American Kolache
American Kolache offers quick-service restaurants featuring Americanized kolaches and casual dining options. Known for its variety of sweet and savory pastries, this franchise operates in the casual dining and bakery industries.
American Kolache franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated initial investment to begin operation of an American Kolache Restaurant ranges from $233,468 to $370,769. This includes a mandatory payment of $39,000 to the franchisor or its Affiliates [p.1].
What is the initial franchise fee?
The initial franchise fee is $39,000 if this is your first location. This fee is not refundable under any circumstances and must be paid upon execution of the Franchise Agreement [p.66].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 6% of Gross Sales, paid weekly [p.67]. Advertising costs are expensed as incurred, but specific amounts for ongoing fees are not provided in these excerpts [p.156, p.168].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally need permission from the franchisor to transfer ownership of your franchise, except for transfers to certain specified individuals like a spouse, parent, or child [p.6]. The franchisor can refuse a transfer for good cause, which includes but is not limited to unspecified reasons [p.6]. Additionally, there are fees associated with transferring your franchise; these include $1,500 for an approved existing member of the ownership group and 75% of the current franchise fee for new individuals joining the American Kolache system [p.88].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on several grounds, including conviction of a felony or other criminal misconduct affecting the operation of the restaurant [p.83], fraudulent activity harming the business [p.83], abandonment of the restaurant [p.83], failure to comply with the franchise agreement two or more times in any 12-month period without correction after notice [p.83], making material misrepresentations or omissions in the application for the franchise [p.83], and other acts permitting termination under applicable state law [p.83].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not get an exclusive or protected territory. According to the FDD, you are granted a non-exclusive assigned territory and may face competition from other franchisees, outlets owned by the company, or other competitive brands [p.37, p.64]. Additionally, the company can establish other American Kolache restaurants in unassigned territories and requires you to stop delivering or catering if another restaurant is established outside your Assigned Territory [p.37, p.64].
What training and ongoing support does the franchisor provide?
The franchisor provides various initial services including site selection assistance, building plans and specifications, management training, and opening assistance [p.180, p.157, p.169]. Additionally, transferees and/or their managers must successfully complete and pass the training course then in effect for franchisees or demonstrate sufficient ability to operate and manage the units [p.115]. This ensures they can fulfill their obligations under the agreement.
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor may provide financial performance information if there is a reasonable basis for it and it is included in the disclosure document [p.51]. However, the franchisor does not make any financial-performance representations other than those noted in Item 19, and they do not authorize their employees or representatives to make such representations either orally or in writing [p.54].
What am I restricted to selling, and where must I buy supplies?
You are required to buy most products and services from suppliers designated by the franchisor or those approved by them that meet their specifications. This includes approximately 35 'core' kolaches and five seasonal or local specialty kolaches as specified [p.85]. While you have some flexibility in what you sell, operating restrictions may limit your ability to operate a similar business during the franchise term [p.4].