Cafe2U FAQ

Frequently Asked Questions 1. Why Cafe2U?

The benefits of becoming a Cafe2U Franchise Partner go beyond the fact you are joining a proven business system.

As the worlds’ largest mobile coffee franchise there are over 200 other business people worldwide whose experience and expertise is readily available to you.

1.1 What do I get for my investment?

A Cafe2U franchise includes all of the following: Fully Fitted Vehicle & Equipment Mercedes Benz Vito Commercial Van professionally fitted with: • Commercial 2 group espresso coffee machine • Top of the range, quiet diesel generator • High grade commercial refrigeration • Food display and storage refrigerator • Commercial automatic coffee grinder • Commercial blending unit • Food grade stainless steel fittings throughout • Water supply and filtration system • Complete vehicle corporate branding • Branded 3m x 3 m marquee with walls (for events) • Built to comply with the Australian standards relating to mobile food vending

• Fire extinguisher • First aid kit • Food grade ice storage • Air horn • Waste water system • Cash drawer • Product storage containers • Dedicated hand washing facility • Branded flying banner • Highest quality interior construction and fittings

Cafe2U's Exclusive "Acceleration Package" Comprehensive 4 Week training package consisting of: • 1 week of classroom training at the Cafe2U academy, incorporating: • Professional barista training • Launch promotional pack • Safe food handling (HACCP Certification) • Business management training • Food management systems • Local area marketing • Franchise Partner training manuals • Vehicle operations • Business operations manuals • Equipment servicing and troubleshooting • Business development manual • 1 week Franchise Partner (in territory) pre work conducted under supervision • 2 weeks in territory launch program with an experienced Franchise Development Manager to fast track the development of your business • A revenue guarantee of $2000 for the 2 weeks launch period. We will prove to you that the business can turnover a minimum of $500.00 per day, and we will stay with you until it does!

Page 1 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 1.1 What do I get for my investment? (cont.)

Launch Promotional Pack • Dedicated web page linked to our company web site and professionally managed • Local area marketing pack • Promotional posters and flyers

• Branded flying banner • 3m x 3m branded marquee with walls (for events) • Loyalty program cards

Uniforms & Stationery • Start-up uniforms • Unique corporate email address supported and managed by head office

• Business letterhead • Business cards and menus

Launch Stock Initial stock for your 2 week on site launch, valued in excess of $1,000, consisting of: • Cafe2U coffee • Cafe2U chocolate • Cafe2U cups & lids • Cafe2U syrups • Cafe2U fruit puree • Cafe2U iced tea

• Cafe2U sugar sticks • Chai • White Chocolate • Stirrers • Syrup pumps

Ongoing Support • 10 Year franchise agreement (5 plus 5) • Head Office support of 17 professionals to support you • Your personal Franchise Development Manager, available to support your business on call and providing as a minimum personal support; • Minimum of 4 visits per year • Weekly telephone conference • Full day operational support • Personalised business development plan • Exclusive Territory • Professional mapping of customers • Unique territorial customer list • Preferred supplier agreements • Ongoing product development • National purchasing power • Website – professionally maintained • Your own webpage on website • 1300 Cafe2U (1300 223 328) • Regional, state and national conferences • National mainstream media campaign • Franchise Partner advisory council • Google Listing – Adwords • Regular Franchise Partner meetings • Monthly e-letter • National events co-ordinator • Online Franchise Partner forum Page 2 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 1.2 What do I need to do to get started?

Cafe2U maintains a strong relationship with many of Australia's leading finance providers.

Typically our lenders will look for either a $20 000 deposit or property equity against which it can be financed. “ ... if not for (Cafe2U Launch Specialist), I wouldn't’t get to the stage I’m at now for 12 months or more...I’ve only been doing this for 2 weeks now, and my opinion of CAFE2U has not changed... this is the best move I have made in my life ”Steve McCarthy – Cafe2U Tamworth February 2011

1.3 What Franchise Partner training is provided?

A comprehensive 4 week training and launch package is included in the new franchise price.

2. Comparing Cafe2U with competitors 2.1 Why do start-up costs vary so much within the industry?

Start-up costs do vary greatly within the mobile café sector. It can be difficult to compare systems as many tend to concentrate on vehicle construction only rather than positioning themselves to offer a complete franchise model.

In line with our mission, vision and values, Cafe2U concentrates on providing Franchise Partners the highest quality franchise system within the sector and also a system with the greatest value for money and return on investment. As the market leader we are seeking to build strong business relationships with Franchise Partners motivated by operating a quality driven business rather than a business selected solely on price.

Franchise Partners that value the importance of quality and value for money will place emphasis on developing their business by providing their own customers the commitment to quality products and service. It has been proven that within the hospitality industry that quality is of greater importance than price.

A lesser priced product indicates two things, a lack of confidence in the product being sold, or a lack of real value to the consumer.

As you can see from information already provided; Cafe2U is the only true turnkey mobile cafe franchise designed for the Franchise Partner to be profitable from Day 1. The common saying “You get what you pay for” is certainly true within the mobile café industry and is why the Cafe2U team continues to grow.

Page 3 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 2.2 What sets Cafe2U apart from its competitors?

The critical factor determining the success of any franchise system is its ability to create an environment whereby its Franchise Partners can be successful and profitable. Without successful Franchise Partners there is no franchise system. Cafe2U understand this and we have developed our systems with this philosophy in mind.

In order to remain the market leader within the industry we created the depth within our system that allows us to continue driving the growth of the brand and network forward. We have been able to develop a recognised brand through use of mainstream media and marketing initiatives involving our Franchise Partners. We are able to provide our Franchise Partners with the necessary business tools, personal and business development skills and access to coaching and mentoring.

Our system allows us to identify, develop and implement new products and operating methods. We are able to invest in detailed mapping information for our Franchise Partners. We are able to protect our Franchise Partners’ investment by developing and maintaining our HACCP food safe management system accreditations.

We negotiate supply agreement across all products and services to ensure that our Franchise Partners receive the best quality products at the best price. We embrace technology and are able to drive innovation within the business. We do all of these things and more whilst always being able to provide dedicated technical and operational support to our Franchise Partners.

2.3 How can Cafe2U offer services that competitors can’t?

The Cafe2U franchise system has been designed for sustainability. Unlike other business models within the industry, the Cafe2U franchise system is not reliant on new franchise sales to fund the operation of the franchisor. This provides our Franchise Partners with confidence and peace of mind that their investment is protected into the future.

Cafe2U is a genuine franchise system. There are many businesses within the mobile cafe industry that claim to be franchise systems, however do not adhere to the basic fundamentals of franchising, which is to foster a mutually beneficial relationship with benefits and obligations attributed to both parties. Beware of companies that simply a van.

Cafe2U has invested heavily in recruiting the best management team of any company within the industry.

Cafe2U currently has over 17 head office staff with over 80 years of combined franchising experience and over 100 years of coffee and hospitality experience. Make sure you investigate management support when researching all systems.

2.3 Why are these services important to me?

Franchising is a 10 year business relationship and you need to be 100% comfortable with who you choose to go into business with. Many within the sector compare franchising to a marriage. Just like any marriage things can and do go wrong. With over 200 franchises currently operating internationally, Cafe2U has been able to demonstrate a proven track record in helping Franchise Partners to manage their own successful business.

Credibility is everything. It is for this reason that Cafe2U conduct a thorough selection process for each new candidate. By recruiting the best Franchise Partners we not only ensure that the Franchise Partner has the greatest chance of success, but also that the value of the franchise system and the businesses within it are retained at the highest level.

There is more to Cafe2U than just the vehicle and equipment. In fact this is the smallest component of the franchise system compared to the value that you will be able to extract to assist you in being a successful business owner.

Page 4 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 3. Business Performance 3.1 How much can a Cafe2U Franchise Partner earn?

The Cafe2U business model is based around high gross profit products combined with minimal operating costs.

Franchise Partners have no wages or rent costs which in traditional business absorb over 50% of your turnover.

Cafe2U is able to provide a net return to the Franchise Partner of between 40% and 55% depending on your finance arrangements.

3.2 Is the business model seasonal?

No. Cafe2U elected to complete a detailed proof of concept in Australia, UK and USA over a 12-month period to specifically test this aspect of the business. Results obtained during these periods and current data from suppliers clearly indicate that the business is not effected by seasonal conditions. The mobile business model delivering direct to customers also allows Franchise Partners a better opportunity to maintain consistency in their sales compared with fixed location outlets.

4. Franchise Partner Training & Launch 4.1 What training is provided?

The Acceleration Package is a comprehensive 4-week training program that is provided as part of the turnkey franchise price. The training includes 1 full week at Cafe2U Academy in Sydney, Australia. This classroom-training concentrates on the coffee barista course, business ownership and business management, equipment maintenance and operation, vehicle operation, food safety management, basic accounting and local area marketing skills. The second week consists of vehicle relocation, knowledge confirmation, business and logistical setup and Franchise Partner in territory pre-work. The third and forth weeks are reserved for your business launch.

4.2 How is my business launched?

The third and fourth weeks of training concentrate on the launch of your new business. This is conducted in your territory and a launch plan is developed with you in your appointed Franchise Development Manager.

During the launch our experienced Franchise Development Manager will guide you and your business up to a minimum of $500 per day in gross sales. Each Franchise Development Manager possesses unique skills in canvassing and cold calling necessary to develop a business. During the launch program the Franchise Partner Development Managers will teach you the skills and techniques that will assist you as you progress further in your new business.

Page 5 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 4.3 What is the Franchise Partner revenue guarantee?

During your allocated launch period, whilst the foundations of your business are being laid, if your business does not achieve $500 in gross sales, Cafe2U will provide you a cheque for the difference. This is called our Franchise Partner Revenue Guarantee and provides you with security and confidence from day 1, allowing you to concentrate on building relationships with your customers.

The Cafe2U Revenue Guarantee is not about financial benefits, its about demonstrating to you that we know your business is worth a minimum of $500.00 a day and our system works. We have total faith in our products, launch specialists and mapping technology and our methods have proven successful time after time. Of course, this is only a starting point for you, as high performers can more than double this amount on a daily basis.

4.4 What happens after the initial launch period?

Prior to their departure, your allocated Franchise Development Manager will develop a short term plan with you to ensure that you are positioned to maintain the business at the $500 per day level whilst your skills and confidence develop. When you are ready to increase the performance of your business it is important to then reapply the skills taught to you during your launch. Remember that your Franchise Partner Development Manager will be there to guide you for each new step you take.

5. Marketing Support 5.1 What marketing is provided during the launch period?

A marketing pack specific for your business is provided as part of your purchase of the business.

This includes a Cafe2U flying banner, a 3m x 3m Cafe2U marquee with walls, a quantity of canvassing packs and promotional flyers, a quantity of loyalty program cards. A local PR release is produced and released in your local paper to coincide with your business launch and each Franchise Partner will receive a dedicated web page for their business that is linked to the company web site.

5.2 What local marketing is available?

Franchise Partners are able to access an online marketing toolbox that allows them to order from a range of marketing products from uniforms to personalised flyers, menus and loyalty cards. These are all designed to be used within your territory to generate weekday business and also event activity if required. Any marketing tool you would like can be templated and uploaded for all Franchise Partners to personalise and order.

Cafe2U' s professional marketing team will train you on the use of all these tools

5.3 What is the Franchise Partner marketing fund?

The National Franchise Partner marketing fund is a compulsory fund that has been established by the franchisor to encourage Franchise Partners to take greater ownership in the marketing not only of their own business but that of the franchise network as a collective. The fund can only be spent by Franchise Partners on initiatives that will benefit all Franchise Partners.

Page 6 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 5.4 How is the fund operated?

All Franchise Partners are required to contribute $27.21 + GST per week to the fund. This contribution is held in a Franchise Partner marketing fund account managed by the Franchise Advisory Committee (FAC) and guided by the Cafe2U's own professional marketing and events team.

This committee is a group of Franchise Partners elected by the Franchise Partner network to act as a marketing voice on its behalf. FAC representatives meet regularly with the Cafe2U marketing team to plan the best use of the funds and monitor the implementation. It is through the collective power of the fund that Cafe2U has been able to market the brand and drive event work through mainstream national media and other initiatives.

Individually it may not appear to be a large fee, but collectively it becomes a powerful tool for our Franchise Partner network.

5.5 Who decides how the fund should be spent?

Franchise Advisory Committee (FAC) members are accountable for the Franchisees Marketing Fund and all expenditure must be with the expressed consent of the FAC and the support of the Franchise Partner network.

6. Events 6.1 How are events allocated by Head Office?

Cafe2U has its own National Events Coordinator whose primary role is the procurement, negotiation and allocation of event work to the Franchise Partner network. Cafe2U maintains a strict Events Code of Conduct whereby Franchise Partners must be offered events within their territory as a first right of refusal. Should a Franchise Partner elect to opt out the event will be redirected to the nearest Franchise Partner to the event. If the event remains unallocated the event is offered to the Franchise Partner network within the applicable region.

6.2 Do I have to service event work?

No. This is entirely up to the individual Franchise Partner. Cafe2U have a number of Franchise Partners that for various reasons do not wish to conduct event work. Many of these Franchise Partners have a successful weekday business and want to maximise the lifestyle benefits that Cafe2U can provide by spending time on weekends with family and friends.

6.3 Can I secure my own events?

Yes. If you wish to secure an event within your territory there are no restrictions or additional costs to do so.

6.4 Can I secure events outside my agreed territory?

Yes. However, should you wish to secure an event outside your agreed territory, or in the territory of another Franchise Partner, there are procedures that need to be followed in accordance with the Events Code of Conduct. This allows Franchise Partners to be informed of activities that are occurring and also allows them to benefit from the team environment.

Page 7 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 7. Becoming a Franchise Partner 7.1 What skills are important to become a Franchise Partner?

Cafe2U is a high-performing entry-level business into the hospitality industry and also a first business opportunity for many. For this reason, previous business management skills and business operation skills are not considered critical. These can be developed over time.

Launching over 200 successful franchises has taught us that for a Franchise Partner to be successful they need to possess some core elements. They must have a desire to be their own boss. They need to be self-starting and clearly motivated by new challenges. They must be a good communicator and enjoy social networking with customers. It is important that they have a passion for the products they sell and be confident in their ability to learn new skills in order to deliver that product. They must be people focused and understand the importance in providing the consumer with value for money. They must be ethical, open and honest with their customers, Cafe2U and themselves.

All you need to do is bring your smile and we will do the rest!

7.2 What is the selection process?

The increased level of demand for Cafe2U franchises has led to a more detailed Franchise Partner selection process. It is important that only the best candidates are selected to join the Cafe2U Franchise Partner family. It is important to note that whilst it is important for Cafe2U to select candidates that are a good fit for our business model, the candidate needs to ensure that Cafe2U will be the right business model for them. We only accept candidates that genuinely want to be part of the Cafe2U brand and build a strong business relationship with us.

Cafe2U operates a 4 step selection process.

• Franchise Application Form: this may be completed online and is obligation free.

• Franchise Partner Profiling Tool: this can also be completed online and provides us an effective method of measuring a candidate’s strengths, weaknesses and compatibility to the Cafe2U business model. Successful completion of the Application and Profiling Tool will allow a candidate to progress further.

• Formal Interview: conducted by a Cafe2U representative. At this interview a Disclosure Document will be provided as well as a process for completion of a formal business plan.

• Accompanying a current Franchise Partner for a selected period of time: allowing candidate to obtain a greater understanding of the business model and to reconfirm to the candidate the levels of commitment required.

Once this has been completed the candidate will be required to submit their business plan to Cafe2U. At this stage the candidate is then referred to board level for consideration. The board will then advise the candidate if their application has been successful.

Page 8 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 7.3 What advice will I need to obtain?

Cafe2U recommends and encourages all candidates obtain legal advice, business advice and financial advice prior to entering into a franchise agreement. This is also encouraged by the Franchise Council of Australia in accordance with the franchising code of conduct.

7.4 How long does will it take for me to become a Cafe2U Franchise Partner?

To get you to the formal launch stage of your business there is a process that needs to be followed. This process is stipulated in the Franchise Code of Conduct. This process includes the application and approval process, understanding the Franchise Disclosure Documentation and obtaining your independent advice. The time taken to complete this process depends entirely on the candidate.

The vehicle construction and training phase that needs to be undertaken to get you to formal launch is a 6 week process. On average a Franchise Partner takes 10 weeks from initial enquiry to being up and running in their own Cafe2U business.

8. Finance, Fees and Franchise terms 8.1 Does Cafe2U have a relationship with any financial lenders?

Yes. Whilst Cafe2U does not provide finance to Franchise Partners, Cafe2U maintains a strong link with many leading lenders.

The benefits of financing a Cafe2U franchise is the bulk of your start up cost relates to your vehicle and equipment. These components can be financed against their own value. Only a small portion of 'soft' costs need to be paid for through either a cash contribution or financing against your existing property equity.

8.2 Does the Franchise Partner own the vehicle and all equipment after the finance payments have been completed?

Yes. The Franchise Partner owns all equipment within the business from day 1. This reduces the risk associated with owning a Cafe2U business significantly compared with other business models.

8.3 Are there any ongoing fees?

Yes. Cafe2U maintains a set weekly fee rather than a percentage of business turnover. The Franchise Fee is set at $ 174.00 +GST per week.

The fee remains at this set rate for the full 10 year term and varied annually only by CPI%, regardless of how successful your business becomes.

Cafe2U also maintains a Franchise Partner Marketing Contribution, which is currently set at $27.21 + GSTper week. This fee is explained in greater detail in the marketing section.

Page 9 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 8.4 What do the ongoing fees cover?

Franchise fees are a necessary part of any franchise system to ensure the long-term sustainability of the franchise network. The Cafe2U franchise fee also allows us to provide you with the support you need and deserve. The Cafe2U franchise fee gives you: • The use of the brand itself. Cafe2U is a well recognised, powerful brand. The clear industry leader • Access to corporate know how (17 head office staff) and proven operating systems • Dedicated, experienced FDM to act as a mentor and business coach for the life of your franchise agreement • Supply agreements - high quality, HACCP approved products delivered to your door • Dedicated events department to source and manage event enquiries • Dedicated marketing department • Updated territory analysis available at any time • Exclusive award winning Cafe2U blend

8.5 What is the term of the franchise?

Cafe2U currently offers new Franchise Partners a 10 year term. This is comprised of a 5 year term with an option of a further 5 years.

9. Cafe2U Territories 9.1 Can I select my own territory?

Yes. Cafe2U identifies and formally maps territories based upon our experience within the industry using a company specialising in business data and mapping. Cafe2U will provide a range of pre-mapped territories for a Franchise Partner to select from.

9.2 Are Cafe2U territories exclusive?

Yes. Each allocated territory remains exclusive to the respective Franchise Partner.

9.3 Why are exclusive territories important?

Exclusively mapped territories ensure that your business can remain as protected as possible. Whilst exclusivity will not protect you from other competitors within your territory, it will mean that you will be the only Cafe2U van operating within the area.

With a strong national brand and the quality of mapping information we can access, Cafe2U are providing a strong barrier to entry for potential competitors. The aim is to have you surrounded by Cafe2U team mates.

Page 10 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 9.4 How are the territories developed?

Cafe2U was the first mobile cafe franchise system to engage the services of a business data and mapping specialist. In late 2004 Cafe2U developed a regression model based upon high performing Franchise Partners.

We were then able to capture the key characteristics of each territory. Once this data had been compiled, a template was able to be produced that would ensure all new franchise territories had sufficient business potential within their territory to be a Cafe2U high performing Franchise Partner. Our model looks at not only the number of businesses within an area but concentrates on businesses that are able to be serviced by a Cafe2U Franchise Partner, so their location plotting is critical. We also look at business size, density, business employee numbers, industry types, white-collar businesses versus blue-collar businesses and working daytime populations.

We believe that going into this level of detail is an important investment in ensuring the success of each new franchise.

10. Cafe2U Products 10.1 What products do Cafe2U Franchise Partners sell?

Due to the nature of the Cafe2U business model, Franchise Partners maintain a core range of products in order to cater to their customers’ requirements. Whilst the business model concentrates on maximising hot beverage sales, Franchise Partners are also able to provide a range of ice blended frappe and fruit smoothie alternatives.

Franchise Partners also offer cold pre-packaged soft drinks, juices and bottled water. Franchise Partners are then able to select from a range of sweet baked products (individually wrapped muffins, slices, friands, tarts, cookies and cakes), individually wrapped sandwiches, wraps and rolls and a selection of hot savoury baked products (gourmet pies, sausage rolls and quiches). Whilst Franchise Partners are able to offer the complete selection, not all Franchise Partners elect to do so. It should also be noted that hot and cold espresso based beverages account for over 75% of Franchise Partners’ sales. This is by design as our expertise is in espresso based beverages and these products yield the highest margins.

10.2 Do I need to purchase from agreed suppliers?

Yes. The key to any franchise business is consistency within the franchise network. It is critical to the success of your business that the same core products are delivered in any region in Australia and internationally. It is also critical that the standard and quality of products sold by each Franchise Partner is maintained at the highest level. This will again assist in the protection of each Franchise Partner’s investment and future value.

To be able to achieve this, nominated suppliers are in place to provide our Franchise Partners with products for use within their business. These products must meet the quality standards of the franchisor and each supplier must be able to supply direct to the Franchise Partners at a price at or below normal commercial rate. Using nominated suppliers allows each Franchise Partner to directly benefit with reduced product pricing obtained via the increased buying power of the franchise network.

Page 11 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 10.3 Is there flexibility within the product range?

Yes. Whilst there are a core range of products that will always remain non-negotiable as part of the franchise, our franchise system does allow for local flair within each franchise. If a Franchise Partner wishes to sell a product that is deemed to be a good fit for the local consumers and the Cafe2U brand, approval to sell the product may be obtained from the franchisor.

10.4 How do Franchise Partners receive products?

All approved and nominated suppliers within the Cafe2U system must be able to deliver to the Franchise Partner's place of residence or nominated delivery point. Each Franchise Partner must ensure that delivery criteria are able to be met to satisfy HACCP product receival standards. The majority of our Franchise Partners organise a delivery frequency that suits their business needs.

10.5 Do I need any extra equipment at home to operate a franchise?

Yes. Franchise Partners will require a standard power point to be located within easy access of the vehicle whilst at home.

Our preferred milk supplier will provide a commercial fridge free of charge. You will also need a 500 L freezer and your are ready to go.

11. Ongoing Development 11.1 What level of on-going support is provided after launch?

• Quarterly Franchise Development Manager (FDM) visits are scheduled as a minimum and Franchise Partners are encouraged to prepare for these visits to obtain maximum benefit • Franchise Partners are contacted weekly by their allocated manager to discuss their business performance, business plan, personal goal, targets and any other technical or operational issues • Franchise Partners have direct access to their FDM for support • Regular Franchise Partner meetings are scheduled • Monthly e-newsletters are sent out to the Franchise Partners covering general news and a range of tips and upcoming events • Preferred supplier agreements are negotiated with Franchise Partner feedback • Ongoing product development and trials, access to web based forums and online Franchise Partner information, national brand awareness marketing, event generation and allocation • Your own webpage on website, professionally managed with SEO and Google adwords advertising • Regional, state and national conferences • National toll free 1300 CAFE2U (1300 223 328) phone service

11.2 How does Cafe2U help you develop your business ?

Cafe2U provides you with business management and development tools that allow you to accurately monitor and manage your business by yourself, or with the help of your Franchise Development Manager. When the times comes, there are tools in place to assist you with multi-franchising so you can watch your business grow further.

Page 12 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

www.franchisebuyer.com.au

Frequently Asked Questions 11.3 How is product development managed within the business?

All new product development is managed by the operations team through the Franchise Partner Development Managers. Franchise Partners regularly provide head office with products that they would like to stock in the vehicle which is then managed, sampled, negotiated, implemented and delivered by head office for all Franchise Partners.

11.4 Who services my business equipment?

All equipment within your vehicle, including the vehicle, is warranted by each individual manufacturer. Cafe2U provides each Franchise Partner with contact information for service agents for routine servicing of power generation and espresso equipment. Cafe2U has been able to negotiate fixed national servicing pricing which provides our Franchise Partners peace of mind regarding servicing costs which tend to fluctuate from region to region.

11.5 Are Franchise Partner meetings conducted?

Yes. These are conducted biannually in each state capital and are attended by the operations team and senior management. Arrangements will be made with regionally based Franchise Partners for them to be present at their closest meeting. Cafe2U also hosts an annual conference open to all Franchise Partners and their families.

11.6 Are tools in place to communicate and share ideas with other Franchise Partners?

Yes. Communication between Franchise Partners is highly encouraged. It is important that Franchise Partners remember that whilst they may be focused on the success of their own business, they are part of a global system and the success of other Franchise Partners benefits everyone. Cafe2U provides a secure online web forum for Franchise Partners to share ideas both nationally and internationally. This is part of a dedicated member section on the website containing business tools for use by all Franchise Partners.

11.7 Can I establish additional vehicles within my territory?

Yes. It is an aspect of the business that we encourage. All our business systems are geared toward Franchise Partner success, so it is only natural that successful Franchise Partners look toward a new challenge.

11.8 Does Cafe2U have any Franchise Partners that are currently managing this?

Yes. We have successful multi franchises in Australia and in the UK.

12. Permits & Insurance 12.1 What insurances will I need?

To operate within the mobile cafe industry there are stipulated insurances that are required. Comprehensive Motor Vehicle insurance, including vehicle, fittings, fixtures and all equipment. In addition to this you will be required to have $10 million Public Liability insurance and $10 million Product Liability insurance. These are common for any business in the hospitality industry.

Page 13 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

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Frequently Asked Questions 12.2 Do I need any council permits?

This depends entirely on how you wish to operate your Cafe2U franchise and the local regulations within your territory. Our experience has shown that each council is different and needs to be managed in a professional manner ensuring that Cafe2U Franchise Partners operate in accordance with local laws and as good corporate citizens.

The Cafe2U business model has been designed to trade during the week on private property that many of the permits for public property do not apply. Operating in this manner usually means that Franchise Partners need only to park their vehicle responsibly and not impede vehicle movement to thoroughfares. Should you intend trading on public property, you can arrange the required permits through your local council for a small annual fee. This may be a requirement to service particular events. This permit is similar to those carried by ice cream vendors.

12.3 Has Cafe2U set up a group insurance policy for Franchise Partners?

Yes. Cafe2U has been able to establish a group insurance policy for all Franchise Partners

13. Selling your Cafe2U Franchise 13.1 What if I want to sell my business?

A Franchise Partner may offer their business for sale at any time during their 10 year term. As with any franchise system a potential buyer must be formally approved by Cafe2U head office to ensure that they have the capability to operate the business and that the standards will be maintained. The franchisor does have first right of refusal to purchase the business back from the Franchise Partner. Cafe2U cannot unreasonably withhold the sale or transfer of a franchised business.

13.2 If I sell my business does the 10 year term restart?

The purchaser of your business is assigned the rights and benefits for unexpired portion of your term only.

Cafe2U has the option of granting them a new 10 year agreement.

13.3 What help does Cafe2U provide to assist the sale of my business?

It is a requirement that any potential buyer completes the Franchise Selection Process.

Cafe2U will assist you when it is the time to sell by providing any relevant leads that we have received and will advise you of your marketing and advertising plan.

13.4 Are there opportunities for career progression with Cafe2U?

Yes. It is no secret that Cafe2U is a growing business and actively recruit high performing Franchise Partners from within the Franchise Partner network. With the brand continuing to grow in Australia, NZ, the UK & USA, opportunities will always present themselves for motivated individuals.

Page 14 of 14 Information provided by Cafe2U and correct as of 6/8/13 - while all care is taken, information should always be confirmed with franchisor.

To contact Cafe2U call John Stanton, at 0421 644 661 or send an email to jstanton@cafe2u.com

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