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\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 Series 020(2023) FRANCHISE DISCLOSURE DOCUMENT 1-800-FLOWERS. COM FRANCHISE CO., INC. A Delaware Corporation Two Jericho Plaza, Suite 200 Jericho, New York 11753 (516) 237-6000 Email: franchise@1800flowers. com www. 1800flowers. com 1-800-Flowers. Com Franchise Co., Inc. offers franchises for retail flower shops that offer flowers, plants, fresh fruit products, including fresh cut fruit bouquets and related products, cookies, candy, gift baskets, gift items, novelty items, personalized gift and novelty items and related products and services to the general public. We offer the rights for 3 different franchises in this Disclosure Document: Standard Franchise Program. Under the Standard Franchise Program, you will sign a Franchise Agreement t o o p e r a t e o n e 1-8 0 0-F l o w e r s. C o m S t a n d a r d F r a n c h i s e d U n i t a t a s i n g l e l o c a t i o n. T h e t o t a l i n v e s t m e n t necessary to begin operation of one 1-800-Flowers. Com Standard Franchised Unit is $258,500 to $774,500. This includes $43,500 to $69,000 that must be paid to us and/or an affiliate. Co-Brand Franchise Program. Under the Co-Brand Franchise Program, you will sign a Franchise Agreement and a Co-Brand Franchise Addendum to co-brand your existing independent retail flower shop to a 1-800-F l o w e r s. C o m C o-B r a n d e d F r a n c h i s e d U n i t. T h e t o t a l i n v e s t m e n t n e c e s s a r y t o b e g i n o p e r a t i o n o f a 1-8 0 0-Flowers. Com Co-Branded Franchised Unit is $57,000 to $156,750. This includes $21,000 to $21,500 that must be paid to us and/or an affiliate. Fruit Bouquets Program. Under the Fruit Bouquets Program, we will grant you the right to offer and sell fruit bouquets and related products from your Standard Franchised Unit or Co-Branded Franchised Unit. The total initial investment necessary to begin operations is $18,500 to $53,500. This includes $0 to $7,500 that must be paid to us and/or an affiliate. A Fruit Bouquets Business may only be added into a Standard Franchised Unit or a Co-Branded Franchised Unit. This Disclosure Document summarizes certain provisions of your Franchise Agreement and other information in plain English. Read the Disclosure Document and all accompanying agreements carefully. You must receive this Disclosure Document at least 14 calendar days before you sign a binding agreement with, or make any payments to the Franchisor or an affiliate in connection with the proposed franchise sale. Note, however, that no government agency has verified the information contained in this document. You may wish to receive your Disclosure Document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact our Senior Vice President-Franchising, Vincent J. Mc Veigh, Two Jericho Plaza, Suite 200, Jericho, New York 11753, (516) 237-6000. The terms of your contract will govern your franchise relationship. Don't rely on the Disclosure Document alone t o u n d e r s t a n d y o u r c o n t r a c t. R e a d a l l o f y o u r c o n t r a c t c a r e f u l l y. S h o w y o u r c o n t r a c t a n d t h i s D i s c l o s u r e Document to an advisor, like a lawyer or accountant. Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up your mind. Information about comparisons of franchisors is available. More information on franchising, such as “A Consumer's Guide to Buying a Franchise”, which can help you understand how to use this Disclosure | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 Series 020(2023)Document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit the FTC's home page at www. ftc. gov for additional information. There may also be laws on franchising in your state. C a l l y o u r s t a t e a g e n c y l i s t e d o n Exhibit Q or visit your public library for other sources of information on franchising. ISSUANCE DATE: OCTOBER 19, 2023 | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 Series 020(2023)How to Use This Franchise Disclosure Document Here are some questions you may be asking about buying a franchise and tips on how to find more information: QUESTION WHERE TO FIND INFORMATION How much can I earn? Item 19 may give you information about outlet sales, costs, profits or losses. You should also try to obtain this information from others, like current and former franchisees. You can find their names and contact information in Item 20 or Exhibits N and O. How much will I need to invest?I t e m s 5 a n d 6 l i s t f e e s y o u w i l l b e p a y i n g t o t h e franchisor or at the franchisor's direction. Item 7 lists the initial investment to open. Item 8 describes the suppliers you must use. Does the franchisor have the financial ability to provide support to my business?Item 21 or Exhibit P includes financial statements. Review these statements carefully. Is the franchise system stable, growing, or shrinking?Item 20 summarizes the recent history of the number of company-owned and franchised outlets. Will my business be the only 1-800-Flowers business in my area?I t e m 1 2 a n d t h e “ t e r r i t o r y ” p r o v i s i o n s i n t h e franchise agreement describe whether the franchisor and other franchisees can compete with you. Does the franchisor have a troubled legal history?Items 3 and 4 tell you whether the franchisor or its management have been involved in material litigation or bankruptcy proceedings. What's it like to be a 1-800-Flowers franchisee?Item 20 or Exhibits N and O list current and former franchisees. You can contact them to ask about their experiences. What else should I know? Th ese q uestion s ar e on ly a few th in gs yo u sh ould look for. Review all 23 Items and all Exhibits in this disclosure document to better understand this franchise opportunity. See the table of contents. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 Series 020(2023)What You Need To Know About Franchising Generally Continuing responsibility to pay fees. You may have to pay royalties and other fees even if you are losing money. Business model can change. The franchise agreement may allow the franchisor to change its manuals and business model without your consent. These changes may require you to make additional investments in your franchise business or may harm your franchise business. Supplier restrictions. You may have to buy or lease items from the franchisor or a limited group of suppliers the franchisor designates. These items may be more expensive than similar items you could buy on your own. Operating restrictions. The franchise agreement may prohibit you from operating a similar business during the term of the franchise. There are usually other restrictions. Some examples may include controlling your location, your access to customers, what you sell, how you market, and your hours of operation. Competition from franchisor. Even if the franchise agreement grants you a territory, the franchisor may have the right to compete with you in your territory. Renewal. Your franchise agreement may not permit you to renew. Even if it does, you may have to sign a new agreement with different terms and conditions in order to continue to operate your franchise business. When your franchise ends. The franchise agreement may prohibit you from operating a similar business after your franchise ends even if you still have obligations to your landlord or other creditors. Some States Require Registration Your state may have a franchise law, or other law, that requires franchisors to register before offering or selling franchises in the state. Registration does not mean that the state recommends the franchise or has verified the information in this document. To find out if your state has a registration requirement, or to contact your state, use the agency information in Exhibit Q. Your state also may have laws that require special disclosures or amendments be made to your franchise agreement. If so, you should check the State Specific Addenda. See the Table of Contents for the location of the State Specific Addenda. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 Series 020(2023)Special Risks to Consider About This Franchise Certain states require that the following risk(s) be highlighted: 1. Out-of-State Dispute Resolution. The Franchise Agreement requires you to resolve disputes with the franchisor by litigation or arbitration only in New York. Out-of-state litigation or arbitration may force you to accept a less favorable settlement for disputes. It may also cost you more to participate in litigation or arbitration with us in New York than in your home state. 2. Spousal Liability. Your spouse must sign a document that makes your spouse liable for all financial obligations under the franchise agreement even though your spouse has no ownership interest in the franchise. This guarantee will place both you and your spouse's marital and personal assets perhaps including your house, at risk if your franchise fails. 3. Financial Condition. The Franchisor's financial condition as reflected in its financial statements (see Item 21) calls into question the Franchisor's financial ability to provide services and support to you. 4. Mandatory minimum payments. You must make minimum royalty or advertising fund payments, regardless of your sales levels. Your inability to make the payments may result in termination of your franchise and loss of your investment. Certain states may require other risks to be highlighted. Check the “State Specific Addenda” (if any) to see whether your state requires other risks to be highlighted. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 i Series 020(2023)1-800-FLOWERS. COM FRANCHISE CO., INC. FRANCHISE DISCLOSURE DOCUMENT TABLE OF CONTENTS Item Description Page ITEM 1 THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES..................... 1 ITEM 2 BUSINESS EXPERIENCE..................................................................................................................... 4 ITEM 3 LITIGATION......................................................................................................................................... 5 ITEM 4 BANKRUPTCY......................................................................................................................................7 ITEM 5 INITIAL FEES........................................................................................................................................7 ITEM 6 OTHER FEES......................................................................................................................................... 8 ITEM 7 ESTIMATED INITIAL INVESTMENT............................................................................................ 21 ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES............................................ 29 ITEM 9 FRANCHISEE'S OBLIGATIONS...................................................................................................... 32 ITEM 10 FINANCING........................................................................................................................................ 35 ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING................................................................................................................................ 37 ITEM 12 TERRITORY......................................................................................................................................... 53 ITEM 13 TRADEMARKS................................................................................................................................... 54 ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION............................................ 56 ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS..................................................................................................... 58 ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL...................................................... 59 ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION............................... 60 ITEM 18 PUBLIC FIGURES............................................................................................................................... 69 ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS................................................................... 70 ITEM 20 OUTLETS AND FRANCHISEE INFORMATION.......................................................................... 70 ITEM 21 FINANCIAL STATEMENTS............................................................................................................. 75 ITEM 22 CONTRACTS...................................................................................................................................... 75 ITEM 23 RECEIPTS............................................................................................................................................. 75 EXHIBITS A Franchise Agreement B C DCo-Brand Franchise Addendum to Franchise Agreement Fruit Bouquets Addendum to Franchise Agreement Sublease E F G H I J KOption to Obtain Lease Assignment State Specific Addenda Confidentiality Agreement General Release Promissory Note Guarantee of Promissory Note Security Agreement L-1 L-2Premier Order Fulfillment Agreement Fruit Bouquets Order Fulfillment Agreement M-1 Bloom Net Membership Agreement M-2 Bloom Net Technologies Systems Agreement M-3 Bloom Net Order Referral Program Rate Schedule N O P Q RList of Current Franchisees List of Former Franchisees Financial Statements Agents for Service of Process & State Administrators Effective Dates Receipts | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 1 Series 020(2023)ITEM 1 THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES The Franchisor 1-800-Flowers. Com Franchise Co., Inc. is a Delaware corporation that was incorporated on February 8, 2000. To simplify the language in this Disclosure Document, “ Franchisor,” “our”, “we” a n d “ us” means 1-800-Flowers. Co m F ranchise C o., In c. “ You” or “ Franchisee ” means the business entity, person or persons who sign the Franchise Agreement. Our principal business address is Two Jericho Plaza, Suite 200, Jericho, New York 11753. We do business under our corporate name as well as under the trade names “ 1-800-Flowers” and “1-800-Flowers. Com ”. We do not do business under any other names. Our agents for service of process are listed in Exhibit Q. Parents, Predecessors and Affiliates We have no predecessors. We are a wholly-owned subsidiary of 1-800-Flowers. Com, Inc., a Delaware corporation (“ 1-800-Flowers ”), our parent, through another subsidiary of 1-800-Flowers, 1-800-Flowers Retail Inc., a Delaware corporation (“ Retail ”). Our affiliates are: Bloom Net, Inc., a Delaware corporation (“Bloom Net ”); 800-Flowers, Inc., a New York corporation (“ 800-Flowers ”); Conroy's, Inc., a California corporation (“ Conroy's ”); Napco Marketing Corp, a Delaware corporation (“ Napco ”); Cheryl & Co., an Ohio company (“ Cheryl ”); The Popcorn Factory, Inc., a Delaware corporation (“ Popcorn ”); Flowerama of America, Inc., an Iowa corporation (“ Flowerama ”); Design Pac Gifts LLC, an Illinois limited liability company (“Design ”); and Harry & David Operations, Inc., a Delaware corporation (“ HDO ”). 1-800-Flowers does not guarantee our performance under the Franchise Agreement. 1-800-Flowers, through its subsidiaries, is an e-commerce provider of floral products, plants, gifts, and fresh fruit products, including fresh cut fruit bouquets and related products (collectively, “ fruit bouquets ”), and conducts international flowers-by-telephone businesses under the names “1-800-Flowers ”, “ 1-800-Flowers. Com ”, “Fruit Bouquets by 1-800-Flowers. Com ” and “ fruitbouquets. com ”, and utilizes the toll-free telephone number 1-800-356-9377, corresponding to “ 1-800-Flowers ”, to receive orders for flowers, fruit bouquets, gifts, and other related products. 1-800-Flowers, through one of its subsidiaries, operates a business (the “ Bloom Net Network ”) that refers floral and gift orders received from consumers through the Internet and by telephone for fulfillment and delivery. Retail operates company-owned retail floral shops. 1-800-Flowers is the holder of the “ 1-800-Flowers ”, “Fruit Bouquets ”, “Fruit Bouquets by 1-800-Flowers. Com ” and “fruitbouquets. com ” service marks, trademarks, logos and other identifying marks (the “ 1-800-Flowers Marks ”). Bloom Net grants limited licenses to use certain software, documentation and copyrighted content that co mprise the “ Bloom Net Technologies Systems ” for communications functions and the fulfillment of orders at retail flower shops. Napco is a subsidiary of Bloom Net and sells hard goods and other products for retail flower shops. In addition, our Franchisees may purchase certain products from Cheryl, Popcorn, Design and HDO in order to fulfill certain types of orders from 800-Flowers. With the exception of Bloom Net, Napco, Cheryl, Popcorn, HDO, Design and Flowerama, the principal business address of our parent and its affiliates is Two Jericho Plaza, Suite 200, Jericho, New York 11753. Bloom Net and Napco's principal business address is 7800 Bayberry Road, Jacksonville, Florida 32256. Cheryl's principal place of business is 646 Mc Corkle Boulevard, Westerville, Ohio 43082. Popcorn's principal place of business is 13970 West Laurel Drive, Lake Forest, Illinois 60045. HDO's principal place of business is 2500 South Pacific Highway, Medford, Oregon 97501. Design's principal place of business is 2457 West North | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 2 Series 020(2023)Avenue, Melrose Park, Illinois 60160. Flowerama's principal place of business is 5108 Nordic Drive, Cedar Falls, Iowa 50613. Operating and Franchising Experience We do not operate a business of the type being franchised. 1-800-Flowers and its predecessors and affiliates have operated businesses of the type being franchised since 1970. Retail currently operates 1 retail store under the trade name “1-800-Flowers ” and 8 Flowerama shops under the trade name “ 1-800-Flowers|Flowerama ”. We have offered franchises for retail flower shops since April 3, 2002. As of our fiscal year ended July 2, 2023, there were 17 franchisees operating 21 1-800-Flowers retail flower shops, 8 1-800-Flowers design centers doing business under the trade name “ 1-800-Flowers ”, 21 franchisees operating 24 Co-Brand retail flower shops that use both the “ 1-800-Flowers ” name and marks and their existing name and 1 company-owned location owned by Retail. We have offered 1-800-Flowers Co-Brand franchises since June 2010 and we have offered the Fruit Bouquets Program to franchisees since October 2011. Flora Plenty of America, Inc., a New York corporation (“Flora Plenty ”), the predecessor of Flora Plenty, Inc., a New York corporation that was liquidated and whose assets were distributed to Retail in June 1995, offered franchises for retail flower shops for sale from 1981 to 1982. Conroy's has offered franchises for retail flower shops for sale since March 1974. Between October 1995 and October 1999, Conroy's offered franchises for retail flower shops operating under the trade names “ 1-800-Flowers ” and “ Conroy's 1-800-Flowers ”. As of July 2, 2023, there were 20 Conroy's franchisees operating 25 retail flower shops under the trade name “ 1-800-Flowers|Conroy's ”. Flowerama has offered franchises for retail flower shops for sale since 1970. As of July 2, 2023, there were 27 Flowerama franchisees operating 36 retail shops under the trade name “ Flowerama ” and 1 retail shop under the trade name “ 1-800-Flowers|Flowerama ” and 8 company-owned locations owned by Retail. We do not offer franchises for sale in other lines of business. Except for Flora Plenty, Conroy's and Flowerama, none of our affiliates have offered franchises for sale in this line of business. None of our affiliates have offered f r a n c h i s e s f o r s a l e i n a n y o t h e r l i n e o f b u s i n e s s. F r a n c h i s e s f o r “ 1-800-Flowers|Conroy's ” shops and “Flowerama ” a n d “ 1-800-Flowers|Flowerama ” shops are available under separate Franchise Disclosure Documents. 1-800-Flowers Marks, System and Trade Practices We have developed the 1-800-Flowers system (the “ 1-800-Flowers System ”) for the operation of retail flower shops (“ 1-800-Flowers Shops ”) that use the trade names “ 1-800-Flowers ” and “ 1-800-Flowers. Com ” and the 1-800-Flowers Marks and our valuable trade practices, designs, phrases, logos, signs, formulas, operating procedures, electronic systems, merchandising methods, cost control, accounting and general business techniques, strategies, routines, copyrights, manuals, training materials, bulletins and all other items we own, use or develop (collectively, the " 1-800-Flowers Trade Practices ") to offer flowers, fruit bouquets, plants, cookies, candy, gift baskets, gift items, novelty items, personalized gift and novelty items and related products and services and sentiment items for sale to the public. All 1-800-Flowers franchisees are members of the Bloom Net Network. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 3 Series 020(2023)Franchise Programs W e o f f e r 3 s e p a ra te f ra n ch i s e s i n th i s Di s cl o s u r e D o c u m e n t, th o u g h w e m a y n o t n e ce s s a ri l y g ra n t y o u th e opportunity to purchase under any of these programs: Standard Franchise Program Under this program, you will sign a Franchise Agreement ( Exhibit A ) to operate one 1-800-Flowers retail unit (a “Standard Franchised Unit ”) at a location that you select and we accept (a “ Franchised Location ”). Your Franchised Location will be designated in your Franchise Agreement before we sign the Franchise Agreement. Co-Brand Franchise Program Under this p rogra m ( the “ Co-Brand Franchise Program ”), you will sign a Franchise Agreement and a Co-Brand Franchise Addendum ( Exhibit B ) to co-brand an existing retail flower shop (an “ Existing Flower Shop ”) to a co-branded 1-800-Flowers Shop (a “ Co-Branded Franchised Unit ”). You may, if you choose to do so, continue to operate your shop under its existing name in combination with the 1-800-Flowers brand, or you may choose to operate your shop only under the 1-800-Flowers brand. Under both of these alternatives, you must add 1-800-Flowers products to your product offerings and use the 1-800-Flowers brand name and signage in and on your shop, on your delivery vehicles, and in all of your marketing efforts, with our approval. As part of our Co-Brand Franchise Program, we will continue to offer opportunities for flower shops that will operate under the trade name “ 1-800-Flowers|Conroy's ”under a separate Franchise Disclosure Document. Use of the term “ Franchised Unit ” in this Disclosure Document refers to both a Standard Franchised Unit and a Co-Branded Franchised Unit, unless the context of its use indicates otherwise. The Fruit Bouquets Program Under this program (the “ Fruit Bouquets Program ”), you will sign a Fruit Bouquets Addendum to Franchise Agreement ( Exhibit C ), w h i c h w i l l g r a n t y o u t h e r i g h t t o o f f e r a n d s e l l f r u i t b o u q u e t s a n d o t h e r r e l a t e d products from your Franchised Unit (a “ Fruit Bouquets Business ”). A Fruit Bouquets Business may only be added into a Franchised Unit. Y o u w i l l a d d f r u i t b o u q u e t s t o y o u r p r o d u c t o f f e r i n g s a n d u s e t h e “ Fruit Bouquets ”, “fruitbouquets. com ” a n d / o r “ Fruit Bouquets by 1-800-Flowers. Com ” b r a n d n a m e, a s w e designate, on signage in your Franchised Unit, on your delivery vehicles, and in all of your marketing efforts and packaging, with our approval. If you would also like to receive fruit bouquet orders for fulfillment from 800-Flowers separate and apart from our franchise program, then you may also sign a Fruit Bouquets Order Fulfillment Agreement ( Exhibit L-2 ). Bloom Net Membership, Bloom Net Technologies Systems and Premier Order Fulfillment In addition to the Franchise Agreement, you must sign a Bloom Net Membership Agreement ( Exhibit M-1 ) and a Bloom Net Technologies Systems Agreement ( Exhibit M-2 ). The Bloom Net Membership Agreement allows you to join the Bloom Net Network, and the Bloom Net Technologies Systems Agreement allows you to refer and receive orders and communications through the Bloom Net Technologies Systems. Separate and apart from our franchise programs, 800-Flowers may refer you floral and gift orders to fulfill in your trade area if you maintain a standard of high quality and fulfill these orders to the complete satisfaction of 800-Flowers. In addition, 800-Flowers may, in its discretion, offer you and you may choose to sign a Premier | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 4 Series 020(2023)Order Fulfillment Agreement ( Exhibit L-1 ). The Premier Order Fulfillment Agreement will entitle you to receive and fulfill floral and gift orders for 800-Flowers in your trade area on a more frequent basis than you would otherwise receive. The Market The market for retail outlets offering flowers, plants, fresh cut fruit bouquets, gift items and related products and services to the general public is well developed, and sales, although typically non-seasonal, may be higher during holidays or on certain dates such as Valentine's Day or Mother's Day. Your competitors include other retail flower and plant shops, including members of the Bloom Net Network, franchisees of ours and our affiliates, gift shops and other retail operators such as grocery stores and discount retailers, as well as street vendors, telephone services and Internet merchants, including 1-800-Flowers. Com, which offer flowers, plants and gift items for sale to the public. If you add a Fruit Bouquets Business into your Franchised Unit, you will a l s o h a v e c o m p e t i t i o n f r o m u s a n d o t h e r c o m p a n i e s t h a t p r o v i d e t h e s e p r o d u c t s, s o m e o f w h i c h m a y b e Internet-based and/or franchise systems. Industry Specific Regulations Franchised Units must comply with federal, state and local laws applicable to the operation of a floral service business, including: (a) obtaining all applicable permits and approvals by municipal, county or state agencies; (b) establishing general standards, specifications and requirements for the construction, design and maintenance of the Franchised Unit; (c) maintaining prescribed standards pertaining to employee health and safety, fire safety and general emergency preparedness; (d) using vending machines as prescribed; and (e) using, storing and disposing of waste, insecticides, and other hazardous materials as prescribed. If you offer fruit bouquets, you must comply with applicable laws regarding the handling, storage, preparation and delivery of fresh fruit. This may require you to obtain food service licenses or other licenses or permits. The Americans with Disability Act of 1990 requires readily accessible accommodation for disabled people and therefore may affect your building construction, site elements, entrance ramps, doors, etc. You must obtain all required real estate permits, licenses and operational licenses. You should investigate whether there are regulations and requirements that may apply in the geographic area in which you are interested in locating your Franchised Unit and you should consider both their effect and cost of compliance. You must also comply with all local, state and federal laws that apply to your operations, including health, sanitation, insurance, smoking laws and regulations, EEOC, OSHA, non-discrimination, employment, and sexual harassment rules, regulations and laws. The Payment Ca rd Indus try Da ta Se curi ty S tanda rd ( “ PCI DSS ”) requires that all companies that process, s t o r e o r t r a n s m i t c r e d i t o r d e b i t c a r d i n f o r m a t i o n m a i n t a i n a s e c u r e e n v i r o n m e n t. P C I D S S a p p l i e s t o a l l organizations or merchants, regardless of size or number of transactions, that accept, transmit or store any cardholder data. You should consult with your attorney concerning these and other local laws and ordinances that may affect your Franchised Unit. ITEM 2 BUSINESS EXPERIENCE Executive Chairman and Chief Executive Officer: James F. Mc Cann Mr. Mc Cann has served as Executive Chairman of 1-800-Flowers since July 2016. He has also served as our Chairman since 2006. Mr. Mc Cann has served as our Chief Executive Officer since July 2023. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 5 Series 020(2023)Vice President: Christopher G. Mc Cann Mr. Mc Cann was appointed as Chief Executive Officer of 1-800-Flowers in July 2016 and served until July 2023. He currently serves as our Vice President. President: Dinesh Popat Mr. Popa t has been ou r P resident sin ce March 20 19. He has also se rve d a s Pre sident of Blo om Ne t, Nap co, Conroy's and Flowerama since March 2019. From January 2017 to March 2019, he was Chief Marketing Officer for Prescriptive Insights in New York, New York. From May 2014 to December 2016, he was Chief Representative Officer for Avon Products, Inc., in New York, New York. Senior Vice President and Chief Financial Officer : William Shea Mr. Shea has been Senior Vice President and Chief Financial Officer for 1-800-Flowers since September 2000. He has also served as our Vice President and Treasurer since 2001. General Counsel, Senior Vice President and Corporate Secretary : Michael R. Manley Mr. Manley has served as General Counsel, Senior Vice President and Corporate Secretary for 1-800 Flowers since July 2018. From August 2013 to July 2018, he was a Partner and member of the Corporate Group of Venable, LLP located in New York, New York. Senior Vice President-Real Estate and Construction: Brian Mc Gee Mr. Mc Gee has served as Senior Vice President-Real Estate & Construction since August 2014. He joined 1-800-Flowers as Director of Real Estate in February 1996. Senior Vice President-Franchising: Vincent J. Mc Veigh Mr. Mc Veigh has been Senior Vice President of Franchising of 1-800-Flowers since January 2018. Before that, from November 2008 to December 2017, he served as Senior Vice President of Bloom Net. Senior Vice President-Florist Operations and Fruit Bouquets : Camilo Escobar Mr. Escobar has been Senior Vice President of Florist Operations and Fruit Bouquets for 1-800-Flowers since September 2008. Director of Franchise Operations: Stephen Lenzovich Mr. Lenzovich has been Director of Franchise Operations since November 2011. ITEM 3 LITIGATION State of Maryland Determination, File Number 2014-0102. In June 2014, the State of Maryland concluded that we, when offering our co-branded franchises under a separate Franchise Disclosure Document, violated the Maryland Franchise Registration and Disclosure Law (the “ Maryland Franchise Law ”) between February 25, | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 6 Series 020(2023)2013 and February 25, 2014 by (i) offering and selling co-brand franchises to 3 Maryland flower shop owners without providing them with our then-current Maryland registered Franchise Disclosure Document, (ii) not requiring them to sign the Maryland state-specific Addendum included in the Franchise Disclosure Document at the time they signed the Franchise Agreement, and (iii) collecting initial franchise fees from one Maryland flower shop owner in violation of Maryland's requirement that we defer collection of initial franchise fees and payments until we had completed our initial obligations as franchisor under the parties' Franchise Agreement. On June 19, 2014, 1-800-Flowers, without admitting or denying any violation of law, voluntarily entered into a Consent Order with the Office of the Attorney General of Maryland and agreed to cease and desist from the offer and sale of franchises in violation of the Maryland Franchise Law and to pay the Attorney General $5,000 as a civil monetary penalty. Arizona Family Florists, LLC, Bradley Denham, Cheryl Denham, South Florals DC, LLC, Daniel Sanchez, Samuel Noriega, Water Mill Flowers, Inc., Thomas Dowd and Cesar Rivera, Plaintiffs, vs. 1-800-Flowers. Com, Inc., 1-800-Flowers. Com Franchise Co., Inc. and Bloom Net, Inc., Defendants, Case Number 2:16-cv-2638-JFB-AYS. On May 24, 2016, the 1-800-Flowers franchisees named as plaintiffs above filed a Complaint in the United States District Court for the Eastern District of New York against the defendants, which was followed by their filing of an Amended Complaint on July 15, 2016. The claims of plaintiffs South Florals, Daniel Sanchez and Samuel Noriega (the “ Miami Plaintiffs ”) were settled and dismissed with prejudice on February 8, 2017. No monies were paid to the Miami Plaintiffs by any of the Defendants; rather, the parties entered into an order fulfillment agreement; the term of one existing Franchise Agreement was reduced and new Franchise Agreements and Co-Brand Franchise Addenda were entered into for 2 of the Miami Plaintiffs' other shops, all with coterminous terms, and provision was made for the potential execution of Franchise Agreements and Co-Brand Franchise Addenda for future new shops on mutually agreed upon terms. A Second Amended Complaint was filed on February 3, 2017 (with the Complaint and the Amended Complaint collectively, the “ Complaint ”) by the remaining Plaintiffs (Arizona Family Florists, LLC, Bradley Denham and Cheryl Denham, collectively the “ Arizona Plaintiffs ” and Water Mill Flowers, Inc., Thomas D o w d a n d C e s a r R i v e r a, c o l l e c t i v e l y t h e “ Ft. Lauderdale Plaintiffs ”). The Complaint was for breach of contract and the covenant of g ood faith an d fai r deali ng, com mon law unfair compe tition, viola tion of the Arizona Consumer Fraud Act, violation of Florida's Deceptive and Unfair Trade Practices Act, Violation of New York's Franchise Sales Act, common law fraud, common law negligent misrepresentation, common law fraudulent inducement and conversion, and seeking damages in the amount of $13,540,120, attorneys' fees, an accounting, a declaration discharging non-compete restrictions, declaratory relief, rescission of an alleged Arizona Fruit Bouquets Franchise Agreement, and a permanent injunction prohibiting defendants from improperly competing in a portion of Fort Lauderdale, Florida, and alleging, among other things, that defendants breached their Order Fulfillment Agreements with the plaintiffs and failed to renew them, failed to pay plaintiffs commissions for completed floral order and gift order fulfillment, failed to provide minimum value in orders, engaged in unfair competition, and made misrepresentations regarding defendants' fruit bouquets program, and that plaintiffs suffered damages as a result. The Defendants filed Answers and Counter-Claims to the Complaint on April 7, 2017. The Answer denied the allegations in the Complaint and asserted numerous affirmative defenses, including release or waiver of certain claims by all or some of the plaintiffs and that certain claims were barred by applicable statutes of limitation, statute of frauds, and rights of set-off. The Counter-Claims sought dismissal of the Complaint, monetary damages for breach of contract, breach of the Arizona Franchise Agreement and abandonment of the Arizona Franchise by the Arizona Plaintiffs, and injunctive relief regarding the Arizona Plaintiffs' continued unauthorized use of the 1-800-Flowers marks and for enforcement of the non-competition provisions in the plaintiffs' agreements, plus legal fees and expenses. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 7 Series 020(2023)Following discovery and cross motions for summary judgement, the Defendants engaged in settlement discussions with the Arizona Plaintiffs. The settlement discussions proved successful and, in order to avoid the cost of a trial with the Arizona Plaintiffs, the case settled in January 2022 for a total sum of $150,000 paid to the Arizona Plaintiffs by Defendants. A settlement agreement was executed by the parties in which there was no admission of liability by any party and contained mutual releases. A Stipulation of Discontinuance with Prejudice was filed with the Court. The remaining Ft. Lauderdale Plaintiffs and the Defendants engaged in settlement discussions. The settlement discussions proved successful and, in an effort to avoid the cost of a trial with the Ft. Lauderdale Plaintiffs, the case was settled in March 2022 for a total sum of $275,000 paid to the Ft. Lauderdale Plaintiffs by Defendants. A settlement agreement was executed by the parties in which there was no admission of liability and contained mutual releases. A Stipulation of Discontinuance with Prejudice was filed with the Court. Other than these 2 actions, no litigation is required to be disclosed in this Item. ITEM 4 BANKRUPTCY No bankruptcy information is required to be disclosed in this Item. ITEM 5 INITIAL FEES T h e a m o u n t o f y o u r i n i ti a l f ra n ch i s e f e e ( th e “ Initial Franchise Fee ”) and the procedures for payment are determined by the type of franchise you purchase. Initial Franchise Fee for Standard Franchised Unit Y o u m u s t p a y u s a n I n i ti a l F ra n ch i s e F e e o f $ 3 0,0 0 0 ( th e “ Standard Initial Franchise Fee ”) for a Standard Franchised Unit. The Standard Initial Franchise Fee is payable in full when you sign the Franchise Agreement and is not refundable under any circumstances. If the term of your Franchise Agreement is less than 10 years, then the Standard Initial Franchise Fee may be reduced accordingly. Initial Franchise Fee for Co-Branded Franchised Unit You must pay us an Initial Franchise Fee of $20,000 (the “ Co-Brand Initial Franchise Fee ”) for a Co-Branded Franchised Unit. The Co-Brand Initial Franchise Fee is payable in full when you sign the Franchise Agreement and Co-Brand Franchise Addendum and is not refundable under any circumstances. If the term of your Franchise Agreement is less than 10 years, then the Co-Brand Initial Franchise Fee may be reduced accordingly. Initial Franchise Fee for Fruit Bouquets Business You must pay us an Initial Franchise Fee (the “ Fruit Bouquets Initial Franchise Fee ”) of $7,500 if we grant you the right to sell fruit bouquets and related products (a “ Fruit Bouquets Franchise ”) at one Franchised Unit and a Fruit Bouquets Initial Franchise Fee of $3,500 for a Fruit Bouquets Franchise at each additional Franchised Unit. A Fruit Bouquets Business may only be added into a Franchised Unit. The Fruit Bouquets Initial Franchise Fee is payable in full when you sign the Fruit Bouquets Addendum to the Franchise | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 8 Series 020(2023)Agreement ( Exhibit C ) and is not refundable under any circumstances. If you sign a Franchise Agreement and a Fruit Bouquets Addendum to the Franchise Agreement on or before October 1, 2024, we will waive payment of the entire Fruit Bouquets Initial Franchise Fee. Product Purchases We may require you to purchase an initial inventory of items that are specific to the 1-800-Flowers System, such as branded signature products, branded packaging, and gift items. As described in Item 8 below, you will purchase these produ cts f rom our a ffiliates, Bl oo m Net an d/or N apco. We e stima te tha t the cos t of this initial inventory will be between $1,000 and $1,500, which will be payable in full upon delivery of the inventory and is not refundable under any circumstances. Sublease If you sublet the Franchised Location from us or a subsidiary or affiliate under our Sublease, you will pay us (or our subsidiary or affiliate, as we direct) rent, which we estimate will be between $2,500 and $7,500 per m o n th. Y o u m u s t a l s o p a y u s o r a s u b s i di a ry o r a f f i l i a te a s e cu ri ty de p o s i t u n de r o u r S u b l e a s e e qu a l t o 2 m o n t h s ' r e n t. W e e s t i m a t e y o u r i n i t i a l f e e s w i l l i n c l u d e 3 m o n t h s ' r e n t p l u s a s e c u r i t y d e p o s i t e q u a l t o 2 months' rent. Refunds, Different Fees and Financing Qualified employees of 1-800-Flowers or its affiliates may pay reduced fees. Otherwise all franchisees must pay the initial fees described in this Item 5. The Standard Initial Franchise Fee, Co-Brand Initial Franchise Fee and Fruit Bouquets Initial Franchise Fee are fully earned by us when paid and are not refundable under any c i r c u m s t a n c e s. W e u s e t h e p r o c e e d s f r o m I n i t i a l F r a n c h i s e F e e s t o d e f r a y a p o r t i o n o f o u r e x p e n s e s i n connection with the sale and establishment of franchises, such as: (i) costs related to developing and improving our services; (ii) expenses of preparing and registering this Disclosure Document; (iii) legal fees; (iv) accounting fees; (v) costs of obtaining and screening franchisees; and (vi) general administrative expenses. In the fiscal year ended July 2, 2023, we did not collect any initial franchise fees. We have the right to reduce, defer or waive the Standard Initial Franchise Fee, Co-Brand Initial Franchise Fee or Fruit Bouquets Initial Franchise Fee if and when we determine, in our sole discretion, that doing so is warranted by a given situation. T h e r e a r e n o o t h e r r e q u i r e d p a y m e n t s t o, o r p u r c h a s e s f r o m, u s o r a n y o f o u r a f f i l i a t e s b e f o r e y o u b e g i n operating as our franchisee. ITEM 6 OTHER FEES (STANDARD FRANCHISED UNIT) Type Of Fee Amount Due Date Remarks Continuing Franchise Fee-Floral Business6% of “Adjusted Gross Sales”; 6% of all “Incoming Sales” other than “Bloom Net Incoming Sales”; 6% of your share of the Gross Sales Price of orders sent as “Outgoing Sales” other than “Bloom Net Outgoing Sales”; 6% of Payable monthly no later than the 5 th day of the month for the immediately preceding month(Note 1, Note 14) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 9 Series 020(2023)Type Of Fee Amount Due Date Remarks “Outgoing Service Handling Fees” Continuing Franchise Fee-Fruit Bouquets Business6% of “Fruit Bouquets Gross Sales”Payable monthly no later than the 5 th day of the month(Note 1, Note 15) Marketing Fee-Floral Business3% of “Adjusted Gross Sales” Payable monthly no later than the 5 th day of the month for the immediately preceding month(Note 1 ) We do not presently charge you a Marketing Fee, but reserve the right to do so in the future. Marketing Fee-Fruit Bouquets Business2% of “Fruit Bouquets Gross Sales”Payable monthly no later than the 5 th day of the month(Note 1 )The Marketing Fee for the Fruit Bouquets Business is paid into a fund that is separate from the Floral Marketing Fund. We do not presently charge you a Fruit Bouquets Marketing Fee, but reserve the right to do so in the future. Rent and Other Occupancy Charges; Sublease Security Deposit Rent and other charges will vary depending on the site. Your security deposit will generally equal 2 months' rent Payable no later than the 1 st day of each month(Note 2 ) Applicable only to properties that are subleased from our affiliate under our Sublease (Exhibit D). Late Charges 10% on delinquent fees; 10% on rent due under our Sublease if not paid by the first day of each month, which is currently 10% annually in California. Payable with delinquent balance(Note 2, Note 3 ) Interest 10% per annum or maximum amount permitted by law Payable with delinquent balance(Note 3 ) Audit Costs Cost of audit, interest on under-payment at 10% or maximum amount permitted by applicable law and a penalty of 25% of the underpayment Payable no later than the 5 th day of the month following billing(Note 4 ) Repossession Costs Legal, repossession, re-letting and other damages according to proof As directed by our Sublease or by the Court(Note 5 ) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 10 Series 020(2023)Type Of Fee Amount Due Date Remarks Opening Corporate Staff Expenses Will vary depending upon number of days in Franchised Unit ($1,000-$3,000)Payable no later than the 20th day of the month following billing(Note 6 ) Additional Training Fee-Floral Business Currently $1,500 per each additional trainee, to defray direct cost of providing training Payable no later than the 5 th day of the month following billing(Note 8) Administrative Transfer Fee (Franchise Agreement)$10,000 plus our out-of-pocket costs associated with the transfer, including costs of attorneys' fees associated with the transfer At the close of escrow for the transfer of the franchise To reimburse our administrative costs in effecting the transfer. You must also reimburse our out-of-pocket costs associated with the transfer. Administrative Transfer Fee (Fruit Bouquets Business)$5,000, plus expenses Atthe close of escrow for the transfer of the Fruit Bouquets Business To reimburse our administrative costs in effecting the transfer. You must also reimburse our out-of-pocket costs associated with the transfer. Administrative Reconciliation Fee$250 per occurrence Payable no later than the 5 th day of the month following billing(Note 1 ) Reimbursement for Advances As incurred Payable no later than the 5 th day of the month following billing(Note 7 ) Remedial Training Our then-current additional training fee plus our out-of-pocket costs for the lodging, travel and meals for our personnel to defray the direct costs of providing the training On demand (Note 8 ) Attorneys' Fees Reasonable as incurred As ordered (Note 9 ) Indemnification Expenses Asincurred Payable as ordered by Court or 5 th day of the month following billing(Note 10 ) Gross-Up Fees Up to 6% Ondemand (Note 1) Successor Franchise Fee-Floral Business$30,000 When you sign the Successor Franchise Agreement(Note 11 ) Successor Franchise Fee-Fruit Bouquets Business$7,500 When you sign the Successor Franchise Agreement and then-current Fruit Bouquets Addendum to the(Note 11 ) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 11 Series 020(2023)Type Of Fee Amount Due Date Remarks Franchise Agreement,as required Relocation Fee $2,500 When we approve your request to relocate your Franchised Unit You must obtain our consent to the relocation of your Franchised Unit. Special Programs Service Fee Up to 6% of Gross Sales generated from special programs Payable monthly no later than the 5 th day of the month following billing(Note 12 ) Additional Layout Charges As incurred Payable no later than the 5 th day of the month following billing(Note 1 3) Order Fulfillment Fees As incurred. Currently, $ 3. 50 per order, or $1. 00 net of delivery confirmation As incurred (Note 1, Note 14, Note 17, Note 18) De-identification Expenses As incurred As incurred (Note 1 6) Bloom Net Monthly Membership Rates As incurred per terms of Bloom Net Membership Agreement. The monthly rates are calculated on a monthly-orders-referred and fulfilled basis and are currently as follows: 0-10 orders: $0. 00; 11-29 orders: $49. 99; 30-59 orders: $129. 99; 60-99 orders: $199. 99; 100-199 orders: $349. 99; 200-299 orders: $599. 99; 300-499 orders: $799. 99; 500-749 orders: $999. 99; 750-999 orders: $1,249. 99; 1000+ orders: $1,499. 99Monthly See Bloom Net Order Referral Program Rate Schedule ( Exhibit M-3 ) (Note 14, Note 17) Bloom Net Monthly Access Rates As incurred per terms of Bloom Net Technologies Systems Agreement. The monthly access rates are calculated on a monthly-orders-referred and fulfilled basis and are currently as follows: 1-10 orders: $0; 11-29 orders: $49. 99; 30-59: $79. 99; 60-99 orders: $119. 99; 100-199 orders: $164. 99; 200-299 orders: $199. 99; 300-499 orders: $244. 99; 500+ orders: $294. 99. Monthly See Bloom Net Order Referral Program Rate Schedule ( Exhibit M-3 ) (Note 14, Note 17) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 12 Series 020(2023)Type Of Fee Amount Due Date Remarks Bloom Net Essential License Fee: $5. 00 per month Other Bloom Net Fees Varies Varies See Bloom Net Order Referral Program Rate Schedule ( Exhibit M-3 ) (Note 14, Note 17) Web site and Intranet Rates Initial Setup Fee: $159. 00; Web Hosting Basic: $99. 99 per month; Web Hosting Advanced: $149. 99 per month; URL Registration Fee: $19. 99 per year; Additional Domain Name Fee: $19. 99 per year; Domain Name Change Fee: $19. 99 (one-time fee); Order Capture Rate: $4. 99 per order, Web Marketing Program: $24. 99 per month Annually, unless otherwise noted(Note 17, Note 19) Purchase Price for Company Operated 1-800-Flowers Shop$50,000-$575,000 Upon the closing of the transaction(Note 20 ) Product or Supplier Approval Reimbursement of our costs, not to exceed $500On demand If you request that we evaluate a product or supplier. Misuse of the Marks Fee$1,000 per infraction On demand (Note 22) Customer Service Fee 25% of the retail value of merchandise we provide or the amount of money we refund to a customer to satisfy a customer service issue that you do not resolve to our satisfaction As incurred (Note 21) Optional Marketing $1,800-$2,500 Annually (Note 23) Liquidated Damages 5% of the gross revenue of any business that provides similar services at your Franchised Unit or any site within 10 miles of any 1-800-Flowers Shop or your Franchised Unit Ondemand If you violate the post-term covenant not to compete, you must pay us, throughout the 2-year period following the termination, transfer, or expiration of your Franchise Agreement. Relocation Assessment An amount equal to the Continuing Franchise Fees you paid for your Franchised Unit at its previous location, plus an additional 10%, during the most recent calendar year On demand If we consent to a relocation of your Franchised Unit, you may close the Franchised Unit at your current Franchised Location within 12 months, but must then reopen at | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 13 Series 020(2023)Type Of Fee Amount Due Date Remarks during which it was operationalthe new franchised location within 12 months from the date you closed. If you fail to do so, we have the right to bill you for the Relocation Assessment. Private Offering Fee (Franchise Agreement)$10,000 or such greater amount as is necessary to reimburse us for our reasonable costs and expenses with reviewing the proposed offering. Before offering. Payable for each proposed private offering of securities, partnership or other ownership interests in Franchisee and is in addition to any Transfer Fee under any Franchise Agreement. OTHER FEES (CO-BRANDED FRANCHISED UNIT) (NOTE 24) Type Of Fee Amount Due Date Remarks Continuing Franchise Fee-Floral Business Begin sata minimum of $850 per month and increases up to a maximum of $1,500 per month during the term of your Franchise Agreement. Will begin at more than $850 per month depending on the sales volume of your Existing Flower Shop in the last calendar year before you sign our Franchise Agreement and Co-Brand Addendum Payable monthly no later than the 5 th day of the month, beginning when the 1-800-Flowers co-branded signage is installed at the Franchised Unit or 60 days after we sign the Franchise Agreement, whichever occurs first(Note 14,Note 25) Marketing Fee-Floral Business$250 per month Payable monthly no later than the 5 th day of the month We do not presently charge you a Marketing Fee, but reserve the right to do so in the future. We have the right to increase this fee up to $750 per month upon 30 days' advance notice to you. If we want you to contribute more than $750 per month to the Floral Marketing Fund, it must be approved by a majority vote of Co-Brand franchisees. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 14 Series 020(2023)Type Of Fee Amount Due Date Remarks Successor Franchise Fee-Floral Business$20,000 Upon execution of the Successor Franchise Agreement and Co-Brand Addendum(Note 11 ) Administrative Transfer Fee-Floral Business$5,000 plus our out-of-pocket costs associated with the transfer, including costs of attorneys' fees associated with the transfer At the close of escrow for the transfer of the Franchise To reimburse our administrative costs to effect the transfer, subject to state law. Except for the allocation of revenues established by Bloom Net or recognized floral wire services (which may be changed by Bloom Net or the floral wire services at any time and which is approximately 73% to the fulfilling florist, 20% to the referring florist and 7% to Bloom Net or the wire service as a payment processing charge), all fees are uniformly imposed by and are payable to us, unless we determine otherwise. No other fees or payments are to be paid to us, nor do we impose or collect any other fees or payments for any third-party. Any fees paid to us are non-refundable, unless otherwise noted. Fees payable to third parties are refundable based on your individual arrangements. We have the right to change all fees paid to us as discussed in this Item 6 at any time. Note 1 : As a Continuing Franchise Fee, you must pay us: (a) 6% of “ Adjusted Gross Sales ”; (b) 6% of the “referring florist's” share (which is currently 20%) of the Gross Sales Price of all orders referred from the Franchised Unit as “Outgoing Sales ” other than “ Bloom Net Outgoing Sales ”; (c) 6% of all “ Outgoing Service Handling Fees ” and/or all other fees or revenues associated with your “ Outgoing Sales ”; and (d) 6% of all “ Incoming Sales ” other than “ Bloom Net Incoming Sales ”. In addition, you mus t pay u s 3% of “ Adjusted Gross Sales ” as a Marketing Fee. “Adjusted Gross Sales ” are the proceeds from all sales made at or by the Franchised Unit. “ Adjusted Gross Sales ” do n o t i n cl u de “ Incoming Sales ” referred to your Franchised Unit, the amount of any “ Bloom Net Incoming Sales ” refe rre d to you r Franchise d Unit, th e am ount of any “ Outgoing Sales ” referred from the Franchised Unit, the amount of any “ Bloom Net Outgoing Sales ” r e f e r r e d f r o m t h e F r a n c h i s e d U n i t, t h e amount of any “ Fruit Bouquets Gross Sales ”, monies spent on purchases of supplies and/or products from us and/or our affiliates, money refunded to a customer upon return of merchandise, or sales taxes or other taxes collected from customers and paid over to the appropriate governmental authority imposing the tax. “Outgoing Sales ” a re o rde rs you refe r (a s the “ referring florist ”) from the Franchised Unit to unaffiliated third-party florists and gift providers and other Franchised Units for fulfillment and delivery by these other f l o r i s t s ( a s t h e “ fulfilling florist ” ). “ Incoming Sales ” are orders referred to your Franchised Unit for fulfillment and delivery from unaffiliated third-party floral providers and other Franchised Units. “ Bloom Net Incoming Sales ” are floral and gift orders referred to your Franchised Unit for fulfillment and delivery by 800-Flowers and/or its affiliates through the Bloom Net Network. “ Bloom Net Outgoing Sales ” are floral and gift orders referred from your Franchised Unit for fulfillment and delivery by 800-Flowers and/or its affiliates through the Bloom Net Network. As a member of the Bloom Net Network, you must pay the current fees and transaction charges due under the Bloom Net Membership Agreement ( Exhibit M-1 ), the Bloom Net Technologies Systems Agreement ( Exhibit M-2) and as specified on the Bloom Net Order Referral Program Rate Schedule (Exhibit M-3 ). If floral or gift | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 15 Series 020(2023)orders for Bloom Net Incoming Sales are referred to you through the Bloom Net Technologies Systems, you will be assessed, or you must pay, the then-current monthly membership rate and an order fulfillment rate per order, as detailed in the table above. “Fruit Bouquets Gross Sales ” are all revenues from operating a Fruit Bouquets Business, including from the s a l e o f a l l p r o d u c t s a n d s e r v i c e s i n, t h r o u g h, o r f r o m y o u r F r a n c h i s e d U n i t, b y a n y m e a n s o f b u s i n e s s conducted at your Franchised Unit, including any orders referred from a third party for fulfillment (except for orders for fruit bouquets referred for fulfillment by 800-Flowers pursuant to the terms of the Fruit Bouquets Order Fulfillment Agreement). “ Fruit Bouquets Gross Sales ” excludes sales or service taxes collected from customers and paid to the appropriate taxing authority and all customer refunds, adjustments and credits given to customers in good faith. T o e n s u r e t h a t w e r e c e i v e a f u l l 6 % o f A d j u s t e d G r o s s S a l e s, 6 % o f I n c o m i n g S a l e s o t h e r t h a n B l o o m N e t I n c o m i n g S a l e s, 6 % o f y o u r s h a r e o f t h e n e t o f s e r v i c e c h a r g e s, c r e d i t s, c h a r g e b a c k s, r e f u n d s a n d t a x e s (cumulatively, the “ Gross Sales Price ”) of floral and gift orders sent as Outgoing Sales other than Bloom Net Outgoing Sales, 6% of Outgoing Service Handling Fees, and 6% of Fruit Bouquets Gross Sales, and the full Marketing Fees that are due, you must pay us, whether in arrears, in advance, in a lump sum or in the same manner that you pay us Continuing Franchise Fees and Marketing Fees, the amount of all taxes we must pay on revenue we earn or collect based upon your use of our intellectual property or other intangibles or based upon the existence of the Franchise Agreement. You will authorize us to debit from your designated primary business checking or savings operating account any funds due and payable to us for Continuing Franchise Fees, Marketing Fees, rent and rent-related expenses and all other sums that you owe to us or our affiliates. You will also authorize us and our affiliates to process your credit card sales transactions and, following the settlement of these transactions, to credit any net amount due to you against all Continuing Franchise Fees, Marketing Fees, rent, rent-related expenses, or other sums that are then due from you to us or our affiliates that you incurred prior to the settlement of these transactions, whether incurred under the Franchise Agreement, the Sublease, or under any other agreement between you and us or our affiliates. In addition, you will authorize Bloom Net, at its option, to deduct and retain an amount equal to all Continuing Franchise Fees, Marketing Fees, rent and rent-related expenses, Bloom Net Access fees and all sums due and owing to us, or our affiliates, from any funds due to you under the Bloom Net Membership Agreement, Bloom Net Technologies Systems Agreement, Premier Order Fulfillment Agreement and/or Fruit Bouquets Order Fulfillment Agreement. You mus t supply us with all re quire d mon thly sales data by the 5 th day of the month for the immediately preceding month to permit us to calculate the amount of your Continuing Franchise Fees and Marketing Fees. If you do no t do so, we will esti mate you r C ontinuing Franchise Fees and Marke ting Fees fo r the mis sing p e ri o d b a s e d u p o n y o u r A dj u s te d G ro s s S a l e s, I n co m i n g S a l e s a n d O u tg o i n g S a l e s a t th e F ra n ch i s e d Un i t during the identical period of the immediately preceding calendar year plus an additional 10% of those amounts, or, if you did not operate the Franchised Unit during the identical period of the immediately preceding calendar year, based upon your average monthly Adjusted Gross Sales, Incoming Sales and Outgoing Sales during the months you operated the Franchised Unit plus an additional 10% of those amounts. If you believe that our estimate of your Continuing Franchise Fees and Marketing Fees exceeds your actual Continuing Franchise Fees and Marketing Fees for any period, you must contest our estimate within the time period in our current 1-800-Flowers Franchise Operations and Brand Standards Manual (the “ Franchise Manual ”) or the Fruit Bouquets by 1-800 Flowers. com Operations Manual (the “ Fruit Bouquets Manual ”) if you add a Fruit Bouquets Business into your Franchised Unit. We will charge you an administrative reconciliation fee of $250 each time you request a reconciliation of estimated and actual fees. We will make | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 16 Series 020(2023)any adjustment or refund as necessary for any over-payments made to us under these procedures within 90 days after we receive all missing sales data from you, Bloom Net or the applicable wire service. If you do not contes t the am ount of ou r esti mate o f your C ontinuing Fran chise Fees and Ma rketing Fee s within the time period in our current Franchise Manual or Fruit Bouquets Manual, our estimate will be presumed to be correct and you will have no further right to contest it. Note 2 : If you sublet the Franchised Location from us or a subsidiary or affiliate under our Sublease ( Exhibit D ), you will pay us (or our subsidiary or affiliate, as we direct) rent under the Sublease in an amount that we will establish. We have the right to require you to pay us rent in excess of the rent we pay to a “ Master Landlord ” for the service we are providing to you by acting as the tenant under a “ Master Lease ”. You must pay all rent, other occupancy expenses and cost-of-living or other adjustments to rent and other occupancy expenses as they become due. You must pay rent no later than the first day of each month or a 10% late charge will also be due. You must also reimburse us, when you sign the Sublease, for all expenses we have paid for the negotiation, signing and/or securing of the Master Lease and for the acquisition of the Master Lease and pay us a security deposit under our Sublease equal to 2 months' rent. At our discretion, we have the right to require you to pay rent and all other charges that become due under the Sublease directly to the Master Landlord. Note 3 : You must pay us a late charge of 10% of overdue fees. You must pay us or our affiliate rent due under the Sublease no later than the first day of each month or the 10% late charge will be due. You must pay us interest on the overdue amount at the rate of 10% per annum from the due date. Interest accrues from the original due date until the overdue amount is paid in full and is in addition to the late charges. We will not assess interest or late charges at rates that exceed the maximum amounts permitted by applicable law. Note 4 : We have the right to review all books, sales records and supporting materials for the Franchised Unit at all re a s o n a b l e ti m e s. W e g e n e ra l l y c o n du c t th e a u di t a t o u r e xp e n s e. I f y o u u n de rs t a te A dj u s te d G r o s s S a l e s, I n co m i n g S a l e s, O u tg o i n g S a l e s, a n d/ o r F ru i t B o u qu e t s G ro s s S a l e s ( co l l e c ti v e l y, th e “ Sales Figures ”), you must pay us the undisclosed fees. If you understate any Sales Figures by 3% or more, you must pay us our audit expenses plus interest on the amount understated at the rate of 10% or the maximum interest rate allowed by law plus a penalty of 25% of the amount of the underpayment. Interest accrues from the date of t h e u n d e r p a y m e n t. I f y o u u n d e r s t a t e a n y S a l e s F i g u r e s m o r e t h a n o n c e d u r i n g t h e t e r m o f t h e F r a n c h i s e Agreement, we have the right to terminate your Franchise Agreement. Note 5 : If we or our affiliate terminate your Sublease due to your default, you are liable for our costs of recovering possession of the Franchised Location and the expenses of re-letting the Franchised Location (including renovation and alteration of the Franchised Location), and for other damages, including the then-current value of the amount of unpaid rent for the balance of the term, less the amount you prove can be reasonably avoided. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 17 Series 020(2023)Note 6 : We will provide you with members of our staff to assist you in the operation of your Franchised Unit for up to one week afte r the F ranchise d Unit opens, at no a dditi onal charge. We have the right to requi re you to permit our staff to remain in the Franchised Unit for more than one week if we determine that our operations staff is necessary for the proper operation of the Franchised Unit. If our staff remains at the Franchised Unit for more than one week, you must pay us the costs we incur to provide this additional service. Note 7 : You must pay us the amount we advance on your behalf, and interest on the advance from the day it is made. Note 8 : If you send more than 2 persons to the Initial Training Program, you must pay us our then-current additional training fee (the “ Additional Training Fee ”), currently $1,500, for each additional trainee for their attendance at the Initial Training Program. If you request us to provide additional Initial Training Programs for your new or replacement supervisorial or managerial personnel following the opening of your Franchised Unit and, in our discretion, we agree to do so, you must pay us the Additional Training Fee for each such new trainee for their attendance at the Initial Training Program. When we provide you with an additional training program related to the 1-800-Flowers System, you will also pay us the Additional Training Fee for the program to defray our co sts ass ocia ted wi th p ro viding the prog ram. In a dditi on, you mus t pay travel and li ving e xpenses fo r your supervisorial and managerial employees who attend such additional training programs. You must pass o u r t r a i n i n g e x a m b e f o r e r e c e i v i n g y o u r t r a i n i n g c e r t i f i c a t e. W e h a v e t h e r i g h t t o r e q u i r e y o u t o a t t e n d refresher training courses every 5 years during the term of the Franchise Agreement to receive training on new i t e m s a n d s t a n d a r d o p e r a t i n g p r o c e d u r e s t h a t w e d e s i g n a t e. I n a d d i t i o n, a n d i f y o u a r e n o t m e e t i n g o u r minimum performance standards, we may provide training and education updates and have the right to impose a fee on you to defray our direct costs for providing these services. Our direct costs include expenses incurred for training materials, travel expenses, the costs for the site where the programs are held, and the like. If we de termine that it i s neces sary, we ha ve the right to re quire y ou to a tten d re medial training, an d may provide other assistance subject to the availability of our personnel. We have the right to charge you our then-current Additional Training Fee for providing such remedial training, to defray the direct costs of providing the training. Note 9 : If we, or our affiliates, incur legal expenses to collect any sum due under the Franchise Agreement, Sublease, Premier Order Fulfillment Agreement, Bloom Net Membership Agreement, Bloom Net Technologies System Agreement, Fruit Bouquets Order Fulfillment Agreement, or Fruit Bouquets Addendum to the Franchise Agreement, or to enforce any provision of these Agreements, we have the right to recover our attorneys' fees, expenses and court costs. Note 10 : You must indemnify, defend and hold us and our affiliates and their respective officers, directors, shareholders, employees and agents free and harmless from all claims of third parties, including our attorneys' fees, expenses and court costs, arising out of the Franchise Agreement, the Premier Order Fulfillment Agreement, the Bloom Net Membership Agreement, the Bloom Net Technologies System Agreement, the Fruit | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 18 Series 020(2023)Bouquets Addendum to the Franchise Agreement, the Fruit Bouquets Order Fulfillment Agreement, or the business conducted at the Franchised Unit. You may incur expenses as a result of this indemnification. Note 11 : If, at the expiration of your Franchise Agreement, we grant you an extension to the term of the franchise (a “Successor Franchise ” ), y o u m u s t e x e c u t e o u r t h e n-c u r r e n t f o r m o f F r a n c h i s e A g r e e m e n t ( a “ Successor Franchise Agreement ”), and pay us a fee (a “ Successor Franchise Fee ”) of $30,000 for a Standard Franchised Unit and $20,000 for a Co-Brand Franchised Unit. If the term of your Successor Franchise Agreement is less than 10 years, then the Successor Franchise Fee may be reduced accordingly. If we also grant you an extension to the term of your Fruit Bouquets Business, you must pay us an additional Successor Franchise Fee of $7,500 and, if we require, execute our then-current form of Fruit Bouquets Addendum to the Franchise Agreement. Note 12 : We have the right to develop special programs designed to generate sales for our franchisees. For all of your gross s ales gene rate d fro m these prog ram s, in a ddi tio n to the Con tinuing Franchise Fees you must pay on those sales, we also have the right to retain up to 6% of those sales, as a service fee to reimburse the Floral Marketing Fund for any advances that it made for the development of such programs, and to generate revenue to us. Note 13 : If you change the location of the Franchised Unit during the term of the Franchise Agreement, you must pay us any costs we incur for the preparation and delivery of any suggested layout plans for the Franchised Unit at the new location. Note 14 : Separate and apart from our franchise programs, 800-Flowers may refer you floral and gift orders to fulfill in your trade area if you maintain a standard of high quality and fulfill these orders to the complete satisfaction of 800-Flowers. In addition, 800-Flowers may, in its discretion, offer you, and you may choose, to sign a Premier Order Fulfillment Agreement ( Exhibit L-1 ). The Premier Order Fulfillment Agreement will entitle you to be referred and fulfill floral and gift orders for 800-Flowers in your trade area on a more frequent basis than you woul d o therwi se receive fo r whi ch you will receive a commis sion, le ss p ro cessing charges, in an amount equal to 80% of the gross sales price of the orders referred by 800-Flowers to you and which are directly fulfilled by you. Your commission and processing charges may vary during the term of your Premier Order Fulfillment Agreement. 800-Flowers may refer incoming floral and gift orders to the Franchised Unit through the Bloom Net Network. 800-Flowers may also refer you orders for fruit bouquets if you choose to sign the Fruit Bouquets Order Fulfillment Agreement and the Fruit Bouquets Addendum to the Franchise Agreement. 800-Flowers may use one of the recognized floral wire services, the Bloom Net Technologies Systems, or other electronic systems designated by 800-Flowers to refer these orders. Wire service charges and Bloom Net Technologies Systems commissions and fees are in addition to, and exclusive of, the fees due to us under the Franchise Agreement. You must sign a Bloom Net Membership Agreement ( Exhibit M-1 ) and a Bloom Net Technologies Systems Agreement ( Exhibit M-2 ). The Bloom Net Membership Agreement allows you to join the Bloom Net Network, and the Bloom Net Technologies Systems Agreement allows you to refer and receive orders and communications through the Bloom Net Technologies Systems. You will pay Bloom Net a monthly membership rate as a Bloom Net member and certain processing and access fees. The monthly membership | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 19 Series 020(2023)rates are calculated on a monthly-orders-referred and fulfilled basis and may vary during the term of your Bloom Net Membership Agreement. You will also pay Bloom Net a monthly software fee and an order fulfillment rate per order for each Bloom Net order you fulfill from your Franchised Unit (see the Bloom Net Order Referral Program Rate Schedule attached as Exhibit M-3). Certain fees are calculated on a monthly-orde rs-refe rre d and fulfilled ba sis and may v ary duri ng the term of you r Blo om Ne t Te chnologies Sys tems Agreement. We have the right to require you to use certain wire services and/or to restrict the wire services you may use. Note 15 : The Fruit Bouquets Pricing Guide, which is governed by the Fruit Bouquets Order Fulfillment Agreement, provides that you will be paid a flat fee commission based on the particular fruit arrangement you provide. 800-Flowers has the right to update this fee structure at any time at its sole discretion, and it expects to update it at least twice a year. The Fruit Bouquets Pricing Guide is provided on-line to franchisees purchasing a Fruit Bouquets Business. Note 16 : Before the final date of termination of the Franchise Agreement, you must modify the Franchised Location to our satisfaction to remove items that identify the Franchised Location as a 1-800-Flowers (and Fruit Bouquets by 1-800-Flowers. Com or fruitbouquets. com, if applicable) Franchised Unit. These items include all exterior, interior and reader-board signs and any other items in or on the building, property and delivery vans containing the 1-800-Flowers Marks. You may be required to assign or transfer to us all telephone and fax n u m b e rs u s e d b y th e F ra n ch i s e d Un i t. O u r F ra n ch i s e M a n u a l, F ru i t B o u qu e ts M a n u a l ( i f y o u a dd a F ru i t Bouquets Business into your Franchised Unit) and stationery containing our 1-800-Flowers Marks must be tu rn e d i n to o u r a u th o ri z e d re p re s e n ta ti v e. Y o u m u s t ce a s e u s e o f a n y w e b s i te U R L co n ta i n i n g o u r 1-8 0 0-Flowers Marks and remove any reference to 1-800-Flowers and Fruit Bouquets from websites, ads in the yellow and white pages, and any delivery vehicles that you control. If you do not do so, we have the right to do so, or cause the same to be done at your expense. Note 17 : You must pay 1-800-Flowers and Bloom Net their current fees and transaction charges due under the Bloom Net Membership Agreement and the Bloom Net Technologies Systems Agreement. The current Bloom Net Order Referral Program Rate Schedule is included in Exhibit M-3 to this Disclosure Document. These fees are subject to change at any time. Note 18 : If you do not timely send your delivery confirmation on an order (by 7:00 PM in the time zone where your Franchised Unit is located), or if your delivery confirmation is missing on an order, you must pay an additional charge of $ 2. 25 on such o rde rs. If you do not reply wi th you r rej ecti on of an orde r re quest within the time periods that we will specify, or fail to meet our specified order referring requirements, additional charges will apply, as disclosed in Exhibit M-3 to this Disclosure Document. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 20 Series 020(2023)Note 19 : We have the right, but are not obligated, to establish and maintain a website to provide information about the 1-800-Flowers System and the goods and services that 1-800-Flowers Shops provide. In addition, we have the right, but are not obligated, to establish and maintain an “ Intranet ” through which we and our franchisees may communicate with each other. If we do so, you shall establish and continually maintain (during all times that the Intranet shall be established and until the termination of the Franchise Agreement) an electronic connection (the specifications of which shall be specified in the Manuals) with the Intranet that allows us to send messages to and receive messages from you, subject to the standards and specifications that we provide. We have the right to requi re you and all o ther franch isees who use the Intranet to contribute a rea sonable amount toward the cost of the Intranet's maintenance. Note 20 : We or an affiliate have the right to sell the assets of company-owned 1-800-Flowers Shops to our franchisees. The purchase price of an ongoing business will equal its fair market value and typically depends on the business's gross sales and cash flow. In the typical case, the buyer will (i) purchase all assets of the business owned by the seller, including the goodwill of the business other than the goodwill associated with the 1-800-Flowers Marks, (ii) receive an assignment of all relevant commercial contracts, and (iii) sublease the Franchised Location from us or an affiliate under a Sublease. The seller will generally retain all liabilities of the former business. The purchase price will vary considerably among 1-800-Flowers Shops, depending upon the gross cash flow for the existing business, and other factors, and is negotiable. The purchase of an existing 1-800-Flowers Shop will be accomplished under our then-current form of Asset Purchase Agreement. Note 21 : You must immediately address and resolve customer service issues with your customers. If you fail to do so to the reasonable satisfaction of a customer, and we or any of our affiliates believe it is necessary to provide the customer with merchandise at reduced or no cost to the customer to satisfy the customer service issue, then we will provide such merchandise to the customer at reduced or no cost to the customer, as we determine to be appropriate, and you must reimburse us for the retail value of such merchandise plus 25% of such value as a customer service fee. Note 22 : If you misuse our 1-800-Flowers Marks, you must pay us $1,000 as a “ Misuse of the Marks Fee ” per infraction upon demand. Note 23 : We have established an optional marketing program whereby we arrange the production and distribution to participating franchisees of certain marketing materials, including banners, seasonal advertising and similar items. If you choose to participate in this program, we will charge you a monthly fee. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 21 Series 020(2023)Note 24 : All fees listed in the Item 6 chart for a Standard Franchised Unit apply to a Co-Branded Franchised Unit. All fees listed in the Item 6 chart for a Co-Branded Franchised Unit only apply to Co-Branded Franchised Units. Note 25 : The requirement to pay Continuing Franchise Fees for a Co-Branded Franchised Unit begins when the 1-800-Flowers signage is installed at your Co-Branded Franchised Unit or 60 days after you sign the Franchise A g r e e m e n t a n d C o-B r a n d A d d e n d u m, w h i c h e v e r o c c u r s f i r s t. Y o u w i l l a u t h o r i z e u s t o d e b i t f r o m y o u r de s i g n a te d p ri m a ry b u s i n e s s ch e ck i n g o r s a v i n g s o p e ra ti n g a cc o u n t, a n y f u n d s du e a n d p a y a b l e t o u s f o r Continuing Franchise Fees, Marketing Fees, and all other sums that you owe to us or our affiliates. You will also authorize us and our affiliates to process your credit card sales transactions and, following the settlement of these transactions, to credit any net amount due to you against all Continuing Franchise Fees, Marketing Fees, or other sums that are due from you to us or our affiliates that you incurred prior to the settlement of these transactions, whether incurred under the Franchise Agreement, Co-Brand Addendum, or under any other agreement between you and us or our affiliates. In addition, you will authorize Bloom Net, at its option, to deduct and retain an amount equal to all Continuing Franchise Fees, Marketing Fees, Bloom Net fees and all sums due and owing to us, or our affiliates, from any funds due to you under the Bloom Net Membership Agreement and/or the Bloom Net Technologies Systems Agreement. The starting amount of the Continuing Franchise Fee for a Co-Branded Franchised Unit is determined based on the volume of floral sales from your Existing Flower Shop during the immediately preceding calendar year before you signed the Franchise Agreement and Co-Brand Addendum, according to the chart that follows this paragraph. For example, if in that calendar year your business had sales volume of $500,000, then your Continuing Franchis e Fee w ould start at $85 0 pe r mo nth and w ould be $1,500 by yea r 7 of the term of the Franchise Agreement. Annual Volume ($) Franchise Agreement Term (Year) 1 2 3 4 5 6 7 8 9 10 Monthly Continuing Franchise Fee ($)250,000-299,999 $850 $850 $850 $850 $1,000 $1,000 $1,250 $1,250 $1,500 $1,500 300,000-449,999 $850 $850 $1,000 $1,000 $1,000 $1,000 $1,250 $1,250 $1,500 $1,500 450,000-599,999 $850 $850 $1,000 $1,000 $1,250 $1,250 $1,500 $1,500 $1,500 $1,500 600,000 + $1,000 $1,000 $1,250 $1,250 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 ITEM 7 ESTIMATED INITIAL INVESTMENT (STANDARD FRANCHISED UNIT) YOUR ESTIMATED INITIAL INVESTMENT Type Of Expenditure Amount Method Of Payment When Due To Whom Payment Is To Be Made Initial Franchise Fee$30,000 (Note 1)Cash ier's check When you sign the Franchise Agreement Us | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 22 Series 020(2023)Type Of Expenditure Amount Method Of Payment When Due To Whom Payment Is To Be Made Franchised Location (3 month's Prepaid Rent & Security Deposit)$10,000 to $ 37,500 (Note 2)As arranged Asincurred Landlords and Us Leasehold Improvements$40,000-$265,000 (Note 3)Asarranged Asincurred Landlords and Suppliers Site Selection, Space Planning, Project Management$5,000-$12,000 (Note 3)Asincurred Asincurred Supplier s Equipment and Fixtures$50,000-$125,000 (Note 4)Asarranged Asincurred Supplier s and Lessors Signs $7,500-$35,000 (Note 4)Asarranged Asincurred Supplier s and Lessors Travel & Living Expenses While Training$1,000-$10,000 (Note 5)Asarranged Asincurred Airlines, Hotels & Restaurants, etc. Miscellaneous Opening Costs$9,000-$15,000 (Note 6)Asarranged Asincurred Supplier s, Utilities, Wire Services, Taxing Authorities, etc. Van $20,000-$25,000 per van (Note 7)Asarranged Asincurred Automobile Dealer or Lessor Insurance $9,000-$15,000 (Note 8)Asarranged Asincurred Insurance Carrier or Finance Company Opening Inventory $15,000-$50,000 (Note 9)Lump sum Before or immediately following Opening Bloom Net, Napco, Suppliers Additional Funds-3 Months$60,000-$150,000 (Note 10)Asneeded Asincurred Employees, Supplier s, Utilities, etc. Grand Opening Promotional Campaign$2,000-$5,000 (Note 11)Lump sum Asincurred Supplier s TOTAL $258,500-$774,500 (Notes 10 and 12) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 23 Series 020(2023)ESTIMATED INITIAL INVESTMENT (CO-BRANDED FRANCHISED UNIT) Type Of Expenditure Amount Method Of Payment When Due To Whom Payment Is To Be Made Initial Franchise Fee$20,000 (Note 13)Cash ier's check When you sign the Franchise Agreement and Co-Brand Addendum Us Franchised Location (3 month's Prepaid Rent & Security Deposit)Not Applicable (Note 14)Not applicable Not applicable You will already have established your rent, security deposit and related occupancy expenses for your Existing Flower Shop. These expenses are not included in this chart. Leasehold Improvements$0-$40,000 (Note 15)Asarranged Asincurred Landlords and Supplier s Equipment and Fixtures$0-$30,000 (Note 16)Asarranged Asincurred Supplier s and Lessors Signs $5,000-$20,000 (Note 16)Asarranged Asincurred Supplier s and Lessors Travel & Living Expenses While Training$1,000-$7,250 (Note 17)Asincurred Asincurred Airlines, Hotels & Restaurants, etc. Van Wrap $500-$2,000 per van (Note 18)Asarranged Asincurred Automobile Graphics Company Grand Opening Promotional Campaign$500-$2,000 (Note 19)Lump sum Before opening Supplier s Insurance $9,000-$13,000 (Note 20)Asarranged Before opening Insurance Companies Product Inventory $1,000-$2,500 (Note 21)Asarranged Before opening Bloom Net, Napco and Suppliers Additional Funds-3 Months$20,000 (Notes 10 and 12 )As needed As incurred Employees, Suppliers, Utilities, etc. TOTAL $57,000-$156,750 (Notes 10 and 12) | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 24 Series 020(2023)FRUIT BOUQUETS BUSINESS YOUR ESTIMATED INITIAL INVESTMENT Type Of Expenditure Amount Method Of Payment When Due To Whom Payment Is To Be Made Initial Franchise Fee $0-$7,500 (Note 1)Cash ier's check When you sign the Fruit Bouquets Addendum to the Franchise Agreement Us Equipment and Fixtures$12,000-$20,000 (Note 4)Asarranged Asincurred Supplier s and Lessors ; Us Signs $5,000-$20,000 (Note 4)Asarranged Asincurred Supplier s and Lessors Travel & Living Expenses While Training$1,000-$5,000 (Note 5)Asincurred Asincurred Airlines, Hotels & Restaurants, etc. Product Inventory $500-$1,000 Asarranged Before opening Supplier s Additional Funds-3 Months$0 As needed As incurred Employees, Suppliers, Utilities, etc. TOTAL $18,500-$53,500 (Notes 10 and 12) Note 1 : See Item 5 for the amount of the Initial Franchise Fees and when each payment is due. All fees and payments are uniformly imposed, payable to us and are non-refundable unless otherwise noted. As described in Items 5 and 10, in our sole discretion, we may offer franchisees the opportunity to finance up to $30,000 of the build-o u t a n d/ o r s i g n a g e co s ts f o r a S ta n da r d F ra n ch i s e d U n i t a n d w e m a y o f f e r f ra n ch i s e e s th e o p p o rtu n i ty t o finance up to $30,000 of the Successor Franchise Fee if they are granted a Successor Franchise. In addition, we or our affiliate may offer franchisees the opportunity to finance up to $30,000 of a portion of the build-out costs and signage costs for a Fruit Bouquets Business. We do not offer financing for any other fees. If you sign a Franchise Agreement and a Fruit Bouquets Addendum to the Franchise Agreement, on or before O c t o b e r 1, 2 0 2 4, w e w i l l w a i v e t h e F r u i t B o u q u e t s I n i t i a l F r a n c h i s e F e e. T h e l o w e s t i m a t e i n t h e “ Fruit Bouquets Business, Your Estimated Initial Investment ” chart above assumes that the Franchise Agreement and the Fruit Bouquets Addendum to the Franchise Agreement have been signed on or before October 1, 2024 and the Fruit Bouquets Initial Franchise Fee has been waived. Note 2 : You must lease the Franchised Location unless you purchase or own an acceptable site for your Franchised Unit. In our discretion, 1-800-Flowers or a subsidiary or affiliate may lease the Franchised Location from a landlord (a “ Master Landlord ”) under a master lease (a “ Master Lease ”) and sublet the Franchised Location to you under our then-current Sublease, or we may lease the Franchised Location to you independent of the terms of a Master Lease and may require the same, different or additional terms than those of the Master Lease. Al te rn a ti v e l y, y o u m a y l e a s e th e F r a n ch i s e d Lo ca ti o n di re c tl y f ro m a th i rd-p a rty l a n dl o rd ( a “ Third-Party | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 25 Series 020(2023)Landlord ”) under a direct lease (a “ Third-Party Lease ”). Franchised Units must include an on-site production area within the footprint of the Franchised Unit where you will process and prepare your orders. Typical sites for Franchised Units are free-standing pads in a mall, shopping center or strip shopping center properties, corner or mid-block properties in commercial areas, or in-line end-cap sites in shopping center or strip s h o p p i n g c e n t e r p r o p e r t i e s. T h e t y p i c a l S t a n d a r d F r a n c h i s e d U n i t h a s 1, 8 0 0-3, 5 0 0 s q u a r e f e e t. R e n t i s estimated at between $2,500 and $7,500 per month. The low estimate includes 3 months' rent, plus a security deposit equal to 1 month's rent. The high estimate includes 3 months' rent, plus a security deposit equal to 2 months' rent. The amount of rent payable for a Franchised Location is dependent upon factors such as the type of franchise purchased, the location, size, age, condition, and visibility of the Franchised Location, and the amount, if any, of a landlord's contribution towards the costs of construction of a Franchised Unit. In addition, the amount of rent is generally subject to scheduled cost-of-living or fixed rent adjustments. These estimates assume that your Standard Franchised Unit will be a leased, unimproved, unfinished retail store-type unit and are based on the assumption that a Third-Party Landlord will require a prepayment of one month's rent and a security deposit equal to 1 month's rent. Some landlords may charge you a higher security deposit. If you sublet the Franchised Lo cati on fro m us, you will pay us or an affiliate rent an d othe r o ccupancy e xpenses under a Sublease in the amounts we determine, including a security deposit equal to 2 months' rent. Other occupancy expenses are not included in these estimated rent figures and vary from site to site. Note 3 : Y o u m u s t p a y a l l e x p e n s e s f o r y o u r l e a s e h o l d i m p r o v e m e n t s u n l e s s a M a s t e r L a n d l o r d o r a T h i r d-P a r t y L a n d l o r d m a k e s a c o n t r i b u t i o n f o r t h e s e e x p e n s e s. I f y o u p a y t h e s e e x p e n s e s, y o u w i l l g e n e r a l l y m a k e installment payments over the course of construction of the leasehold improvements to contractors, material suppliers, and the like. These estimates include costs of construction, materials, permits, overhead and profit, architectural fees, building supervision and bonds and insurance. These estimates do not include the costs for construction of a new building under a ground lease. These estimates also include the cost of hiring a third party to assist you with locating a suitable site, negotiating a lease or purchase agreement, space planning and project management for the build-out of your Franchised Unit. We have the right to designate the vendor whom you must use for these services. Note 4 : Y o u m u s t p a y a l l e x p e n s e s f o r y o u r e q u i p m e n t, f i x t u r e s, f u r n i s h i n g s, s i g n s, t e l e p h o n e s a n d c o m p u t e r hardware, software, point of sale and accounting systems for the Franchised Unit. You can either purchase these items directly from a vendor or dealer, in which case you will likely make lump sum payments to the vendor at or about the time of installation, or you can arrange for an equipment lessor or other financing source to participate in the acquisition of these items with you. You will pay a deposit and/or a number of installment payments at the funding of the obligation and must typically make monthly installment payments for 24 to 60 months if you arrange financing of this type. If you add a Fruit Bouquets Business into your Franchised Unit, you will have additional expenses for required equipment, signage and supplies, such as are contained in a fruit bouquets starter kit, which includes tools, packaging and containers, and may include equipment required for compliance with applicable health laws related to food service businesses. In some cases, you may purchase certain equipment from us or our affiliates. Your costs may be lower if we determine that your Franchised Unit already has sufficient refrigerator, storage, prep space and/or equipment to accommodate a Fruit Bouquets Business. The estimate includes the costs to meet our signage requirements, which include a vehicle wrap for your van (if applicable), interior signage and exterior signage. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 26 Series 020(2023)Note 5 : The initial training fee is included in the Initial Franchise Fee, but you must pay all travel and living expenses for you and your trainee(s) to attend our initial training program (the “ Initial Training Program ”). Expenses included in this item are estimated round-trip air fares, lodging and meal expenses, and auto rental charges for you and one additional trainee. Note 6 : These estimates include security deposits, utility deposits, legal and accounting fees, initial set up, initial website set up and domain name change fees, automated credit card clearing setup, bond expenses and the like. Note 7 : You must pay all expenses if you acquire a van for the Franchised Unit. You can either purchase a van directly from a vendor or dealer, in which case you must either make a lump sum payment at the time of delivery or arrange for a vehicle lessor or other financing source to participate in the acquisition of a van with you. You will pay a deposit and/or a number of installment payments at the funding of the obligation and must typically make monthly installment payments for 24 to 60 months if you arrange financing of this type. If requested by us, your delivery vehicle must be wrapped with the current corporate-approved vehicle wrap standards, set forth in the Franchise Manual or Fruit Bouquets Manual (if applicable). Note 8 : You must acquire and maintain the required forms of insurance coverage for the Franchised Unit. If you add a Fruit Bouquets Business into your Franchised Unit, you may have to purchase additional types of insurance related to the provision of food products. We have the right to require you to maintain insurance coverage in amounts that exceed any coverage required by a Master Lease or Third-Party Lease. You must either make a lump sum payment to the insurance company at the time the coverage becomes effective or arrange for a financing source to participate in the acquisition of this coverage with you. You will pay a deposit and/or a number of installment payments at the funding of the obligation and must typically make monthly installment payments for 4-10 months if you arrange financing of this type. You may not amend or cancel your insurance policies without at least 30 days' prior written notice to us. You must provide us with certificates of insurance evidencing coverage on an ongoing basis. Note 9: We may require you to purchase an initial inventory of items that are specific to the 1-800-Flowers System, such as branded signature products, branded packaging, and gift items. As described in Item 8 below, you will purchase some of these products from our affiliates, Bloom Net and/or Napco. We estimate that the cost of this initial inventory will be between $15,000 and $50,000, which will be payable in full upon delivery of the inventory and is not refundable under any circumstances. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 27 Series 020(2023)Note 10 : You must, at all times, maintain adequate reserves and working capital sufficient for you to fulfill all of your obligations under your Franchise Agreement and to cover the risks and contingencies of your Franchised Unit for at least 3 months. The estimates for “Additional Funds” provided above include estimated employee wages, 3 months of inventory, facility expenses, opening cash, and other miscellaneous expenses that you may incur during the first 3 months of operations, but do not include a salary or draw for you. These estimates do not take into account the finance charges, interest and related costs you may incur if you finance any portion of your initial investment or any other recurring monthly operating expenses. These amounts are the minimum recommended levels to cover operating expenses, including employee salaries for 3 months. Additional working capital may be required if sales are low or fixed costs are high. Note 11 : Y o u m u s t co n du ct a g r a n d o p e n i n g ca m p a i g n to p ro m o te y o u r F ra n ch i s e d Un i t a n d w e e s ti m a te y o u w i l l spend between $2,000 and $5,000 on this campaign. Note 12 : We relied on over 50 years of experience in the floral and gift business and on the experiences of our franchisees opening and operating 1-800-Flowers Franchised Units, if and to the extent that they shared this information with us, to compile these estimates. You should review these figures carefully with a business advisor before m a k i n g a n y d e c i s i o n t o p u r c h a s e t h e f r a n c h i s e. G e n e r a l l y, a l l t h e p a y m e n t s d i s c u s s e d i n I t e m 7 a r e n o t refundable; however, each vendor establishes and enforces its own refund policies. The Item 7 estimates do not include real estate and related occupancy costs. Note 13 : S e e I te m 5 f o r th e a m o u n t o f e a ch p a y m e n t a n d w h e n e a ch p a y m e n t i s du e. I n i ti a l F ra n ch i s e F e e s a re n o t refundable. As described in Items 5 and 10, in our sole discretion, we may offer franchisees the opportunity to finance up to $30,000 of the build-out, and/or signage costs for a Franchised Unit and we may offer franchisees the oppo rtunity to finance up to an additional $30,00 0 of the Success or Franchise Fee if they are granted a Successor Franchise. We may also offer you the opportunity to finance up to an additional $30,000 of remodeling costs and/or signage costs, if you are granted a Successor Franchise. In addition, we or our affiliate may offer franchisees the opportunity to finance up to an additional $30,000 of the build-out costs and signage costs for a Fruit Bouquets Business. We do not offer financing for any other fees. Note 14 : You should already have a site for your Existing Flower Shop, which will become the Franchised Location for your Co-Branded Franchised Unit. You will already have established your rent, security deposit and related occupancy expenses. These expenses are not included in this chart. Your Co-Branded Franchised Unit must have at lea st 1,000 squa re fee t and you mu st have the right to o ccupy its Fran chised Lo cation fo r a t least 5 years. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 28 Series 020(2023)Note 15 : If we require you to add or change your leasehold improvements, you must pay all of those expenses. Unless we approve your existing leasehold improvements, you must make leasehold improvements to bring your E x i s t i n g F l o w e r S h o p t o o u r c u r r e n t s t a n d a r d s a n d s p e c i f i c a t i o n s ; h o w e v e r, w e m a y b e f l e x i b l e i n t h e s e requirements because of the unique design, layout, location and physical characteristics of your Existing Flower Shop. Note 16 : If we re quire you to add or change the equipment or fixture s of you r Exi sting Flower Shop in o rde r to co-brand it to become a Co-Branded Franchised Unit, you must pay all related expenses. You must change your signage as we require. You must install equipment, fixtures and signs at the Co-Branded Franchised Unit to bring your Existing Flower Shop to our current standards and specifications; however, we may be flexible in these requirements because of the unique design, layout and physical characteristics of your Existing Flower Shop. If you add a Fruit Bouquets Business into your Franchised Unit, you will have additional expenses for required equipment and signage, which may include equipment required for compliance with applicable health laws related to food service businesses. Your costs may be lower if we determine that your Franchised Unit already has sufficient refrigerator, storage, prep space and/or equipment to accommodate a Fruit Bouquets Business. The es ti m ate in clu de s th e co s ts to m ee t ou r sig nag e re qui re men ts, whi ch in clu de a v ehi cle w ra p f o r you r v an (i f applicable), interior signage and exterior signage. Note 17 : The initial training fee is included in the Initial Franchise Fee for your Co-Branded Franchised Unit, but you must pay all travel and living expenses for you and your trainee(s) to attend the Initial Training Program. Expenses included in this item for you and your one trainee are estimated round-trip air fares, lodging and meal expenses for one week and auto rental charges for 1 week of training at our training facility. The lower end of our estimate assumes that you and your trainee(s) are within driving distance of our training facility. Additional information on our training program is provided in Item 11. Note 18 : You will, in most cases, already have vans for your use as delivery vehicles for your Existing Flower Shop that y o u w i l l u s e f o r y o u r C o-Bra n de d F ra n ch i s e d Un i t. Y o u m u s t m a k e s u re th a t y o u r v a n s c o m p l y w i th o u r standards, must promptly replace worn-out equipment at your expense, and must cause your delivery vans to be repaired and repainted when appropriate or as designated by us. If requested by us, your delivery vehicle m u s t b e w r a p p e d w i t h t h e c u r r e n t c o r p o r a t e-a p p r o v e d v e h i c l e w r a p s t a n d a r d, s e t f o r t h i n t h e F r a n c h i s e Manual or Fruit Bouquets Manual (if applicable). If you do not have any vans, Franchisor may require you to acquire one. Note 19 : If you are Co-Branding your Franchised Unit, we estimate you will spend between $500 and $2,000 on a grand opening campaign. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 29 Series 020(2023)Note 20 : Our estimates assume that you have at least the minimum insurance that we require. If you do not already have the required minimum insurance for your Existing Flower Shop, you will have to purchase the additional coverages that we require for your Co-Branded Franchised Unit. If you add a Fruit Bouquets Business into y o u r C o-Bra n de d F ra n ch i s e d Un i t, y o u m a y h a v e t o p u rch a s e a ddi ti o n a l ty p e s o f i n s u r a n ce re l a te d to th e provision of food products. Note 21 : Our estimates assume that you have an existing inventory of floral products from your Existing Flower Shop, b u t i f y o u a d d a F r u i t B o u q u e t s B u s i n e s s i n t o y o u r C o-B r a n d e d F r a n c h i s e d U n i t, t h e n y o u w i l l n e e d t o purchase an initial inventory of fruit and other items we specify. You may also have to purchase an initial inventory of items that are specific to the 1-800-Flowers System, such as branded signature products, branded packaging, and gift items. ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES Purchases from Designated and Approved Suppliers You must purchase or lease all goods, merchandise, services, supplies, fixtures, equipment (which may include computer hardware and software), and inventory for the Franchised Unit from designated or approved suppliers according to our standards and specifications. We will provide you with a list of our designated and approved suppliers after you sign your Franchise Agreement. You must purchase specific products and services we require you to obtain from specific suppliers, and we or our affiliates may be included in those suppliers. All flowers, plants, fruit bouquets, accessories, gift and sentiment items and other merchandise sold from the Franchised Unit, and all fixtures, furnishings, signs and equipment installed at the Franchised Unit must conform to the standards and specifications we establish in the Franchise Manual, the Fruit Bouquets Manual (if you add a Fruit Bouquets Business into your Franchised Unit), and other manuals, company d i r e c t i v e s a n d m a t e r i a l s t h a t w e p r o v i d e. Y o u m u s t u s e o u r c u r r e n t, a p p r o v e d d e s i g n s f o r m e r c h a n d i s e placement in your Franchised Unit and must stock an inventory of these items in the amounts that we determine. If you fail to remove any unapproved flowers, plants, fruit bouquets, accessories, gift and sentiment items or other merchandise from the Franchised Unit within 5 days after our written notice to you to do so, we have the right to enter the Franchised Unit without prior notice to remove such unapproved merchandise from the Franchised Unit. Y o u m a y o n l y u s e b o o k k e e p e r s a n d a c c o u n t a n t s w e a p p r o v e t o a s s i s t y o u w i t h y o u r r e c o r d k e e p i n g a n d financial reporting obligations under the Franchise Agreement and the Franchise Manual, and under the Fruit Bo u qu e ts M a n u a l ( i f y o u a d d a F ru i t Bo u qu e t s Bu s i n e s s i n to y o u r F ra n ch i s e d Un i t). Y o u m u s t s e l e c t y o u r bookkeepers and accountants and submit them to us for our approval at least 30 days before you open the Franchised Unit for business. You may recommend bookkeepers and accountants to us at any time in accordance with our procedures. We will test and evaluate bookkeepers and accountants at our expense and at no cost to you and approve or disapprove the bookkeepers and accountants with reasonable promptness, not to exceed 90 days. You must submit quarterly financial statements, including a balance sheet and a profit and loss statement to us, prepared by a certified public accountant. If you are signing a Franchise Agreement and Co-Brand Addendum to operate a Co-Branded Franchised Unit, we do not require you to purchase a new co m p u te r s y s te m o r p o i n t o f s a l e s y s te m w h e n y o u c o-b ra n d y o u r E xi s ti n g F l o w e r S h o p to b e c o m e a C o- | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 30 Series 020(2023)Branded Franchised Unit, but we have the right to require you to purchase a specific system in the future. You m u s t p r e p a r e a n d s u b m i t t o u s d a i l y a n d / o r w e e k l y r e v e n u e r e p o r t s, w h i c h s h a l l b e s u b m i t t e d t o u s electronically or via such other means we identify. We and/or our affiliates have the right to negotiate purchase arrangements with suppliers (including price terms, fees and/or rebates, such as from wire services) for your benefit. There are currently no purchasing or distribution cooperatives in which you must participate. We do not provide any material benefits to our franchisees (such as the grant of additional franchises or territories) based on our franchisees' use of approved suppliers. We do not currently derive any revenue from approved or designated suppliers, however, our affiliates do so. We have the right to derive revenue from approved or designated suppliers in the future if rebates or other considerations become available to us because of your purchases or our purchases of products or services. Purchases from Us or Our Affiliates You must purchase goods we designate from Bloom Net. net, a division of Bloom Net, and/or from Napco, as we require. Bloom Net or Napco will generally be the only approved supplier of certain products. As a member of the Bloom Net Network, you must pay Bloom Net membership rates and enter into a Bloom Net Membership Agreement with Bloom Net. You must also enter into a Bloom Net Technologies Systems Agreement with Bloom Net to obtain a limited license to use certain software, documentation and copyrighted content that comprise the Bloom Net Technologies Systems, or other software systems Bloom Net designates to fulfill orders and other functions at the Franchised Unit. Bloom Net or its designee are the only approved suppliers of the Bl o o m N e t T e ch n o l o g i e s S y s te m s. I n a d di ti o n, w e, o u r s u b s i di a ry o r o n e o f o u r a f f i l i a te s m a y s u b l e a s e th e Franchised Location to you. You may also purchase certain confection products from Cheryl, Popcorn, Design and HDO in order to fulfill certain types of orders from 800-Flowers. With these exceptions, neither we, nor our affiliates, are the only approved suppliers of any required products or services. We or our affiliates have the right to derive revenue from Subleases and from the sale of designated products to our franchisees. Bloom Net may derive revenue from the licensing of the Bloom Net Technologies Systems to our franchisees and from the Bloom Net membership rates they pay, and Napco derives revenues from the sale of designated products to our franchisees. We estimate that your required purchases or lease will range from 75% to 80% of your total initial investment and 30% to 40% of your annual operating expenses. If you are co-branding your existing business, we estimate that your required purchases or lease will range from 15% to 21% of your total initial investment and 28% to 34% of your annual operating expenses. Bloom Net's (incl. Napco) total revenues were $133,183,266 during the fiscal year ended July 2, 2023. B l o o m N e t ' s ( i n c l. N a p c o ) t o t a l r e v e n u e s f r o m t h e s a l e o f t h e i r d e s i g n a t e d p r o d u c t s a n d s e r v i c e s t o 1-8 0 0-Flowers franchisees during this period were $3,456,323 or 2. 60% of its total revenues. Bloom Net's total revenues from its software licensing with 1-800-Flowers franchisees during this period were $2,552,408 or 1. 92% of its total revenues. Bloom Net's total revenues from membership rates paid by 1-800-Flowers franchisees during this period were $627,598 or 0. 47% of its total revenues. Bloom Net's total revenues from its sale of designated wholesale products paid by 1-800-Flowers franchisees during this period were $276,318 or 0. 21% of its total revenues. The sources of this information are the financial books and records of Bloom Net. I f y o u s u b l e t t h e F r a n c h i s e d L o c a t i o n f r o m u s, y o u w i l l p a y u s o r a s u b s i d i a r y o r a f f i l i a t e r e n t a n d o t h e r occupancy expenses under a Sublease in amounts we determine. Our total revenues based on the most recent | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 31 Series 020(2023)audited financial statements were $1,272,925 during the fiscal year ended July 2, 2023. Our total revenues from Subleases with franchisees during this period were $274,280 or 22% of our total revenues. Our parent company, 1-800-Flowers, owns us, Bloom Net and Napco, which are approved suppliers. James F. Mc Cann, Christopher Mc Cann, Dinesh Popat, William Shea, Michael R. Manley, Vincent Mc Veigh, Brian Mc Gee, Stephen Lenzovich and Camilo Escobar each own an interest in 1-800-Flowers. Recommended Suppliers Y o u m a y r e c o m m e n d s u p p l i e r s t o u s a t a n y t i m e. W e t e s t a n d e v a l u a t e r e c o m m e n d e d s u p p l i e r s a t y o u r expense and approve or disapprove the suppliers with reasonable promptness, not to exceed 90 days based upon our tests and evaluations of their products or services. A supplier must demonstrate to our reasonable satisfaction that it can supply an item meeting our standards and specifications for the item, that it is in good financial standing in the business community, and that its products and/or services are reliable. Our specifications and standards for supplier approval are generally available upon written request. We will notify you if and when we no longer approve a previously approved supplier. A supplier must continually adhere to our standards to maintain its approval. You may not use a supplier before we approve the supplier in w r i t i n g. W e c u r r e n t l y d o n o t c h a r g e a n y f e e b e y o n d o u r a c t u a l e x p e n s e s f o r t e s t i n g a n d e v a l u a t i n g recommended suppliers. Rebates If marketing rebates become available from suppliers and we, or our affiliates, earn rebates during the term of your Franchise Agreement as a result of our franchisees' purchases of products from these suppliers, we or our affiliates will deposit these rebates into the Floral Marketing Fund, if reinstated. During the fiscal year ended July 2, 2023, we received no rebates from sales of items to franchisees. POS System You must purchase or lease the point of sale/computer system that we require. As described in Item 11 below, we currently have 2 different systems that we have approved for use in Franchised Units. You must choose one of these systems for your Franchised Unit. Insurance Y o u m u s t o b t a i n a n d m a i n t a i n t h e m i n i m u m i n s u r a n c e c o v e r a g e s t h a t w e r e q u i r e. I f y o u d o n o t a l r e a d y maintain insurance that meets our minimum requirements, you must obtain additional insurance as necessary. Y o u m u s t p r o v i d e u s w i t h a c e r t i f i c a t e o f i n s u r a n c e o r o t h e r e v i d e n c e t h a t y o u h a v e m e t o u r i n s u r a n c e requirements within 10 days after the insurance is obtained, but not later than the date your Franchised Unit opens while displaying the 1-800-Flowers Marks. We have the right to require you to obtain insurance coverages that are greater than those required by the terms of your lease, or your lease may require insurance c o v e r a g e s t h a t a r e g r e a t e r t h a n w h a t w e r e q u i r e. A l l o f y o u r i n s u r a n c e p l a n s, w i t h t h e e x c e p t i o n o f y o u r Employment Practices Liability Insurance and Worker's Compensation, must name us as an additional insured, and all policies must provide us with 30 days' advance notice of any cancellation or termination of c o v e r a g e. W e h a v e t h e r i g h t t o c h a n g e o u r i n s u r a n c e r e q u i r e m e n t s, a n d y o u m u s t c o m p l y w i t h a n y s u c h c h a n g e s. I f y o u d o n o t o b t a i n a l l r e q u i r e d i n s u r a n c e c o v e r a g e, w e h a v e t h e r i g h t t o p u r c h a s e t h e m i s s i n g insurance coverage on your behalf and you must reimburse our costs incurred to obtain this insurance for you. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 32 Series 020(2023)Currently, we require that you have and maintain the following insurance coverages: (i) auto liability for hired and non-owned vehicles and scheduled vehicles (if owned) for a combined single limit of $1,000,000; (ii) public liability including products liability, covering bodily injury, property damage, and advertising, sidewalks and parking areas and personal injury in the amount of at least $1,000,000 combined single limit and an aggregate o f $ 2, 0 0 0, 0 0 0 a g a i n s t c l a i m s f o r p e r s o n a l i n j u r y, d e a t h o r p r o p e r t y d a m a g e o c c u r r i n g i n, o n, o r a b o u t t h e Franchised Unit; (iii) workers compensation as may be required by law; (iv) employer's liability for a limit of $1,000,000 for each accident or disease; (v) fire and extended coverage insurance on the Franchised Unit and its property in an amount adequate to rebuild or replace all of it in the event of an insured loss; (vi) fire-legal liability insurance in an amount of the value of the Franchised Location; (vii) business interruption insurance in sufficient amounts to cover 12 months of Continuing Franchise Fees and Marketing Fund Fee payments to us, 12 months of rent and other direct site costs for the Franchised Location, and 12 months of insurance premiums and other fixed expenses; (viii) Employment Practices Liability Insurance; and (ix) an umbrella policy in the amount of at least $2,000,000. Credit Cards You are required to honor all credit, charge and cash cards approved by us in writing. To the extent that you store, process, transmit or otherwise access or possess cardholder data in connection with your operation of the Franchised Unit, you are required to maintain the security of such data and adhere to the then-current P a y m e n t C a r d I n d u s t r y D a t a S e c u r i t y S t a n d a r d s ( “ PCI DSS ”), currently found at www. pcisecuritystandards. org, f or the p ro tection of cardhol der data throughout the te rm. Y ou shall, if we request that you do so, provide appropriate documentation to us to demonstrate compliance with applicable PCI DSS requirements by you and all of your identified subcontractors. ITEM 9 FRANCHISEE'S OBLIGATIONS This table lists your principal obligations under the Franchise Agreement and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this Disclosure Document. Obligation Section In Agreement Disclosure Document Item a. Site selection and acquisition/ lease Section 3 of Franchise Agreement Items 6, 7,8and 11 b. Pre-opening purchases/ leases Section s 3, 9, 10(l), 10(m), 10( o), 10( u), 10( v),10(y),12 and 13 of Franchise Agreement Item 8 c. Site development and other pre-opening requirements Sections 3, 9, 10(m), 10(n), 10( o), 10( v),12 and 13 of Franchise Agreement; Sections 2. 2, 2. 9, 2. 11, 2. 12, and 2. 13 of Co-Brand Addendum Items 6, 7, 8 and 11 d. Initial and ongoing training Section s 10( j),10(l)and 11(a)-11(c) and 11(f) of Franchise Agreement Item 11 e. Opening Section s9(c)and 10(n) of Franchise Agreement ; Section 2. 9 of Co-Brand Addendum Items 7 and 11 f. Fees Sections 5, 7, 8, 10(f), 17( d)(vii) and (ix),17(e), 17(g),18 and 22(f) and (g) of Franchise Agreement; Sections 2. 4-2. 8 and 2. 16 of Co-Brand Addendum; Sections “Receipt of Orders” and “Settlement Processing Statement” of Bloom Net Membership Agreement; Sections 1 and 5 of Bloom Net Technologies Systems Agreement Items 5, 6,7 and 11 | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 33 Series 020(2023)Obligation Section In Agreement Disclosure Document Item g. Compliance with standards and policies/operating manual Section s2(b), 7(c), 8( c)(iv), 8(d), 9(a),9(b), 9(e),9(g), 10, 12, 14, 15 and 18 of Franchise Agreement; Sections 2. 9-2. 13, 2. 17 and 2. 18 of Co-Brand Addendum; Fruit Bouquets Manual and company directives; Sections “Appearance”, “Capabilities”, “Attitude”, and “General” of Bloom Net Membership Agreement; Section 4 of Bloom Net Technologies Systems Agreement; Section 3 of Fruit Bouquets Order Fulfillment Agreement; Section 3 of Premier Order Fulfillment Agreement Items 8 and 11 h. Trademarks and proprietary information Sections 2 (b), 2(c), 2(d), 9(g), 15, 16( d),16(e),and 18 of Franchise Agreement; Sections 2. 10, 2. 11, 2. 15, 2. 17 of Co-Brand Addendum; Sections “Confidential Information” and “Trademarks” of Bloom Net Membership Agreement; Sections 3, 6 and 9 of Bloom Net Technologies Systems Agreement; Sections 2 and 12 of Fruit Bouquets Order Fulfillment Agreement; Sections 2 and 12 of Premier Order Fulfillment Agreement Items 13 and 14 i. Restrictions on products/ services offered Section s2(b)-2(d), 10(a), 10(h), 10(p), 10(x), 12(a), 12(c), 12(f) and 12(g) of Franchise Agreement; Section 4 of Bloom Net Technologies Systems Agreement; Sections 1 and 7 of Fruit Bouquets Order Fulfillment Agreement; Sections 1 and 7 of Premier Order Fulfillment Agreement Item 16 j. Warranty and customer service requirements Section s8(c)(iv) and 10(r) of Franchise Agreement; Section “Attitude” of Bloom Net Membership Agreement; Section 4 of Bloom Net Technologies Systems Agreement; Section 1 of Fruit Bouquets Order Fulfillment Agreement; Section 1 of Premier Order Fulfillment Agreement Item 11 k. Territorial development and sales quotas Not applicable Item 12 l. Ongoing product/service purchases Section s 10( u), 10( v),10(x),12 and 18 of Franchise Agreement; Section 4 of Bloom Net Technologies Systems Agreement Items 6 and 8 m. Maintenance, appearance and remodeling requirements Section s9(g), 9(h), 10(b), 10(d), 10(e), 10(m),10(o), 10(t), 10(u), 10(v) and 18 of Franchise Agreement; Section 4 of Bloom Net Technologies Systems Agreement Items 7and 11 n. Insurance Section 13 of Franchise Agreement ; Section 10 of Fruit Bouquets Order Fulfillment Agreement; Section 10 of Premier Order Fulfillment Agreement Item s7and 8 o. Advertising Sections 8, 15(g) and 18 of Franchise Agreement Items 6, 7 and 11 p. Indemnification Section s3(e), 7(e), 7(k), 9(f), 10(l),10(s), 17(g) and Section 19 of Franchise Agreement; Section 10 of the Sublease; Section “Indemnification” of Bloom Net Membership Agreement; Sections 4, 5 and Exhibit A (Section 7) of Bloom Net Technologies Systems Agreement; Section 9 of Fruit Bouquets Order Fulfillment Agreement; Section 9 of Premier Order Fulfillment Agreement Item 6 | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 34 Series 020(2023)Obligation Section In Agreement Disclosure Document Item q. Owner's participation/ management/ staffing Section s 10( i), 10( j), 10( k), 10(l), 10( t) and 10( x) of Franchise Agreement Items 11 and 15 r. Records/reports Section s10(l) and 14 of Franchise Agreement; Section 11 of Fruit Bouquets Order Fulfillment Agreement; Section 11 of Premier Order Fulfillment Agreement Item 6 s. Inspection/audits Section s8(c)(vi),9(c), 10(d), 11(f), 11(g), 14(b),14(d) and 15(g) of Franchise Agreement Items 6 and 11 t. Transfer Section 17 of Franchise Agreement ;Section 11 of the Sublease; Section “Change of Ownership” of Bloom Net Membership Agreement; Section 9 of Bloom Net Technologies Systems Agreement; Section 14(g) of Fruit Bouquets Order Fulfillment Agreement; Section 14(g) of Premier Order Fulfillment Agreement Item 17 u. Renewal Section s 4(b)-4(f) of the Franchise Agreement; Section 2 of Bloom Net Technologies Systems Agreement; Section 4 of Fruit Bouquets Order Fulfillment Agreement; Section 4 of Premier Order Fulfillment Agreement Item 17 v. Post-termination obligations Section s16(b), 16(e), 16(f),17(e), 18(c), 18(e)and 22 of Franchise Agreement; Section “Termination” of Bloom Net Membership Agreement; Section 8 of Bloom Net Technologies Systems Agreement; Sections 2 and 12(b) of Fruit Bouquets Order Fulfillment Agreement; Sections 2 and 12(b) of Premier Order Fulfillment Agreement Item 17 w. Non-competition covenants Section s 16(a),16(b), 16(c), 18(c) and 22(a) of Franchise Agreement; Section 15 of Fruit Bouquets Order Fulfillment Agreement Item 17 x. Dispute resolution Section s 23(a), 23(b) and 23( t) of Franchise Agreement; Section “Errors, Omissions and Disputes” of Bloom Net Membership Agreement; Section 9 of Bloom Net Technologies Systems Agreement; Section 14(f) of Fruit Bouquets Order Fulfillment Agreement; Section 14(f) of Premier Order Fulfillment Agreement Item 17 y. Security Interest Section 7(j)of Franchise Agreement Item s10 an d17 z. Charges Section s7 and 8 of the Franchise Agreement; Section 5 and Exhibit B of Fruit Bouquets Order Fulfillment Agreement; Section 5 and Exhibit A of Premier Order Fulfillment Agreement Items 6, 7 and 11 [THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK. ] | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 35 Series 020(2023)ITEM 10 FINANCING Item Financed (Source)Amount Financed Down Payment Terms (Years)Apr %Prepay Penalty Security Required Liability Upon Default Loss Of Legal Right On Default Purchase Price for Company-Owned Store (Note 1)A portion of purchase price (Note 1)Varies (Note 1)Varies (Note 1)Varies (Note 1)None Personal Guarantee, Security Interest (Note 2)Loss of franchise and/or repossession of business (Note 3)Waive presentment for payment, notice of dishonor, and protest. Leased Space for Franchised Location (Note 4)Not Applicable Not Applicable5-10 Not Applicable None (Note 4) Loss of franchise, back rent damages, & attorneys' fees (Note 3)None Partial Build-out Costs and Signage (Note 2)Up to $30,000 Not Applicable Up to 1 7% None Personal Guarantee, Security Interest (Note 2)Loss of franchise, damages and attorneys' fees (Note 3)Waive presentment for payment, notice of dishonor, and protest. Partial Build-out Costs and Signage (Fruit Bouquets Business Only) (Note 2)Up to $30,000 Not Applicable Up to 1 7% None Personal Guarantee, Security Interest (Note 2)Loss of franchise, damages and attorneys' fees (Note 3)Waive presentment for payment, notice of dishonor, and protest. Remodeling Costs and/or Signage (Note 2)Up to $30,000 Not Applicable Up to 1 7% None Personal Guarantee, Security Interest (Note 2)Loss of franchise, damages and attorneys' fees (Note 3)Waive presentment for payment, notice of dishonor, and protest. Successor Franchise Fee (Note 2)Up to $30,000 Not Applicable Up to 1 7% None Personal Guarantee, Security Interest (Note 2)Loss of franchise, damages and attorneys' fees (Note 3)Waive presentment for payment, notice of dishonor, and protest. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 36 Series 020(2023)Except as described above and below, we do not offer direct or indirect financing. We do not guarantee your note, lease or any other obligation. Any offer of financing we make to you will depend on your individual circumstances. Our decision to offer financing is in our sole discretion and we do not guarantee that you will receive an offer of financing from us. We do not receive direct or indirect payments for arranging financing. We do not currently sell, assign or discount to a third party any part of the financing arrangement we make with you, but we have the right to do so in the future. We do not arrange financing from any other sources. Note 1 : If you are purchasing a company-owned 1-800-Flowers Shop, a portion of the purchase price may be financed by the seller. You must sign a Promissory Note in the seller's favor. The term of the Promissory Note will range from 1 to 2 years. The interest payable will be fixed for the term of financing and the minimum interest rate will generally be the prime rate of interest plus 1%-2%. Monthly payments will vary depending upon interest rates, the term of the Promissory Note, and the amount of the down payment. Our standard form of Promissory Note is attached to this Disclosure Document as Exhibit I. Note 2 : If you meet our criteria, including a minimum credit score of 650, we may offer you the opportunity to finance u p t o $ 3 0, 0 0 0 w i t h u s, w h i c h m a y b e u s e d f o r b u i l d-o u t o f y o u r F r a n c h i s e d U n i t a n d / o r p u r c h a s e a n d installation of signage. In addition, if you choose to purchase a Fruit Bouquets Business, we may offer you the opportunity to finance up to an additional $30,000, which may be used for build-out costs and signage related to the Fruit Bouquets Business. Offers of financing are made to franchisees in our sole discretion on a case-by-case basis. We may also offer you the opportunity to finance up to an additional $30,000 of remodeling costs a n d/ o r s i g n a g e co s ts, i f y o u a re g ra n te d a S u cce s s o r F ra n ch i s e. W e m a y a l s o o f f e r y o u th e o p p o r tu n i ty to finance up to an additional $30,000 of the Successor Franchise Fee if you are granted a Successor Franchise. The financing is generally payable over 1 year with interest at the rate of 7% per annum, but these terms may vary on a case-by-case basis. Your failure to pay any amounts owed to us when due is a material breach of your Franchise Agreement. We will have the right to terminate your Franchise Agreement if you breach the Franchise Agreement or fail to cure a non-payment breach. If we grant you financing, you must sign a Promissory Note ( Exhibit I ) in our favor. If you are a partnership, limited liability company or corporation, all of your partners, members or shareholders must sign our Guarantee ( Exhibit J ). The Promissory Note is secured, and you must sign a Security Agreement ( Exhibit K ) in our favor. You may prepay the Promissory Note with no prepayment penalty. Note 3 : If you default on any payment of principal or interest, all payments will immediately become due. Failure to make the payments required by the Promissory Note may result in termination of your Franchise Agreement and any other agreement between you and us and our repossession of the assets of the Franchised Unit and the Franchised Location. If we pursue collection of the Promissory Note, we have the right to require you to pay our legal fees and expenses. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 37 Series 020(2023)Note 4 : In some cases, you will sublease the Franchised Location from us or an affiliate under a Sublease. The precise terms of a Sublease will vary depending upon many factors, including the size and location of the Franchised Location. If you do not make a rent payment on time, we have the right to collect the unpaid rent and other damages. If you are in default under a Sublease, we have the right to terminate the Sublease, take over the F r a n c h i s e d L o c a t i o n a n d t e r m i n a t e y o u r F r a n c h i s e A g r e e m e n t. W e a l s o h a v e t h e r i g h t t o r e q u i r e y o u t o reimburse us for our court costs and attorneys' fees due to your default. ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING Except as listed below, we are not required to provide any assistance to you. Pre-Opening Obligations Before you open your business, we will: a. Site Criteria. Provide you with our site criteria, a sample layout for the interior of a typical Franchised Unit, and a typical set of preliminary plans and décor specifications for a Franchised Unit. We have the right to ch a n g e o u r s i te c ri te ri a a t a n y ti m e. ( Franchise Agreement, Sections 3(a), 9(b) ). You must submit your proposed lease to us and allow us at least 15 days to review it, which we will do only as necessary to confirm that the provisions required by the Franchise Agreement have been included in the lease and that you and your landlord have signed an Option to Obtain Lease Assignment ( Exhibit E) in the form we specify, and you must provide us with a fully signed copy of any lease you sign following our acceptance. ( Franchise Agreement, Section 3(b)(ii) ). If you are signing a Franchise Agreement and a Co-Brand Addendum, we will provide you with a typical set of preliminary plans and décor specifications for a Co-Branded Franchised Unit within 30 days of your request. ( Co-Brand Addendum, Section 2. 2 ). b. Plans and Specifications. Review your plans and specifications for your Franchised Unit and either approve or provide you with comments about the plans and specifications. ( Franchise Agreement, Section 9(b)). c. Consultation. Consult with you on both the construction or renovation of your Existing Flower Shop, if any, and equipping of your Franchised Unit, and provide you with a list of designated and approved suppliers of goods and services for the construction, renovation and equipping of the Franchised Unit. (Franchise Agreement, Sections 9(c), 12 and 14(b) ). d. Inspection. Make a final inspection of your Franchised Unit following completion of construction (or renovation) to authorize you to open the Franchised Unit for business. ( Franchise Agreement, Section 9(c) ). Your Franchised Unit must be built-out to our specifications, including any leasehold improvements, and the signage that we designate and/or approve (including interior and exterior signage for the Franchised Unit and any required vehicle wrap, if you own a vehicle) must be installed, not later than 9 months after you sign the Franchise Agreement, or if you are purchasing a Co-Branded Franchised Unit, within 90 days after you sign the Franchise Agreement and the Co-Brand Addendum. If you fail to have the Franchised Unit built-out and the signage installed within these periods, we will have the right to terminate the Franchise Agreement without giving you an opportunity to cure the default, but we may grant you an extension of this timeframe | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 38 Series 020(2023)a t o u r d i s c r e t i o n. ( Franchise Agreement, Section 9(g) ). I f y o u a d d a F r u i t B o u q u e t s B u s i n e s s i n t o y o u r Franchised Unit, your Franchised Unit must be equipped and ready to offer fruit bouquets not later than 6 months after you sign the Fruit Bouquets Addendum to the Franchise Agreement. e. Initial Training Program. Make our Initial Training Program available to your “ Principal Owner ” and a “ General Manager ”, without charge, for a period of time that we determine, which period will be prior to the date scheduled for the Franchised Unit to open for business. Please see Item 15 for the definitions of “Principal Owner ” and “ General Manager. ” (Franchise Agreement, Section 11(a) ). f. Additional Initial Training Programs. Provide the Initial Training Program to additional supervisorial or managerial personnel, if you request us to do so and, in our sole discretion, we agree to do so. For this service, we have the right to charge our then-current Additional Training Fee, currently $1,500, for each trainee for their attendance at the Initial Training Program. ( Franchise Agreement, Section 11(b) ). g. Virtual Training. W e m a y p r o v i d e a n y o r a l l p o r t i o n s o f t h e I n i t i a l T r a i n i n g P r o g r a m a n d / o r Additional Initial Training Program remotely over a virtual communication platform designated by us. (Franchise Agreement, Section 11(f) ). h. Manuals. Immediately following your successful completion of the Initial Training Program, loan you one hard copy of, or otherwise provide you with electronic or other access to, the Franchise Manual, the Fruit Bouquets Manual (if you add a Fruit Bouquets Business into your Franchised Unit), and all other manuals that govern the operations of the Franchised Unit to use during the term of the Franchise Agreement. We may post some or all of the Manuals on a restricted website, intranet, or extranet to which you will have access. The Manuals contain our standard operational procedures, policies, rules and regulations with which you must comply. ( Franchise Agreement, Section 10(b) ). The Franchise Manual contains 359 pages (including appendices). The Fruit Bouquets Manual contains 383 pages (including appendices). The Fruit Bouquets Pricing Guide is provided on-line to all franchisees purchasing a Fruit Bouquets Business. You will be given the opportunity to review the Franchise Manual and the Fruit Bouquets Manual (if you add a Fruit Bouquets B u s i n e s s i n t o y o u r F r a n c h i s e d U n i t ) b e f o r e y o u s i g n y o u r F r a n c h i s e A g r e e m e n t. Y o u m u s t o p e r a t e y o u r Franchised Unit in compliance with the terms of your Franchise Agreement and the Manuals. N o t w i t h s t a n d i n g t h e r e q u i r e m e n t s o f t h e M a n u a l s a n d t h e F r u i t B o u q u e t s P r i c i n g G u i d e, y o u a l o n e w i l l exercise day-to-day control over all operations, activities and elements of your Franchised Unit, including over your employees. Under no circumstances will we do so or be deemed to do so. The various requirements, restrictions, prohibitions, specifications and procedures of the 1-800-Flowers System with which you must comply under your Franchise Agreement and the Manuals do not directly or indirectly constitute, suggest, infer or imply that we control any aspect or element of the day-to-day operations of your Franchised Unit, but o n l y c o n s t i t u t e s t a n d a r d s t o w h i c h y o u m u s t a d h e r e w h e n e x e r c i s i n g y o u r c o n t r o l o v e r t h e d a y-t o-d a y operations of your Franchised Unit consistent with our policies. ( Franchise Agreement, Section 10(a) ). i. Designated and Approved Suppliers. Provide you with a list of our designated and approved suppliers after you sign your Franchise Agreement. ( Franchise Agreement, Section 12 ). Continuing Obligations During the operation of your business, we will: a. Marketing Plans and Materials. Review samples of all marketing and promotional plans and m a t e r i a l s y o u d e s i r e t o u s e, w h i c h y o u m u s t s u b m i t t o u s f o r o u r a p p r o v a l b e f o r e t h e i r u s e. ( Franchise Agreement, Section 8(d) ). | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 39 Series 020(2023)b. Standards. Determine the standards of quality, service, production, merchandising and marketing for your Franchised Unit. ( Franchise Agreement, Section 10(a) ). c. Additional/Remedial Training. Provide you and your supervisorial and managerial personnel with continuing training and education updates in various ways such as through the use of videos, conventions, workshops and meetings, and the like, and provide ongoing and refresher courses in the various aspects of the operation of a Franchised Unit, all of which you must attend. ( Franchise Agreement, Section 11(c) ). d. On-Site Assistance. Provide certain members of our operations staff for up to one week to assist you in establishing standard operating procedures. On-site opening assistance will not be provided if you or any of your affiliates already own or operate another Franchised Unit, or if your Franchise Agreement is signed as a Successor Franchise Agreement. We will select the representatives who will provide the on-site training and the length of time that such training will be provided. ( Franchise Agreement, Section 11(e) ). e. Inspections. Inspect the Franchised Unit to determine the operational status of the Franchised Unit, to grade all aspects of the operation of the Franchised Unit, to maintain compliance with the standards and requirements of the 1-800-Flowers System and to enhance uniformity and quality control. ( Franchise Agreement, Section 11(f) ). f. Consultation and Advisory Services. Consult with you or your supervisorial or managerial personnel concerning the operation of the Franchised Unit, and provide counseling and advisory services to you about th e o p e ra ti o n o f th e F ra n ch i s e d Un i t. W e w i l l, a t r e a s o n a b l e ti m e s, u p o n re qu e s t a n d a t n o ch a rg e to y o u, provide counseling and advisory services to you with respect to the planning, opening and operation of the Franchised Unit, including consultation and advice regarding operating problems and procedures, new developments and improvements in the 1-800-Flowers System, customer credit and collection advice, record keeping, purchasing, marketing, promotion and merchandising, business forms and the interpretation of policy as set forth in the Manuals, as the same may be amended, and in other directives of ours. Generally, we may make recommendations that we deem appropriate to assist your efforts. However, you alone will establish all requirements, consistent with our policies, regarding (i) employment policies, hiring, firing, training, wage and hour requirements, record keeping, supervision, and discipline of employees; (ii) the individuals to whom you will offer and sell your products and services; and (iii) the suppliers from whom you o b t a i n a n y p r o d u c t s o r s e r v i c e s u s e d i n o r a t y o u r F r a n c h i s e d U n i t f o r w h i c h w e h a v e n o t e s t a b l i s h e d designated or approved suppliers. ( Franchise Agreement, Section 11(g) ). g. Virtual Training and Inspections. We may provide all or any portions of the Additional/Remedial Training, post-opening on-site assistance, post-opening consultations and/or post-opening inspections remotely over a virtual communication platform designated by us. ( Franchise Agreement, Section 11(f) ). h. Designated and Approved Suppliers. P r o v i d e y o u w i t h u p d a t e d l i s t s o f o u r d e s i g n a t e d a n d approved suppliers of goods and services periodically during the term of the Franchise Agreement. ( Franchise Agreement, Section 12 ). i. Testing of Recommended Suppliers. Test and evaluate sources of supply you recommend to us with reasonable promptness and approve or disapprove these sources. ( Franchise Agreement, Section 12(f) ). j. Uniform System of Accounting. Provide you with a uniform system of accounting and record keeping for the Franchised Unit, including standardized forms. ( Franchise Agreement, Section 14(a) ). | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 40 Series 020(2023)k. Defense of 1-800-Flowers Marks. Protect and defend your use of the 1-800-Flowers Marks. ( Franchise Agreement, Section 15(a) ). l. Pricing Guidelines. Provide pricing guidelines for 1-800-Flowers products and services, subject to Applicable Law. ( Franchise Agreement, Section 8(c)(iv) ). m. Manuals. Continue to provide you with access to our Franchise Manual and Fruit Bouquets Manual during the term of your Franchise Agreement, which may include audio, video, compact discs, computer software, other electronic media and/or written materials. We have the right to update or change the Manuals in our sole discretion, and may do so from time to time. ( Franchise Agreement, Sections 10(b) and 11(d) ). Length of Time to Open Your Franchised Unit You must open your Standard Franchised Unit for business within 9 months after signing your Franchise Agreement, unless we agree otherwise. ( Franchise Agreement, Section 3(a) ). You must re-open your Existing Flower Shop as a Co-Branded Franchised Unit within 90 days after you sign the Franchise Agreement and Co-Brand Addendum. ( Co-Brand Addendum, Section 2. 9 ). A Standard Franchised Unit usually opens for business 180 days after the Franchise Agreement is signed or the location is accepted. Factors that may affect the length of time between signing of the Franchise Agreement and opening for business include the time necessary for you to: identify a location that we will accept; obtain any financing you need; obtain required permits and governmental agency approvals; fulfill local ordinance requirements; complete construction, remodeling, alteration, and improvement of the Franchised Location, including the installation of fixtures, equipment, and signs; and complete the hiring and training of personnel. Delay in construction may be caused by inclement weather, material or labor shortages, labor actions, slow deliveries, equipment shortages, pandemics and similar factors. Site Selection/Lease/Purchase of Real Estate Standard Franchised Unit You mus t identify a l oca tion f or your S tanda rd Fran chised Unit that we mus t appro ve be fore you lease o r purchase the location. ( Franchise Agreement, Section 3(a) ). We expect that you will use a third-party to assist you in locating a suitable site, negotiating the lease or purchase agreement, and planning the interior of the Franchised Unit, and with project management. We will provide you with our site selection criteria following the effective date of your Franchise Agreement. You are solely responsible for selecting the site for your Franchised Location. We will review, approve, reject or provide comments to you regarding your proposed Franchised Location site within 30 days after receipt of all available information regarding the site. ( Franchise Agreement, Section 3(a) ). We consider the general location and neighborhood, traffic patterns, parking, size, physical characteristics, lease terms, contributions for leasehold improvements, if any, from a landlord, level of competition, the proximity of other 1-800-Flowers Shops to your proposed Franchised Location, and population density, income levels and other demographic information in our consideration of a site. Following o u r a p p r o v a l o f a p r o p o s e d F r a n c h i s e d L o c a t i o n, i f y o u w i l l b e e n t e r i n g i n t o a T h i r d-P a r t y L e a s e f o r t h e Franchised Location directly with a Third-Party Landlord, you must submit your proposed Third-Party Lease t o u s a n d a l l o w u s a t l e a s t 1 5 d a y s t o r e v i e w i t, w h i c h w e w i l l d o o n l y a s n e c e s s a r y t o c o n f i r m t h a t t h e provisions required by the Franchise Agreement have been included in the Lease, and that you and the Third-Party Landlord have signed an Option to Obtain Lease Assignment ( Exhibit E) in the form we specify. You | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 41 Series 020(2023)must provide us with a fully signed copy of any lease you sign following our acceptance. (Franchise Agreement, Section 3(b)(ii) ). I f y o u h a v e n o t s e l e c t e d a n a p p r o v e d F r a n c h i s e d L o c a t i o n f o r a S t a n d a r d Franchised Unit within 6 months from the date you sign the Franchise Agreement, or open the Franchised Location within 9 months from the date you sign the Franchise Agreement, we have the right to terminate the Franchise Agreement. ( Franchise Agreement, Section 3(a) ). The typical length of time between the signing of the Franchise Agreement and, if applicable, the Fruit Bouquets Addendum to the Franchise Agreement, and the opening of a Standard Franchised Unit is 6 to 9 m o n th s. I f y o u a d d a F ru i t Bo u qu e ts Bu s i n e s s i n to y o u r F ra n ch i s e d Un i t a f t e r i t h a s b e e n co n s tru cte d, w e estimate the time between signing the Fruit Bouquets Addendum to the Franchise Agreement and when you begin to offer fruit bouquets will be between 4 to 6 months. The factors that affect this time include your ability to secure financing and obtain building permits, as well as weather conditions, pandemics, mishaps during the course of construction/renovation, delayed installation of equipment, fixtures and signs, your completion of the Initial Training Program, and your selection, hiring and training of competent personnel. Co-Branded Franchised Unit You will not need to locate a site for your Co-Branded Franchised Unit because you will already be operating your Existing Flower Shop from your current premises. We will be deemed to have accepted your existing p re m i s e s f o r co n v e rs i o n t o a C o-B ra n d e d F ra n ch i s e d Un i t w h e n w e s i g n y o u r C o-Bra n d Ad de n du m. ( Co-Brand Addendum, Section 2. 2 ). Your Existing Flower Shop must be fully co-branded to become a Co-Branded Franchised Unit, including any leasehold improvements required and the installation of the signage that we designate and/or approve (including interior and exterior signage for the Co-Branded Franchised Unit and any required vehicle wrap), not later than 90 days after you sign the Franchise Agreement and Co-Brand Addendum. If you fail to fully co-brand your Existing Flower Shop and install the required signage within this 90 day period, we have the right to terminate the Franchise Agreement without giving you an opportunity to cure the default. ( Co-Brand Addendum, Section 2. 11 ). I f y o u a d d a F r u i t B o u q u e t s B u s i n e s s i n t o y o u r Franchised Unit, your Co-Branded Franchised Unit must be equipped and ready to offer fruit bouquets not l a te r th a n 6 m o n th s a f te r y o u s i g n th e F ru i t B o u qu e ts A dde n du m to th e F ra n ch i s e Ag re e m e n t. ( Co-Brand Addendum, Sections 2. 2 and 2. 11 ). The typical length of time between when you sign the Franchise Agreement and Co-Brand Addendum and the re-opening of your business is 60 to 90 days. If you add a Fruit Bouquets Business into your Co-Branded F r a n c h i s e d U n i t, w e e s t i m a t e t h e t i m e b e t w e e n s i g n i n g t h e F r u i t B o u q u e t s A d d e n d u m t o t h e F r a n c h i s e Agreement, and when you begin to offer fruit bouquets, will be between 4 to 6 months. The factors that affect this time include your ability to secure financing and obtain building permits, as well as weather conditions, pandemics, mishaps during the course of renovation, the delayed installation of equipment, fixtures or signs, and your completion of the Initial Training Program. Successor Franchise If we grant you a Successor Franchise, we will have an option to require you to relocate the Franchised Unit at the end of the initial term of your Franchise Agreement, based upon our analysis of market changes in your trade area during the past 10 years of your operation of the Franchised Unit. If we elect to require you to re-locate the Franchised Unit, we must give you 6 months' prior written notice of our intention to do so and you must re-locate the Franchised Unit at your sole expense. If you are subletting the Franchised Unit's premises under a Sublease from us or a subsidiary or affiliate, you must give us notice that you wish to renew the | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 42 Series 020(2023)Sublease and we must receive your notice not later than 30 days before the landlord requires notice of renewal under the terms of the Master Lease. ( Franchise Agreement, Sections 3(e) and 4(b); Sublease, Sections 4(b) and 4(d) ). Website We have the right, but are not obligated, to establish and maintain a website to provide information about the 1-800-Flowers System and the goods and services that 1-800-Flowers Shops provide. Our website may include a se ries o f interio r web pages tha t may identify 1-800-Flowers Shops by name, geographic region, a ddres s, telephone number or e-mail address. We have the right to use this website to engage in electronic commerce, or to establish another facility on the Internet to do so. ( Franchise Agreement, Section 18(c) ). You may not establish a website that includes our 1-800-Flowers Marks, nor may you offer, promote, or sell any products or services or make any other use of the 1-800-Flowers Marks on the Internet without our prior written consent. (Franchise Agreement, Sections 18(b) and 18(c) ). As a condition to granting our consent, we have the right to establish requirements that we deem appropriate, including the requirement that your only presence on the Internet must be through one o r m ore web p ages that we e stablish on ou r website. You m ay not soli cit or accept orders through your website for 1-800-Flowers' or its subsidiaries' products. We may, in our discretion, permit you to use an existing website and/or domain name, but if your domain name or URL contains any of our 1-800-Flowers Marks, you must transfer the domain name or URL to us when we direct you to do so and on the expiration or termination of your Franchise Agreement. (Franchise Agreement, Sections 18(b), 18(c) and 18(f) ). You are strictly prohibited from using the 1-800-Flowers Marks in any manner on any social media and/or networking Websites, such as Facebook, Linked In, Instagram and Twitter (or any successor Websites), without our prior written consent. ( Franchise Agreement, Section 18(b)(iii) ). If you are signing a Fran chise Ag reement an d a Co-Brand Addendum, we may permi t you to con tinue to operate a website you operated as an independent florist, provided that you utilize our 1-800-Flowers Marks as defined by the Franchise Manual and the Fruit Bouquets Manual (if you add a Fruit Bouquets Business into your Franchised Unit). ( Co-Brand Addendum, Section 2. 17 ). Intranet We have the right, but are not obligated, to establish a website or other electronic system providing private and secure communications (e. g., an Intranet) between us, our franchisees, and other persons and entities that we decide are appropriate. If we require, you must establish and maintain access to the Intranet in the manner we designate. Additionally, we have the right to periodically prepare agreements and policies concerning the use of the Intranet that you must acknowledge and/or sign. ( Franchise Agreement, Section 18(e) ). Internet We have the right, but are not obligated, to initiate an electronic commerce program. You may have the opportunity to participate in the program if you are in good standing under the Franchise Agreement and any other ag reement with u s o r ou r affilia tes. ( Franchise Agreement, Section 18(d) ). We ha ve the sole right to market on the Internet and use the 1-800-Flowers Marks on the Internet, including all use of websites, domain names, URLs, directory addresses, email addresses, metatags, linking, advertising, co-branding and other arrangements, and in all other forms of electronic media. You may not separately register any domain name or any portion of a domain name containing the 1-800-Flowers Marks or participate or market on any website or other form of electronic media (including social technology, social media and social networking platforms) using the 1-800-Flowers Marks, unless you first obtain written approval from us. Your general conduct on the | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 43 Series 020(2023)Internet or other forms of electronic media, including your use of the 1-800-Flowers Marks or any advertising, is subject to the terms and conditions of the Franchise Agreement, the Manuals, and any other rules, requirements or policies that we have the right to periodically identify. ( Franchise Agreement, Section 18(b) ). We and our affiliates, including 800-Flowers, have the right to service customers in your trade area via the Internet, and, as such, you may be competing with us or our affiliates for the business of these customers and the fulfillment of their orders. Marketing and Marketing Funds We may maintain and administer 2 separate Marketing Funds. The 1-800-Flowers Franchise Co., Inc. Marketing Fund (the “ Floral Marketing Fund ”) was suspended in January 2009 and remained suspended during the fiscal year ended July 2, 2023. If reinstated, the Floral Marketing Fund will be for the benefit of the entire 1-800-Flowers System to assist in the provision of floral services and products, and, if established, the “Fruit Bouquets Marketing Fund ” will be for the benefit of all franchisees offering the Fruit Bouquets Program and is intended to maximize general public recognition in all media, of the Fruit Bouquets Marks, patronage of retail outlets participating in the Fruit Bouquets Program, and the availability of fruit bouquets and related products offered at 1-800-Flowers Franchised Units and elsewhere. If the Floral Marketing Fund is reinstated, and if you operate a Standard Franchised Unit, you must contribute to the Floral Marketing Fund an amount equal to 2% of Adjusted Gross Sales. ( Franchise Agreement, Section 8(a) ). If you add a Fruit Bouquets Business into your Franchised Unit, you will also contribute to the Fruit Bouquets Marketing Fund an amount equal to 2% of your Fruit Bouquets Gross Sales each month ( Fruit Bouquets Addendum, Section 9 ); however, the Fruit Bouquets Marketing Fund has not yet been established, so no money has been collected or spent by this fund. Once the Fruit Bouquets Marketing Fund is established, we have the right to begin collecting Fruit Bouquets Marketing Fund contributions from you upon 30 days' advance written notice. If the Floral Marketing Fund is reinstated, and you operate a Co-Branded Franchised Unit, you must pay a Marketing Fee of $250 per month to the Floral Marketing Fund. ( Co-Brand Addendum, Section 2. 7 ). National and regional marketing programs can include the use of television and radio campaigns, yellow pages advertising, public relations activities, the use of toll-free telephone numbers, telemarketing systems, on-line computer networks and services, the Internet, interactive television and other technological advances for local and regional coverage. We have the right to direct the activities of the Marketing Funds and have the right to utilize the services of advertising and public relations agencies to assist in these activities. ( Franchise Agreement, Section 8(c)(iii) ). We have the right, but not the obligation, to make expenditures for you that d i r e c t l y b e n e f i t y o u o r y o u r F r a n c h i s e d U n i t. ( Franchise Agreement, Section 8(c)(i) ). A n y p o r t i o n s o f t h e Marketing Funds that are not spent during the fiscal year in which they accrue may be spent by the Marketing Funds during any following year. ( Franchise Agreement, Section 8(c)(viii) ). We will make contributions to the Marketing Funds equal to the amounts required of comparable Franchised Units for each of our or our subsidiaries' or affiliates' company-owned 1-800-Flowers Shops operating in any market or region in which there are also 5 or more Franchised Units in operation. ( Franchise Agreement, Section 8(c)(ii) ). During the term of your Franchise Agreement, at your written request within 120 days after the end of our fiscal year, if reinstated or established, we will provide you with an annual statement summarizing the expenditures of the Marketing Fund(s) to which you may have contributed during the immediately preceding f i s c a l y e a r. N e i t h e r M a r k e t i n g F u n d w i l l b e a u d i t e d. ( Franchise Agreement, Section 8(c)(vi) ). The 1-800-Flowers Marketing and Finance Departments administer the Marketing Funds on our behalf. ( Franchise Agreement, Section 8(c) ). | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 44 Series 020(2023)During the fiscal year ended July 2, 2023, the Floral Marketing Fund did not have any expenses. The Floral Marketing Fund remained suspended in the fiscal year ended July 2, 2023, but money remaining in the Floral Marketing Fund will continue to be used for promotional purposes. During the fiscal year ended July 2, 2023, the Floral Marketing Fund spent a total of $0 of its previously accrued funds. During the fiscal year ended July 2, 2023, the Fruit Bouquets Marketing Fund was not yet established, so no money was collected or spent by the Fruit Bouquets Marketing Fund. We receive reimbursement from the Marketing Funds for all direct and indirect expenses incurred for our development of marketing programs for 1-800-Flowers Shops products and services, and for our supervision and administration of the Marketing Funds. ( Franchise Agreement, Section 8(c)(v) ). We have the right to begin collecting Floral Marketing Fund contributions again at any time and we will provide 30 days' advance written notice that you must begin contributing. No portion of the Marketing Funds are used for advertising for the sale of franchises. Local Marketing Y o u m a y u n d e r t a k e a d d i t i o n a l m a r k e t i n g a n d a d v e r t i s i n g a t y o u r o w n e x p e n s e d u r i n g t h e t e r m o f t h e Franchise Agreement; however, your use of any and all marketing materials in any medium is subject to our prior review and written approval and must be conducted in a dignified manner in accordance with our then-current standards and specifications. ( Franchise Agreement, Section 8(d) ). Cooperative We reserve the right to form a local, regional or national advertising coverage area in which your Franchised U n i t i s l o c a t e d f o r t h e p u r p o s e o f d e v e l o p i n g a c o o p e r a t i v e l o c a l, r e g i o n a l o r n a t i o n a l a d v e r t i s i n g o r promotional program (a “ Cooperative ”). We, in our sole discretion, will have the right to change, merge, or dissolve the Cooperative. If formed, the Cooperative will not be dissolved until all of the money collected for the Co opera tive has been spent fo r a dv erti sing and p romo tional pu rposes. ( Franchise Agreement, Section 8(g)). Grand Opening Promotional Campaign We will develop and provide you with a promotional campaign for the grand opening of the Franchised Unit for business. We estimate that you will spend between $2,000 and $5,000 for a Standard Franchised Unit (Franchise Agreement, Section 8(f) ) and between $500 and $2,000 for a Co-Branded Franchised Unit. ( Co-Brand Addendum, Section 2. 8 ). Franchise Advisory Board We no longer have a Franchise Advisory Board, but we have the right to re-establish one in the future. POS Systems During the term of your Franchise Agreement, we will use our best efforts through our affiliates to establish and maintain standards for the required computerized point-of-sale hardware, software and/or web-based systems (“ POS Systems ”) for the Franchised Unit and provide you, either directly through our affiliates or indirectly through the use of approved third-party vendors, with ongoing technical support, maintenance and r e p a i r s e r v i c e s, u p g r a d e s a n d u p d a t e s f o r t h e s e s y s t e m s. ( Franchise Agreement, Section 11(g) ). We will specify the currently approved POS Systems in the list of designated and approved suppliers that we give you, and we have the right to change the approved POS Systems in the future. We currently approve the Bloom Net | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 45 Series 020(2023)Business Management System (Bloom Net BMS) and the Visual Ticket POS System, but these POS Systems are not the only systems we may approve. The hardware distributor of the Bloom Net BMS POS System is Dell Computers, One Dell Way, Round Rock, Texas 78682, telephone: 800-999-3355. The software vendor for the Bloom Net BMS POS System is Bloom Net, Two Jericho Plaza, Suite 200, Jericho, New York, 11753, telephone: 516-237-6000. Bloom Net Business Management System: Bloom Net Business Management System Hardware Requirements Description Dell Optiplex 3090 Workstation (WS360010) (or similar model) Workstation Brother Laser Printer ( HL-L6200DW ) (or similar model) Printer Dell Point of Sale (POS) Kit: Keyboard/Swiper, Cash Drawer & Receipt Printer (OM300010) (or similar model)POS Kit Bloom Net Technologies BMS Software: All inclusive, multi-user license License Agreements and Software The estimated cost to purchase or lease the Bloom Net POS System is approximately $150 to $10,000. The estimated cost for monthly lease, maintenance, upgrades and updates is approximately $200 per month. The m anufactu rer of the Visual Ticke t P OS Syste m i s Floral Syste ms. com, Inc., 4 97 Main Roa d, Co rfu, N ew York 14036, telephone: 866-797-2428. The estimated cost to purchase or lease the Visual Ticket POS System is approximately $5,000 to $50,000. The estimated cost for monthly lease, maintenance, upgrades and updates is approximately $200 to $500 per month, depending on the number of stations and features chosen. If you are co-branding your Existing Flower Shop under the Co-Brand Addendum, we expect that you will initially use your existing POS System in your Co-Branded Franchised Unit. We have the right to specify the POS System you must purchase at any time, although at our discretion we may wait to do so until after your existing contract expires. We also have the right to change the approved POS Systems in the future. When we require you to purchase an approved POS System, the relevant provisions in your Franchise Agreement will apply. ( Co-Brand Addendum, Section 2. 12 ). You must update and upgrade your POS System during the term of the Franchise Agreement. You must pay a monthly charge for technical support as established by your service provider. You must use your POS System in your business as a cash register system, a customer data system, an inventory system, an employee payroll and time maintenance system, a wire service reconciliation and a daily sales reporting system. We have the right to, and will, access daily sales information from your POS System in our sole and absolute discretion and will require you to transmit this data on a daily basis by fax, telephone or through dedicated electronic polling systems. All electronic cash registers, POS Systems, electronic communications systems and computer h a rdw a re a n d s o f t w a r e i n s ta l l e d a t th e F ra n ch i s e d U n i t m u s t p e r m i t u s t o p o l l s a l e s i n f o rm a ti o n f ro m th e Franchised Unit and to electronically transmit and obtain sales and other data to and from the Franchised Unit. (Franchise Agreement, Section 10(m) ). You must enter into a Bloom Net Technologies Systems Agreement with Bloom Net to obtain a limited license to use certain electronic communications software, documentation and content that comprise the Bloom Net | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 46 Series 020(2023)Technologies Systems, or other electronic systems Bloom Net designates to fulfill orders and communications functions at the Franchised Unit. ( Franchise Agreement, Section 2(b) ). Initial Training Program All training will occur, as we determine in our discretion, at our Jericho, New York headquarters, designated locations in Jacksonville, Florida, through a virtual communication platform and/or at a Franchised Unit or company-owned 1-800-Flowers Shop. The Initial Training Program consists of approximately 20 days of training, including 1 week of training at one of our training facilities and one week of training at your Franchised Unit or another Franchised Unit. ( Franchise Agreement, Section 11(a) ). We do not cu rrently have a se t sche dule f or providin g training. The Initial T raining Prog ram is conducted when, in our judgment, there are a sufficient number of individuals ready to train, but in any event will be provided to you prior to the date scheduled for your Franchised Unit to open for business. We will train your Principal Owner and General Manager to open a Franchised Unit at no cost to you other than your initial franchise fees. ( Franchise Agreement, Section 11(a) ). If you send more than 2 persons to the Initial Training Program, you must pay us the Additional Training Fee, currently $1,500, for each additional trainee for their a t t e n d a n c e a t t h e I n i t i a l T r a i n i n g P r o g r a m. T h e I n i t i a l T r a i n i n g P r o g r a m i s m a n d a t o r y f o r y o u a n d y o u r designated supervisorial or managerial employee and is available to any other of your supervisorial and managerial employees whom you desire to attend this program, at your expense. We require that all trainees pass our certification test at the conclusion of the training program. You must pay for the living and travel expenses for all of your participants in the Initial Training Program. ( Franchise Agreement, Section 10(l) ). We may, at your request and in our discretion, provide additional Initial Training Programs for your new or replacement supervisorial or managerial personnel following the opening of your Franchised Unit. If you request us to provide such training and, at our discretion, we agree to do so, you must pay us our then-current Additional Training Fee for each additional trainee for their attendance at the Initial Training Program. In addition, you must pay all transportation costs, food, lodging and similar costs incurred in connection with your employees' attendance at any such Additional Initial Training Programs. ( Franchise Agreement, Section 11(b) ). If the trainee is not the person who will perform the accounting functions required by the Franchise Agreement and the Franchise Manual, we have the right to require the person who will be responsible for those functions to attend training sessions that deal with accounting matters. ( Franchise Agreement, Section 10(l)(i) ). You and your designated trainee must complete the Initial Training Program to our satisfaction. We generally do not require franchisees who operate multiple Franchised Units to attend the Initial Training Program after doing so for their first Franchised Unit, but we do require them to send their supervisorial and managerial employees for each of their Franchised Units to the Initial Training Program. You and your supervisorial and managerial employees must a tten d training and e ducation p rog rams and re fre sher course s provide d by us du ri n g th e te rm o f th e F ra n ch i s e Ag re e m e n t. ( Franchise Agreement, Section 10(l) ). T h e f o l l o w i n g a re o u r Initial Training Programs as of our most recent fiscal year end: | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 47 Series 020(2023)INITIAL TRAINING PROGRAM STANDARD FRANCHISED UNIT Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Introduction 2 0 Corp. HQ, Jacksonville, FL or virtual communication platform Franchisee Compliance Checklist 4 16 Corp. HQ, Jacksonville, FL, Various Agencies or virtual communication platform Product Knowledge: Flowers 2 4 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Product Knowledge: Plants 2 2 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Care and Handling 2 6 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Product Knowledge Review & Exam: Flowers & Plants/Care & Handling2 0 Corp. HQ, Jacksonville, FL or virtual communication platform Flower & Plant Identification 0 8 Flower Marts or virtual communication platform Design Principles 4 24 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Design Principles Review & Exam 1 0 Corp. HQ, Jacksonville, FL or virtual communication platform Delivery Services 2 8 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Delivery Services Review & Exam 1 0 Corp. HQ, Jacksonville, FL or virtual communication platform Guest Services & Selling Skills 4 8 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Guest Services & Selling Skills Review & Exam1 0 Corp. HQ, Jacksonville, FL or virtual communication platform Loss Prevention 2 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 48 Series 020(2023)Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Merchandising 3 4 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Merchandising Review & Exam 1 0 Corp. HQ, Jacksonville, FL or virtual communication platform POS Training 0 24 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Marketing, Advertising & Promotions6 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Marketing, Advertising & Promotions Review & Exam1 0 Corp. HQ, Jacksonville, FL or virtual communication platform Finance & Administration 8 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Finance & Administration Review & Exam1 0 Corp. HQ, Jacksonville, FL or virtual communication platform Seasonal Planning 4 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Store Review 2 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform Vendor List 1 0 Corp. HQ, Jacksonville, FL, Existing Franchise Store or virtual communication platform TOTAL HOURS 56 104 INITIAL TRAINING PROGRAM CO-BRANDED FRANCHISED UNIT Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Introduction 1 0 Franchisee Store Location or virtual communication platform Franchisee Compliance Checklist2 0 Franchisee Store Location or virtual communication platform | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 49 Series 020(2023)Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Delivery Services 2 0 Franchisee Store Location or virtual communication platform Delivery Services Review & Exam1 0 Franchisee Store Location or virtual communication platform Guest Services & Selling Skills4 0 Franchisee Store Location or virtual communication platform Guest Services & Selling Skills Review & Exam1 0 Franchisee Store Location or virtual communication platform Loss Prevention 2 0 Franchisee Store Location or virtual communication platform Merchandising 3 0 Franchisee Store Location or virtual communication platform Merchandising Review & Exam1 0 Franchisee Store Location orvirtual communication platform Marketing, Advertising & Promotions6 0 Franchisee Store Location or virtual communication platform Marketing, Advertising & Promotions Review & Exam1 0 Franchisee Store Location or virtual communication platform Finance & Administration4 0 Franchisee Store Location or virtual communication platform Finance & Administration Review & Exam1 0 Franchisee Store Location or virtual communication platform Seasonal Planning 4 0 Franchisee Store Location orvirtual communication platform Store Review 2 0 Franchisee Store Location or virtual communication platform Vendor List 1 0 Franchisee Store Location or virtual communication platform Franchisee Questions 4 0 Franchisee Store Location or virtual communication platform TOTAL HOURS 40 0 The instructors for floral training include Stephen Lenzovich, Mike Cline, Arthur Herrera and Elmerinda Phillips. Each of our instructors has at least 8 years of experience in the subject they are teaching and they have all been with us for more than 8 years. | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 50 Series 020(2023)INITIAL TRAINING PROGRAM FRUIT BOUQUETS Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Health, Sanitation and Safety. 5 0 Existing Franchised Unit or virtual communication platform Location Set-up. 5 0 Existing Franchised Unit or virtual communication platform Design Resource Guide. 25 0 Existing Franchised Unit or virtual communication platform Production 1 0 Existing Franchised Unit or virtual communication platform Fruit and Supply Purchasing. 5 0 Existing Franchised Unit or virtual communication platform Storage, Equipment and Work Flow 1 0 Existing Franchised Unit or virtual communication platform Delivery Procedures, Delivery Vehicles. 5 0 Existing Franchised Unit or virtual communication platform Training Video. 5 0 Existing Franchised Unit or virtual communication platform Kitchen Basics, Cleaning Practices. 5 0 Existing Franchised Unit or virtual communication platform Selecting Fruit. 5 0 Existing Franchised Unit or virtual communication platform Washing Fruit. Preparing Fruit for Cutting. 25 0 Existing Franchised Unit or virtual communication platform Fruit Cutting, Slices and Shapes. 5 0 Existing Franchised Unit or virtual communication platform Fruit Storage. 25 0 Existing Franchised Unit or virtual communication platform Arranging 3 0 Existing Franchised Unit or virtual communication platform Cutting Apples, Oranges and Pears. 25 0 Existing Franchised Unit or virtual communication platform Skewering Fruit. 25 0 Existing Franchised Unit or virtual communication platform Chocolate-Storage, Prep, Dipping. 5 0 Existing Franchised Unit or virtual communication platform | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 51 Series 020(2023)Subject Hours Of Classroom Training Hours Of On-The-Job Training Location Decorating with Chocolate. 5 0 Existing Franchised Unit or virtual communication platform Toppings. 5 0 Existing Franchised Unit or virtual communication platform Containers, Preparing Bases. 25 0 Existing Franchised Unit or virtual communication platform Skewering Other Fruit. 5 0 Existing Franchised Unit or virtual communication platform Arranging 3. 25 0 Existing Franchised Unit or virtual communication platform Wrapping. 25 0 Existing Franchised Unit or virtual communication platform TOTAL HOURS 16 0 If you purchase a Fruit Bouquets Business, we will provide an additional 2 days of training at no cost to you, at your existing Franchised Unit and/or through a virtual communication platform as described above. ( Fruit Bouquets Addendum, Section 10 ). The instructors for Fruit Bouquets training include Scott Shepard, Priscilla Targownik and Billy Cabral. With the exception of Billy Cabral who has been with us for less than 3 years, our instructors have been with us for at least 6 years and have at least 7 years of experience in the subjects they are teaching. Fruit Bouquets training is currently conducted at your Franchised Unit and/or through a virtual communication platform. INITIAL TRAINING PROGRAM MULTI-UNIT OPERATIONS Subjects Hours Of Classroom Training Location Introduction 1Corp. HQ, Jacksonville, FL or virtual communication platform Managing Standards at Multiple Sites 4Corp. HQ, Jacksonville, FL or virtual communication platform Advertising & Promotions for Multiple Sites 3Corp. HQ, Jacksonville, FL or virtual communication platform Purchasing for Multiple Sites 3Corp. HQ, Jacksonville, FL or virtual communication platform Building a Staff for Multiple Sites 4Corp. HQ, Jacksonville, FL or virtual communication platform Questions & Wrap-Up 1Corp. HQ, Jacksonville, FL or virtual communication platform TOTAL HOURS 16 | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 52 Series 020(2023)The primary instructional materials include the Franchise Manual, the Fruit Bouquets Manual, visual materials (such as Power Point slides) and other materials that we believe will be useful during training. Before you open for business at the Franchised Unit, you, or other supervisorial or managerial personnel that you designate who will assume responsibility for the day-to-day management of the operation of your Franchised Unit, must attend and successfully complete our Initial Training Program to our satisfaction. You shall be responsible for all expenses incurred in connection with attendance at the Initial Training Program, including, without limitation, the costs of transportation, lodging, meals, training materials and any wages. Upon your agreement, we may waive this training requirement if you are experienced in the floral business and do not require initial training. Furthermore, the Initial Training Program will not be provided if (i) you or a n y a f f i l i a t e o f y o u r s a l r e a d y o w n s o r o p e r a t e s a n o t h e r F r a n c h i s e d U n i t a t t h e t i m e t h a t y o u s i g n y o u r Franchise Agreement, or (ii) you are signing the Franchise Agreement as a Successor Franchise Agreement. (Franchise Agreement, Sections 10(l) and 11(a) ). Additional Initial Training. If you request that we provide the Initial Training Program to additional supervisorial or managerial employees, other than your Principal Owner and General Manager, and at our discretion we agree to do so, we will have the right to charge you our then-current Additional Training Fee, currently $1,500, for each of your additional trainees for their attendance at the Initial Training Program, in order to defray the direct costs of training such persons. In addition, you shall be responsible for any and all other expenses incurred in connection with you and your employees attending such additional training, including the costs of transportation, lodging, meals, training materials and any wages. The training of the additional person(s) shall be done at times and at locations we determine, which times and locations may not be the same as established for you and the initial trainee. ( Franchise Agreement, Section 11(b) ). I f y o u a d d a F r u i t B o u q u e t s B u s i n e s s t o y o u r F r a n c h i s e d U n i t, y o u m a y r e q u e s t a d d i t i o n a l t r a i n i n g o r assistance related to fulfilling fruit arrangements. If, at our discretion, we provide such additional training, we will provide the additional training at no charge. (Fruit Bouquets Addendum, Section 12 ). Additional/Remedial Training. We will provide your Principal Owner and General Manager, and, as appropriate, your supervisorial or managerial employees, with additional training and education programs through the use of videos, conventions, workshops and meetings, and the like, and shall provide ongoing and refresher courses in the various aspects of operation of a Franchised Unit. We have the right to require you to complete such training, and to charge you our then-current Additional Training Fee, currently $1,500, for each additional trainee for such training and education program that is in-person, in order to defray the direct costs of providing these services. In addition, you will be responsible for any and all other expenses incurred in connection with you and your supervisorial or managerial employees attending these training and education programs, including, without limitation, the costs of transportation, lodging, meals, training materials and any wages. ( Franchise Agreement, Section 11(c) ). If we de termine that it i s neces sary, we ha ve the right to re quire y ou to a tten d re medial training, an d may provide other assistance subject to the availability of our personnel. We have the right to charge you our then-current Additional Training Fee for you and each additional trainee for such remedial training, to defray the direct costs of providing the training. In addition, you will be responsible for any and all other expenses incurred in connection with you and your supervisorial and managerial employees attending such remedial training, including the costs of transportation, lodging, meals, training materials and any wages. We will, in our discretion, select the time and location of all remedial training. ( Franchise Agreement, Section 11(c) ). | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 53 Series 020(2023)Virtual Training and Assistance. We may provide all or any portions of the Initial Training Program, Additional Initial Training Program, Additional/Remedial Training Programs, post-opening on-site opening assistance and/or post-opening consultations remotely over a virtual communication platform designated by us. ( Franchise Agreement, Section 11(f) ). ITEM 12 TERRITORY Franchise Agreement You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands we control. Your Franchise Agreement will designate the approved location of the Franchised Unit and you may conduct business only at that Franchised Location. You can solicit and accept orders through recognized floral wire services and Bloom Net, pre-approved local yellow pages advertising and other pre-approved media, as we deem appropriate, without restriction, but you may not use other alternative distribution channels to solicit or fill orders. You may not use the Internet or a centralized telephone system for inter-store or intra-store transmissions of sales to or from the Franchised Unit w i t h o u t o u r p r i o r w r i t t e n c o n s e n t o r o t h e r w i s e u s e i n t e r-s t o r e o r i n t r a-s t o r e t r a n s m i s s i o n s o f s a l e s t o understate Gross Sales. As a member of the Bloom Net Network, you may be referred orders from Bloom Net or 800-Flowers at your Franchised Unit through the Bloom Net Network for fulfillment, but neither Bloom Net nor 800-Flowers is obligated to refer you any wire, telephone or Internet orders. If an order is referred to you for fulfillment using these alternative distribution methods, you will earn a portion of the revenue from that order if you fulfill the order according to our requirements. The Premier Order Fulfillment Agreement, if you choose to sign it, does not grant you exclusive rights to fulfill orders in a specific area or zip code. There is no minimum sales quota, market penetration or other contingency you must meet to maintain your rights under the Franchise Agreement, except that you must comply with the terms of the Franchise Agreement, the 1-800-Flowers System, the Franchise Manual, the Fruit Bouquets Manual (if you add a Fruit Bouquets Business into your Franchised Unit) and any of our other directives. General We and our affiliates can establish membership relationships and company-owned units using the 1-800-Flowers Marks and grant franchises under the trade name “1-800-Flowers” or “Conroy's Flowers” for a similar or competitive business that will use the 1-800-Flowers Marks at any location. Retail will operate company-owned retail units under the trade names “1-800-Flowers”, “Conroy's Flowers”, “1-800-Flowers. Com”, “Fruit Bouquets”, “Fruit Bouquets by 1-800-Flowers. Com”, “fruitbouquets. com”, “Flowerama”, “1-800-Flowers|Conroy's”, and “1-800-Flowers|Flowerama”. 1-800-Flowers, through its subsidiaries, is a leading e-commerce provider of floral products and gifts through the Internet. 1-800-Flowers has developed an international flowers-and-gifts-by-telephone business selling flowers, gifts and related products and services under the trade name “1-800-Flowers” and utilizes the toll-free telephone number 1-800-356-9377, corresponding to “1-800-Flowers”, to receive orders. Orders received through the Internet and by telephone are referred to retail flower shops for fulfillment. We and our affiliates have the right to establish other methods | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
\\Prolaw1\shares\Documents\CPer\16342-11\3124689_3. docx 2023 1-800-FLOWERS FDD 10/19/23 54 Series 020(2023)and alternative channels of distribution under the 1-800-Flowers Marks or other trademarks at any location in the future and have the right to use the 1-800-Flowers Marks, the 1-800-Flowers System, and the marks and names of our affiliates, to own and operate and to grant others the right to own and operate 1-800-Flowers kiosks, carts, concessions, design centers or distribution centers, satellite units, or other mobile, remote, limited service or non-permanent facilities, or other retail operations as part of larger retail venues such as department stores, supermarkets, or shopping malls, or in public areas such as amusement parks, airports, train stations, public facilities, college and school campuses, arenas, stadiums, hospitals, office buildings, convention centers, airlines (in-flight service) and military bases, both within and outside your trading area. In addition, we and o u r a f f i l i a t e s h a v e t h e r i g h t t o o w n a n d / o r o p e r a t e a n d t o g r a n t o t h e r s t h e r i g h t t o o w n a n d / o r o p e r a t e competing businesses through toll-free “1-800”, “1-888”, “1-877” and “1-866” telephone numbers, on-line computer networks and services and the Internet, including so called “virtual stores”, anywhere. We have the right, but are not obligated, to initiate an electronic commerce program. You may have the opportunity to participate in the program if you are in good standing under the Franchise Agreement and any other agreement with us or our affiliates. We have the sole right to market on the Internet and use the 1-800-Flowers Marks on the Internet and in all other forms of electronic media, including all use of websites, domain names, URLs, directory addresses, email addresses, metatags, linking, advertising, co-branding and other arrangements. You may not separately register any domain name or any portion of a domain name containing the 1-800-Flowers Marks or participate or market on any website or other form of electronic media (including social technology, social media and social networking platforms) using the 1-800-Flowers Marks, unless you first obtain written approval from us. You may not solicit sales through alternative distribution channels, such as catalog sales, telemarketing or other direct marketing, without our prior written consent. We are not required to pay you if we exercise any of the rights specified above. I f y o u r l e a s e f o r th e p re m i s e s o f th e F r a n ch i s e d Un i t te rm i n a te s w i th o u t y o u r f a u l t, o r i f th e p re m i s e s a re damaged, condemned or otherwise unusable, or if in your and our reasonable judgment there is a change in the character of the location of the Franchised Unit sufficiently detrimental to its business potential to warrant its relocation, we may grant our permission for you to relocate the Franchised Unit. You may not relocate your Franchised Unit without our prior written consent, which will not be unreasonably w i t h h e l d. Y o u a r e n o t g r a n t e d a n y o p t i o n s, r i g h t s o f f i r s t r e f u s a l, o r s i m i l a r r i g h t s t o a c q u i r e a d d i t i o n a l franchises, but we may consider granting you the right to establish additional Franchised Units under then-current Franchise Agreements, particularly if you already own additional Existing Flower Shops in areas and at sites that we approve, but we have no obligation to do so. ITEM 13 TRADEMARKS 1-800-Flowers authorizes us to grant you the limited right to operate a Franchised Unit under the “1-800-Flowers” trade name and 1-800-Flowers Marks. You may also use our other current and future trade names, tra dema rks and/o r se rvi ce mark s to opera te your F ran chised Unit on a limite d basis only wi th our e xpres s written consent. The word “trademark” means all trade names, trademarks, service marks and logos used to identify your Franchised Unit. The following service marks have been registered on the United States Patent and Trademark Office Principal Register: | 1 800 FLOWERS.COM FRANCHISE CO INC_2023_Items1-23.pdf |
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