Paciugo
Paciugo offers gelato and specialty food franchises through Caffès and Kiosks. Known for artisanal Italian gelato, it operates in the casual dining and dessert retail sector.
Paciugo franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges from $232,700 to $612,250 for a Paciugo franchise Store [p.1], and from $109,700 to $294,250 for a Paciugo franchise Kiosk [p.1]. This includes an initial franchise fee of $20,250 to $25,750 that must be paid to the franchisor or affiliate [p.1]. If you open a Co-brand Store, the total initial investment will be higher due to additional costs [p.22].
What is the initial franchise fee?
The initial franchise fee varies depending on whether it's for a standard Store or a Co-brand Store, and if part of an area development agreement. For a first Store, the initial franchise fee is $20,000, while for each additional Store, it is $15,000 unless you are opening a Co-brand Store, in which case the initial franchise fee is $7,500 [p.11]. This isn't specified in the excerpts.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee and advertising obligations can vary as they may be different from the terms in the current Franchise Agreement [p.139]. Advertising costs are expensed as incurred, but specific amounts are not provided in these excerpts; for instance, advertising expenses were approximately $140,338 for 2023 and $118,513 for 2024 [p.71, p.60].
How long is the initial franchise agreement, and can I renew it?
The term of the initial franchise agreement is not specified in the excerpts. However, you may renew the franchise granted by this Agreement for two consecutive five-year terms if certain conditions are met [p.121].
Can I sell or transfer my franchise, and what does that require?
The franchisor, PFI, can transfer its rights under the agreement, which could affect your ability to sell or transfer your franchise. According to [p.96] and [p.138], PFI may assign all or part of its obligations to another party, and any such assignee would become responsible for fulfilling PFI's duties. You are required to waive claims related to the loss of association with PFI as the franchisor and agree that PFI has the right to engage in various business activities that could impact your franchise, including mergers, acquisitions, or sales of assets. This isn't specified in the excerpts regarding specific conditions for you to sell or transfer your franchise, but generally, such transfers would need PFI's approval due to the terms allowing them to assign their rights [p.5].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is a default by you as specified in the franchise agreement. However, termination without reasonable cause is unlawful under Section 13.1-564 of the Virginia Retail Franchising Act [p.49] and [p.152].
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a franchisee, you need to have a minimum of $500,000 in net worth and $150,000 in liquid assets. [p.49]
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, PFI-owned outlets, or other competitive brands controlled by PFI [p.31]. Additionally, there is no territorial protection provided unless specified in a mutually agreed upon Addendum to the Development Agreement and/or Franchise Agreement [p.163].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training conducted over a one-week period in the Dallas, Texas area (or virtually) supervised by Jeremy Cook and other qualified staff members. This training is mandatory at least three months before opening your first store or acquiring an existing one. Ongoing support includes access to instruction materials from various sources, including the Manual and additional tools. However, specific details about ongoing support beyond initial training are not detailed in these excerpts. [p.29]
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 21 franchised outlets in operation [p.58]. Over the years, a total of five outlets have been closed (three in 2024, one in 2022, and three in 2023, with two openings in 2024 and one in 2022, and one opening in 2023) [p.58, p.80, p.69].
Does the franchisor share any financial performance or earnings information?
The franchisor can provide actual records of an existing outlet being considered for purchase. However, they do not make representations about future financial performance or past financial performance of company-owned or franchised outlets, and they authorize no such representations from their employees or representatives [p.45]. The franchisor may share historical revenue and expense information with prospective franchisees in the best interest of the system [p.136], but this is not specified to be included in Item 19 of the FDD.
What am I restricted to selling, and where must I buy supplies?
You are restricted from operating a similar business during the term of the franchise agreement. Specifically, you may not own, operate, or have any interest in businesses that offer gelato, ice cream, frozen custard, frozen yogurt, or other frozen treats/desserts or beverage items offered at Paciugo stores, except for a Paciugo Store operated pursuant to a then-currently effective Franchise Agreement. Regarding supplies, you must purchase from the franchisor or designated sources all required items such as fixtures, furniture, equipment, food products and ingredients, beverages, uniforms, merchandise, advertising materials, gift certificates, stationery, bags, packaging, and other goods and services as specified by the franchisor. Additionally, in some geographic areas, PD is the only approved distributor for proprietary gelato.