExcise taxesPublication 509, a Tax Calendar, contains a general tax calendar, an employer's tax calendar, and an excise tax calendar that explains when to file returns, make tax payments, and do other things required by the federal tax law. This publication is updated annually.INCOME TAXESEvery business must file an annual income tax return. Which form you should use depends on how your business is organized.If you are:File:A sole proprietorSchedule C (Form 1040)A partnershipForm 1065A corporationForm 1120 or 1120-AAn "S" corporationForm 1120SFederal Taxes (continued)Federal income and self-employment taxes are pay-as-you-go taxes. Generally, you will pay the tax during the year as you earn your income. Sole proprietors, partners, or shareholders of an "S" corporation pay as they go by making regular payments of estimated tax during the year. For information on estimated tax, see IRS Publication 505, Tax Withholding and Estimated Tax.Corporations pay as they go by making periodic deposits of their estimated income tax, as described earlier.SELF-EMPLOYMENT TAXESSelf-employment tax is the social security tax for individuals who work for themselves, such as sole proprietors and members of a partnership. The tax is figured and reported on Schedule SE, which is attached to and filed with Form 1040.For more information, obtain Publication 533, Self-Employment Tax.SOCIAL SECURITY, MEDICARE, AND WITHHELD INCOME TAXESIf you have employees, you are required to pay the following:Federal income taxesSocial security taxesMedicare (insurance)Federal Taxes (continued)The total amount of federal income tax must be withheld from your employees' wages. For social security tax (the FICA, or Federal Insurance Contributions Act tax), you withhold part from your employees' wages and you pay a matching amount yourself. An additional amount must be withheld from employees' wages for Medicare. Social security, Medicare, and withheld income taxes are reported and paid together.Determine the amount of income tax to withhold from each employee's paycheck from a tax table furnished by the Internal Revenue Service using the employee's gross pay for that pay period and the number of exemptions claimed by the employee (from W-4 form). The tax tables to use may be found in Publication 15, Circular E, Employer's Tax Guide. Your state's department of revenue can provide you with similar information about state taxes. The amount to withhold for social security is based on a percentage of the gross pay.UNEMPLOYMENT TAXESThe Federal Unemployment Tax system (FUTA) provides for unemployment compensation for laid-off workers. Federal unemployment tax is reported and paid separately from social security taxes and withheld income taxes. You pay the FUTA tax from your funds. Employees do not pay this tax or have it withheld from their pay. Use Form 940, "Employer's Annual Federal Unemployment Tax (FUTA) Return," to report this tax.Federal Taxes (continued)EXCISE TAXESUnless you are in the business of manufacturing or selling certain products, you should not have to pay excise taxes. However, there are excise taxes on certain kinds of businesses and transactions, and on the use of various kinds of equipment, facilities, and products.Refer to Publication 510, Excise Taxes, on excise taxes you must report.STATE TAXESSTATE INCOME TAXESIf you are operating as a sole proprietor or as a partner, you will not receive a salary as your employees do. There will be no income tax withheld from the money you take out of your business. To meet your tax obligations, you must estimate your tax liability and file your income taxes at year-end. Your state's revenue department will supply you with a tax guide for small businesses and the applicable forms. Your tax return is filed at year-end as an individual return, and your liability is computed from profits earned by the business in that year.STATE UNEMPLOYMENT TAXESMany states require payment of an unemployment tax to be reported quarterly and paid separately from any other state taxes. This tax is paid as a percentage of gross wages, up to a maximum wage level that varies from state to state. The percentage, called an "experience rating," is determined by the number of claims attributable to your business' account. It is applied to your employees' taxable gross wages. In general, the lower the number and amount of the claims, the lower the experience rating will be. This tax is not withheld from the employees' pay, but is the sole responsibility of the business.SALES TAXESMost states have a tax on retail sales (sales to the end user). This tax varies depending upon the state. (IF/SINCE) you will be making retail sales or collecting tax on a sale, you must obtain a seller's permit and be assigned a tax number. Your seller's permit and tax number should be kept handy.State Taxes (continued)If you are required to collect tax on some items and not others, you will need to set up a system of record keeping that accommodates those requirements. In many areas, you are not required to collect taxes on sales to certain non-profit institutions, such as schools and churches. These institutions should provide you with their tax-exempt number.Businesses are usually required to remit sales tax deposits quarterly.COUNTY OR TOWN TAXESSALES TAXSome counties or towns impose sales taxes in addition to sales tax set by the state. Know what the tax liability, if any, is in your county or town.PERSONAL PROPERTY TAXSome towns or counties levy an annual tax based on the value of your inventory and equipment. If this is applicable to you, you will receive a form in the mail to be completed and returned.COUNTY OR TOWN BUSINESS TAXSome counties, villages, and towns levy a county or town business tax. The rate of taxation can be obtained by calling your city hall.FEDERAL TAX FILING CHECKLIST **Source: IRS Publication 334, Tax Guide for Small Businesses (pub/irs-pdf/p334.pdf)EMPLOYEE TIPSIn accordance with the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA), all tipped store employees who earn more than $20 per month in tips must maintain accurate records of their gratuities and report this tip income to their employer by the tenth of the month following each month in which tips were received. This includes tips that are received directly from customers, as well as those that charge customers have added to their bills and that you have paid over to the employee. No report needs to be made for any month in which the tips were less than $20.Employees must give their employer a written statement showing:1.The name, address, and social security number of the employee2.The name and address of the employer3.The calendar month or period covered by the statement4.The total amount of tips the employee received during the period covered by the statementTips received by your employees in December 2000 and reported to you in January 2001 are considered income in 2001.Form 4070, Employee's Report of Tips to Employer, available from the IRS, may be used for reporting tips.If you operate a large food and beverage establishment, refer to Publication 539 concerning new tip reporting requirements.Employee Tips (continued)To figure withholding taxes on tips, you can choose one of two ways:1.Treat the tips as part of the employee's current or preceding wage payment and use the regular graduated withholding rates; or2.If income tax has already been withheld from the regular wage payment, determine the tax to withhold from tips by using a flat 20 percent rate.PAYING ADDITIONAL FEESAs certain situations present themselves, you as a Sloan’s franchisee may incur additional fees. These fees are detailed in the Sloan’s Franchise LLC Disclosure Document and are listed below for your quick reference. As these fees change and the Disclosure Document is amended, these pages of your operations manual will be revised and new ones will be mailed to you.TYPE OF FEEAMOUNTDUE DATEREMARKSRoyalty Fee6% of gross sales Payable weekly on TuesdayYou must pay your royalty fee directly to us. See definition of gross salesMarketing Fund ContributionCurrently, 1% of gross salesPayable weekly on TuesdayYou pay your marketing fund contribution to us. We will give you 30 days notice before increasing required contributions. Audit ExpensesAll costs and expenses associated with audit, approximately $1,500 - $5,000Upon demandAudit costs payable only if the audit shows you have not spent 2% of your monthly gross sales on local advertising or if you underreported amounts you owe us by 3% or more. Late Fees1.5% per month or the highest rate allowed by the state where you are located, whichever is lower Upon demandApplies to all overdue fees you owe us. Also applies to any understatement in amounts due revealed by an audit. Approval of Products or Suppliers4$500 - $1,000Time of evaluationApplies to the costs we expend in our evaluation of new suppliers you wish to purchase from or products you wish to purchase. Paying Additional Fees (continued)TYPE OF FEEAMOUNTDUE DATEREMARKSInsurance Policies$500 - $2,500Upon demandAmount of unpaid premiums plus our reasonable expenses in obtaining the policies; payable to us only if you fail to maintain required insurance coverage and we elect to obtain coverage for you.Transfer Fee$10,000At the time of transferPayable to us at time of transfer. Does not apply to an assignment under Section18.3 of the Franchise Agreement. System ModificationsNot more than $25,000 during the initial term of the franchiseAs requiredIf we make changes to our System, you must adapt your business to conform to the changes. Some examples of changes include new equipment, fixtures, software or new Marks. Relocation AssistanceApproximately $750 - $1,500Time of assistanceIf you need our assistance to relocate, you must reimburse our costs to assist you. Paying Additional Fees (continued)TYPE OF FEEAMOUNTDUE DATEREMARKSCustomer Service5All costs incurred in assisting your customers, approximately $3,500 - $7,000Upon demandYou must reimburse us if we determine it is necessary for us to provide service directly to your customers. Substitute or New Manager Training/ Additional Training6Currently, $500 per day, plus your expenses in attending Time of trainingWe provide an initial training program before you begin operations and ongoing training programs during the term of the franchise. If you have to repeat our training programs, we may charge you a fee. Additional Operations AssistanceCurrently, $600 per day plus our expenses Time of assistanceWe provide assistance around the beginning of operations and during the term of the franchise. If you request additional assistance beyond what we provide, you may be charged a fee, plus our expenses if we need to travel to accommodate your request.Cost of Enforcement All costs including reasonable attorneys’ feesUpon demandYou must reimburse us for all costs in enforcing obligations if we prevail. Temporary Management AssistanceCurrently, $600 per day, plus our expensesEach month that it appliesIf you breach the Franchise Agreement or following the death or incapacity of an owner of the franchise, we may temporarily manage your franchised business. IndemnificationAll costs including attorneys’ feesUpon demandYou must defend lawsuits at your cost and hold us harmless against lawsuits arising from your operation of the franchised business. ................
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