Baristas Coffee Company, Inc. (BCCI)

[BobSinCA]

That's what I said re: franchise fees, profitability.

Mr. Henthorn's email to you spoke about selling supplies to franchisees, with profit margin to BCCI. Happy to assume that is accurate.

My point there is that if BCCI can't make money using their supplies at cost -- which they haven't with the kiosks, with $0.60 operating loss on every $1 of revenue -- it will not be easy for franchisees to make money with the extra 7% revenues in royalties/marketing PLUS BCCI margins on the supplies.

For reference, BCCI reported directs costs (read: supplies?) as 35% of kiosk revenues in 2014. If half of this is supplies which BMOC must buy from BCCI, and there is 15% margin, that is an ADDITIONAL 2.5% of revenues in the BMOC cost structure, not in the BCCI structure. This will be reduced by the extent to which BMOC is selling non-BCCI products such as the soup (but, costs there as well).

Hope BMOC makes lots of money -- but just saying it won't be easy with all of these costs.