Ellianos Coffee Company
Ellianos Coffee Company offers a range of coffee drinks, pastries, and food items in retail outlets. Known for fresh-roasted coffee and espresso drinks, it operates in the quick-service restaurant sector.
Ellianos Coffee Company franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin the operation of a Traditional Ellianos Store ranges from $671,500 to $1,068,700. This includes an additional Development Fee of $10,000 if you sign a Development Agreement for each store you agree to develop, which is credited against the Initial Franchise Fee. [p.1]
What is the initial franchise fee?
The initial franchise fee ranges from $12,500 to $30,000 for similarly situated franchisees. This fee is recognized when the franchise location opens for operations [p.201]. Additionally, if a franchisee signs a Development Agreement, they will pay an additional Development Fee of $10,000 per store developed, which is credited against the Initial Franchise Fee [p.1].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is based on a percentage of reported sales, with specific percentages not detailed in these excerpts. Additionally, you must spend or contribute a percentage of Net Sales for marketing and promotional purposes, as outlined in Section 8 and Appendix D [p.110].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in these excerpts. However, to renew your franchise beyond the initial term, you must provide a written notice (Renewal Notice) between eight and twelve months before the expiration of the Initial Term [p.103]. Failure to timely provide this notice will result in waiving your option to renew [p.103].
Can I sell or transfer my franchise, and what does that require?
According to [p.62], during the Development Term, if you sell (and we approve the sale of) a Franchised Store that you developed, you will continue to count that Ellianos Store as a Franchised Store under the Development Schedule, provided it continues to be operated pursuant to a franchise agreement with Ellianos or its affiliates. For transfers, [p.73] states that prior to the transfer becoming effective, you or the transferee must pay a Transfer Fee—$5,000 if the transferee is a new Ellianos franchisee and $2,000 if they are an existing one—and cover associated evaluation costs by Ellianos.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement without an opportunity for cure upon the occurrence of certain events, as stated on pages [p.78] and [p.139]. Additionally, the franchisor may also terminate the agreement if there is a change in its business model or operating restrictions that could require additional investments or harm your franchise business, as mentioned on page [p.3]. This isn't specified in the exact grounds for termination but indicates potential scenarios where termination might occur.
What financial requirements — net worth and liquid capital — do I need to qualify?
You must maintain the minimum net worth and amount of liquid capital as specified by the franchisor in their sole discretion [p.63]. They may refuse to accept a site for a proposed Franchised Store if you fail to demonstrate sufficient financial capabilities, also at their sole judgment, to properly develop, operate, and maintain that Franchised Store [p.63].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. According to [p.34], you will face competition from other Ellianos franchisees and outlets owned by the company. Additionally, [p.101] outlines that while there is a Protected Area, certain rights are reserved by the franchisor, which can affect your ability to operate within this area. [p.92] also mentions potential restrictions if you sign a neighboring development agreement.
What training and ongoing support does the franchisor provide?
The franchisor provides an Initial Training Program that includes classroom and online instruction, as well as training at designated facilities. This program is conducted periodically and must be completed before the Franchised Store opens, typically 15 days prior to opening [p.30, p.119]. Ongoing support includes on-site supervision by the Operating Principal or a manager who has successfully completed the Initial Training Program [p.37]. Managers may also need to sign confidentiality agreements if they attend training programs or have access to confidential information [p.37].
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?
The franchisor is permitted to provide financial performance information if there is a reasonable basis for it and if certain conditions are met, such as providing actual records from an existing outlet [p.45]. However, the franchisor does not make any financial performance representations other than those specified in Item 19 of the disclosure document, nor do they authorize their employees or representatives to make such representations [p.50].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those products and services expressly authorized by the franchisor in the Manual or otherwise in writing. You may not add or modify any menu items without prior written approval [p.37]. Additionally, you may have to buy or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.3]. This isn't specified in the excerpts for supply sources beyond the potential restriction on where to source certain items.