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FAR EASTERN UNIVERSITY

Institute of Accounts, Business, and Finance


Business Administration Department

An Franchising Paper Presented to the


Faculty of the Institute of Accounts, Business, and Finance of
Far Eastern University
Sampaloc, Manila

In Partial Fulfillment
Of the Requirements for the
Degree of Business Administration

Anabo, Shannen Clui


Han, Dong
Ignacio, Grace Anne
Lim, Ryan
Pigon, Princess Remily
Sarmiento, Danielle Ann
Silvestre, Ma. Maricar

NOVEMBER 2018

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

TABLE OF CONTENTS

Cover Page
Executive Summary 1
A. Company Name 2
B. Type of Business 2
C. Company Profile 3
D. Key Personnel 5
E. Start-Up Schedule and Competition 6
F. Funds Requested 8
G. Funds Use Statement 8
H. Funds Repayment 8
Marketing Aspect
A. Major Marketing Objectives 10
B. Market Plan and Pricing Strategy 10
C. Franchisee Recruitment Plan and Flowchart 12
D. Franchisee Prospectus 13
E. Franchise Sales and Advertising 14
F. Franchisee Location Criteria Selection 15
G. Grand Opening 16
H. Customer Advertising 17
I. Business Model 21
J. SWOT Analysis 22
K. Franchisability 23
Management Aspect
A. Outline Operations Manual in Detail 26
B. Outline Training Manual for Franchising 32
C. Determine Franchisor System Headquarters 34
D. Activity and Time Chart 41
Financing and Accounting
A. Best Case Scenario 43
B. Worst Case Scenario 44
C. Return on Investment 45
D. Franchisor’s Viewpoint 46
Legal Aspect
A. Disclosure Documents 48

APPENDICES

Appendix A. Investment Agreement 65


Appendix B. TOWS Matrix 69

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

LIST OF FIGURES

Fig 1. Cafe Investors 2


Fig 2. Company Logo 3
Fig 3. 933 Co-Working Manila Logo 7
Fig 4. HomeRoom Co-Working and Study Lounge Logo 7
Fig 5. Recruitment Flow Chart 11
Fig 6. Franchisee Prospectus 12
Fig 7. Diligence Café Customers 13
Fig 8. Diligence Café Legarda Branch Location Map 14
Fig 9. Grand Opening Details 15
Fig 10-11. Sample Digital Promo Posters 16
Fig 12-13. Diligence Cafe Sipag Card 18
Fig 14. Diligence Cafe Gift Book 19
Fig 15. Business Model 31
Fig 16. Organizational Chart 34
Fig 17. PERT Chart 41

LIST OF TABLES

Table 1. Key Personnel 5


Table 2. GANTT chart of Activities 6
Table 3. Required Funding 8
Table 4. Diligence Café Pricing 11
Table 5. Diligence Café Pricing for Franchisee 11
Table 6. Market Segmentation 15
Table 7. Grand Opening Budget Proposal 16
Table 8. SWOT Analysis 22
Table 9. Organizational Relationships 35
Table 10. Sales Projection (Best) 43
Table 11. Sales Projection (Worst) 44
Table 12. Return on Investment 45
Table 13. Franchisor’s Viewpoint 46

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

EXECUTIVE SUMMARY

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

Executive Summary

Diligence Café is a friendly co-working space that provides unlimited internet and wifi

connection, unlimited coffee, napping services, and shower services. It aims to give a place for

students and young professionals to plan and do an all-nighter type of work that offers wifi,

coffee, and etc. Currently, Diligence Café has 3 branches, particularly around universities, their

branches are at: Katipunan, Taft, and Espana.

Its ambiance and peaceful atmosphere makes the customer productive, especially with

group studies and meetings. Diligence cafe provides function halls and meeting rooms for their

customers to accommodate a large group of people or seeks privacy.

Its primary target market is students, young professionals and millennials ages 14-28

years old in any gender. The café will be using a media vehicle such as digital, PR, and loyalty

card marketing.

The standard hours of operation of the café is 24 hours and open all holidays except

Christmas Day, Easter Sunday, Thanksgiving Day, and Christmas Eve. The organizational chart

contains the general manager, receptionist, cashier, barista, kitchen server, and security guard.

Diligence Café franchise will be cost of 2,375,000 pesos to start up its operation that

includes the preparation of facilities, furniture and equipment, marketing expenses, franchising

fees, and governmental registration requirements. And the estimated recover of its initial

investment is 5 years and 1 month.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

A. Company Name

Diligence Cafe

B. Type of Business

Fig 1. Cafe Investors

According to Elmerei Cuevas, Diligence Cafe is a service retail type of business that

provides place, services and good foods especially to students, their main target market. The

legal name of Diligence Cafe under DTI (Department of Trade and Industry Philippines) is

named after their investors. The Diligence Cafe in Katipunan is a separate entity from the

second branch named Diligence Cafe Taft.

It is a partnership business consists of four (4) investors, two (2) managers and ten (10)

staff for the two branches: Katipunan and Taft Diligence Cafe.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

C. Company Description

Fig 2. Company Logo

Diligence Cafe was founded in 2016 by Elmerei Cabello Cuevas. The Cafe offers 19-

hour stay-in with unlimited Wi-Fi and unlimited coffee and/or juice for only Php 70.00 per hour

inclusive of power outlets for chargers and napping services. For 1-day stay-in, Diligence Cafe

requires Php 350.00 inclusive of unlimited coffee and/or juice, unlimited Wi-Fi connectivity,

power outlets and napping services. They also have a meeting/conference room up for rental for

Php 400.00 per hour and for the showers, an additional Php 100.00 inclusive of the shower kit.

Diligence Cafe is the dream cafe for students especially for those people who does their

thesis. The concept of it revolves around students in need of a place to accommodate study

groups without the fear of distractions. This cafe has branches in Katipunan, Taft and España

accessible to schools and universities near the area.

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Business Administration Department

Vision

To be the top productivity cafe for visionaries and world changers and promote

Diligence, Vision, and a sense of Destiny

Mission

Provide the best atmosphere, culture, venue, food and service for productivity,

inspiration and excellence

Business Concept

Diligence Cafe is the first coffee shop in the Philippines that opens from 12:00 nn until

7:00 am that also provides napping and shower services. Diligence Cafe targets to market the

college students and people reviewing for board exams that prefer studying at coffee shops

rather than at home or inside their dorms and the library because of its limited hours. But the

problem with coffee shops is that it doesn’t welcome more too much hours of stay and it’s not

conducive when it’s becoming noisy because of customers who just want to chill and hang-out.

Diligence Cafe, on the other hand, offers exactly what students are looking for: a place like

Diligence Cafe where they can focus and be productive until dawn.

Other than having meeting/conference rooms, shower services and locker services, they

also offer printing services which is convenient for their customers. And if a student needs rest,

they also allow naps, provided that they avail what is called a Nap Slip and write down details

such as their name and the time they want to be woken up. So, students have no fear of

missing out deadlines due to oversleeping because Diligence Cafe got their backs.

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Institute of Accounts, Business, and Finance
Business Administration Department

D. Key Personnel

Person Responsibilities

Mr. Ryan Lim Responsible for setting policies, operations,


General Manager creation and maintenance of budgets and
overseeing all functions.

Ms. Shannen Clui Anabo Welcomes visitors by greeting them;


Receptionist answering or referring inquiries.

Ms. Ma. Maricar Silvestre Handles cash transactions with customers


Cashier and tells the servers to serve the food or
drinks ordered by the customers.

Ms. Princess Remily Pigon Prepares and sells coffee drinks by following
Barista prescribed recipes and preparation
techniques for coffee drinks.

Ms. Dana Sarmiento Prepares and cooks the food ordered by the
Kitchen Head customers and maintain the sanitary
requirements of the kitchen.

Ms. Grace Anne Ignacio Greet and escort customers to their tables
Server and serve food and drink orders.

Mr. Dong Han Monitor and authorize entrance and departure


Security Guard of people to guard against theft and maintain
security of premises.

Table 1. Key Personnel

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

E. Start-up Schedule and Competition

Start-up Schedule

The chart below states the activities for making a franchise establishment of Diligence

Cafe before the normal operation will take place. The business establishment will pre-operate

on the months of January to July 2019.

Activities JAN FEB MAR APR MAY JUN JUL

1. Organizational Planning

2. Acquisition of Funds

3. Signing of all Contracts

4. Application for Permits

5. Designing the Store

6. Procurement Stage

7. Hiring of Employees

8. Soft Opening

9. Grand Opening

Table 2. GANTT Chart of Activities

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Business Administration Department

Competition

• Co-Working Manila

Fig 3. 933 Co-Working Manila Logo

933 Co-working MNL is one of Manila's newest community of entrepreneurs, creative,

startups, and students. They offer a premium yet affordable coworking space, workshops,

events and study labs. 933 Co-working MNL is a fully equipped office with fast fiber optics Wi-Fi,

fully centralized air condition, toilet with amenities shower, and napping area.

• Homeroom Co-Working and Study Lounge

Fig 4. HomeRoom Co-Working and Study Lounge Logo

Homeroom displays a homey environment located at Dapitan Street in Sampaloc,

Manila. Their rates are inclusive of fiber Wi-Fi, unlimited coffee and tea and nuts, plenty of

power outlets (extension wires are also provided if needed) and it is open until 7:00 am. It also

offers the use of the napping and shower services, as well as, the conference rooms.

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Institute of Accounts, Business, and Finance
Business Administration Department

F. Funds Requested

Diligence Cafe would need a total of 2,375,000 money in peso for a franchise business

to start its operation including all expenses such as:

• Preparation of facilities

• Materials, tools, furniture and equipment

• Marketing expenses

• Franchising fees

• Governmental registration requirements

G. Funds Use Statement

Table 3. Required Funding

H. Funds Repayment

Payback period measures the total number of year needed to recover the initial

investment used to start or operate a business or franchise. In the case of Diligence Cafe, the

computed payback period is 5 which mean the company can recover its initial investment for a

franchise in an estimated 5 year and 1 month.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

MARKETING ASPECT

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

A. Major Marketing Objectives

The following are the objectives of Diligence Cafe franchising business:

• To expand and establish more reputable franchise units to reach more customers in

different areas near universities.

• To enhance customer relationships

• To gain market share of 0.44 % within a year

• To maintain being innovative

• To provide and exceed the customers expectation by having competitive advantage

• To maximize profit and revenues

Major Marketing Goals

• To satisfy customers’ needs despite of their differences

• To build customers loyalty and commitment

• To provide customers a convenient and friendly place

• To explain and establish more reputable units to reach mire customers In different areas

near universities

• To maintain competitiveness, advancement and to adapt towards changing in the

environment, including the needs and wants of our customers

B. Market Plan and Pricing Strategy

• Product

a. Tangible goods - Rice meals, desserts, pastas, appetizers, hot and cold drinks.

b. Intangible service - Napping, shower services, 19-hour stay-in with unlimited

Wi-Fi inclusive of power outlets for chargers, and meeting/conference room up for

rental.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

• Price

Co-Working Industry
Average Price Per: Diligence Cafe
1 hour Php 70.00
Unlimited Stay Php 350.00
Conference Room Php 400.00/per hour
Shower Services Php 100.00 with shower kit

Table 4. Diligence Café Pricing

For Franchisee:

• Price
Co-Working Industry Diligence Cafe

Average Price Per: Cost Price Retail Price

1 hour Php 40.00 Php 70.00


Unlimited Stay Php 200.00 Php 350.00
Conference Room Php 250.00 Php 400.00/per hour
Shower Services Php 50.00 Php 100.00 with shower kit
Table 5. Diligence Café Pricing for Franchisee

Diligence Cafe effectively uses penetration pricing strategy because it offers

reasonable prices, attempting to obtain the maximum share of the market possible. The

competitors that offer the similar line of services are 933 Coworking Manila and

Homeroom Co Working Space with also the same range of prices. But what makes

Diligence Cafe different, it is more established because it is one of the pioneers in the

co-working industry, hence, making it more attractive to customers due to the name that

it carries, and they are more equipped with market research because they have more

experience in dealing with customers. They have already mastered what the customers

need and what the customers prefer when it comes to the ambiance, food and additional

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Institute of Accounts, Business, and Finance
Business Administration Department

services. Diligence Cafe’s make their customers feel that they get more than what they

pay for. Its features and benefits are very accommodating.

Diligence Cafe could also engage in the discounting pricing strategy by giving the

customers discounts when paying in monthly memberships or within paying in a specific

period. It is a good strategy because it attracts more users who wants lesser pricing.

C. Franchise Recruitment Plan and Flow Chart

Fig 5. Recruitment Flow Chart

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Business Administration Department

D. Franchisee Prospectus

Fig 6. Franchisee Prospectus

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Institute of Accounts, Business, and Finance
Business Administration Department

E. Franchisee Sales and Advertising

Fig 7. Diligence Café Customers

• Diligence Cafe is the dream cafe for students, millennials, and young professionals.

• It offers 19-hour stay-in with unlimited Wi-Fi, use of power outlets, napping and shower

services.

• The business will be serving tangible goods such as rice meals, desserts, pastas,

appetizers, hot and cold drinks.

• It also offers meeting/conference room for rental.

• The franchisor will offer training and assistance seminars to all store personnel.

• There will be a general manager to supervise the opening of franchise.

• The franchisee must follow the franchisor’s guidelines and services offered.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

F. Franchisee Location Criteria Selection

Fig 8. Diligence Café Legarda Branch Location Map

The objective is to base a site at Legarda Street in front of LRT Legarda. It is within the

university belt area that aims to cater students, young professionals and millennials. The

location is high in term of foot traffic because it is in front of the LRT Legarda Station making it

more exposed thus reaching the greater public who commutes in the area every day.

Target Market Profile

Geographical Demographics Psychographics Behavioral


Region: NCR Age: 14-28 years old Social Class: Buying Capacity:
Middle Class Normal Rate (at
least Php 200.00
per day)
Gender: Male and Interests: Studying, Occasion: Regular
Female Paper works, Silent and personal
Places, Books, occasions (2-3
Friends, and times per week)
Technology
City: Manila Occupation: Students, Type: Achievers Usage Rate: Mid-
Young Professionals and Visionaries Heavy level users.
Income: Php 6,000.00 Benefits:
- Php 12,000.00/per Discounts, coupons,
month and promos.
Table 6. Market Segmentation

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Institute of Accounts, Business, and Finance
Business Administration Department

G. Grand Opening

Fig 9. Grand Opening Details

Grand Opening Budget Proposal

Lights and Sounds System Php 13,500


Food and Refreshments Php 8,000

Emcee Php 1,500

Usherettes Php 5,000


TOTAL Php 28,000

Table 7. Grand Opening Budget Proposal

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

H. Customer Advertising

The cafe focuses on promotional activities which targets students, millennial and

young professionals. These includes the use of the following media vehicles: digital, PR,

and loyalty card marketing.

I. Digital Marketing

Diligence cafe creates different digital posters, announcements, promotions to

keep their customers updated and informed regarding the newest services, schedule

and prices. The cafe is using three different social media platforms in order to utilize their

digital media content; Facebook, Twitter, and Instagram.

Fig 10-11. Sample Digital Promo Posters (Saan Aabot Ang Piso Mo? Stay for just 1

peso) (1 day stay for 350PHP, inclusive of unlimited Wi-Fi, coffee, shower, napping

services.)

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Institute of Accounts, Business, and Finance
Business Administration Department

II. PR Marketing

Public relations are known to be an effective marketing strategy in the

Philippines, and it’s widely used by cafes and restaurants who are seeking publicity from

consumers using blogs and digital contents. Seizing on this opportunity, Diligence cafe

has partnered with different bloggers and food enthusiasts to gain awareness in the vast

platform.

Sample of PRs from different online writers:

● Imelda Czysz of coworker.com

“Diligence Cafe attracts an eclectic crowd of students and professionals

from remote workers to locals and there is plenty of parking to be had for those

with their own 4 wheels. With a relaxed and inspiring vibe, you can grab a late

brekky or lunch plus meals throughout the night to have your daily dose of brain

food. Walk-ins are welcome and it is a great venue if you need space for a group

of cohorts.”

● Diane Camacho of A Fat Kid Inside

“Tucked away in one of the obscure buildings along Katipunan Avenue,

D-Caf (as the managing partner, Elmerei Cuevas fondly referred to it), is a

student’s go-to for all-nighters. Open from 2:30 pm to 7:00 am from Mondays to

Saturdays; 6:00 pm to 7:00 am on Sundays. It’s the perfect place to cram that

thesis or study for your Board or Bar exams.”

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Business Administration Department

● Nicole Cruz of Preview.ph

“Ladies, gentlemen, and crammers alike, we just found the perfect place

where you can work, work, and, err, work. Diligence Cafe sets the bar high for

how a coffee house-slash-work space should be like—no one's gonna judge you

for plugging in your laptop! Imagine your favorite neighborhood coffee place, only

made more convenient with all your office needs. Its facilities and services make

the cafe conducive for reading, writing, and even holding meetings. So you could

expect a comfortable and hopefully more productive day! Now there’s no excuse

for not making that deadline.”

III. Loyalty Card Marketing

Diligence Cafe offers a loyalty card to its customers to encourage repeat visits.

The “Sipag Card” is free and may be redeemed again once the member consumes

his/her free visit for the second time.

Fig 12-13. Diligence Cafe Sipag Card

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Institute of Accounts, Business, and Finance
Business Administration Department

IV. Coupons

Aside from the “Sipag Card,” the cafe also gives its loyal consumers a

transferable gift book which entitles them for a free stay in the cafe.

Fig 14. Diligence Cafe Gift Book

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FAR EASTERN UNIVERSITY
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Business Administration Department

I. Business Model

Fig 15. Business Model

Diligence Cafe’s business model is focused in transacting directly with its customers

such as students, millennials and young professionals. The students, being its main target are

the reason why some of the existing branches: Taft Branch near De La Salle University and

Katipunan Branch near Ateneo de Manila University, are strategically placed in locations where

most of the foot traffic comes from the students of the said schools. There is no middlemen

involved. Diligence Cafe offers exactly what these students are looking for such as a place to

study, conduct meetings, or even concentrate. On the other hand, the young professionals’

needs are also catered here. These young working professionals could use Diligence Cafe to

have a conducive place to finish their work deadlines and brainstorm ideas. Lastly, this is the

perfect go-to-place for millennials. The relaxing and cozy ambiance it offers while being homey

all at the same time is what makes Diligence Cafe the stand out among its competitors.

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Business Administration Department

J. SWOT Analysis

Strengths Weaknesses

• The organization has strong ethical • Health effects of consuming


values and ethical mission statement. Diligence Products
• Unique and high quality of products and • Limited Products offered to its
services. customers
• Strong relationships with customers, • Low brand awareness
chances of providing customer’s needs. • Natural disasters affect the supply to
• Efficiency and effectiveness in supply produce products offered
chain. • Lack of innovation, the franchise
• Hygiene and quality business does not allow you to add
• Provides a huge range of coffee and food something new which is not
products as per the demand of the coffee mentioned in the franchise contract.
and food market.
• Save your money, you require less
money as compared to a new business
and hence rest of your money gets saved
in the coffee and food business

Opportunities Threats

• Company supply and price of coffee is • The cafe can expand its operations
subject to significant volatility. in other places. New Markets for
• Its success has led to the market entry coffee such as Legarda which have
and the existing of many competitors and more universities around it.
copycat brands that pose potential • Growing number of population
threats. • Product innovation and new growth
• Almost the same variety of drinks platforms
• Large number of competitors in specialty • Future growth is increasing by the
of coffee products. population
• Economic conditions in Philippines might • You can choose the place and venue
decrease customer spending. where you can establish the
franchise outlet that can serve the
people with the offered products.

Table 8. SWOT Analysis

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Strengths relative to Weaknesses

Since the business has a unique product line and services, it can relatively grow its

market using different marketing promotions. Brand awareness is relatively low but can still be

boosted through the cafe’s high public relations.

The cafe can also take advantage of its PRs to further tap other potential markets.

Threats relative to Opportunities

There is a huge competition in this type of market but since the current segment of

diligence cafe has a huge potential growth, it can be boosted by sales promotions, strategies

and through the establishment of additional branches. The cafe can also differentiate itself by

providing an enhanced consumer relationship and personalization.

In Franchisee’s Perspective

Since the cafe needs to focus on delivering an enhanced consumer value, the

franchisee may create personalized marketing strategies to further cater the needs of its

customers and create a brand loyalty. Sales promotions, and other related marketing

campaigns won’t be the top priority of the franchisee since the franchisor has already prepared

a stable plan to create more relevant marketing campaigns.

K. Franchisability

Diligence Cafe is open for investments and franchising through written agreements.

For every Php 25,000 peso investment, Diligence Cafe offer the following benefits:

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1. Free 2 hr stay for every investor/assignee visit for every company-owned branch

(Katipunan included)

2. Yearly Dated Gift Certificates of Php 2,500 which you can use, sell, give

3. 10% discount on cash purchases.

4. Optional Profile on Company website

5. Yearly Proportionate share of profits net of all expenses after first year of

operations.

More details are found in the Investor Agreement and Projections. In all technicality,

there is no equity or voting rights involved. The second branch is somewhat like a trial

franchised branch wherein all net profit will be distributed to the investors proportional to the

amount invested.

Ballpoint figures, Diligence Cafe gross at an average of 500k per month and net of 100k

per month. But this because it just started but the management is very optimistic to grow these

figures in the coming year and even for the next branch.

What Diligence Cafe' is Looking for as Franchisors:


1. Have Philippines citizenship (or permanent residency) and be at least 21 years old
2. Good Credit history - An acceptable credit history
3. Have no prior record of felony convictions or other criminal record that could impact your
ability to operate a store.
4. Retail, operations or management experience of at least 3 years
5. Initial investment of at least 3,000,000
6. Has a good community standard
7. Possess great Leadership and People-Handling Skills
8. Willing to devote certain amounts of time and attention to fully understand and utilize the
day to day operations of the restaurant

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Business Administration Department

MANAGEMENT ASPECT

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A. Outline Operations Manual in Detail

Drinks and baking procedure

Grinding Coffee:
1. Make sure grinder is clean and there are no leftover coffee beans in the mouth of the
grinder.
2. Make sure grinding setting is correct:
3. Pour coffee beans into the mouth of the grinder.
4. Place #6 paper bag on the holding spout.
5. Press “Start” button. Tip: hold #6 paper bag loosely from the bottom with your hands to
prevent spills.
6. Once grinding is complete, shake the holding device before removing the bag. Clean
spout and surrounding areas with the grinder brush.
7. Pour ground coffee into respective coffee container and cover with a lid to keep fresh.

Brewing Coffee:
1. Place paper coffee filter on scale.
2. Scoop 0.20lb (for small batch) or 0.50lb (for large batch) of coffee grinds into the paper
coffee filter by weighing on scale.
3. Place paper coffee filter into the brew basket -ensure paper filter edges are all standing
up and expanded to the sides of the basket.
4. Make sure coffee server (Airpot or ThermoFresh Server) is under the machine and top is
open/serving spout is closed.
5. Wait until coffee has stopped dripping into the coffee server.
6. Remove server and close the lid as soon as possible to retain heat.
7. Remove the brew basket and throw away the used paper coffee filter and grounds.
Proceed with caution as the basket and grounds are hot.
8. Rinse brew basket with warm-hot water to get rid of leftover grinds and coffee flavors.

Brewing Iced Coffees:


1. Make sure brew basket is warm and clean prior to brewing.
2. Make sure iced coffee container is clean prior to brewing. Place under brewer.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

3. Scoop 0.30lb (for small batch) or 0.60lb (for large batch) of coffee grinds into the paper
coffee filter by weighing on scale.
4. Place paper coffee filter into the brew basket, ensure paper filter edges are all standing
up and expanded to the sides of the basket.
5. Slide the brew basket into the coffee brewer’s rails until it stops.
6. Coffee brewer will show brewing and dripping time. Note: This is only an estimate.
7. Wait until coffee has stopped dripping into the iced coffee container.
8. Rinse brew basket with warm-hot water to get rid of leftover grinds and coffee flavors.
9. Return empty and clean brew basket to coffee brewer to keep it warm.

Brewing Iced Tea:


1. Make sure brew basket is warm and clean prior to brewing.
2. Make sure iced tea container is clean prior to brewing. Place under machine.
3. Place iced tea bag in the brew basket (no paper coffee filter needed!).
4. Slide the brew basket into the coffee brewer’s rails until it stops.
5. Make sure coffee brewer is on the SMALL size setting for iced tea, and the “Ready to
Brew” light is on.
6. Press “Brew/Start” button.
7. Coffee brewer will show brewing and dripping time.
8. Wait until tea has stopped dripping into the iced tea container.
9. Remove brew basket and throw away the used iced tea bag.

Making Cold Brew:


1. Insert reusable mesh filter bag into Toddy, fully opening bag and folding the elastic cover
the top rim of the Toddy.
2. Insert paper filter into mesh bag, fully opening and making sure it touches the bottom of
the Toddy & mesh bag.
3. Pour entire 5lb bag of special cold brew ground coffee into filter – level the grounds by
tapping the Toddy gently on the floor.
4. Have 1 ½ gallons of cold filtered water prepared, plus another 1 gallon ready to go.
5. Slowly pour the first 1 ½ gallons, in a circular motion, evenly over the grounds – turning
the Toddy to evenly saturate.
6. Loosely twist the top of the paper filter bag close, about 2” above the grounds.

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Business Administration Department

7. Loosely twist the mesh bag closed and ties with string above the paper filter.
8. Slowly pour the remaining 1 gallon of filtered water around the outside of the mesh filter
bag –turning the Toddy to evenly saturate.
9. Once complete, the water level should come up to the inner inside ridge of the Toddy.
10. Mark the lid with date and time of this process.

Muffins
1. Line muffin pan with muffin baking cups
2. Mix batter VERY WELL -scraping the bottom of the bucket.
3. Fill muffin cups as directed below with muffin batter.
4. Bake at 250 degrees for 15 minutes.
5. After 15 minutes, increase oven to 300 degrees and continue to bake for 25 minutes
or until done –test they are done by inserting a toothpick into the center, the toothpick
should come out clean.
6. Finished muffins should be completely cooked –no raw centers.

Cookies
Bake at 300 degrees for 15-17 minutes, or until done. Cookie edges should be golden
brown.

Opening Procedures
• Prepare muffins in baking pans following baking instructions and baking number
guidelines.
• Bake muffins.
• Place scones on baking sheet according to baking layout and bake using baking
instructions.
• Take butter and cream cheese containers out of refrigerator. Place a spreader into each
container and replace slotted cover.
• Unwrap food in pastry case that was wrapped from the night before. Check all
sandwiches for freshness. If any are unsellable, discard and record on waste log.
• Unwrap and cut sandwiches to fill empty spots on the trays –using oldest sandwiches
first
• Check dates on salad boxes and inspect for freshness.

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Business Administration Department

• Begin brewing coffee and continue throughout the remaining of the opening procedures
until all coffees are brewed.
• Place cookies on baking sheet according to baking layout and bake using baking
instructions and baking number guidelines
• Fill milk carafes and set on condiment counter. Ensure condiment counter is clean and
all items are stocked –straws, stirrers, sugar shaker, all sweetener packets, napkins,
Java Jackets, Pure Cane sugar syrup, Sugar free sweetener syrup, 4oz. sample cups.
• Fill basket with bagels keeping same flavors together.
• Put newspapers neatly on rack and make sure all other publications are neatly stacked
and organized.
• Turn on soup warmer to highest.

Ongoing Procedures
• Brew airpots as needed. Airpots of coffee stay fresh for 4 hours and then need to be re-
brewed. Wipe down top and outside of airpot after brewing and before returning to
serving area.
• Keep condiment counter clean and stocked. Wipe top surface completely including syrup
bottles, sugar shaker, sample airpot, straw & stirrer holders, sign holders, and wall
behind. Wipe inside and out of garbage cabinet. Keep milk carafes full and clean. Keep
sugar cubbies stocked.
• Keep coffee barrels full of fresh beans, signs straight and clean, with clean scoops
inserted into the beans on the right side, handle standing up. Barrel liners completely
around the barrel edge, clean and free of tears. (See image in online folder). Empty
coffee bags stocked for customer self-serve.
• Pre-bagged coffee stocked nicely -neat and clean.
• Roaster’s Choice display full and with sign inside clean sign holder.
• Cups display full with a neat row of each coffee –Hampton Classic, Hampton Classic
Decaf, Hampton Hazelnut, Organic Peru Norte.
• All customer seating areas clean –table tops wiped and chair seats, arms and legs
wiped. Floor free of crumbs; sweep as needed.
• Clean entry door(s) –Windex glass, wipe frames, and sweep doorways.

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Institute of Accounts, Business, and Finance
Business Administration Department

• Clean outdoor seating area(s) –wipe tables and chairs. Empty outdoor garbage(s) as
needed – make sure bag is properly inside container and outside of container is clean.
• Stock retail items –mugs, Bodum items, Tates cookies, biscotti, wafels, gums, tea
canisters, gift cards, chips, cold drinks.
• Keep containers of coffee grinds for brewing full.
• Stock hot & cold cups, lids, bags, straws, napkins, Java Jackets, utensils, sugars,
stirrers, etc., etc. –all store items should always be stocked.
• Check iced coffees & iced teas –rebrew as needed.
• Check the bathroom at least once per hour –ensure clean & stocked and garbage
emptied.
• Fill Bakery Case with more baked goods, panini, etc. as needed and per manager
direction.
• Windex front of bakery case.
• Clean, clean and clean some more!

Closing Procedures
• Clean and put away extra airpots as the day slows down -remember each airpot only has
4 hours of freshness!
• Change cream cheese and butter containers –discard any cream cheese remaining from
the morning. Place a new block of cream cheese into a fresh container, cover and place
in refrigerator for the next morning. Follow the same procedure for the butter. Wash used
containers and store in proper place.
• Refill all coffee beans –customer barrels, espresso hoppers, and grinds for brewing.
• Discard unsold bagels, record on Waste Log. Turn off toaster. Once cool, thoroughly
clean toaster top to bottom remembering to remove and clean toaster tray, around
toaster area, bagel basket and bagel area.
• Clean microwave inside and out –remove tray and wash. Wipe down front, top and
sides. Move microwave and clean underneath.
• Turn off soup warmer and remove soup bain-maries from warmer. Pour soups into third
pans and allow cooling slightly. If there are 4 servings or less of a soup remaining, ladle

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Institute of Accounts, Business, and Finance
Business Administration Department

soups into cups, cover with lid and label lid with soup name. Once soups are slightly
cool, cover pan tightly with plastic wrap and store in refrigerator.
• Record unsold newspapers for the day. Take newspapers from racks and separate
covers from the insides of each paper. The insides are garbage; the covers are saved
intact (front & back) and returned to the distribution company at the end of the week.
Save the covers from each day in a designated bin. On Sundays, collate all the covers
so the day of each paper is together. Count the returns and record on return invoice. One
copy of the return invoice goes back to the company. Cross reference last week’s return
invoice with current company invoice –they should match. Verify if there is a balance due
or a credit. Pay accordingly as long as the returns accounted for by the company match
store records. Place the weeks covers, copy of return invoice, and check, if paying,
inside provided bag. (This bag and invoice arrive with the newspaper delivery Sunday
mornings). Leave bag outside in the designated pick-up spot.
• Take out croissants and cinnamon rolls for the next morning, following your baking
numbers and the sheet pan placement on the following page:

Hours of Operation
Standard hours of operation: 24hrs
Open all holidays except
Christmas Day
Easter Sunday
Thanksgiving Day
Christmas Eve

Inventory & Ordering


It is important to keep a good stock of products in your store, so you always have
everything you need to fulfill customer orders. Inventory should be taken at least once weekly so
that low or depleted supplies can be replenished.
Remember that inventory is like money sitting on your shelves, so you want to make
sure not to have too much just sitting there. The bulk of your products –cups, food, paper
products– come from J Kings, and with multiple deliveries every week, with good planning, you
can order as needed.

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Institute of Accounts, Business, and Finance
Business Administration Department

It is a good idea to e-mail or text orders to your vendors and confirm the order was
received. Keeping a “paper trail” of orders not only helps you with inventory tracking, but also
allows for any errors in deliveries to be fixed right away.

Make sure to always check -in orders when they are delivered and before the delivery
driver leaves your store. It is much easier to have errors corrected with the driver while he is
present, rather than trying to fix things with a vendor’s office later.

B. Outline Training Manual for Franchising

Training Employees
Be sure to be prepared for their arrival on their first day, greet them warmly when they
arrive, and buddy (pair) them up with your most dynamic staff member for training if you will not
be doing the training yourself. We highly suggest that new staff members spend their first shift
with the manager and then subsequent shifts with senior staff members who have shown to be
good with giving positive instruction.

Remember the way we trained you when you train your staff. We believe the Buddy
System is a great way to train new employees. Always be encouraging and demonstrate each
activity. You do it; now the staff member tries. New employees should not be making espresso
drinks -or even touching the espresso machine -for many shifts.

The new staff member should stand behind the trainer on the beginning shifts so that they can:
LISTEN to the language the trainer uses.
ASSIST the trainer with fulfilling simple parts of order.
FULFILL brewed coffee orders.
ASK questions and the trainer should ask them questions to test what they’re learning -
no “yes” or “no” questions!
The training employee is almost like a personal assistant for the trainer, a shadow, and
they should do everything together -including having their meal break together. The break is a
great time for the trainer to get to know their new team member better and ask how they like
being here so far and what questions do they have. The new employee might feel more

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Business Administration Department

comfortable in this informal setting and reveal some information about the training. This
feedback can help adapt the training better for this particular employee going forward since
each person learns differently.

On the first day a new staff member should learn three things:
DO NOT SAY “small or large”, we only want to sell larges -go over techniques for
selling larges.
DO NOT SAY “single or double”, we only want to sell Double espresso drinks
DO NOT SAY “whole or half (panino)”, we only want to sell whole sandwiches -
go over techniques for selling wholes.
If your brand-new staff member is allowed to say small and half on their first day, take it
from us, they will be saying that for as long as they work for you, and your store will be missing
out on profit.

During down time new staff members should look at the buttons in the register (POS)
and then try to match the button up with the actual item in the store. Go look at retail shelves
and find each item you see in the POS. Where is the coffee beans button? Where is the
chocolate espresso beans button -and then how do you fill that order. This training activity is
also a good way for the trainer to remember all the items they need to cover in training. You or
your trainer should talk about each item with the new hire -what is a Holiday Cookie?

When customers order Espresso Bar Beverages that have milk in them, we should be
asking, “Would you like Whole Milk?” as the default instead of asking what milk would they like
or rattling off every milk option we have in the POS. Efficiency is key to getting guests in and out
quickly. And guests don’t like making so many choices. If it’s a beverage that includes whipped
cream (it’s always better with whipped cream!), then staff should ask, “Would you like Whole
Milk and whipped cream?” Again, we are suggesting the drink WE want to make and helping the
customer with less decisions.

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Institute of Accounts, Business, and Finance
Business Administration Department

C. Determine Franchisor System Headquarters

1. Organizational Chart

ORGANIZATIONAL STRUCTURE

CEO CAO

Franchisee

General
Manager

Chef Server Receptionist Cashier Guard

Fig 16. Organizational Chart

Organizational Relationships

Person Job Responsibilities Educational Work Salary


Requirements Experience

Mr. Ryan Lim Responsible for setting Bachelor's 2 years of Php 20,000
General policies, operations, creation degree in previous
Manager and maintenance of budgets business experience in a
and overseeing all functions. management or management
a related field position

Ms. Shannen Welcomes visitors by At least a high 1-3 years of Php 15,000
Clui Anabo greeting them; answering or school graduate experience
Receptionist referring inquiries. or
administrative,
communications
or business
courses.

Ms. Princess Handles cash transactions Must be a high 1-3 years of Php 15,000
Remily Pigon with customers and tells the school graduate experience
Cashier servers to serve the food or
drinks ordered by the
customers.

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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

Ms. Ma. Maricar Prepares and sells coffee Must be at least 1-3 years of Php 15,000
Silvestre drinks by following a high school experience
Barista prescribed recipes and graduate or
preparation techniques for graduate of any
coffee drinks. food service
management

Ms. Dana Prepares and cooks the Must be a 2 years of Php 18,000
Sarmiento food ordered by the graduate of experience in
Kitchen Head customers and maintain the HRM or any kitchen
sanitary requirements of the food related management.
kitchen. course.

Ms. Grace Anne Greet and escort customers At least a high 1-3 years of Php 15,000
Ignacio to their tables and serve school experience
Server food and drink orders. graduate.

Mr. Dong Han Monitor and authorize At least a high 1-3 years of Php 16,000
Security Guard entrance and departure of school experience
people to guard against theft graduate.
and maintain security of
premises.

Table 9. Organizational Relationships

2. Policies

Policies and procedures:

• Employees must be in their proper uniform at all times.

• Proper dress code must be followed

• ID’s is a must

• Maximum of 7 days for the vacation usage. It can be monetized if not used

• Cleanliness must observe at the workplace. Workplace must be clean before and
after the operation

• Payroll is every 15 days.

• It is prohibited to access any private information of the business

• Business equipment and supplies must be used for Diligence Cafe only.

• Employees must pass all the exam and interview upon being held as hired.

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Institute of Accounts, Business, and Finance
Business Administration Department

The purpose of this policy is to state Diligence café position in administering an equitable
and consistent discipline for unsatisfactory conduct in the workplace. Diligence café have the
right to terminate an employee in any violations they may commit. Thus, this case will proceed
to due process and if violations are evident, this will subject to termination of the employee. The
purpose of Diligence café is to produce a good service of employees with proper etiquette.
Furthermore, it will produce a well-mannered and best employee that a customer can have.

All employees are responsible for complying with the policies, rules and regulations
contained herein.
• Dress Code
• Attendance Policy
• Leave Policy
• Equal employee Opportunity
• Payroll and Overtime
• Confidentiality and Non-disclosure

3. Personnel Management

Recruitment Process
Step 1: The recruitment team will be posting some vacant and available job position.
Step 2: The recruitment team will now be accepting and screening applications.
Step 3: The chosen applicants will be scheduled for an interview and test.
Step 4: The HR will deliberate and evaluate the applicants.
Step 5: Successfully selected the qualified applicants for the said job.
Step 6: The HR will now designate the work and position for the applicant.

Wage and compensation benefits:

• 13th month pay


Thirteenth-month pay is a form of monetary benefit given to every rank-and-file
employee payable before the end of every year as stipulated by the Department of Labor
and Employment (DOLE). These employees must have worked for at least one month in

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Business Administration Department

a year. Basically, the amount of the 13th month pay is 1/12 of the employee’s annual
salary.

• Retirement pay
Upon the age of 60 years or higher, the employee who has served a company for at
least five years may be granted a retirement pay equivalent to at least one-half month of
salary for every year of service. A fraction of at least six months is considered as one
whole year

• Overtime pay
The employee who renders overtime will be given additional compensation equivalent to
his regular wage plus at least 25% premium.

Overtime pay for a holiday or rest day shall be paid an additional compensation from the
rate of the first eight hours on a holiday or rest day plus at least 30%.

On a Special Non-Working day or rest day, an additional compensation of 30% premium


will be paid in addition to the rate of the first eight hours of holiday or rest day.

• Night shift differential (NSD)


Applies to employees who work between 10:00 p.m. and 6:00 a.m., where an additional
10% premium is applied for every hour at work.

• Leave benefits
While sick leave and vacation leave benefits are not specifically stated under the law, it
stipulates that private employees are allowed to provide employees a yearly Service
Incentive Leave of five days with pay. This applies to employees with work tenure of at
least one year within the company.

• Maternity leave
Any pregnant woman employee who has worked with the company for at least six
months will be granted a maternity leave of at least two weeks prior to her due date

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Business Administration Department

(expected date of delivery) and four weeks after normal delivery or miscarriage with full
pay based on her regular salary.

• Paternity leave
The R.A No. 8187, or Paternity Leave Act of 1996, grants seven days of fully paid leave
to married fathers. This is effective up to the first four deliveries of the legitimate spouse.

Mandatory government benefits and contributions:

• Social Security System (SSS) benefits


It is an insurance program mandated by the Philippine government to cover all income
earners or workers in the private sector, in contrast, government workers are covered by
the GSIS or Government Service Insurance System.

• Pag-IBIG benefits
Pab-IBIG provides housing loans, calamity loans, and multi-purpose loans to employees
in the Philippines. The repayment is covered by both the employer and employee and
the employees share is deducted from his or her salary.
• PhilHealth benefits
This is the healthcare insurance provided to Filipinos by the government. PhilHealth
extends financial assistance for inpatient and outpatient hospitalization. One of its most
comprehensive packages is the Z Benefit Package, made for patients undergoing
prolonged hospitalization and expensive treatments, or suffering from Millennium
Development Goal (MDG)-related illnesses.

Manager

Task carried out by restaurant managers vary depending on the type of restaurant, but
usually include:

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Business Administration Department

Business Activities:
• Being responsible for the performance of the café.
• Deciding what’s best for the improvement of the café.
• Creating marketing activities like promotional events and discounts.
• Writing reports about the café’s sales, foods, and staff’s control.
• Planning budget and discusses with the senior managements.
• Preparing of the profits and sales.
• Strategizing the marketing activities to promote the café.
• Planning the café’s menu that can attract customers.
Barista/Chef
• Responsible for the kitchen staffs to be instructed about the works in the kitchen
• Organizes the dishes in a presentable way.
• Responsible for the cleanliness of the kitchen café.
• Estimates the budget for the supplies and ingredients that will be needed.
• Inspects the foods to ensure the quality and safety of the food.
• Checks the ingredients from time to time to avoid food poisoning.
Cashier
• Checks the money of the customer whether it is fake or not.
• Checks the amount of change before giving to the customer.
• Collects payment through cash payment only.
• Balance cash drawer by counting cash from the beginning of the work hours and before
the closing hours.
Kitchen Assistant
• Responsible for the cleanliness of the shop.
• Washes the dirty dishes and utensils that will be needed immediately.
• Prepares and chop the needed ingredients of the chef.
• Disposes the garbage.
• Maintaining cleanliness of the floors, tables, and windows of the shop.
• Storing the new supplies and distorting the expired ingredients.

Security Guard
• Monitors and protect the shop from any criminal and violence that may occur.

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Business Administration Department

Waiters
• Greets and serve the guests politely.
• Proper uniform at all times.
• Inform the guests about the special menu and best sellers of the café.
• Entertains the guests if they have questions about the food.
• Take the orders of the guests.
• Performs the cleaning of the tables whenever the customers are done.
• Entertains all the customer’s needs.
• Observe the guests ensure their satisfaction on their food.
• Knows the basics in cooking and preparing of the foods.

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Business Administration Department

D. Activity and Time Chart

106 days

Fig 17. PERT Chart

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Business Administration Department

FINANCING AND ACCOUNTING

42
A. Best Case Scenario

Year 1 Year 2 Year 3 Year 4 Year 5

Avg Customers 60 62 64 66 68

Avg. Hours 2.00% 3.0 3.1 3.1 3.2 3.2

Price Point of stay 5.00% 70.0 70.0 80.0 84.0 88.2

Avg. Spent excl. stay 5.00% 80.0 84.0 88.2 92.6 97.2

Effective days per year 2.00% 92% 94% 95% 95% 95%

Sales 7,277,188 7,887,036 9,373,235 10,299,460 11,307.665

• Stay 58% 4,215,750 4,532,269 5,541,254 6,120,141 6.753,298


Business Administration Department

• Food 22% 1,606,000 1,777,360 1,957,334 2,119,426 2,292,834


FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance

• Others 20% 1,455,438 1,577,407 1,874,647 2,059,892 2,261,533

Table 10. Sales Projection (Best)


The table below shows the Sales Projection for the first 5 years for Diligence Café.

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Year 1 Year 2 Year 3 Year 4 Year 5
B. Worst Case Scenario

Avg Customers 57 58.9 60.8 62.7 64.6

Avg. Hours 2.00% 2.85 2.95 2.95 3.04 3.04

Price Point of stay 5.00% 66.5 66.5 76.0 79.8 83.79

Avg. Spent excl. stay 5.00% 76.00 79.8 83.79 87.97 92.34

Effective days per year 2.00% 87.4% 94% 90.25% 90.25% 90.25%

Sales 6,913,328.60 7,492,684.20 8,904,573.25 9,784,487.00 10,742,281.75

• Stay 58% 4,004,962.50 4,305,655.55 5,264,191.30 5,814,133.95 6,415,633.10


Business Administration Department
FAR EASTERN UNIVERSITY

• Food 22% 1,525,700.00 1,688,492.00 1,859,467.30 2,013,454.70 2,178,192.30


Institute of Accounts, Business, and Finance

• Others 20% 1,382,666.10 1,498,536.65 1,780,914.65 1,956,898.31 2,148,456.35

Table 11. Sales Projection (Worst)


The table below shows the Sales Projection for the first 5 years for Diligence Café.

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Institute of Accounts, Business, and Finance
Business Administration Department

C. Diligence Café ROI

CASHFLOW IN Year 1 Year 2 Year 3 Year 4 Year 5


Financial Asset, Beg
Sales 7,277,188 7,887,036 9,373,235 10,299,460 11,307,665
Interest 22,234 36,785 49,012 66,094 85,393
TOTAL CASH IN 7,299,421 7,923,821 9,442,247 10,365,554 11,393,058

CASH FLOW OUT


Cost of Franchisee 385,00 404,250 424,463 445,686 467,970
Coupon
Cost of Goods 642,400 710,944 782,934 1,029,946 1,130,766
Office Expense 727,719 788,704 937,324 1,029,946 1,130,766
Least Cost 1,680,000 1,881,600 2,107,392 2,360,279 2,643,512
Utilities 720,000 792,000 871,200 958,320 1,054,152
HR Cost 1,819,297 1,971,759 2,343,309 2,574,865 2,826,916
Board Member’s 338,262 406,627 481,049 528,548 580,235
Cost
TOTAL CASH OUT 6,312,678 6,955,884 7,947,670 8,745,414 9,620,686
PROFIT BEFORE 986,744 967,937 1,474,577 1,620,140 1,772,372
DIVIDENDS
DIVIDENDS 400,000 400,000 400,000 500,000
PROFIT AFTER 986,744 567,937 1,074,577 1,220,140 1,272,372
DIVIDENDS
Depreciation 200,000 400,000 1,000,000 1,700,000 2,300,000
Reserve
Financial Asset, END 1,786,744 2,154,681 2,629,258 3,149,398 3,821,770

Table 12. Return on Investment

ROI Formula:

Net Profit / Total Investment * 100 = ROI

Php 3,821,770.00 / Php 2,375,000 * 100 = 60.91% ROI

= Php 1,446,612.50

Return on investment for Php 2,375,000 Franchise fee and other expenses are expected

on year 4 of operations. The 5 year ROI computation gives the franchisee a 60.91% ROI or +

Php 1,446,612.50

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Business Administration Department

D. Franchisor’s Viewpoint with Regards to Royalties

Aside from the initial Franchise Fee of 2,375,000.00, the Franchisee shall remit to

Franchisor 10% of the net profits of its business in the form ROYALTIES. Distribution of profits

shall be made on the 6TH of EVERY MONTH.

Based on the Financial Statement of Diligence Café during Year 1, the total sales of Php

1,786,744 would mean that annual royalty fee would be Pho 178,674.40 as the 10%. The

succeeding years are reflected in the table below:

Franchise Fee Total NET Sales 10% Royalty Expected Profit

Year 1 2,375,000.00 1,786,744 178,674.40 2,553,674.40

Year 2 2,154,681 215,468.10 215,468.10

Year 3 2,629,258 262,925.80 262,925.80

Year 4 3,149,398 314,939.80 314,939.80

Year 5 3,821,770 382,177.00 382,177.00

Table 13. Franchisor’s Viewpoint

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Business Administration Department

LEGAL ASPECT

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Business Administration Department
C
A. Disclosure Documents
o
p
FRANCHISE AGREEMENT y
r
i
This Franchise Agreement ("Agreement") is made and effective this 15 NOVEMBER 2018, g
h
t
BETWEEN: DILIGENCE CAFE (the "Franchisor"), a company organized and existing under
E
the laws of MANILA of METRO MANILA, with its head office located at:
n
v
1221 LEGARDA ST. MANILA, METRO MANILA i
s
i
o
AND: [FRANCHISEE NAME] (the "Franchisee"), an individual with his main address
n
located at OR a company organized and existing under the laws of the
[State/Province] of [STATE/PROVINCE], with its head office located at: S
B
[COMPLETE ADDRESS] S
.

2
WHEREAS, Franchisor and certain of its Affiliates own, operate and franchise DILIGENCE CAFE 0
throughout PHILIPPINES which, among other things, rent, sell and market FOOD AND BEVERAGE AND 0
CO-WORKING SPACES to the GENERAL PUBLIC; and 6
.
WHEREAS, Franchisor and certain of its Affiliates acquire, produce, license market and sell FOOD AND
A
BEVERAGE AND CO-WORKING SPACES; and
l
l
WHEREAS, Franchisee is willing to purchase on a per Location (the terms initially capitalized in this
Agreement and not otherwise defined herein shall have the respective meanings set forth in Paragraph r
18 of this Agreement) basis a specified number of FOOD AND BEVERAGE AND CO-WORKING
i
g
SPACES; and
h
t
WHEREAS, Franchisor is willing to provide various marketing, advertising and promotional services and s
activities in support of Franchisee;
r
e
s
48 e
r
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FAR EASTERN UNIVERSITY
Institute of Accounts, Business, and Finance
Business Administration Department

NOW, THEREFORE, based on the above premises and in consideration of the covenants and
agreements contained herein, and intending to be legally bound, the parties agree hereto as follows:

1. AGREEMENT TERM

The term of this Agreement shall be for the period OF 5 YEARS (the "Term"), commencing as of the date
of this Agreement. Each year of the Term, as measured from the date of this Agreement, is a "Contract
Year."

2. TERRITORY

The territory for purposes of this Agreement with respect to DILIGENCE CAFE shall be PHILIPPINES,
their territories and possessions (the "Territory"), except with respect to those DILIGENCE CAFE for
which Franchisee has only PHILIPPINES Distribution Rights, in which case, the Territory with respect to
such DILIGENCE CAFE shall be limited to PHILIPPINES and, if and to the extent Franchisor owns or
controls such rights, to territories and possessions of PHILIPPINES).

3. REVENUE SHARING

Franchisee shall remit to Franchisor 10% of the net profits of its business in the form ROYALTIES.
Distribution of profits shall be made on the 6TH of EVERY MONTH.

4. FRANCHISOR COMMITMENTS

Beginning as of the date of this Agreement for LEGARDA BRANCH located in PHILIPPINES within 3
calendar months hereafter, and for Participating Franchises within 3 calendar months hereafter,
Franchisee agrees as follows:

4.1 Purchasing

The following purchasing requirements shall apply to all Locations and Participating Franchises

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A. There should be at least Php 10,000 worth of products per order.


B. There is 3 days lead time for delivery after placing an order.
C. All orders must be made every Tuesday of the week.

4.2 Missing Products

For each INVENTORY that is lost, stolen or otherwise not reasonably accounted for, for more than 45
calendar days during the period commencing upon delivery to Franchisor's distribution center and ending
on the last day of the relevant Revenue Sharing Period, Franchisee shall pay PHP 5,000 to Franchisor.
For any such INVENTORY Franchisee will reimburse Franchisor the applicable distribution wholesale
price less the applicable average Purchase Price received by Franchisee.

4.3 Payment

The parties acknowledge and agree that if Franchisee fails to order PHP 10,000 WORTH OF
PRODUCTS required under Paragraph 4.1, Franchisee shall pay PHP 5,000 to Franchisor, as liquidated
damages, an amount equal to PHP 5,000 for each unit which Franchisee failed to order. If Franchisor fails
to deliver the number or units ordered by Franchisee under Paragraph 4.1, Franchisor shall pay to
Franchisee, as liquidated damages, an amount equal to PHP 5,000 for each unit which Franchisor failed
to deliver. The parties hereto expressly agree and acknowledge that actual damages for purposes of this
Subparagraph would be difficult to ascertain and that the amount set forth above represents the parties'
reasonable estimate of such damages.

4.4 Marketing

With respect to advertising of DILIGENCE CAFÉ, Franchisee agrees to consult with Franchisor and to
keep Franchisor reasonably appraised of its marketing plans and activities and to comply with
Franchisor's then-current customary marketing support policies and practices to the extent they are
reasonable and practicable. Franchisor shall have the right to approve such plans, and Franchisee shall
provide a timely opportunity for said approval by Franchisor. Franchisor shall exercise its approval rights
in a timely and reasonable manner.

Should Franchisee fail to comply in good faith with its obligations under Paragraph 4.4, Franchisor shall
be entitled to give written notice to Franchisee of such failure. In no event shall Franchisor be obligated to

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provide such advertising which it would otherwise have been obligated to provide during such time as
Franchisor's obligations hereunder were suspended because of Franchisee's failure to fulfill its obligations
under this Paragraph 4.4.

4.5 Participating Franchises

While Franchisee cannot guarantee that its Franchises will adopt the Agreement, Franchisee will use
good faith commercially reasonable efforts to recommend adoption of the Agreement to its Franchises
and anticipates a high level of adoption thereby. Franchisor hereby agrees that each Participating
Franchise shall execute a letter agreement, which has been approved by Franchisee in form and
substance, in favor of Franchisor, agreeing to be bound by the terms and conditions of this Agreement as
if it were a party hereto (the "Participating Franchise"). Franchisee shall be liable for each Participating
Franchise's performance of its financial obligations hereunder as if such Participating Franchise were a
Location. Franchisor shall have the right to proceed against Franchisee for money only for any failure of a
Participating Franchise to fully perform the financial terms and conditions of this Agreement. Participating
Franchises shall be subject to the same terms and conditions under the Agreement as Locations, unless
specifically designated otherwise. Implementation of the Agreement at the Franchise level and Franchise
payments there under will be administered by Franchisor.

4.6 Placement

Franchisee shall exercise good faith commercially reasonable efforts to maximize revenue on SALE of
FOOD AND BEVERAGE AND CO-WORKING SPACES. At all times during the entire Revenue Sharing
Period, Franchisee shall make available for SALE at each Location all the FOOD AND BEVERAGE AND
CO-WORKING SPACES purchased for such Location.

4.7 Packing and Shipping

Franchisor will be solely responsible for making FOOD AND BEVERAGE AND CO-WORKING SPACES
ready for consumer PURCHASE AND RENTAL and for shipping the FOOD AND BEVERAGE from its
distribution center to Franchisee’s Locations.

4.8 Returns/Exchanges

The purchase requirements set forth in Paragraph 4.1 shall not be subject to any returns by Franchisee.
Franchisor will exchange defective or damaged products. Defective products shall mean those that are

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mechanically defective, mispackaged, physically blemished or contain extraneous material. Franchisee


shall report defective or damaged products to Franchisor promptly following discovery of such defect or
damage.

4.9 Location Count

Franchisee will report to Franchisor on a calendar month basis the number of currently operating
Locations, including Participating Franchises, non-participating Franchises, New Franchisor Locations
and recently closed Locations.

4.10 Demographic Information

Franchisee will provide to Franchisor, on an ongoing basis, information regarding the demographic make-
up generally of Franchisee customers.

5. COMMITMENTS

5.1 Marketing Support

In lieu of specific marketing support programs such as rebate, co-op and MDF programs, and as payment
for services and in consideration for the various other services and activities which Franchisee has
agreed to perform hereunder for the benefit of Franchisor, such as sales and rental reporting functions,
Franchisor agrees to credit on a per FOOD AND BEVERAGE AND CO-WORKING SPACES basis (on
the relevant invoice) Franchisee with marketing support funds ("Marketing Support Funds") in the amount
of PHP 50,000 OR of in the amount of 15% of the Purchase Price generated by DILIGENCE CAFÉ.
Marketing Support Funds shall not be used to advertise, promote or otherwise market product not
distributed by Franchisor. In addition to Marketing Support Funds, Franchisor shall continue to provide
Franchisee with standard IN-STORE point of purchase marketing materials as customarily utilized by
Franchisor.

A. Franchisee shall use all of the Marketing Support Funds to advertise in measured media.
With respect to said advertising of DILIGENCE CAFÉ, Franchisee agrees to consult with
Franchisor and to keep Franchisor reasonably appraised of its marketing plans and activities
and to comply with Franchisor then-current customary marketing support policies and
practices to the extent that they are reasonable and practicable. Franchisor shall have the

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right to approve such plans, and Franchise shall provide a timely opportunity for said
approval by Franchisor. Franchisor shall exercise approval rights in a timely and reasonable
manner.

B. With respect to 15% of the Marketing Support Funds, Franchisor and Franchisee shall jointly
determine how said monies will be used to advertise, promote or otherwise market
DILIGENCE CAFÉ.

C. Franchisor shall use 15% of the Marketing Support Funds for IN-STORE FOOD AND
BEVERAGE AND CO-WORKING SPACES specific marketing and promotion.

D. Should Franchisee fail to comply in good faith with its obligations under paragraphs 4.1 A, B
and C, Franchisor shall be entitled to give written notice to Franchisee of such failure. If
Franchisee fails to remedy such failure to Franchisor's satisfaction within 30 calendar days
following receipt of such notice, Franchisor shall be relieved of its obligations to provide
Marketing Support Funds, until such time as Franchisee complies in good faith with its
obligations under this Paragraph 4.1 D. In no event shall Franchisee be entitled to receive
Marketing Support Funds which would otherwise have accrued during such time as
Franchisee's rights hereunder were suspended because of its failure to fulfill its obligations
under this Paragraph 4.1 D.

6. ELECTRONIC REPORTING

At no cost or expense to Franchisor, Franchisee will provide to Franchisor, electronically, daily access to
all Franchisee DILIGENCE CAFE information along with weekly summaries, in such form as may be
reasonably specified by Franchisor from time to time, of all performance information as to Franchisee's
SALE OR RENTAL of FOOD AND BEVERAGE AND CO-WORKING SPACES, including, but not limited
to, daily SALES OR RENTAL data, daily inventory and daily Revenue from each Location on a Location
by Location, DILIGENCE CAFE by REPORT basis.

7. REVIEW

Within 30 calendar days following the end of each Contract Year, the parties shall meet and in good faith
review the terms of this Agreement. Should no agreement be reached between the parties with respect to

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adjusting or amending the terms of the Agreement, the then current terms of the Agreement shall remain
in full force and effect. Within the 30 calendar days following the end of the month of the Term, either
party may give 2 months notice to terminate the Agreement. If such notice is given by either party, from
such notification forward, Franchisee shall have no right or obligation to purchase additional FOOD AND
BEVERAGE AND CO-WORKING SPACES under this Agreement and Franchisor shall be relieved of any
right or obligation to sell FOOD AND BEVERAGE AND CO-WORKING SPACES to Franchisee under
this Agreement.

8. TERMINATION

The following transactions or occurrences shall constitute material events of default (each an "Event of
Default") by the applicable party (the "defaulting party") hereunder such that, in addition to and without
prejudice to or limiting any other rights and remedies available to the non-defaulting party at law or in
equity the non-defaulting party may elect to immediately and prospectively terminate this Agreement at
the sole discretion of the non-defaulting party by giving written notice thereof to the other party at any time
after the occurrence of an Event of Default setting forth sufficient facts to establish the existence of such
Event of Default.

8.1 Material Breach


A material breach by a party of any material covenant, material warranty, or material representation
contained herein, where such defaulting party fails to cure such breach within 30 calendar days after
receipt of written notice thereof, or within such specific cure period as is expressly provided for elsewhere
in this Agreement; or

8.2 Insolvency and/or Bankruptcy


A party makes an attempt to make any arrangement for the benefit of creditors, or a voluntary or
involuntary bankruptcy, insolvency or assignment for the benefit of creditors of a party or in the event any
action or proceeding is instituted relating to any of the foregoing and the same is not dismissed within 30
calendar days after such institution; or

8.3 Failure to Make Payment


A failure by either party to make payment of any monies payable pursuant to this Agreement, as and
when payment is due. Except as otherwise provided herein, no termination of this Agreement for any
reason shall relieve or discharge any party hereto from any duty, obligation or liability hereunder which
was accrued as of the date of such termination.

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9. PUBLIC DISCLOSURE AND CONFIDENTIALITY

9.1 Public Disclosure

Each party agrees that no press release or public announcement relating to the existence or terms of this
Agreement (including within the context of a trade press or other interview or advertisement in any media)
shall be issued without the express prior written approval of the other party hereto.

9.2 Confidential Information

During the Term and for a period of 5 YEARS thereafter, Franchisee and Franchisor shall hold, and shall
cause each of their directors, officers, employees and agents to hold in confidence the terms of this
Agreement (including the financial terms and provisions hereof and all information received pursuant to,
or developed in accordance with, this Agreement) specifically including but not limited to the Franchisor.
Franchisee and Franchisor hereby acknowledge and agree that all information contained in, relating to or
furnished pursuant to this Agreement, not otherwise known to the public, is confidential and proprietary
and is not to be disclosed to third parties without the prior written consent of both Franchisee and
Franchisor. Neither Franchisee nor Franchisor shall disclose such information to any third party (other
than to officers, directors, employees, attorneys, accountants and agents of Franchisee and Franchisor or
the affiliates of either, who have a business reason to know or have access to such information, and only
after each of whom agrees to being bound by this paragraph) except:

a. To the extent necessary to comply with any Law or the valid order of a governmental agency
or court of competent jurisdiction or as part of its normal reporting or review procedure to
regulatory agencies or as required by the rules of any major stock exchange on which either
party's stock may be listed; provided, however, that the party making such disclosure shall
seek, and use reasonable efforts to obtain, confidential treatment of said information and
shall promptly, to the greatest extent practicable, notify the other party in advance of such
disclosure;

b. As part of the normal reporting or review procedure by its parent Franchisee, its auditors and
its attorneys;

c. To the extent necessary to obtain appropriate insurance, to its insurance agent or carrier, that
such agent or carrier agrees to the confidential treatment of such information; and

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d. To actual or potential successors in interest, provided, however, that such person or entity
shall have first agreed in writing to the confidential treatment of such information.

10. NO RIGHT TO USE NAMES

a. Neither Franchisee nor Locations nor Participating Franchises shall acquire any right to use,
nor shall use any copyrights, trademarks, characters or designs owned or controlled by
Franchisor or any of its Affiliates, including without limitation, the names DILIGENCE CAFÉ
alone or in conjunction with other words or names, in any advertising, publicity or promotion,
either express or implied, without Franchisor's prior consent in each case, and in no case
shall any Franchisee or Location advertising, publicity, or promotion, express or imply any
endorsement of the same.

b. Franchisee shall not acquire any right to use, nor shall use the name DILIGENCE CAFE
alone or in conjunction with other words or names, or any copyrights, trademarks, characters
or designs of the same in any advertising, publicity or promotion, either express or implied,
without Franchisor's prior consent in each case, and in no case shall any Franchisee
advertising, publicity, or promotion, express or imply any endorsement of the same.

11. ASSIGNMENT

This Agreement and the rights and licenses granted hereunder are personal and neither party shall have
the right to sell, assign, transfer, mortgage, pledge nor hypothecate (each an "Assignment") any such
rights or licenses in whole or in part without the prior written consent of the non-assigning party, nor will
any of said rights or licenses be assigned or transferred to any third party by operation of law, including,
without limitation, by merger or consolidation or otherwise; provided, however, that an Assignment
pursuant to or resulting from a sale of all or substantially all of the assets or all or a majority of the equity
of Franchisee to any Person or Persons or any other form of business combination, such that the
Franchisee business as currently existing remains substantially intact, including, without limitation, a sale
to the public, shall not require such consent so long as such Assignment is not to damage; and provided
further that any Assignment by (i) Franchisee, to damage or (ii) Franchisor to any Affiliate of Franchisor.
In the event that Franchisee or Franchisor assigns its rights or interest in or to this Agreement in whole or
in part, the assigning party will nevertheless continue to remain fully and primarily responsible and liable

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to the other party for prompt, full, complete and faithful performance of all terms and conditions of this
Agreement.

12. AUDIT RIGHTS

a. During the Term and continuing until 12 months following the date of expiration or earlier
termination of this Agreement Franchisor may, audit the financial books, information systems
and records of Franchisee as reasonably necessary to verify Franchisee's compliance with its
obligations under this Agreement; provided, however, that

i. Such audit shall be at the sole cost and expense of Franchisor (unless such audit
reveals that payments due to Franchisor for any 12 month period were understated
by more than 10% percent, in which case, in addition to all other rights which
Franchisor may have, Franchisee shall promptly reimburse Franchisor to the extent
of its reasonable out-of-pocket costs of such audit);

ii. Franchisor may not audit more than twice per year (and no such audit shall continue
for more than 30 calendar days from the date the auditors are given access to the
applicable records), and

iii. Any such audit shall be conducted only during regular business hours and in such a
manner as not unreasonably to interfere with the normal business activities of
Franchisee.

b. Franchisee shall keep and maintain complete and accurate books of account and records in
connection with its obligations under this Agreement at its principal place of business until the
months following the date of rendering of the initial statement reflecting such records unless a
legal action with regard thereto is commenced during such period.

c. During the Term and continuing until 12 months following the date of expiration or earlier
termination of this Agreement, Franchisor may inspect and audit the books, records and store
premises of Locations and Participating Franchises as reasonably necessary to verify
compliance with this Agreement; provided, however, that

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d. Such audit shall be at the sole cost and expense of Franchisor (unless such audit reveals that
payments due to Franchisor for any 12 month period were understated by more than 10% in
which case, in addition to all other rights which Franchisor may have, Franchisee shall
promptly reimburse Franchisor to the extent of its reasonable out-of-pocket costs of such
audit), and (b) any such audit shall be conducted only during regular business hours and in
such a manner as not unreasonably to interfere with the normal business activities of
Location or Participating Franchises.

13. FRANCHISOR'S REPRESENTATIONS AND WARRANTIES

Franchisor represents and warrants that:

a. It is a corporation organized and existing under the laws of PHILIPPINES with its principal
place of business in MANILA;

b. The undersigned has the full right, power and authority to sign this Agreement on behalf of
Franchisor;

c. The execution, delivery and performance of this Agreement does not and will not, violate any
provisions of PHILIPPINES articles or certificates of incorporation and bylaws, or any
contract or other Agreement to which Franchisor is a party;

d. There is no broker, finder or intermediary involved in connection with the negotiations and
discussions incident to the execution of this Agreement, and no broker, finder, agent or
intermediary who might be entitled to a fee, commission or any other payment upon the
consummation of the transactions contemplated by this Agreement;

e. This Agreement has been duly executed and delivered and constitutes a legal, valid and
binding obligation, enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in a proceeding in
equity or at law.

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14. FRANCHISEE'S REPRESENTATIONS AND WARRANTIES

Franchisee represents and warrants that:

a. It is a corporation organized and existing under the laws of the PHILIPPINES with its principal
place of business in the MANILA;

b. The undersigned has the full right, power and authority to sign this Agreement on behalf of
Franchisee;

c. There is no broker, finder or intermediary involved in connection with the negotiations and
discussions incident to the execution of this Agreement, and no broker, finder, agent or
intermediary who might be entitled to a fee, commission or any other payment upon the
consummation of the transactions contemplated by this Agreement;

d. This Agreement has been duly executed and delivered and constitutes the legal, valid and
binding obligation of Franchisee enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereinafter in effect, affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and

e. The execution, delivery and performance of this Agreement does not, and will not, violate any
provisions of Franchisee's articles or certificates of incorporation and bylaws, or any contract
or other Agreement to which Franchisee is a party.

15. FORCE MAJEURE

The duties and obligations of the parties hereunder may be suspended upon the occurrence and
continuation of any "Event of Force Majeure" which inhibits or prevents performance hereunder, and for a
reasonable start-up period thereafter. An "Event of Force Majeure" shall mean any act, cause,
contingency or circumstance beyond the reasonable control of such party (whether or not reasonably
foreseeable), including, without limitation, to the extent beyond the reasonable control of such party, any
governmental action, nationalization, expropriation, confiscation, seizure, allocation, embargo, prohibition
of import or export of goods or products, regulation, order or restriction (whether foreign, federal or state),

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war (whether or not declared), civil commotion, disobedience or unrest, insurrection, public strike, riot or
revolution, lack or shortage of, or inability to obtain, any labor, machinery, materials, fuel, supplies or
equipment from normal sources of supply, strike, work stoppage or slowdown, lockout or other labor
dispute, fire, flood, earthquake, drought or other natural calamity, weather or damage or destruction to
plants and/or equipment, commandeering of vessels or other carriers resulting from acts of God, or any
other accident, condition, cause, contingency or circumstances including (without limitation, acts of God)
within or without PHILIPPINES. Neither party shall, in any manner whatsoever, be liable or otherwise
responsible for any delay or default in, or failure of, performance resulting from or arising out of or in
connection with any Event of Force Majeure and no such delay, default in, or failure of, performance shall
constitute a breach by either party hereunder. As soon as reasonably possible following the occurrence of
an Event of Force Majeure, the affected party shall notify the other party, in writing, as to the date and
nature of such Event of Force Majeure and the effects of same. If any Event of Force Majeure shall
prevent the performance of a material obligation of either party hereunder, and if the same shall have
continued for a period of longer than 30 days, then either party hereto shall have the right to terminate
this Agreement by written notice to the other party hereto.

16. INDEMNIFICATION

Each party (the "Indemnifying Party") shall indemnify and hold the other party and its affiliates and their
respective employees, officers, agents, attorneys, stockholders and directors, and their respective
permitted successors, licensees and assigns (the "Indemnified Party(ies)") harmless from and against
(and shall pay as incurred) any and all claims, proceedings, actions, damages, costs, expenses and other
liabilities and losses (whether under a theory of strict liability, or otherwise) of whatsoever kind or nature
("Claim(s)") incurred by, or threatened, imposed or filed against, any Indemnified Party (including, without
limitation, (a) actual and reasonable costs of defense, which shall include without limitation court costs
and reasonable attorney and other reasonable expert and reasonable third party fees; and (b) to the
extent permitted by Law, any fines, penalties and forfeitures) in connection with any proceedings against
an Indemnified Party caused by any breach (or, with respect to third party claims only, alleged breach) by
the Indemnifying Party of any representation, term, warranty or agreement hereunder. Neither party shall
settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending
or threatened Claim in respect of which the Indemnified Party is entitled to indemnification hereunder
(whether or not the Indemnified Party is a party thereto), without the prior written consent of the other
party hereto; provided, however, that the Indemnifying Party shall be entitled to settle any claim without
the written consent of the Indemnified Party so long as such settlement only involves the payment of
money by the Indemnifying Party and in no way affects any rights of the Indemnified Party.

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17. REMEDIES

No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of
any other remedy which is otherwise available at law, in equity, by statute or otherwise, and except as
otherwise expressly provided for herein, each and every other remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or
otherwise and no provision hereof shall be construed so as to limit any party's available remedies in the
event of a breach by the other party hereto. The election of any one or more of such remedies by any of
the parties hereto shall not constitute a waiver by such party of the right to pursue any other available
remedies.

18. DEFINITIONS

A. "Affiliate" shall mean an entity in which either party has a controlling interest.

B. "Franchise" shall mean all Franchisee Locations which Franchisee informs Franchisor are
Franchises.

C. "Laws" shall mean all international, federal, national, state, provincial, municipal or other laws,
ordinances, orders, statutes, rules or regulations.

D. "Location" shall mean any Location in [COUNTRY] or [COUNTRY], which, at any time during
the Term of this Agreement, is wholly owned and/or operated by Franchisee, whether or not
such Location is operated under the "Franchisee" trademarks. Should Franchisee undertake
to own or operate outlets different than the outlets it has traditionally operated, such as by
way of example, kiosks, carts, "Locations within a Location", "rack jobbing" operations or
vending machines, the parties shall negotiate in good faith to agree upon terms for the
inclusion of such retail outlets in this Agreement.

E. "New Franchisee Location" shall mean a Location which Franchisee or any of its Franchisees
or Affiliates first owns or operates after the commencement date of this Agreement, excluding
Franchisee's acquisition of franchised Franchisee Locations.

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F. "Revenue Sharing Period" shall mean the period commencing on 12 th and running through
until the end of 24th.

19. MISCELLANEOUS

G. This Agreement shall not constitute any partnership, joint venture or agency relationship
between the parties hereto. The parties shall be considered independent contractors.

H. This Agreement, together with the attached exhibits embodies the entire understanding of the
parties with respect to the subject matter hereof and may not be altered, amended or
otherwise modified except by an instrument in writing executed by both parties.

I. The headings in this Agreement are for convenience of reference only and shall not have any
substantive effect.

J. All rights and remedies granted to the parties hereunder are cumulative and are in addition to
any other rights or remedies that the parties may have at law or in equity.

K. Should any non-material provision of this Agreement be held to be void, invalid or


inoperative, as a matter of law the remaining provisions hereof shall not be affected and shall
continue in effect as though such unenforceable provision(s) have been deleted herefrom.

L. Unless otherwise indicated, all dollar amounts referenced herein shall refer to and be paid in
PHILIPPINE PESO.

M. No waiver of any right under or breach of this Agreement shall be effective unless it is in
writing and signed by the party to be charged.

N. This Agreement shall be governed by and construed in accordance with the internal Laws of
PHILIPPINES applicable to Agreements entered into and wholly performed therein.
Franchisee hereby consents to and submits to the jurisdiction of the Franchisor and any
action or suit under this Agreement may be brought in any Court with appropriate jurisdiction
over the subject matter established.

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O. None of the provisions of this Agreement is intended for the benefit of or shall be enforceable
by any third parties.

P. This Agreement may be executed in separate counterparts each of which shall be an original
and all of which taken together shall constitute one and the same Agreement.

Q. All notices shall be in writing and either personally delivered, mailed first-class mail (postage
prepaid), sent by reputable overnight courier service (charges prepaid), or sent by transmittal
by any electronic means whether now known or hereafter developed, including, but not
limited to, email, facsimile, telex, or laser transmissions, able to be received by the party
intended to receive notice, to the parties at the following addresses:

Franchisor Address:
1221 LEGARDA ST. MANILA, METRO MANILA

Franchisee Address:
[SPECIFY]

20. GOVERNING LAW

This Agreement shall be governed by, and construed under, the laws of MANILA of PHILIPPINES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written.

FRANCHISOR FRANCHISEE

Authorized Signature Authorized Signature

Print Name and Title Print Name and Title

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APPENDICES

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APPENDIX A. Diligence Cafe Investment Agreement

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APPENDIX B. TOWS Matrix

OPPORTUNITIES (O) THREATS (T)


E
X 1. Expected Increase in 1. Calamities might affect the
T demand supplies of raw materials
E 2. A lot of students around 2. Strong competitor
R University Belt are attracted 3. Government Policies
N to the idea of studying in a 4. Consumer Preference
A coffeeshop or co-working. 5. There are similar ventures that
L 3. A lot of coffeeshops are now offer the same service.
becoming unpleasant to the 6. Other companies can offer the
INTERNAL customers who want to relax same services with lower
because of studying prices.
students. 7. Too much variety can cause
confusion.

STRENGTHS (S) SO ST

1. Diligence Cafe offers a lot of S1/O2 S3/T2/T5/S1


services customized to every The business will take The business offers a unique
potential customer need. advantage to the foot traffic type of concept among other
2. Being a customer gives out the caused by the students. coffee shops and should continue
feeling of being in a premium S2/O1,O3 to innovate it.
experience. The business can satisfy the
3. Diligence Cafe is strategically consumer demand without
placed near its target market. affecting other type of
customers.

WEAKNESS (W) WO WT

1. Instability of raw materials W1,W2/T4,T5,T1 W3/T4


supplies The production should be taken Formulate marketing strategies to
2. Perceived as premium product into consideration knowing that position the product.
3. The business model can be there is high foot traffic in the
easily imitated. area and it might affect the W4/T7/T4
4. The prices can be a little supply of raw materials as well Make occasional promotions to
expensive for students. as the lead time to deliver the make the prices more appealing
5. The utilities are in continuous product to customers. to the customers.
usage even with few
customers.

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