Gloria Jeans Coffee
Gloria Jeans Coffee franchises offer stores selling gourmet coffee, teas, and baked goods. Known for its quality beverages and snacks, it operates in the competitive café and coffee shop industry.
Gloria Jeans Coffee franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to open a small store under 1,000 square feet without a drive-thru is at least $327,919, which includes an initial franchise fee of $30,000 and a Grand Opening Fee of $10,000. For a Kiosk, the total initial investment is at least $208,919, including the same fees. [p.226, p.245, p.242]
What is the initial franchise fee?
The initial franchise fee is $30,000 and is payable in a lump sum when you sign the Franchise Agreement. This fee is fully earned by the franchisor upon payment and is non-refundable [p.14].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a percentage of the Gross Sales from the store, as specified in Item 16 of Schedule 1 [p.94]. There is no specific mention of an advertising contribution fee in the provided excerpts; it only discusses the franchisee's obligation to participate in Marketing Fund programs and follow pricing recommendations [p.32, p.34].
How long is the initial franchise agreement, and can I renew it?
The term of the franchise is not specified in years within these excerpts; instead, renewal is contingent upon the franchisee's election to renew at least six months but no more than nine months prior to expiration [p.73]. The franchisor may refuse to renew for certain reasons, and failure by the franchisee to execute necessary agreements within 60 days after delivery can be deemed as an election not to renew [p.73].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires the prior written consent of the franchisor [p.103]. The transferee must meet certain conditions such as having sufficient business experience and financial resources, assuming all existing obligations, completing a training program, and complying with design standards among others [p.229]. Additionally, there will be a transfer fee to cover the franchisor's costs in approving and effectuating the assignment, and funds may need to be escrowed for any necessary refurbishing or remodeling of the store [p.103, p.229].
On what grounds can the franchisor terminate the agreement?
According to [p.229], a franchisor can terminate a franchise agreement prior to expiration only for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and curing such failure after being given written notice and a reasonable opportunity not exceeding 30 days.
What financial requirements — net worth and liquid capital — do I need to qualify?
The FDD does not specify exact net worth or liquid capital requirements for qualifying as a franchisee. However, it does state that the transferee must demonstrate adequate financial resources and capital to complete the Development Schedule in a timely manner [p.161]. This suggests there are minimum financial capabilities expected but no specific numbers are provided.
Do I get an exclusive or protected territory?
The answer depends on the location of your GJC Store: - For street/non-shopping mall locations, you will receive a Protected Territory defined by a 'Protected Territory' addendum [p.37]. - For mall locations, you do not receive any protected territory [p.38]. - Outside these specific cases, there is no exclusive or protected territory provided [p.40].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program, which includes both online and on-site components, typically lasting 10-15 days. This is mandatory for franchisees and any approved managers before the store opens. Additionally, the franchisor may require more field training based on performance evaluations. Ongoing support includes refresher or additional training as needed, especially if a new manager is added after opening. [p.77, p.35]
How many franchised outlets are there, and how many have closed or been terminated?
As of June 28, 2024, there were 37 franchised GJC Stores in operation in the USA [p.8]. Additionally, during the last three years, a high percentage of franchised outlets were terminated, not renewed, transferred, or ceased operations for other reasons [p.5], indicating that some have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor does not provide representations about future or past financial performance for new franchises. However, if you purchase an existing GJC Store, the franchisor may provide actual records of that specific store's performance [p.55]. Additionally, the franchisor is permitted to share financial performance information only under certain conditions, such as providing actual records of an existing outlet or supplementing the information in Item 19 with possible performance scenarios [p.55].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling products approved by the franchisor, principally coffee drinks and other beverages, as well as a limited amount of other approved items [p.10]. You may have to buy or lease items from the Franchisor or a limited group of suppliers designated by them, which might be more expensive than similar items you could purchase on your own [p.4].