Franchising

WHAT IS FRANCHISING?

"Franchising is a sales and production system of both goods and services which is based on a close and continuous cooperation between legally and financially separate and independent parties - a franchiser (provider of franchising) and their single franchisees (receivers of franchising). The franchisor both guarantees to franchisees the right and charges them with the duty to run a business in compliance with his philosophy." Franchising is a system that enables beginning entrepreneurs to gain values which can be in established form of running a business built only by the method "experiment - error".

DEFINITION OF FRANCHISING AS WE SEE IT AFTER FIVE-YEAR EXPERIENCE

Franchising is a form of running a business on the basis of the acceptance of the rights to use the brand (so called licence) and know-how which means above all the adoption of the instructions "how to do it". The franchising partner acquires other intangible assets. As every new entrepreneur the franchisee runs all business risks. He invests his own capital in his own business; he has his own business with his funds, at his expense and at his own risk.

BASIC IDEA OF AMBIENTE RESTAURANTS

The aim of the Ambiente Restaurants philosophy is to offer to their quests the continual, high and quality standards in thematically specific restaurants at middle prices. The Ambiente Restaurants offer today four basic conceptions of franchising:

• THE LIVING RESTAURANTS!
• RISTORANTE PASTA FRESCA!
• PASTACAFFÉ AMBIENTE (TONINO LAMBORGHINI)
• RESTAURANTE BRASILEIRO

TARGET GROUP

• Higher and middle income groups
• Age group 18-65 years
• Local and regional clientele coming for amusement or celebration
• BUSINESS LUNCH in the informal ambience
• Woman as an "ARBITER ELEGANTIAE" (ELLE magazine says that its readers have dinner twice a week in Ambiente Restaurants)

BASIC FIGURES TO AMBIENTE FRANCHISING

• The first Ambiente was founded in 1995.
• Starting from 1997 ten restaurants were open on the basis of franchising; 6 AMBIENTE, 2 PASTACAFFE Tonino Lamborghini, 1 CAFÉ SAVOY and 1 PIZZA NUOVA.
• Two of the restaurants was closed down.
• Setting up of a restaurant lasts from eight to twelve months from the conclusion of the franchising contract.
• Entrance fee for franchising and opening related services is from 800,000 to 1,100,000 CZK.
• Amount of franchising fee is 2-3 % of the turnover monthly.
• Due to the extent of the market and the purchasing power of expenses for entertainment and services we don't plan a rapid expansion, especially to the regions out of the capital Prague.

The owner of the trade mark Ambiente and the franchisor is the company M AMBIENTE SYSTEM GASTRONOMIE, Ltd.