Kolache Factory
Kolache Factory is a Texas-based retail bakery cafe offering kolaches and complementary menu items. Known for its unique Eastern European pastries, it operates in the competitive quick-service restaurant sector.
Kolache Factory franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single new Kolache Factory franchise ranges from $641,900 to $937,400. This includes costs such as dough mix, other dough products, sausage products, and the POS system, which together account for approximately 15% of the establishment cost [p.15].
What is the initial franchise fee?
The initial franchise fee is $44,900 per Store, payable upon signing the Franchise Agreement. This fee includes a credit of $20,000 for each Store developed under a Development Agreement, which reduces the effective initial franchise fee to $24,900 after applying the credit. [p.141], [p.8]
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is not specified in the excerpts, but it's clear that franchisees are required to contribute to the Ad Fund at a rate of up to 3% of annual Gross Sales. [p.91]
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement term is not explicitly stated in the provided excerpts. However, based on [p.95], if you are in full compliance with your agreements and obligations under the Franchise Agreement, you have the option to renew the franchise for two additional terms of five years each upon the expiration of the 10-year primary term.
Can I sell or transfer my franchise, and what does that require?
According to the FDD excerpts, you can sell or transfer your franchise, but it requires compliance with specific procedures [p.99]. If the proposed transfer involves a complete disposition of the franchise, Franchisee must relinquish the franchise in writing [p.99]. Additionally, if you are a multi-Store operator transferring an operating Store to a new owner, the franchisor can allow the new owner to sign a Development Agreement for more Stores in your Development Area and potentially relocate a Store within it [p.26]. The franchisor may also permit Franchisee to transfer the franchise to a qualified purchaser under certain conditions [p.95].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law, as stated on [p.52]. Additionally, RCW 19.100.180 may supersede the franchise agreement in areas including termination and renewal, according to [p.53] and [p.121].
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 receive an exclusive territory [p.48]. You may face competition from other franchisees, company-owned outlets, or competitive brands controlled by the franchisor [p.26]. However, the franchisor provides some competitive protection for your store within your development area, but this does not extend to special outlets like temporary booths or kiosks [p.27].
What training and ongoing support does the franchisor provide?
The franchisor provides a comprehensive initial training program, which includes both in-person sessions at a designated facility and potentially online components due to current protocols. This training is mandatory for all franchisees and certification trainees, who must sign non-disclosure and confidentiality agreements before starting. The training covers 220 hours and requires attendees to be present and on time; chronic tardiness or absences can result in dismissal, impacting the store's opening schedule. Ongoing support includes periodic re-enrollment for initial or refresher training if available and payment of related expenses by the franchisee. [p.20]
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 under certain conditions [p.36]. However, the company does not have full access to or confidence in cost or EBITDA information from franchisees to include it with their Financial Performance Representations [p.38].
What am I restricted to selling, and where must I buy supplies?
You are not specifically restricted to selling any particular items, but you may be required to purchase certain dough products and sausage products from suppliers designated by the franchisor. This is detailed on [p.14]. For equipment and inventory, you can purchase from or through any distribution network established by the company, with all equipment needing to be new ([p.21]). The franchisor has the right to designate specific suppliers for certain items like kolache dough mix and croissant dough, but it is not currently an authorized supplier of these products itself ([p.14] and [p.3]).