Cafe Serendipity Holdings Inc. (CAFS)

[lesgetrich]

??? I don't understand your confusion. REBRANDING IS FRANCHISING!!! They are open now and have been open under the current management for some time. They become Cafe Serendipity stores within the next few weeks. I assume at that point they will be under full franchise contract. During the transition they were probably stocking up on CAFS product line and making appropriate preparations including signage and any necessary remodeling.

Each store is projected to gross $2 million revenue. CAFS gets the $25,000 franchise fee for each store (assuming they didn't give them a discount for being first) plus a 20% ongoing franchise, consulting and marketing fee. They also get exclusive product sourcing with a requirement that 60% of products be sourced from MCIG (which pays them a 5% rebate in addition to any wholesale markup - the rebate is required from all vendors). CAFS also receives 20% of the store's gross revenue with the store owner getting a net pre-tax profit of 25%.

In return, the store gets...

Franchise Agreement - (8% of the 20% ongoing gross)

• Exclusive Use of all Trademarks, Logos and Branding of Cafe
Serendipity, Inc.
• Use of all Accounting, POS and Technology System
• Exclusive Product Selection
• Proprietary Store Design
• Categories:
Marijuana strains (10 skus) Accessories
Edibles, Beverages
Apparel, Vapes & Pipes
Cafe Lounge, Lotions & Oils
& More...

Consulting Agreement - (7% of the 20% ongoing gross)

• Financial Guidance
• Personnel Training
• Inventory Management
• Product Knowledge Training
• Cash Management
• Standard Operating Procedures
• Retail Store – Site Location Analysis

Marketing & Advertising - (5% of the 20% ongoing gross)

• Print Media
• Online Media
• Social Media
• Cafe Serendipity App: “Push Notifications”, Automatic Sign-in
to the Store and Daily Newsletter

The PR says that they are a "Branded Licensed Store"!!! This would make them subject to all of these terms.

Source...

Cafe Serendipity Investor Presentation