what is a rock ‘n’ joe coffee bar?n'joe-franchisebrochure-201… · rock ‘n’ joe...

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What is a Rock ‘n’ Joe Coffee Bar?Rock ‘n’ Joe is a Rock & Roll Coffee Bar. It’s a cool place for people who love exceptionalcoffee, premium food, and quality rock n’roll music in a trendy and relaxingenvironment.

Rock ‘n’ Joe Coffee Bar is all about creativeexcellence. Taste the award-winning andproprietary coffee masterfully blended byDillanos’…one of North America’s premier coffee roasters. Enjoy our chef-select menu consisting of superior sandwiches, wraps and salads while listening to the best rock and roll.

In between sips of your favorite specialty coffee drink, check out the musical mementos thataccent the walls. From the ambience to the service…every note in the Rock ‘n’ Joe experiencein perfect harmony of upscale and inviting.

For entrepreneurs with a passion for great proprietary coffee blends, food, specialty drinks,and rock n’ roll music…Rock ‘n’ Joe Coffee Bar is more than the hippest hangout in town; it’san opportunity for a whole new lifestyle.

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The Rock ‘n’ Joe 20-Year StoryIn the early 90s, Kevin Brennan noticed that specialty coffees and specialty sandwiches were just beginning to become popular in the United States. He had a great idea to capitalize on both those trends with a bistro that would specialize not only in the finest coffees, but also legendary sandwiches and truly delicious pastries. But Kevin’s ingenuity didn’t stop there.

Kevin had long been a fan of rock and roll music, and he’d been an avid collector of rock memorabilia. He was determined to combine his passion for rock music with his bistro business idea.

He imagined a coffeehouse with a state-of-the-art sound system that pumped out rock hits from the 60s through the present. The walls would be covered with colorful memorabilia from his

own extensive collection. In this cool and relaxing space,customers would be served the world’s finest coffeesand flavorful sandwiches made from high-quality andinteresting ingredients. These rock and roll loungeswould feed the body and the soul of music lovers like him.

In 1993, Kevin’s dream became a reality when the first Rock ‘n’ Joe coffeehouse opened in the New York suburb of Cranford, NJ.

Rock ‘n’ Joe was an instant hit. Customers flocked to the cozy lounge and investors clamored for a chance to own their own franchises. But before expanding, Kevinwanted to be sure that the heart of the business wassolid. While adding a handful of locations in New Jersey, he perfected the food and drink recipes, developedefficient and friendly staff practices, and streamlinedall of the business systems.

In 2013, Rock ‘n’ Joe was acquired by Ablak Holdings.The Ablak Holdings team has over 25 years of experience

in managing and franchising food businesses. Kevin’s idea of a rock and roll coffee house lives on and, through partnership with ambitious new franchise owners, is ready to hit the national stage.

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Our “Quality” PhilosophyMuch of the Rock ‘n’ Joe success comes from a commitment to a high quality product. Our coffee blend recipes are developed based on superior quality, color, texture, and taste in mind. We utilize a #1 Arabica bean…which is a far superior quality coffee bean. In fact, there are 5 levels of Arabica Coffee. We use the best #1 Arabica bean in all of our blends. The result is aconsistently better customer experience that keeps peoplecoming back for more.

Now ask the other popular coffee houses…you know who they are…what quality of coffee bean they use. You’ll soon find out why Rock ‘n’ Joe has continuously won awards for their superiorpremium coffee quality.

If you want the best…you have to use the best ingredients, period! We realize it’s cheaper for large chains to use a lower grade Arabica bean. After all, manypeople aren’t aware of the various quality “grade levels”. But, make no mistake about it…you can sure taste the difference! Ask our loyal patrons who have been customers for over 20 years.

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Your Perfect Specialty CoffeeFirst, the water is filtered so nothing but the purest water is used to formulate your specialty drink! Think about it! The base of any product is the key to its final outcome!

That’s why we take such great care making sure we start with the right water for our creations. You see…every barista knows the secret to a great specialty coffee. Yes…we know that all ingredients must work in harmony with each other! Great coffee starts with great water. Our world-class coffee means a perfect cup every time no matter what specialty coffee you choose.

Now try one of our house specialty drinks that includes Espresso topped with steamed milk, caramel syrup and caramel sauce. Can you say whoa?! In fact, all of our specialty coffee drinks – including blended, iced, and flavorful drip coffees – are made to be both visually appealing and consistently delicious.

Your Perfect PastriesWe use the palette of hundreds of people to determine our mix of pastries. Our customers love the array of delectable confections that complement our coffee selections. The aroma when you walk into our stores takes you over and envelopes your senses while the pastries provide a heightened level of eye appeal. The showmanship continues with the mouth-watering presentations.

Rock ‘n’ Joe Coffee Bar array of bakery items include plain and flavored bagels, flavored biscotti, croissants, muffins, scones, Danish, brownies, doughnuts, cookies, nut and fruit breads andseasonal items sure to tempt even the most strong-willed. We want the best for you...so we test for flavor, consistency and a high taste appeal. Theresults show. Better ingredients equal better products. We have followed these principles from the beginning and know that our customers deserve nothing less. Whether it’s our breakfastpastries, muffins, sconces…you will get a consistent flavor profile day in and day out!

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Your Perfect MenuEach of our award-winning coffees coupled with our varied breakfast and lunch menu, posesnew choices that will certainly please. You will notice immediately that our high quality ingredients remain the focal pointthroughout the menu. This attention to detail is not by accident. Our Franchise Partners and patrons deserve to be supported in this manner…using our strict quality control practices forall items purchased for our menu.

Your Perfect DrinksA snow-white mound of fluffy foam made from steamed milk tops all our drink creations, ensuring menu items look and taste as good as they sound. In fact, all of our specialty coffee drinks – including blended, iced, and flavorful drip coffees – are made to be both visuallyappealing and consistently delicious. Add to that a variety of “flavor-full” frozen drinks, and you’ve now greatly increased your customer appeal across all age demographics.

Rock ‘n’ Joe’s proven track record of success has not come easy! Year after year we have been blessed with new customers. We feel you have to “give” before you “get”. We believe that our attention to detail is one of many reasons we have been graced by volumes of awards spanning over two decades.

But perhaps our most prestigious award is our renowned customer loyalty. Repeat customers make up themajority of our business, and we’re proud to bevoted a family favorite.

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From Bean to Brew - Rock N Joe Coffee ExcellenceThe centerpiece of Rock ‘n’ Joe has always been the coffee.We clearly know that this business would only succeed if thecoffee tasted better than the competition’s. Just like all greatmusicians have a signature sound, our signature blends woulddefine who we are…a favorite among our customers for over20 years.

Since day one, Rock ‘n’ Joe coffees have been made fromthe very best beans that are then roasted using superiorroasting techniques. Every cup is brewed with specially treated water, which is essential for a taste that is consistently rich andflavorful. The result is a delicious cup of coffee every single time.

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Selecting and Processing the Best BeanCoffee is a deciduous, shrub-like tree. Most cultivars used in commercialproduction are pruned back each year to less than 8 feet in height, and every 8-10 years the tree is pruned nearly to the ground. The life of the tree in terms of good coffee production can be 50 years.

The coffee cherry matures for about5-6 months on the branch, and it issusceptible to damage from weather or insects during that entire period. At any given time, then, a branch of a coffee tree will have both ripe and unripecherries. Green cherry, which is the least ripe, is completely unacceptable in good coffee. Yellow to red cherry is not necessarily going to ruina cup, but there’s a chance the taste can be affected. Overripe cherry can give an interestingnuance to a cup in small amounts, but too many will ruin the cup entirely. Ideally, all the fruit used to make coffee is the deep red to crimson color of a perfectly ripe coffee cherry.

The only way to ensure a perfect cup of coffee is to hand pick the coffee cherries usingcontinuous passes on the same trees.

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Processing the Coffee CherryAfter being harvested by hand, the coffee cherry is brought to a wet mill where it must be depulped within 6-12 hours after picking to avoid rotting. At the wet mill, thecherries are put into a deep water flotation tank. The ripe cherries sink, while any unripe fruit floats and is skimmed off the surface. The remaining ripe cherries go into a pulper where the external skin of the fruit isremoved.

Once the skin has been removed, the pulpy musiclage of the coffee is put in anotherwater tank to ferment. Coffee fermentation can last anywhere from 12 to 72 hours and iscarefully controlled to avoid causing any off flavors in the coffee. After fermentation, the coffee is dried on a drying patio for four to eight days until it reaches about 12% moisture content. Finally, the coffee is sent to the dry mill where it is sorted, screened, prepped, and bagged for export. All of the coffee roasted and brewed by Rock ‘n’ Joe is ethically sourced. The beans are picked and processed by farmers who receive fair wages for their important labor.

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Our Top Rankings & AwardsThe Specialty Coffee Association of America (SCAA) launched the “Golden Cup” award in the 1980s as a way to significantly raise the quality of coffee being sold across America. It wasfigured that only a few coffeehouses could ever meet such lofty standards in the quality of beans, as well as in the specific protocols to properly grind and brew the coffee. It is with a tremendous level of satisfaction that Rock ‘n’ Joe Coffeehouse was named a winner of the “Golden Cup”. Rock ‘n’ Joe joins a smallhandful of coffeehouses and restaurants across the country earning the prestigious designation.

“Our signature coffee is a tremendous source of pride for us. This award reinforces that Rock ‘n’ Joe consistently provides one of the best cups of coffee around. Period. Rock ‘n’ Joe, offers a signature blend of coffee with a smooth taste; a smart alternative to the specialty coffee chains that are known for the powerful, burnt taste of their brews. Along with its secret bean selection and roasting technique, Rock ‘n’ Joe coffees are made with specially-treated water – a key component for consistently rich, flavorful drip coffee. For the Golden Cup, Rock ‘n’ Joe prepares its coffee according to the SCAA’s precise brewing standards, and had to submit water samples and brewed coffee for laboratory analysis. SCAA officialsanalyze the water samples to determine the amount of minerals in the water; they also study the ratio of water to coffee. Only samples found to be within the SCAA’s prescribed limitsqualify for the Golden Cup award.

We are proud to note that Rock ‘n’ Joe is committed to using only ethically sourced coffee,from which farmers receive fair wages and the coffee is grown pesticide-free. “While thesecoffees cost more, we believe it is a better quality bean that we are proud to purchase.It’s just a better way to do business. Everybody wins.

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Our Affiliations & PartnershipsDillanos Coffee Roasters is a family owned specialtycoffee roaster located in Sumner, Washington. Established in 1992, the company was named Roast magazine’s 2011 Macro Roaster of the Year, presented annually to the U.S.’s top roaster with an output of more than 100,000 pounds as decided by the Roast editorial board.

Dillanos roasts a variety of premium specialty coffee blends and single-origin coffees forRock ‘n’ Joe, including several specially selected direct trade coffees.

Rock ‘n’ Joe’s commitment to quality coffee has been rewarded with recognition and accolades from customers and industryexperts. We have also been named one of the “Best NewJersey Coffeehouses” in 2012 and 2015. All of Rock ‘n’ Joe’sproprietary blends start and end with Dillanos… Roaster ofthe Year.

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Store TourInviting, warm, cozy, friendly, cool andcomfortable are some words our customers use to describe Rock ‘n’ Joe Coffee Bar. Just walk into any of our stores and feel the sense of belonging and acceptance.

Listen to the rhythm of the Rock ‘N’ Roll.Tell me what it’s all about! There’s a song somewhere in these words! You’ll never be sorry that you visited our coffee bars.

In fact, after one tour of the coffee bar…you find yourself kicking back relaxing to the musicand infectious environment.

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A Typical CustomerThe Rock ‘n’ Joe customer appreciates great coffee and food, but doesn’t want to pay toomuch for either. They come back to Rock ‘n’ Joe over and over again for the relaxing themedatmosphere. Our customers dig the music and the musical mementos, and appreciate thefriendly staff serving up their favorite specialty drinks.

Rock ‘n’ Joe has mass appeal, so a customer is just as likely to be slinging a backpack as hauling a briefcase. Study groups and book clubs can gather around the tables, while solo writers and readers might take advantage of the community seating.

The Ideal Franchise OwnerFor the right person, a Rock ‘n’ Joe franchise can be both a profitable business and a rewarding lifestyle. This could be the right opportunity for you if, much like our founder Kevin, you are a coffee and music lover with an energetic and outgoing personality.

You should also have a passion for retail sales, customer service, and building relationships. A commitment to excellence, integrity, and honesty are a must, as is a track record of maturity, sound judgment, and stability. Previous experience in management, retail sales, or food service is a plus but is not required.

You may be financially ready to take on this opportunity if you have a net worth of at least $250,000 with $100,000 in liquid assets. You need to be able to cover your personal expenses for at least 6 months without relying on returns from your new franchise. You should also have a 680 credit score or higher and the ability to secure financing. In order to be successful as a franchise owner, you must be prepared to: • Follow a proven system. • Accept advice from others. • Work long hours. • Work without supervision or support staff. • Lead and manage a team. • Ask for help. • Take a financial risk. • Work hard. • The ideal franchise owner knows that starting and building a successful business is not easy, but that the rewards outweigh the sacrifice and risk with the right opportunity.

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Site Selection ProcessOne of the most important aspects of any franchise relationship involves the determination of the designated territory that will be allocated to the franchisee. The bottom-line purpose for having a designated territory is to ensure there won’t be undue competition for the franchisee from the sales of products or services by another outlet using the same brand and/or operating system. The key word in the preceding sentence is “undue.”

This subject is almost certainly the greatest cause of conflict in the franchise industry over the past 10 or 20 years. The goal of both parties--the franchisor and the franchisee--is generally to maximize the sales and profit performance of the units in their franchise system. What makes this issue so difficult is that there are two conflicting schools of thought in terms of how best to accomplish this goal.

One argument is that this goal is best met when the designated territory size is large enough to ensure there’s virtually no chance that another outlet operating under the same brand or system will “cannibalize” any of the possible sales that might be achieved by another operating unit. The counter argument is based on the concept of maximizing total market share for the brand,in order to maximize the aggregate performance of all the units in the franchise system.

Either argument, taken to its extreme, becomes self-defeating. The challenge in achievingbalance between these arguments is to reach a decision about the relative importance of brand awareness and consumer convenience in terms of driving sales and profits.

Most new franchisees (and many existing ones as well) intuitively believe in the merits of the first argument. The belief is that the elimination of any chance of cannibalizing sales wouldresult in maximizing sales and profits from each existing unit, which is typically their goal.

If we carried this argument to its extreme, we would only have one McDonald’s in all of Chicago, since any additional units might potentially cut into some sales that the one unit could haveotherwise attained. Of course, if there were only one McDonald’s in all of Chicago, mostconsumers wouldn’t accept the inconvenience of traveling to it and most would also neverhave heard of the McDonald’s brand, since the advertising budget of only one unit wouldn’t allow for the ubiquitous level of advertising we have come to experience from this brand. The second argument is typically favored by franchisors.

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Site Selection Process (continued)So what’s the answer? The answer is that a balance must be struck. This is no easy task,but it’s a balance that creates the best overall situation for both the franchisees and thefranchisor. Maximizing total aggregate sales volume, while at the same time protectingindividual unit profitability, creates a rising tide that lifts all boats in the franchise system.Good franchisors are trying to achieve the highest market share and gross revenue possible, while also maintaining individual unit profitability at levels high enough to sufficientlycompensate franchisees so they are willing to stay in business and continue building thebrand with further units.

Unfortunately, this is not an exact science and even many well-meaning franchise companies can make errors in attempting to find this ideal balance. When this happens in a way that results in too many units being put into too small of a market area in too short a period of time, it often results in conflict and even litigation between franchisees and franchisors. When a mistakehappens where designated territories are too large, it often results in slow growth of thebrand and slow growth results for the franchisees.

As a general rule, you’ll find that the larger and more successful a franchise system is, thesmaller the designated territories are. That’s not to say there are no designated territories in these systems, just that the designated territories are no larger than they have to be to create the proper balance for growing the system with a minimum of conflict.

If you are considering becoming a franchisee in any system, make sure to carefully investigate this issue before deciding to get the franchise. If the franchise does not have designatedterritories (or if you think they are too small) ask lots of questions before making a decisionon the business and be prepared to walk away if you can’t get comfortable with the answers. The fact is that it is very difficult to address the issue of designated territories after you become a franchisee, so get this important job done in advance.

Look at the Franchise Disclosure Document (FDD) to determine what designated territory iscommonly granted to a franchisee. Also pay close attention to any rules you see in the FDDconcerning geographical restrictions on marketing or sales in the business.

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Site Selection Process (continued)Give some careful thought to the business model of the franchise to determine what seems fair to you in terms of protecting your business if you become a franchisee. Consider how you willbe marketing the business to attract customers. Will you have enough potential customersprotected from marketing efforts of your fellow franchisees to be successful? Will there be enough units developed to create an advertising pool sufficient to drive the success of yourbusiness?

Finally, and most important, call a number of the existing franchisees and ask them what their opinion is about the balance being struck by the franchisor in relation to this critical issue.Forewarned is forearmed--take advantage of the franchisees who’ve gone down this pathbefore you to find out if this critical issue is being handled properly.

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Opening a Store - From Start to FinishEven though we have a 12-week checklistthat encompasses every facet of your store development from beginning to end…there are numerous variables that affect the timeline of store openings.

For starters it may take longer to findquality real estate available, the permitsand inspections may extend beyond initial expectations, additional financing may need considered and hiring employees may all contribute to extended periods of time.On top of that, add timely installation of equipment including signage, procuring insurances and system training at Rock ‘n’ Joe’s Franchise Support Center.

You see…our methods and systems takes all of the components necessary to opening a store and reduces it to a checklist format that encompasses hundreds of items needing completed by all parties involved.

Imagine each week knowing in advance what exactly needs completed! This will be the norm! Please see below our Store Development Process with many items and dates removed to protect the confidentiality of our proprietary systems.

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NEW STORE OPENING CHECKLISTThis checklist establishes time frames and guidelines for time-critical events leading up to your store opening. Adherence to this schedule will insure a timely and successful opening. Our utmost priority is to help all Franchise Partners get their store opened as quickly andefficiently as possible. By using our Recommended Suppliers, Agents and Contractors, andour extensive experience and expertise, and by complying with all Rock ‘n’ Joe build-outrequirements, you will open sooner and without lost sales to you. The Store Opening Checklist has four segments:

1. PRIOR TO SITE ACQUISITION 2. PRIOR TO STORE CONSTRUCTION 3. STORE UNDER CONSTRUCTION 4. STORE PRE-OPENING FINAL CHECKLIST

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PRIOR TO SITE ACQUISITION

STEP 1FRANCHISE SALES • Complete & Submit Franchise Application • Submit Financials & Resume • Attend Franchise Partner Visit at Franchise Support Center • Review Franchise Disclosure Documents • Submit Letter of Denial or Approval • Submit Letter of Intent and Deposit • Execute & Submit Franchise Agreement & Remaining Balance • Receive Map of Approved Store Development Area

PLEASE NOTE, THAT STEP 1 MUST BE COMPLETED IN ITS’ ENTIRETY BEFORE MOVING ON TO STEP 2.

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PRIOR TO STORE CONSTRUCTION

STEP 2FINANCE • Work with Finance Department to Secure Funding prior to lease execution (If transfer submit copy of executed assignment of lease) • Submit Tax Statements and other Documents as Required • Secure Financing Commitment Letter Prior to Lease Execution • Establish Business Entity • Register Company with State • Obtain State Tax I.D. Number • Notify State of Employer Status • Obtain Employer Identification Number (EIN) • Obtain Sales Tax Exemption Certificate • Set-up Unemployment Compensation Tax with State • Set-up Bank Accounts

REAL ESTATE • Rock ‘n’ Joe Real Estate Broker Locates Potential Site • Submit Completed Site Evaluation Plan (SEP) for approval • Receive SEP Approval Letter From Rock ‘n’ Joe • Enter into Lease Negotiation/Submit Letter of Intent (LOI) • Submit Lease Draft to Director of Real Estate & Construction for Review, Approval and Addendums prior to Execution of Lease • Submit to your Attorney for review

HUMAN RESOURCES • Establish General Liability (GL) and Umbrella Insurance (needed for lease signing)

TRAINING • Schedule Pre-Opening Meeting, Rock ‘n’ Joe Franchise Support Center

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PRIOR TO STORE CONSTRUCTION (continued)

STEP 3CONSTRUCTION • Coordinate Space Survey with Director Construction • Receive store lay out from Director of Construction. This is the base drawing utilized in developing construction documents and equipment ordering. • Contract Rock ‘n’ Joe’s Approved Architect to do the permitting and construction drawings. • Select 3 contractors from Approved Contractor List to submit bids for construction or negotiate with approved Design / Build Contractor. A list of approved contractors can be found in Section 6 of the Design and Construction Manual. Advise them when plans will be available. Select contractors with experience in restaurant construction and check references for bidding purposes in new markets. • Arrange for Water Quality Testing for confirmation of appropriate water filtration system.

STEP 4CONSTRUCTION • Architect completes final drawings for review and approval by the Director of Construction. Plans will be reviewed promptly and correction requirements will be sent in writing. Do not proceed with construction without corporate approval. • Conduct pre-bid meeting. Director of Construction will attend to answer any questions the contractors may have.

STEP 5CONSTRUCTION • Receive bids from Contractors and forward to Director of Construction for Evaluation.

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PLEASE BE ADVISED THAT THE FOLLOWING TIME FRAMES ARE FOR REFERENCE ONLY AS TIME REQUIRED FOR PERMITTING AND INSPECTION VARIES.

10 WEEKS BEFORE OPENINGPURCHASING • Set up Food Vendor Account (Submit food service credit application and tax exempt certificate to distributor)

REAL ESTATE • Submit Executed Approved Lease to Director of Construction

CONSTRUCTION • Contract should be awarded to General Contractor based on the bids you received. A contract should be executed (you can use the one in the Design and Construction Manual or a typical AIA form). Forward a copy of the bid breakdown and contract to the Director of Construction. • Architect/Contractor has received Approved Plans for Permitting (Department of Health and Building) • Contact utility companies (phone, electric, gas, water/sewer) and set up accounts. You may have to pay a deposit, depending on the company. • Begin construction. General Contractor will pick up building permit and begin construction. Verify time frame of construction to project an opening date. Schedule Lay-out / Progress meeting with Director of Construction.

TRAINING • Schedule New Franchisee Training Program for 8 Weeks Prior to Your Store Opening

9 WEEKS BEFORE OPENINGFRANCHISE OPERATIONS • Determine Official Store Name with Director of Franchise Operations

CONSTRUCTION • Confirm address. Verify the actual address of the unit with the Post Office and confirm with the Director of Construction.

PRIOR TO STORE CONSTRUCTION (continued)

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STORE UNDER CONSTRUCTION

8 WEEKS BEFORE OPENINGHUMAN RESOURCES • Begin Management Selection • Contract Payroll Service • Set-up Worker’s Comp Insurance • Set-up Employment Practices Insurance (EPLI) optional

INFORMATION SYSTEMS • Place order for POS system (system TBD) • Place order for telephone system (system TBD) • Place order for Telephone and Internet service (specs to follow selection of POS system) • Place order for music system

TRAINING • Begin New Franchise Training

FRANCHISE OPERATIONS • Meet with Franchise Consultant on Competitive Pricing

MARKETING • Schedule pre-opening marketing meeting

CONSTRUCTION • Begin obtaining kitchen equipment quotes from ROCK ‘N’ JOE approved vendor list. Approved kitchen equipment suppliers can be found in Section 6 of the Design and Construction Manual.

Note: The quotation system is offered for convenience and does not necessarily guarantee the lowest price on individual items. All equipment must be equal or better to ROCK ‘N’ JOE standards. Please be advised, equipment is subject to approval by Director of Construction. Make sure you are comparing identical equipment.

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STORE UNDER CONSTRUCTION (continued)

7 WEEKS BEFORE OPENINGCONSTRUCTION • Review kitchen equipment and smallwares and award contract. All equipment should now be ordered. Remember that the order is not final until the supplier receives the deposit check. Try to give the suppliers as much lead time as possible to save yourself any delivery hold ups. Equipment delivery should be scheduled for Monday, three (3) weeks before the training start date to allow for assembly, plumbing and electrical hook ups. • At this point, you should be getting a handle on the time frame for construction completion. You will need to plan the completion date and opening date now so that delivery dates can be established. You will need to have the following permits in hand 21 days prior to opening: Certificate of Occupancy, Final Building Inspection, Final Department of Health

FRANCHISE OPERATIONS • Review Price Points and Meet with Franchise Consultant on Competitive Pricing

6 WEEKS BEFORE OPENINGHUMAN RESOURCES • Order Federal and State Required Posters from www.laborlawcenter.com

INFORMATION SYSTEMS • Project POS System Install date range • Schedule Data Wiring Installation (specs pending POS selection)

CONSTRUCTION • Review exterior signage quotes and award contract. The sign company should be familiar with local sign codes and permitting. (Sign permits are typically separate from building permits.) The layout must be emailed or faxed to ROCK ‘N’ JOE’S Creative Manager for approval prior to sign being fabricated.

MARKETING • Confirm store name and address (US Postal Service) • Conduct Market Research Confirm the following with your telephone utility company: • Directory listing changed to DBA name “Rock ‘n’ Joe”

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5 WEEKS BEFORE OPENINGCONSTRUCTION • Order security system. Approved security provider can be found in Section 6 of the Design and Construction Manual. Schedule installation for the last week of construction. • Confirm Utility Service Dates • Review projected opening date and schedule training and advertising. Note: Be realistic since moving the date later may not be easy.

MARKETING • Hang “Coming Soon” and “Now Hiring” Signage • Begin the recruiting process • Recruiting / Coming Soon direct mail begins

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4 WEEKS BEFORE OPENINGFINANCE • Merchant Account Number

FRANCHISE OPERATIONS • Set Price Points w/ Franchise Consultant • Enter Pricing into POS system • Estimate Grand Opening Sales • Develop Initial Food Order • Continue the recruiting process until appropriate number of employees are hired • Establish Credit Card Authorization Service & Card Processor

INFORMATION SYSTEMS • Confirm POS System Installation Date

PURCHASING • Place Uniform Order • Contract with a Local Trash Removal Company (if the service is not provided for in your lease) • Contact Director of Purchasing for Towels, Aprons, and Logo Mats Ordering • Contract with Local Grease Trap Service (if required)

CONSTRUCTION • Confirm equipment delivery dates. Double check with equipment suppliers to assure that they are on schedule for delivery to arrive next week, early Monday or Tuesday. • Complete Telephone and Data Cable wiring including extension of building Demark and wiring.

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3 WEEKS BEFORE OPENINGHUMAN RESOURCES • Place Help Wanted Ads

MARKETING • Print • POP • Signage • Direct Mail • Media • Review all proofs with marketing department • Continue the recruiting process

CONSTRUCTION • Install Kitchen Equipment • Install Smallwares Package. The soap and paper towel dispensers, dishwashing sanitizer, stem and hanging thermometers, will need to be installed be needed for the Health Department inspection. • Install Phones and verify phone and High Speed Internet Service is properly configured • Verify Broadband Internet Access has been delivered and is on site, terminated in the office. • Install Safe • Test all equipment to ensure it is operational and functional. • Construction Should be Complete • Schedule walk through for final inspections for Occupancy and Health • Complete the set up of store. Equipment should be installed and operational and all utilities hooked up and live

OPERATIONS • Forward Department of Health License, Certificate of Occupancy, Business License, General Liability Insurance, Worker’s Compensation Insurance & Non-Owned Auto Insurance to Franchise Support Center • Fax number is 412.937.9204. • Operations will Assign an Opening Date

TRAINING • Unpack, Clean and Prep Balance of Smallwares Package • Staffing Levels Update

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2 WEEKS BEFORE OPENINGFINANCE • Completed Automatic Transfer (ACH) Forms to Franchise Support Center

HUMAN RESOURCES • Post Required Federal and State Posters

INFORMATION SYSTEMS • Latest time to Install Phones • Verify Phone Service configuration • Verify Static and Dynamic IP addresses for Broad Band Internet Connection

MARKETING • Receive Grand Opening materials • Schedule marketing crew for promotional activities • Continue the recruiting process

PURCHASING • Place Initial Food Order (coordinate with Franchise Consultant)

CONSTRUCTION • Confirm Security System was Ordered and Installation Date • Confirm that Permits have been Received and Forwarded to Director of Franchise Operations

TRAINING • Update on Staffing Level

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1 WEEK BEFORE OPENINGHUMAN RESOURCES • Copies of GL, Workers Comp Certificates of Insurance to Franchise Support Center

INFORMATION SYSTEMS • Install POS Computer System • Test Credit Card Authorization Process (Monday before Opening)

MARKETING • Continue the recruiting process

PURCHASING • Receive Initial Food Order

CONSTRUCTION • Complete Punch List Items

TRAINING • Submit Staffing Sign-Off (list of staffing by position certified by Franchisee (Monday) • Completed Training Schedule for all Team Members Submitted (Monday) • Review/Comply with Instructions for In-Store Food Preparation (Saturday) • In-Store Training Schedule begins Sunday • Training Begins (Saturday before opening)

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NEW STORE PRE-OPENING FINAL CHECKLIST • Construction completed • Utilities in place and operational • All equipment installed and tested • Phone lines and internet service and fully functional and properly configured • All final inspection certificates forwarded to office • Exterior signage installed • POS system installed and fully configured • Small wares received, sanitized and stocked • Final cleaning completed • Staffing levels satisfied and verified • Copy of executed approved lease on file at Franchise Support Center • Copy of all required insurance on file at Franchise Store Support Center • Workers Comp • General Liability (w/ Rock ‘n’ Joe as additional insured) • Property/Casualty • Signed Franchise and Development Agreements on file at Franchise Store Support Center • Copy of executed operating partner agreement (if applicable) on file at Franchise Store Support Center • ACH forms submitted and filed

While this is certainly a comprehensive listing, much detail has not been introduced here in order to protect the proprietary nature of our systems. The all-inclusive Design & Construction Manual permits you to recognize much greater detail.

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Our Mock Rush – Soft OpeningYou heard of the old saying “you never get a second chance to make a first impression”.

We believe whole heartedly in that statement! Let us just say that we test all systems before Grand Opening! Rock ‘n’ Joe sends a team of people to your store to ensure your employees are trained thoroughly. Now it’s time to test them to make sure that all cylinders are firing correctly.

We also exhaustively ensure that all systems are in place…functional and operating before Grand Opening. Some franchise companies say they do this…we put our money where our mouth isby applying the necessary resources to support you in this most important day towards yoursuccessful business venture.

You may have to contend with a line of people waiting to order and to be served. We here at Rock ‘n’ Joe elect to give away hundreds of free cups of coffee that day. Much like yourself…once you tasted the coffee you were sold! For the cost of a coffee…your cost…you will attract many loyal customers from that day alone! So many of our franchisees state “that they would pay the cost of giving away free coffee all day long for gaining new loyal customers”. So would most people!

At the end of the Mock Rush, a thorough review is given of all staff, systems and operations! It is then that the necessary changes are made before embarking on the perfect day of reckoning…the Grand Opening Day!

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GRAND OPENING DAY!Would you believe, we have a manual for this also? OK…we don’t exactly have a separatemanual. But, we could! We just incorporated all the information for a perfect Grand Opening in our Marketing Manual and then again in our Operations Manual!

In Section 3, we discuss the Grand Opening Process and breakdown your advertising expenses. An example of Grand Opening expenses includes the following:

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GRAND OPENING DAY! (continued)A potential Schedule of “YOUR” Grand Opening Day may consist of:

6 Weeks Prior to Opening • Confirm Store Name and Address (US Postal Service) • Conduct Market Research (Trade Area Worksheet) • Confirm the following with your telephone utility company • Order Pre-Grand Opening Materials

5 Weeks Prior to Opening • Hang “Coming Soon” and “Now Hiring” Signage • Begin the recruiting process • Recruiting / Coming Soon direct mail begins

4 Weeks Prior to Opening • Continue the recruiting process

3 Weeks To Opening (21 Day Confirmation of Grand Opening Date) • Order Grand Opening Materials • Review and return all proofs from Grand Opening Materials • Continue the recruiting process

2 Weeks To Opening • Receive Grand Opening Materials • Schedule promoing Crew and begin promoing process • Continue the recruiting process

1 Week To Opening • Continue doorhanging process every day until open • Continue the recruiting process

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GRAND OPENING DAY! (continued)GRAND OPENING MARKETINGDay Before Store Opens • Distributing Advertising Collateral • Hang “Grand Opening” Banner • Set-up helium tank and balloons • Set-up tent, tables, prize wheel, music (where applicable) • Set-up inflatable or wind-streamer (where applicable)

5:00 AM (1 hour before opening) • Have radio station set up broadcast station with tent (where applicable)

5:30 AM (1/2 hour before opening) • Begin handing out free Large Coffee and menus to customers standing in line • Conduct an official ribbon-cutting ceremony with local officials and team members • Have radio station begin on-air promos (where applicable) • Create a photo opportunity for local media

6:00 AM Store Opens • Hand out menus to customers • Continue to take pictures for local newspapers • Begin to hand out 200 free Large Coffees • Thank each customer for coming in • Hand out New Customer Kits to customers (mix of promo items) • Hand helium balloons to kids • Begin games and give-aways at Rock ‘n’ Joe Tent or Radio Remote Tent

8:00 AM (2 hours after opening) • Radio station concludes two hour promo period and packs up equipment (where applicable)

Do you want us to tell you that we have it all down to a science? Well almost! Some of the planning is up to you! We provide you a “Pre-Opening Marketing Timeline” starting with 6-weeks prior to Grand Opening. The countdown begins with us working on a grid for the postal service to deliver your pre-opening advertising pieces. Then we work on every item necessary for your customer to have the ultimate “Grand Opening” experience. Your Grand Opening Day experience starts with a bouquet of flowers from Rock ‘n’ Joe commemorating your launch!

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Why the Coffee Industry?Owning a Rock ‘n’ Joe coffee house puts you at the forefront of one of the leading business trends in America: Americans are clamoring for coffee!

According to the Specialty Coffee Association of America (SCAA), the number of specialty coffee drinkers has risen in the last five years from 9% to 16% of the adult population. In 2003, the SCAA estimates that coffeehouses sold a whopping $6.12 billion worth of specialty coffee.

Specialty coffee sales are increasing by 20% per year and accountfor nearly 8% of the 18 billion dollar U.S. coffee market. Coffee drinkers consume in the United States 3.1 cups of coffee per day or over 400 million cups ofcoffee per day making the United States the leading consumer of coffee in the world.

50% of the population, equivalent to 150 million Americans, drink espresso, cappuccino, latte,or iced/cold coffees. The average Espresso Drive-thru Business sells approximately 200-300 Cupsof Espresso and Coffee Based Drinks per day at an average $3.45. Independent coffee shops manage to sell 31% of espresso-based drinks, while the rest is brewed coffee at an averageprice of $2.38.

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The Franchise Disclosure & Award ProcessWe will walk you through a thorough evaluation to see if amutual partnership exists. The evaluation consists of initialdiscussions over the telephone or in person. Once theframework has been established and collectively there is acomfort level to proceed, we will request you submit a Franchise Application. This will help us to understand your background and financial qualifications.

Once approved, we will issue to you a Franchise DisclosureDocument (FDD). While we pride ourselves on being transparent…the Federal Trade Commission requires all Franchisors to disclose critical information to aid in your decision-making process. This is done through the FDD. Our next step is to be absolutely certain that you fully understand all information contained in the FDD. We request an hour-long telephone conference with you to answer any questions and to ensure complete disclosure.

We then prepare a day-long event for you at our Franchise Support Center here in Pittsburgh. This is called our Partner Visit. This special day is your day. A day when you will meet our 24 member support team and get any additional questions answered. You will meet our Founder and other Executive Team Members along with department managers for Operations, Training, Marketing, Accounting, Real Estate, Construction, Human Resources, IT, Financing and many others who are responsible for supporting you in your store development and ongoing operations after your store is opened.

Here you can speak to our Franchisee Partners, tour the store and witness live operations. Once you commit to move forward with Rock ‘n’ Joe…the agreements are executed and webegin to seek store locations. The ideal 1800 to 2200 square foot store location usually takesapproximately 180 days to build-out your store.

Approximately 60 days prior to opening your store, we will train you and several personnel atour Franchise Support Center and at your store location. As your opening day approaches, our Marketing Department will assist you in developing asuccessful Grand Opening event. On the big day when you finally open your doors, Rock ‘n’ Joe will have a team of people at your store to ensure all goes well. There will be a line of people waiting to taste your superior quality products!

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Your Due DiligenceWhen you invest in a franchise, you must invest your time, passion, and hard work as well. It is imperative you have a complete understanding of the franchise opportunity. A prospectivefranchise candidate must look at the total cost, the training programs and if they would accept the corporate culture of the company. It’s essential that prospective franchisees ensure thatthe franchise is a good fit for them before making a commitment. Consider that you would be obligated to follow the franchise business model. Can you adapt in a structured environment? Remember that the franchise system you bought into is a proven model. Even though most franchise systems give you some latitude to apply your entrepreneurial spirit, it would not be wise to deviate from the model unless you could prove to the Franchisor that your system worked better.

Think about your lifestyle, family, work preferences, financial situation, skills, experience, and passions. Appropriate interaction between a prospectivefranchisee and the Franchisor should include the Franchisor helping you to identify whether the system is a good fit for your skills, experience, interests, financial capacity, and lifestyle. Beware ofFranchisors that are there simply to accept your investment without appropriately evaluating this information! Submitting a completed franchisee application form to the system in which you are interested is typically the next step. Good Franchisors will perform a thorough background check. This actually helps both parties. This enables the Franchisor to evaluate you properly.A good Franchise Company will be direct with you and let you know if they feel you qualify asa good fit for the system.

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Your Due Diligence (continued)You initial meetings/interviews with franchiserepresentatives should layout the franchise development process and the expectations of both parties. Once acomfort level is reached, you should receive for reviewa Franchise Disclosure Document (FDD). This lengthydocument is a requirement of the Federal TradeCommission (FTC) and must be issued to you at least14 business days in advance and prior to any form oftransaction taking place between you and the Franchisor. In other words…by law… you cannot do business with the Franchisor unless you have taken time to evaluate the FDD properly and/or consulted with professionals with expertise in franchising, such as a lawyer, accountant and banker. The Franchisor will likely be interviewing you and will want to see that you have been making your own inquiries and are being proactive about finding out as much as you can from your professional sources.

Examine Franchisee validation from every angle during a proper due diligence process. Review documentation, conduct meetings and interviews, and participate in hands-on learning. This will help prospective Franchisees go into their franchise business with as much essential information as possible. Finally, know what resources are available in the form of training, manuals and online tools to assist in all phases of your franchise business.

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Our Franchisee ValidationOur Franchise Partners tells us when they think we’re doing wrong! We just tell them we’re never wrong! How about that for an answer?! Of course, we make bad decisions at times!However, we are not so fool of ourselves that we can’t change course to achieve the common goal. Isn’t that a sign of good communication…when a partner can tell you you’re doingsomething wrong and you can accept it?

We believe in being transparent, admitting when we’re wrong and immediately taking thepath of mutual understanding. These are not just words! This message resonates throughout Rock ‘n’ Joe. Ask our Franchise Partners and they will share with you some of the reasons why Rock ‘n’ Joe has been the recipient of so many awards throughout its 20-year history.

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The Ideal Franchise OwnerWe would love to tell you that we have the “perfect” franchisee model for the ideal franchise owner. Fortunately…we’re close but not perfect. We receive many calls from customers inquiring about our franchise opportunity! Most of our franchisees that are now with us first tasted the superior quality of our coffee and wanted to know how to get involved in the business. Yes, we request you submit a Franchise Application to show the minimum capital requirements of $250,000 network and $100,000 in liquidity…but our main focus is that you have a great attitude and passion for the business, a supportive family, be very customer service oriented, have some prior background in the food industy or an operating partner who does and be very community-minded. Quite frankly, the more people that taste our products the more loyal customers you will gain. Think about that for a minute…how many ways could you sample Rock ‘n’ Joe coffee and foods if you owned a Rock ‘n’ Joe store? What about local schools, businesses, sports teams, chuches and social clubs and residential community centers for a start. Much like yourself…once they taste the coffee and food they will come!!!

You see we have successful franchisees in all walks of life…across different ethnicities andamong all age groups! We are very proud of our diverse community of Franchise Partners. We could certainly profile our “ideal franchise partner” much more closely. Sarcastically,let’s see how this could help! Ok then…we want a person or persons that are married with2.2 children, own their own home, has lived in their community for more than five years, hasa minimum one-year background in the food or coffee segments, is currently employed, has a second income coming into the household (to pay for your living expenses while you run thebusiness), a minimum 680 credit score with no past bankruptcies, judgments or leins…and wecan go on and on and on!

While all of this is important, we have found that success comes in all sizes, shapes and in all walks of life. Quite frankly, we have had individuals that met all the above criteria only to find out the business was just not for them. On the other hand, we have current Franchisees who came to Rock ‘n’ Joe with the right attitude, passion and capitalization and succeeded wellbeyond those that match the ideal profile.

So, what are we trying to say!? If you bring the right attitude, passion and financials we will most likely give your Franchise Application very serious consideration! In fact, we will help you move through the maze of issues you will encounter…including financing!

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Our ManualsAs a Rock ‘n’ Joe Franchise Owner, you’ll have the benefit of more than two decades ofexperience on your side. Our manuals will show you how to turn a brand new coffee barrestaurant into a successful business and neighborhood staple.

Our playbook selection includes:

A COMPLETE GUIDE TO STORE OPERATIONS,PROCEDURES ANDPROTOCOL

MARKETING 101, 102 AND 103 TO ASSIST IN GROWING YOUR BUSINESS

A DESIGN & CONSTRUCTION MANUAL WITH EXCEPTIONAL STORE DEVELOPMENTDETAIL

A GAME PLAN STRATEGYON PROFITABILITY ANDFINANCIAL MANAGEMENT.A DEFINITE GAME WINNER!

Operations Manual

Marketing Manual

Design and ConstructionManual

inancial managementManual

f

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What are my start-up costs?The investment to open a Rock ‘n’ Joe Store ranges from $218,000 to $414,000. This amount varies greatly based on the square footage of the location you lease. You can also reduce your initial out-of-pocket expense by purchasing the equipment used or through leasing…an option that Rock ‘n’ Joe assists you in securing and providing the lowest out-of-pocket expense.

Leasehold Improvements will vary based on the number of seats, bathroom and ADArequirements, HVAC, electrical and plumbing requirements and to what degree we can use the existing walls and the current build-out to accommodate our design. Rest assured there will be experts assessing each location to exploit any efficiency we can gain. The example below gives a breakdown of start-up costs for opening a new franchise:

Estimated Initial Investment

The amount of Additional Funds vary based on your industry-specific experience, management skills, business acumen, local economic and competitive conditions and how quickly break-even is achieved. This money is your reserved fund that is used while you are operating the store.

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How Much Can I Make?The success of your franchise store is dependent on many factors including your businessacumen, prior experience in a related industry, your willingness to follow a proven system, the “sweat equity” applied to your business, and your ability to manage the financial aspects of your business and personal life. Your discussions with our Franchise Partners will uncover this information to your liking.Please judge yourself!

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Let’s Talk FinancingYou’re really excited and have communicated you’re interest to the Franchisor. You’ve done your homework and now after performing significant levels of due diligence you want to move forward. So…what’s next!

Do you ask the Franchisor for assistance? Of course you do!!! After all…if you’re like mostpeople…you need money to finance the franchise, royalty fees, inventory and working capital?

First, create a personal balance sheet to list your assets and liabilities. Under assets, list all your holdings--cash on hand, checking accounts, savings accounts, real estate, automobiles, bonds, securities, insurance cash values and other assets. Make a complete list of all your assets. Then make a list of your liabilities. List your current bills, all your charges, your home mortgage, auto loans, finance company loans and so on. Subtract your liabilities from your assets. Once you’ve completed this worksheet, find out your credit rating. There are three commondenominators all potential lenders look for in a credit rating: stability, income and track record.

Most lenders will want to know how long you’ve been at a certain job and lived in the samelocation. If you have bounced around from job to job or from house to house be prepared with good explanations. Your income level is important… but more importantly is your ability to live within that income. You have to show that you can manage your income well. If you can’t manage your personalfinances, a red flag will be raised in the lender’s mind! The lenders will apply logic here bysaying that if you can’t handle your personal finances then how can you handle a business loan. A third major factor a lender will view is your track record. In other words, how successful have you been in paying off past debt? If you have a record of past due amounts, judgments, liens and so on, you should get these squared away before asking for a loan.

Contact your credit bureau to get a copy of your credit history and FICO Score. Under the law, credit bureaus are required to give you your credit history. Correct any wrong information or at least make sure your side of the story is on record. If being laid off or any illness caused some of the negative credit history, then request that comments be placed on your file representing the reason for delinquency.

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Let’s Talk Financing (continued)Your FICO Score needs to be a minimum of 680 and, more often than not, above 680 or more to be considered for a loan. To improve your credit rating pay off your credit card each month. Use one credit card monthly but make sure you are paying off the entire amount each and every month. Now you need a business plan. I know…no wants to engage in this aspect of due diligence.However, a well written Business Plan will go a long way to securing a loan. The SBA requires that a Business Plan be completed before obtaining approval. A well-thought-out business plan can make the difference between having your loan application accepted or rejected. Yourbusiness plan should include a pro-forma, projections and cost analysis; estimates of working capital; an indication of your “people skills”; a study of the competitive landscape and themarketing plan. Always ask the franchisor first if they provide any form of financing. Financing may be available for the franchise fee, equipment or operations. As well, franchisors can often point you toleasing companies. Leasing companies are a great approach to financing equipment and other start-up costs.

Some types of financing companies may also provide asset-based lending to finance franchisees’ furniture, equipment, signs and fixtures, and will allow franchisees to purchase the equipmentat the end of the lease.

If you have good credit record and pass all the financial requirements, we will do everything we can to assist you. This includes assistance with business plans and introductions to lendingsources.

Make a working list of all other available sources of capital. Most capital comes from friends and relatives first, then home mortgages, veterans’ loans, bank loans, SBA loans and financecompanies.

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Let’s Talk Financing (continued)Many times… banks that aren’t willing to work with you based on your financial profile and credit history may suggest working with an SBA loan guarantee. These loans are guaranteed up to 90 percent by the SBA. Make sure you work with a franchisor that is approved by the SBA thatincludes expeditious loan processing. Rock ‘n’ Joe is approved by the Franchise Registry andhas an established FRUNS Number that permits financial institutions to validate its approval.

Small businesses simply submit a loan application to the lender for initial review, and if the lender finds the application acceptable, it forwards the application and its credit analysis to the nearest SBA office. After SBA approval, the lender closes the loan and disburses the funds; the borrower makes loan payments to the lender.

Other options would be to take out a home-equity line of credit or a second mortgage on your home. Be careful when utilizing this type of financing, however. The home-equity line of credit and a second mortgage are secured by your home. If you can’t repay the amount you financeusing this source, you risk losing your home.

You can also use assets such as stocks, bonds, and mutual funds to secure a loan as long as they’re not part of a qualified plan like an IRA profit-sharing plan. Also, if you are over age59 and have a lot of money tied up in an IRA, you could use it for part of your financingrequirements. Although you’ll have to pay taxes on the amount used, not to mention sufferthe loss of income from interest, it can be a good financing tool.

If you are under age 59 and your IRA is one of your largest assets, you still may be able totake advantage of this avenue without accruing the 10-percent penalty associated with earlywithdrawal. By taking Substantial Equal Periodic Payments spread over a minimum of fiveyears, based on your life expectancy, and a set of annuity tables published by the IRS, youcan eliminate the 10-percent penalty, although the money is still taxable.

There can be many sources of financing available to help you launch the franchise of your dreams. However, you will need working capital for the first three to six months of storeoperations. Always keep 25% of your cash reserves as a basis for working capital.

For example…if between borrowing and your liquidity you have $200,000…keep $50,000 of that capital as a base for working capital. If the remaining $150,000 is not sufficient to pay for the business opportunity…then reconsider your investment or reposition your loan strategy.

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Let’s Talk Financing (continued)You will need working capital to support ongoing expenses that are not covered by sales revenue. New businesses may generate negative cash flow. You cannot guarantee that you will not have additional expenses in the first months of operation. Your costs will depend on factors such as how well you follow the franchisor’s methods and procedures, the sales volume of your business, your management skills and experience, business acumen, local economic conditions, the local market for our product, wage rate, competition, your rent structure and many other factors.

Financing will be the most critical step in acquiring your dream. Keep debts and expenses toa minimum. Many business owners take on too much debt, forgetting that cash flow must paythat debt. Avoid dipping into your retirement money or your kids’ college funds. All start-up businesses are a risk! Work with a franchisor with an established proven model and that has withstood the test of time. A well thought out plan is critical and can provide the advantage you need in maximizing the financial reward for you and your family!

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SUMMARYThe criteria we use when deciding whether or not to finance a new store is similar to what a bank uses. We want to do everything possible to ensure the success of our partners, and partof that means making sure you are in the right position financially to get started.

In order to qualify for a Rock ‘n’ Joe Franchise, you will need: • $250,000 Networth • Minimum $100,000 Liquidity - Cash, Stocks, Bonds, Insurance, Equity Credit Lines etc. • 1 yr. Food Management Experience or Operating Partner with the experience • A good FICO Score and credit history • A great attitude with passion

Additional Items you may want to consider: 1. The most common source of start-up capital is friends and family. 2. Seek out lenders that understand franchising. 3. Be totally honest and upfront with lenders. Hide nothing. Be prepared to explain everything. 4. Don’t exhaust your liquidity by paying off outstanding debts before filing a loan application. Lenders want you to have capital available. 5. If you lack liquidity, find a partner with money. 6. Consider equipment leasing to conserve start-up capital and improve the appearance of your balance sheet. 7. Consider buying used equipment, furniture, vehicles, etc. 8. Don’t overlook angel investors and venture capitalists. 9. Don’t give up.

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Available TerritoriesRock ‘n’ Joe is expanding in the U.S. Below is a list of territories that are currently targetedfor franchise development. Please contact Franchise Sales at 1-800-862-3554 to discuss your selected territory.

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Meet Our Franchise Support Center TeamVarol AblakJim PowersShawn LevineSteve MacesicJustin NeidingerLaura SableTrish ThewesRene O’BrienJoe Button Angie PackMichelle BushmireAmy Myers

ChairmanExecutive Vice PresidentCEODirector of ITPurchasing ManagerAccounting ManagerHuman Resources ManagerGraphics ManagerConstruction ManagerFranchise Development CoordinatorFranchise Accounts Receivable CoordinatorGraphic Artist

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FAQ & FACTSAnswers to some frequently asked questions.

Q. What is the initial investment required for a Rock ‘n’ Joe Franchise?The initial cost of a Rock N Joe franchise ranges from $218,000 to $414,000 (includes optional $80,000 Liquor License), which pays for the build-out and start-up expenses. Part of thisinvestment is the initial franchise fee, which is $30,000. The investment range will varysignificantly due to (a) whether you lease or purchase the equipment, (b) the squarefootage and current build-out of the leased site as it relates to leasehold improvementsand (c) a liquor license if acquired.

Q. What is required to become a Rock ‘n’ Joe Franchisee?

We are looking for franchisees with outgoing personalities, outstanding work ethic, passion for customer service, and a love of coffee, great food and rock music. Also, we require a minimum net worth of $250,000 with $100,000 in liquid assets.

Q. What is the franchising royalty?

There is a 6% franchising royalty.

Q. What are your advertising fees?The current Marketing Fee is 2%.

Q. Is financing available?

At this time, Rock ‘n’ Joe does not offer financing assistance. However, we are happy toprovide recommendations to third party lenders for you to contact.

Q. What is the average square footage of a Rock ‘n’ Joe franchise?Franchised Rock ‘n’ Joe stores are usually between 1,800 and 2,200 square feet.

Q. Do I have to buy my food and equipment from the Corporate Office?Franchisees secure their inventory and equipment through approved third party distributors. Rock ‘n’ Joe works to select the assortment of products and equipment necessary to produce our signature products. We negotiate on behalf of the franchise community to securecompetitive pricing. This helps insure that the consumer experience is the same regardlessof the geographical location of our units and allows our franchisees to focus on delivering great service and fresh products.

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FAQ & FACTS (continued)Answers to some frequently asked questions.

Q. How well can I do with a Rock ‘n’ Joe franchise?The success of your franchise store is dependent on many factors including: (1) your business acumen, (2) prior experience in the related industry, (3) your willingness to follow a proven system, (4) the “sweat equity” applied to your business and (5) your ability to manage the financial aspects of your business and personal life.

Q. Does Rock ‘n’ Joe provide training?

You will receive both in-store and classroom training for all aspects of our business including coffee and food preparation, sales and marketing techniques, as well as administrative and office matters. We will also provide support prior to, during, and after you open your own location.

Q. What is the term of the franchise agreement?

The Initial term of you Rock ‘n’ Joe franchise agreement is 10 years, with one 10-year option.

Q. I’m interested. What is the next step?Simply fill out the no-obligation Franchise Application and submit it to us. We will be in touch with you shortly with more information.

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How to Evaluate a Quality FranchisorFRANCHISE EVALUATION CHECKLIST 1. Has the franchisor been in business long enough (5 years or more) to have established a good reputation?

2. Have you checked Better Business Bureaus, Chambers of Commerce, Dun and Bradstreet, or bankers to find out about the franchisor’s business reputation and credit rating?

3. Did the above investigations reveal that the franchisor has a good reputation and credit rating?

4. Does the franchising firm appear to be financed adequately so that it can carry out its stated plan of financial assistance and expansion?

5. Have you found out how many franchises are now operating?

6. Have you found out the “mortality” or failure rate among franchises?

7. How many years on average have the stores been opened and operating?

8. Have you checked with some franchisees and found that the franchisor has a reputation for honesty and fair dealing among those who currently hold franchises?

9. Has the franchisor given you a Franchise Disclosure Document (FDD)?

10. Has the franchisor provided audited financial statements?

11. Will the franchisor assist you with: _____ A management training program? _____ An employee training program? _____ A public relations program? _____ Obtaining capital? _____ Merchandising ideas? _____ Designing store layout and displays? _____ Inventory control methods? _____ Analyzing financial statements?

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How to Evaluate a Quality Franchisor (continued)FRANCHISE EVALUATION CHECKLIST (continued) 12. Does the franchisor provide continuing assistance for franchisees through Franchise Consultants who visit regularly?

13. Does the franchising firm have experienced management?

14. Will the franchisor assist you in finding a good location for your business?

15. Has the franchising company investigated you carefully enough to assure a good basis for developing a partnership with you?

16. Have you determined exactly what the franchisor can do for you that you cannot do for yourself?

THE PRODUCT OR SERVICE 17. Has the product or service been on the market long enough to gain good consumer acceptance?

18. Is it priced competitively?

19. Is it the type of item or service which the same consumer customarily buys more than once?

20. Is it an all-year seller in contrast to a seasonal one?

21. Is it a staple item in contrast to fad?

22. Does it sell well elsewhere?

23. Would you buy it on its merits?

24. Will it be in greater demand five years from now?

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How to Evaluate a Quality Franchisor (continued)FRANCHISE EVALUATION CHECKLIST (continued) 25. If it is a product rather than a service: ____ Is it packaged attractively? ____ Does it stand up well in use? ____ Is it easy and safe to use? ____ Does it comply with all applicable laws? ____ Is it manufactured under certain quality standards? ____ Do these standards compare favorably with similar products on the market? ____ If the product must be purchased exclusively from the franchisor or a designated supplier, are the prices to you, as the franchisee, competitive?

THE FRANCHISE AGREEMENT 26. Does the franchise fee seem reasonable?

27. Do continuing royalties or percent of gross sales payment appear reasonable?

28. Is the total cash investment required and the terms for financing the balance satisfactory?

29. Does the cash investment include payment for fixtures and equipment?

30. If you will be required to participate in company sponsored promotion and publicity by contributing to an advertising fund, will you have the right to veto any increase in contributions to the “fund”?

31. If the parent company’s name, product or service protected by a patent or trademark?

32. Are you free to buy the amount of merchandise you believe you need rather than being required to purchase a certain amount?

33. Can you, as the franchisee, return merchandise for credit?

34. Can you engage in other business activities?

35. If there is an annual sales quota, can you retain your franchise if it is not met?

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How to Evaluate a Quality Franchisor (continued)FRANCHISE EVALUATION CHECKLIST (continued) 36. Does the agreement give you a protected territory for the length of the franchise?

37. Is your territory protected?

38. Is the franchise agreement renewable?

39. Can you terminate your agreement if you are not happy for some reason?

40. Is the Franchisor prohibited from selling the franchise out from under you?

41. May you sell the business with approval of the Franchisor?

42. Will the Franchisor help you sell the business?

43. Does the agreement obligate the Franchisor to give you continuing assistance after you are operating the business?

44. Are you permitted a choice in determining whether you will sell any new product or service introduced by the Franchisor after you have opened your business?

45. Is there anything with respect to the franchise or its Operation which would make you ineligible for special financial assistance or other benefits accorded to small business concerns by federal, state, or local government?

46. Did your lawyer approve the franchise agreement after he studied it paragraph by paragraph?

47. Did you consult an attorney to review the FDD and an accountant to review your financial projections?

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Next StepsStep 1: Request More Information. After researching us and gaining a comfort level, fill out the Request More Information Formand we will forward you a checklist indicating the next steps along with a Franchise Application.We will contact you shortly thereafter to arrange a convenient time to speak.

Step 2. Receive the Franchise Disclosure Document (FDD).After our follow-up discussion regarding your application and to answer any remaining questions you may have, we will forward our FDD for your review. We will then establish a time to speak you to thoroughly review the FDD. We will ask you to sign, date and return the FDD Receipt which is located in the back of the FDD.

Step 3. Establish a Date to Attend our Partner Visit.We setup a day-long event for you to visit with our Support Team at our Franchise SupportCenter in Pittsburgh. These people will be supporting you in the future in every phase of your store development and ongoing operations…so meeting them and discussing every aspect ofthe opportunity is key to both parties gaining an understanding of the potential for a mutual partnership.

Step 4. Talk to our Franchise Partners. During the required 14-day waiting period, in which the Federal Trade Commission mandatesthat no transaction between franchisor and the potential new franchisee candidate can take place, you can call existing franchisees.

Step 5. Execute Agreements.If you’ve come this far…it would be our pleasure to host your success.

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Join the Rock ‘n’ Joe FamilyAt Rock ‘n’ Joe, we believe in keeping our promises.As we continue to grow into our region as a leader in thecoffee marketplace, we have made promises not only to stay true to our fantastic products, but to:

• Our franchise partners, whom we strive to make successful through our support services

• Our Franchise Support Center Team, who provide the dedication, insight, and hard work necessary to grow our chain

• Our customers, who love our product!

As a new Rock ‘n’ Joe franchisee, you will have a Franchise Consultant who is trained to provide expert assistance during your new store opening. Your consultant will also give you personalon-going operations support, including quality assurance, marketing, business management,and special help with new promotions and product roll-outs.

Please contact our Franchise Development Coordinator:

Angie Pack Franchise Development Coordinator Rock ‘n’ Joe Coffee Bar 1-800-862-3554 412-919-2100 x 527 [email protected]