Flowerama 2024 Franchise FAQ - FDD Ninja

Question 1

What was the total settlement amount Flowerama paid to the Arizona Plaintiffs in January 2022?

Accepted Answer

0-Flowers marks and for enforcement of the non-competition provisions in the plaintiffs' agreements, plus legal fees and expenses.

Following discovery and cross motions for summary judgement, the Defendants engaged in settlement discussions with Arizona Plaintiffs. These settlement discussions proved successful and, in order to avoid the cost of a trial with these plaintiffs, the case was settled in January 2022 for a total sum of \$150,000. A settlement agreement was executed by the parties in which there was no admission of l

Source: Item 3 — LITIGATION (FDD pages 12–13)

Question 2

According to the Flowerama Co-Brand Addendum, what happens in the event of a conflict between the Addendum and the Franchise Agreement?

Accepted Answer

In the event of any conflict or ambiguity between the terms of this Addendum and the Franchise Agreement, the terms of this Addendum shall control.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 3

What is the dependency for a Flowerama franchisee to use the marks on social media?

Accepted Answer

- (iv) You understand and acknowledge that you are strictly prohibited from using the Marks to promote your Franchised Unit using the Marks in any manner on any social and/or networking Websites, such as Facebook, LinkedIn and Twitter, without our prior written consent.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 4

If a Flowerama franchisee already has sufficient refrigerator, storage, and prep space, can their equipment costs for the Fruit Bouquets Program be lower?

Accepted Answer

(2) **Equipment, Fixtures and Signs.** If you purchase the Fruit Bouquets Program, you will have additional expenses for required equipment, signage and supplies, such as what is contained in a fruit bouquets starter kit, which includes tools, packaging and containers, and may include equipment required for compliance with applicable health laws related to food service businesses. In some cases, you may purchase certain equipment from us or our affiliates. Your costs may be lower if we determine that you have sufficient refrigerator, storage, prep space and/or equipment to accommodate this program. The signage requirements include a vehicle wrap for your van (if you own one), interior signage and exterior signage.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–29)

Question 5

If the Fruit Bouquets Marketing Fund is established for Flowerama, will Flowerama contribute to the fund for company-owned units, and under what conditions?

Accepted Answer

If established, we will make contributions to the Fruit Bouquets Marketing Fund equal to the amounts required of comparable Centers for each of our or our subsidiaries 'or affiliates' company-owned units operating in any market or region in which there are 5 or more Centers in operation. (**Franchise Agreement, Section 22 D**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 6

Under what condition will a Flowerama franchisee be required to contribute to the 1-800-Flowers Marketing Fund?

Accepted Answer

- a. **Marketing Fund Contribution**. Upon notification from Franchisor that the 1-800- Flowers Marketing Fund has been reinstated, Franchisee shall contribute two percent (2%) of the Franchised Unit's Gross Sales to the 1-800-Flowers Marketing Fund. Such contribution shall be payable on the tenth (10th) day of each month based on Gross Sales generated in the previous calendar month (or the next business day if the tenth (10th) of any month is not a business day).

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 7

Under what condition is a Flowerama franchisee required to wrap their delivery vehicle?

Accepted Answer

- (6) **Delivery Vehicle; Van Wrap**.

You will, in most cases, already have vans for your use as delivery vehicles for your existing Flowerama Center.

You must make sure that the vans comply with our standards, must promptly replace worn-out equipment at your expense and must cause your delivery vans to be repaired and repainted when appropriate or as designated by us.

If requested by us, your delivery vehicle must be wrapped in accordance with the current corporate-approved vehicle wrap standards.

If you do not have any vans, you are not required to do so, unless we request that you acquire one.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–29)

Question 8

Under what condition is the Flowerama local advertising fee cancelled?

Accepted Answer

| Type Of Fee | Amount | Due Date | Remarks | |-------------------------------------|--------------------------------------|-----------------------------------------------------------|----------------------------------------------------------------------------------------------------| | Royalty – Floral Business | 6% of Gross Sales2 | 15 days after end of week in which gross sales made | Reduced to 5% if payment made by 3rd calendar day after close of week for which payment due. | | Royalty – Fruit Bouquets | 6% of Fruit Bouquets Gross Sales2 | Payable monthly on the 10th day of the next month | Payable if you purchase the Fruit Bouquets Program. | | Local Advertising | 1% of Gross Sales2 | As incurred annually | Payable to third parties. This fee is cancelled if a Marketing Fund is established. | | Marketing Fund – Floral Business | 2% of Gross Sales2 | Payable monthly on the 10th day of the next month | Payable to us only if a Marketing Fund is established. | Source: Item 6 — OTHER FEES¹ (FDD pages 15–19)

Question 9

Under what conditions will Flowerama not defend or indemnify a franchisee against third-party claims of trademark infringement?

Accepted Answer

We have the right to control any administrative proceedings or litigation involving a trademark licensed by us to you. If you learn of any claim against you for alleged infringement, unfair competition, or similar claims about the Marks, you must promptly notify us. We will promptly take the action we consider necessary to defend you. We must indemnify you for any action against you by a third party based solely on alleged infringement, unfair competition, or similar claims about the Marks. We will have no obligation to defend or indemnify you if the claim against you relates to your use of the Marks in violation of the Franchise Agreement, or your gross negligence or willful misconduct with respect to your actions pursuant to the Franchise Agreement.

Source: Item 13 — TRADEMARKS (FDD pages 54–57)

Question 10

Under what conditions can either party terminate the Flowerama Premier Order Fulfillment Agreement during an automatic renewal?

Accepted Answer

|     | Provisions                                          | Section in Premier Order Fulfillment Agreement | Summary                                                                                                                          |
|-----|-----------------------------------------------------|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|
| (a) | Length of the term | Section 4 | One year |
| (b) | Renewal or extension of the term | Section 4 | Automatic one-year renewals, unless terminated by either party at least 15 days before agreement is to be renewed |
| (c) | Requirements for Florist to renew or extend | Not applicable | Not applicable |
| (d) | Termination by Florist | Section 4 | Florist may terminate on 45 days' prior written notice |
| (e) | Termination by 800-Flowers without cause | Section 4(b) | Either party may terminate on 45 days' prior written notice |
| (f) | Termination by 800-Flowers with cause | Section 4 | 800-Flowers can termin

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 60–71)

Question 11

Under what conditions can Flowerama require a franchisee to upgrade their POS System?

Accepted Answer

We reserve the right to specify the POS System or any component thereof you must purchase at any time. We also have the right to change the approved POS System in the future. You must, upon 90 days' notice from us, upgrade your POS System, but no more frequently than every 3 years during the term of your Franchise Agreement. When we require you to purchase our approved POS System, the information below will apply. If you are a start-up franchise, you must purchase the POS System we designate or approve. (**Franchise Agreement, Section 18 E**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 12

What happens to the Principal's obligations if the Borrower or Principal becomes insolvent in relation to the Flowerama agreement?

Accepted Answer

---------|--|
| Flowerama of America, Inc. ("Lender") to or for the account of ("Borrower"), under that                   |  |
| certain Promissory Note (the "Note") dated payable by Borrower to Lender, said                            |  |
| Note having been delivered in connection with that certain Franchise Agreement between Borrower as        |  |
| Franchisee and Lender as Franchisor dated (the "Franchise Agreement"), and in                             |  |
| order to induce Lender to accept the Note from Borrower, ("Principal"), being the                         |  |
| and the holder of a majority interest in Borrower, hereby guarantees: (i)                                 |  |
| the prompt payment to Lender of all sums that may in any manner whatsoever be presently due and owing     |  |
| and of all sums which shall in the future become in any manner whatsoever due and owing to Lender from    |  |
| Borrower under the Note whether by acceleration or otherwise; and (ii) the due performance by Borrower of |  |
| all its obligations under the Note.                                                                       |  |

Principal also agrees: (a) that the liability of Principal is DIRECT, ABSOLUTE AND UNCONDITIONAL and may be enforced without (i) requiring Lender first to resort to any other right, remedy or security or (ii) regard to the validity, regularity or enforceability of any obligation or purported obligation of Borrower under the Note or otherwise; (b) that this Guaranty shall not be impaired by any modification or extension of the Note or any other agreement between Borrower and Lender, nor by any modification or release of any of the obligations hereby guaranteed or of any security therefor, nor by any agreement or arrangement whatsoever with Borrower or anyone else; (c) that Principal shall be liable to Lender for all attorneys' fees and costs incurred by Lender by reason of this Guaranty or in connection with or arising out of or in enforcing any rights granted Lender hereunder or in any respect relating to the Note; (d) that Principal shall not have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for the debts and obligations of Borrower to Lender, unless and until all of Borrower's obligations in respect of the Note have been paid in full; (e) that if Borrower or Principal shall at any time become insolvent or make a general assignment or if a petition in bankruptcy or any insolvency or reorganization proceedings shall be filed or commenced by or against Borrower or Principal, any and all obligations of Principal shall, at Lender's option, become immediately due and payable without notice;

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 13

If an existing Flowerama franchisee co-brands their existing Flowerama Center, is there an initial franchise fee?

Accepted Answer

If you are an existing Flowerama franchisee that will cobrand its existing Flowerama Center with the 1-800-Flowers brand, we will not charge an Initial Franchise Fee, but you must sign the Co-Branding Addendum for an Existing Flowerama Center (**Exhibit A-3**) to obtain the co-branding rights.

Source: Item 5 — INITIAL FEES (FDD pages 13–15)

Question 14

When is the 1-800-Flowers Marketing Fund contribution due from Flowerama franchisees?

Accepted Answer

the grant of this franchise and Franchisor's undertakings and agreements contained in the Franchise Agreement constitute the sole and only consideration for the payment of the initial franchise fee and that the initial franchise fee shall be fully earned by us upon the parties' execution of the Franchise Agreement and this Addendum and shall be non-refundable. If the term of the Franchise Agreement is less than then (10) years, then the initial franchise fee may be reduced accordingly.

# 5. **1-800-FLOWERS MARKETING FUND**.

- a. **Marketing Fund Contribution**. Upon notification from Franchisor that the 1-800- Flowers Marketing Fund has been reinstated, Franchisee shall contribute two percent (2%) of the Franchised Unit's Gross Sales to the 1-800-Flowers Marketing Fund. Such contribution shall be payable on the tenth (10th) day of each month based on Gross Sales generated in the previous calendar month (or the next business day if the tenth (10th) of any month is not a business day).
- b. **Maintenance of Marketing Fund.** The 1-800-Flowers Marketing Fund shall be maintained and administered by Franchisor or its designee as follows. All references herein to "**Franchisor**" shall be deemed to include any designated party to which Franchisor has delegated the rights and responsibilities described herein.
- (i) Franchisor shall direct all national and regional marketing programs with sole discretion over the creative concepts, materials and media used in such programs and the placement and allocation thereof.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 15

According to the Flowerama FDD, what standards must a Florist comply with to protect the 1-800-Flowers brand?

Accepted Answer

Florist acknowledges that it does not expect, and will not receive, any marketing, training or other substantial assistance from 1-800-Flowers with reference to Florist's obligations hereunder, and 1-800-Flowers has imposed upon Florist only those requirements necessary for the proper fulfillment of the orders and to protect the Licensed Property and the 1-800-Flowers brand.

Consistent with the foregoing, Florist shall comply with all requirements and guidelines relating to the protection of the Licensed Property and the 1-800-Flowers brand, including, without limitation, those pertaining to quality, service, delivery, communications and other standards established by 1-800-Flowers from time to time for the fulfillment of its orders, as further set forth on Exhibit A, which may be amended from time to time.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 16

According to the Flowerama franchise agreement addendum for Minnesota, what happens in the event of a conflict between the addendum and the franchise agreement?

Accepted Answer

- 8. In the event of any conflict between the terms of this Addendum and the terms of the Franchise Agreement, the terms of this Addendum shall prevail.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 17

According to Minnesota Rules, can Flowerama require litigation to be conducted outside of Minnesota?

Accepted Answer

4. Minn. Stat. Sec. 80C.21 and Minnesota Rules 2860.4400(J) prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties, or judgment notes.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 18

According to the Flowerama Release Agreement, what happens if a party delays exercising a right under the agreement?

Accepted Answer

- 7.10 **No Waiver**.

No delay, waiver, omission, or forbearance on the part of any Party to exercise any right, option, duty, or power arising out of any breach or default by any other Party of any of the terms, provisions, or covenants of this Release Agreement, and no custom or practice by the Parties at variance with the terms of this Release Agreement, shall constitute a waiver by any Party to enforce any such right, option, or power as against the other Parties, or as to a subsequent breach or default by the other Parties.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 19

How does Flowerama account for its leases?

Accepted Answer

lt of payments to affiliated entities that exceeded the advances from affiliated entities. Fixed dates and terms have not been established for repayment of the amounts due from the affiliated entities. In addition, these advances and repayments do not bear interest.

The Company purchased products and services from affiliates totaling \$72,070 and \$137,272 during the 52-week period ended July 2, 2023 and 53-week period ended July 3, 2022, respectively. As of July 2, 2023 and July 3, 2022, no material amounts were payable to these affiliates.

The Company has pledged all of its assets as collateral for the credit facility of its Parent corporation. The credit facility terms contain positive and negative covenants with which its Parent was in compliance with as of July 2, 2023.
![](_page_186_Picture_1.jpeg)

# **(8) Leases**

The Company currently leases an office and retail store facilities under various leases through fiscal 2027. Lease agreements may contain renewal options and rent escalation clauses and require the Company to pay real estate taxes, insurance, common area maintenance and operating expenses applicable to the leased properties. The Company accounts for its leases in accordance with ASC 842. At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time, by assessing whether the Company has the right to obtain substantially all of the economic benefits from use of the identified asset, and the right to direct the use of the identified asset.

At the lease commencement date, the Company determines if a lease should be classified as an operating or a finance lease (the Company currently has no finance leases) and recognizes a corresponding lease liability and a right-of-use asset on its Balance Sheet. The lease liability is initially and subsequently measured as the present value of the remaining fixed minimum rental payments using discount rates as of the commencement date. Variable payments (including most utilities, real estate taxes, insurance and variable common area maintenance) are expensed as incurred. Further, the Company elected a shortterm lease exception policy, permitting it to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less) and an accounting policy to account for leases and nonlease components as a single component for certain classes of assets. The right-of-use asset is initially and subsequently measured at the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use asset. Right-of-use assets are assessed for impairment using the long-lived assets impairment guidance.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 20

What action must a Flowerama franchisee take if they become aware of an unauthorized third party using the Flowerama marks?

Accepted Answer

If you learn that any third party whom you believe is not authorized to use the Marks is using the Marks or any variant of the Marks, you must promptly notify us. We will determine whether or not we wish to take any action against the third party. You will have no right to make any demand or to prosecute any claim against the alleged infringer for the infringement.

Source: Item 13 — TRADEMARKS (FDD pages 54–57)

Question 21

What action must a Flowerama franchisee take if there is a transfer of ownership in a corporate or partnership franchisee?

Accepted Answer

All transfers of ownership in a corporate franchisee and a partnership franchisee shall immediately be reported by Franchisee to Franchisor.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 22

What actions are specifically prohibited regarding Customer Data for a Flowerama franchisee during the term of the agreement and thereafter?

Accepted Answer

You acknowledge the confidential nature of the information contained in the Operations Manual and of information and procedures made available to you by us. To protect the System, the Trademarks, the Flowerama trade secrets and the goodwill associated with the same, you shall not duplicate or publish the Operations Manual or any confidential literature. You shall not disclose to anyone other than an authorized employee the information in the Operations Manual or any confidential literature and shall return the Operations Manual and any confidential literature to us at the expiration or other termination of this Agreement.

You shall further observe all pertinent restrictions contained elsewhere in this Agreement, including, but not limited to, provisions related to maintaining the confidential nature of information you have received from us during the term of this Agreement and the non-competition covenants set forth in Section 21.H.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 23

In the Flowerama addendum, what does the term "Franchised Unit" refer to?

Accepted Answer

Franchisee desires to purchase a start-up co-brand "**1-800-Flowers|Flowerama**" shop at a retail fixed-location geographical site to be approved by Franchisor (the "**Franchised Location**").

The cobranded franchise pursuant to the Franchise Agreement shall be referred to as a "**Franchised Unit**" or "**Flowerama Cente**r".

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 24

What additional charge does Flowerama assess if a franchisee fails to send delivery confirmation by 7:00 PM in their time zone?

Accepted Answer

llected from customers and paid to the appropriate taxing authority, and (b) all customer refunds, adjustments and credits given to customers in good faith. - [3] If you do not timely send your delivery confirmation on an order (by 7:00 PM in the time zone where your Center is located), you must pay an additional charge of \$2.25 on such order. If you do not reply with your rejection of an order request within specified time periods, or Source: Item 6 — OTHER FEES¹ (FDD pages 15–19)

Question 25

What was the address of the Flowerama #

Accepted Answer

| David L. & Donna F. Watson Flowerama #104 1300 South El Paseo Road Las Cruces, NM 88001 575-523-6400    |                                                                                                                                |
|---------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 26

What is the address for the Agent for Service of Process in California for Flowerama?

Accepted Answer

| STATE      | STATE ADMINISTRATOR                           | AGENT FOR SERVICE OF PROCESS                 |
|------------|-----------------------------------------------|----------------------------------------------|
| CALIFORNIA | Department of Financial Protection and        | California, Commissioner of Financial        |
|            | Innovation:                                   | Protection and Innovation                    |
|            | 320 West 4th Street, Suite 750                | 320 West 4th Street, Suite 750               |
|            | Los Angeles, California 90013                 | Los Angeles, California 90013                |
|            | (213) 576-7505/(866) 275-2677                 | (213) 576-7505/(866) 275-2677                |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 27

What does Flowerama agree to ensure regarding users of Licensed Material?

Accepted Answer

In addition, to the extent Licensed Material includes software or documentation provided by any third party pursuant to a license ("Third Party Material"), Customer agrees, as a condition to the right to use such Third Party Material, to abide by the terms and conditions of said licenses (including such additional User terms and conditions that shall be required by such license), to ensure that any Users abide by same and Customer shall be bound by such terms and conditions by virtue of its execution of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 28

What agreements must an assignee of a Flowerama franchise execute?

Accepted Answer

other than the original partners as described above, Franchisor shall have the option to purchase not only the interests being transferred but also the remaining interests so that our ownership will be one hundred percent (100%). Any purchase of such remaining interests shall be valued on a basis proportionate to the price of the interests initially being offered.
- (iii) Should Franchisor elect to exercise its right of first refusal, Franchisor and Franchisee shall take all action necessary to cause Franchisee's lease to be assigned to Franchisor.
- i. **Conditions of Assignment**. In order to obtain Franchisor consent to an assignment of the franchise, Franchisee shall:
  - (i) Bring all accounts with Franchisor and/or its affiliates current.
- (ii) Execute a general release in a form prescribed by Franchisor of all claims which Franchisee may have or believe to have against Franchisor or its affiliates, and their respective officers, directors, agents and employees whether the claims are known or unknown, which are based on, arise from or relate to the Franchise Agreement, the Franchised Unit or the Franchised Location, as well as claims, known or unknown, which are not based on, do not arise from or do not relate to the Franchise Agreement, the Franchised Unit or the Franchised Location but which relate to other franchise agreements, franchised units, franchised locations and other agreements between Franchisor and its affiliates and Franchisee which arose on or before the date of the general release, including, without limitation, all obligations, liabilities, demands, costs, expenses, damages, claims, actions and causes of action, of whatever nature, character or description, arising under federal, state and local laws, rules and ordinances, provided, however, that all rights enjoyed by Franchisee and any causes of action arising in Franchisee's favor from the provisions of Article 33 of the GBL and the regulations issued thereunder shall remain in force; it being the intent of this provision that the nonwaiver provisions of GBL Sections 687.4 and 687.5 be satisfied.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 29

Is Flowerama allowed to require a franchisee to waive a jury trial in Minnesota?

Accepted Answer

- 9. No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 30

What is the alternative to the 1% gross sales local advertising requirement for Flowerama franchisees?

Accepted Answer

During each calendar year, you must spend a minimum of 1% of gross sales for local advertising and promotion of your Flowerama Center. You may use your own advertising material, but the media and content of your advertising is subject to our approval. (**Franchise Agreement - Section 22 A**). In lieu of the above advertising requirement, we, at our sole option, may establish a "Marketing Fund" for Flowerama Centers. (**Franchise Agreement - Section 22 B**).

# **Flowerama Marketing Fund – Standard Flowerama Centers**

As of the date of this Disclosure Document, we have not established a separate Flowerama Marketing Fund (the "**Flowerama Marketing Fund**"), but we reserve the right to do so at any time in the future upon 90 days' written notice to you. When the Flowerama Marketing Fund is implemented, company-owned and affiliate-owned Standard Flowerama Centers will make contributions to the Flowerama Marketing Fund equal to the amounts required of comparable Centers for each of our or our subsidiaries' or affiliates' companyowned units operating in any market or region in which there are 5 or more Standard Flowerama Centers in operation. If a Flowerama Marketing Fund is established, all franchisees will be uniformly required to pay to us on or before the 10th day of each calendar month an amount equal to 2% of their Gross Sales for the preceding calendar month. (**Franchise Agreement - Section 22 B**).

The Flowerama Marketing Fund monies will be used by us for the purpose of advertising, promoting and enhancing the total Flowerama image. (**Franchise Agreement - Section 22 B**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 31

How does the Americans with Disabilities Act of 1990 potentially impact the building construction and site elements of a Flowerama Center?

Accepted Answer

The Americans with Disability Act of 1990 requires readily accessible accommodation for disabled people and therefore may affect your building construction, site elements, entrance ramps, doors, etc.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 7–11)

Question 32

What was the amount of deferred provision (benefit) for Flowerama in 2022?

Accepted Answer

Company contributions may be made at the discretion of the Board of Directors, limited to the maximum amount deductible for income tax purposes. The Company did not make any matching contributions to the plan during either of the 52-week period ended July 2, 2023 or the

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 33

Besides 'Flowerama' and 'Flowerama of America', what other marks might a Co-Brand Flowerama Center use?

Accepted Answer

America**". Our franchise offering will use the trade names and service marks "**Flowerama**" or "**Flowerama of America**" (the "**Flowerama Marks**") as well as "**1-800-Flowers**" and "**1-800-Flowers.Com**" (for Co-Brand Flowerama Centers only), as we may designate (collectively, the "**Co-Brand Marks**"). Our agents for service of process are disclosed in **Exhibit C**.

Since 1970, we have operated company-owned retail floral centers in enclosed shopping malls. From 1972 until July 1990, we sold franchises for the operation of Flowerama retail floral centers in enclosed shopping malls. We no longer operate franchises located in enclosed malls. In 1986, we opened a companyowned retail floral center that was not located in an enclosed shopping mall.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 7–11)

Question 34

Will Flowerama Centers owned by the franchisor or its affiliates contribute to the Flowerama Marketing Fund?

Accepted Answer

ing Fund for the total costs (including indirect costs) of developing, producing and distributing any advertising materials and collecting the Advertising Fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any Advertising Fee). (**Franchise Agreement - Section 22 D**).

If established, Centers owned by us or our affiliates will contribute to the Flowerama Marketing Fund on the same basis as you. The Flowerama Marketing Fund Fees paid will be kept separate and distinct and will be accounted for separately from our other funds. These funds will not be used to defray any of our general operating expenses, except as described above. (**Franchise Agreement - Section 22 D**).

Any sums paid to the Flowerama Marketing Fund that are not spent in the year they are collected will be carried over to the following year. If established, we will prepare an annual accounting of the Flowerama Marketing Fund within 120 days after the end of our fiscal year and will distribute it to our franchisees, upon written request, once a year that will state the total amount of money collected and spent by the Flowerama Marketing Fund during the previous year and list, by general category, the manner in which we spent the money. The report will not be separately audited. We are not required to have the Flowerama Marketing Fund statements audited. (**Franchise Agreement - Section 22D**).

# **1-800-Flowers Marketing and Marketing Funds – Co-Brand Flowerama Centers**

We or 1-800-Flowers or our affiliates may maintain and administer a marketing fund for Flowerama Centers that co-brand with 1-800-Flowers (the "**1-800-Flowers Marketing Fund**"). The 1-800-Flowers Marketing Fund was suspended in January 2009 and remained suspended during the fiscal year ended June 30, 2024. If the 1-800-Flowers Marketing Fund is reinstated, and if you operate a Co-Brand Flowerama Center, you must pay 2% of all Gross Sales (the "**1-800-Flowers Marketing Fund Fee**") that will be paid into the 1-800- Flowers Marketing Fund.

The 1-800-Flowers Marketing Fund will be for the benefit of the entire 1-800-Flowers System (including co-branded franchises) and the BloomNet Network related to the provision of floral services and products.

If reinstated, the Marketing Funds will be maintained as described below.

National and regional marketing programs can include the use of television and radio campaigns, yellow pages advertising, public relations activities, the use of toll-free telephone numbers, telemarketing systems, on-line computer networks and services, the Internet, interactive television and other technological advances for local and regional coverage. We can direct the activities of the Marketing Funds directly and can utilize the services of advertising and public relations agencies to assist in these activities. We can, but have no obligation to, make expenditures for you that directly benefit you or your Center. Any portions of the Marketing Funds that are not spent during the fiscal year in which they accrue will be spent during the following year. If reinstated, we will make contributions to the Marketing Funds equal to the amounts required of comparable Centers for each of our or our subsidiaries' or affiliates' company-owned units operating in any market or region in which there are five or more Centers in operation.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 35

What is Christopher G. McCann's current role at Flowerama?

Accepted Answer

**Vice President: Christopher G. McCann**

Mr. McCann was appointed as Chief Executive Officer of 1-800-Flowers, in Jericho, New York, in July 2016 and served until July 2023. He currently serves as our Vice President, in Jericho, New York, since July 2023.

ITEM 18 PUBLIC FIGURES

We do not use any public figure to promote our franchise, except that 1-800-Flowers' founder, Executive Chairman and Chief Executive Officer, James McCann, and its former Chief Executive Officer, Christopher McCann, do promote 1-800-Flowers, our parent, in media advertisements. They are not compensated for this promotion over and above their normal compensation as Executive Chairman and Chief Executive Officer and former Chief Executive Officer of 1-800-Flowers.

Source: Item 2 — BUSINESS EXPERIENCE (FDD pages 11–12)

Question 36

Where does Flowerama conduct the '

Accepted Answer

do not directly or indirectly constitute, suggest, infer or imply that we control any aspect or element of the day-to-day operations of your Flowerama Center, but only constitute standards to which you must adhere when exercising your control over the day-to-day operations of your Flowerama Center consistent with our policies. (**Franchise Agreement, Section 14**).

### **Training**

After you obtain your Flowerama Center location, but not later than 6 weeks before the opening of your Flowerama Center, we will train you and/or a person designated by you as follows at our Cedar Falls, Iowa headquarters, our Cedar Falls area company-owned Flowerama Centers, through a virtual communication pl

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 37

What constitutes an assignment of the Flowerama Franchise Agreement if the franchisee is an individual?

Accepted Answer

- c. **Assignment to a Controlled Corporation or Limited Liability Company.** If Franchisee is an individual, individuals or a partnership, Franchisor expressly consents to the assignment of this franchise to a corporation or limited liability company formed and controlled by Franchisee to operate the Franchised Unit; provided, however, that Franchisee shall be and remain, together with said corporation and its shareholders, or said limited liability company and its members, jointly and severally liable for all obligations under the Franchise Agreement and for all breaches thereof and, provided further, that Franchisee shall continue to supervise the operation of the Franchised Unit.

Franchisee shall immediately notify Franchisor of any such assignment and shall complete all appropriate agreements required by Franchisor as a result thereof.

No transfer fee shall be charged by Franchisor for its participation in this type of transfer; provided, however, that a transfer pursuant to this Section 8(c) may occur one (1) time only.

- d. **Transfers Deemed to be Assignments**.

If Franchisee is an individual, the transfer of any portion of Franchisee's interest in the Franchise Agreement will be deemed to be an assignment of the Franchise Agreement.

If the Franchise Agreement is assigned to a controlled corporation or limited liability company as provided in Section 8(c) above, the transfer from the original shareholders of the corporation or members of the limited liability company of any of the outstanding capital stock or voting power of such corporation or limited liability company will be deemed to be an assignment of the franchise.

If Franchisee is a partnership, or if the Franchise Agreement is assigned to a partnership, a transfer of the franchise will be deemed to have occurred when any of all partnership interests have been transferred to other than the original partners who entered into the Franchise Agreement or obtained an assignment of the franchise.

All transfers of ownership in a corporate franchisee and a partnership franchisee shall immediately be reported by Franchisee to Franchisor.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 38

What constitutes a material breach of the Flowerama Franchise Agreement related to payments, and what opportunity does the franchisee have?

Accepted Answer

Your failure to pay any amounts owed to us when due is a material breach of your Franchise Agreement, and you will have an opportunity to cure the breach. We will have the right to terminate your Franchise Agreement if you repeatedly breach the Franchise Agreement or fail to cure a non-payment breach. If you default under the Promissory Note or the Guarantee, or if you are in default under your Franchise Agreement, we have the right to demand immediate payment of all amounts due under the Promissory Note.

### **Note 2**:

If you default on any payment of principal or interest, all payments will immediately become due. Failure to make the payments required by the Promissory Note may result in termination of your Franchise Agreement and any other agreement between you and us and our repossession of the assets of the Center and the franchised location. If we pursue collection of the Promissory Note, we have the right to require you to pay our legal fees and expenses.

Source: Item 10 — FINANCING (FDD pages 36–38)

Question 39

What costs can Flowerama reimburse itself for from the Flowerama Marketing Fund?

Accepted Answer

If established, e have the right to reimburse ourselves out of the Flowerama Marketing Fund for the total costs (including indirect costs) of developing, producing and distributing any advertising materials and collecting the Advertising Fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any Advertising Fee). (**Franchise Agreement - Section 22 D**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 40

Did the Counter-Claims against the Arizona Plaintiffs include a request for injunctive relief regarding the use of 1-800-Flowers marks in relation to Flowerama?

Accepted Answer

The Counter-Claims sought dismissal of the Complaint, monetary damages for breach of contract, breach of the Arizona Franchise Agreement and abandonment of the Arizona Franchise by the Arizona Plaintiffs, and injunctive relief regarding the Arizona Plaintiffs' continued unauthorized use of the 1-800-Flowers marks and for enforcement of the non-competition provisions in the plaintiffs' agreements, plus legal fees and expenses.

Source: Item 3 — LITIGATION (FDD pages 12–13)

Question 41

What are some of the criteria Flowerama uses to determine whether to designate a supplier as an approved supplier?

Accepted Answer

If you wish to purchase an item from a supplier that has not yet been approved by us, you must make a written request to us for approval of the proposed item or supplier. Our criteria for approval, as may be needed, may be requested from us directly in writing on a case-by-case basis. Generally, we apply the following criteria, among others, in considering whether the supplier will be designated as an approved supplier: (1) ability to produce the products, services, supplies, or equipment to meet both our standards and specifications for quality and uniformity and our franchisees' and customers' expectations; (2) production and delivery capabilities and ability to meet supply commitments; (3) integrity of ownership (to ensure that its association with us will not be inconsistent with our image or damage our goodwill); (4) financial stability; and (5) the negotiation of a mutually satisfactory license to protect our intellectual property. Our intention in approving any item or supplier is to ensure brand consistency.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 29–32)

Question 42

What are the current Order Fulfillment Fees for a Flowerama franchise?

Accepted Answer

val Fee | Not to exceed \$1,000 | As incurred | To cover the cost we incur in determining our approval of an unapproved supplier. |![](_page_16_Picture_0.jpeg) | Type Of Fee | Amount | Due Date | Remarks | |--------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Order Fulfillment Fees3, 4 | Currently \$3.50 per order or \$1.00 net of delivery confirmation | As incurred | Payable to BloomNet. | | Other BloomNet Fees3, 4 | Varies | Varies | You must pay all current fees and transaction charges due under the BloomNet Membership Agreement and the BloomNet. Technologies Systems Agreement. Th Source: Item 6 — OTHER FEES¹ (FDD pages 15–19)

Question 43

Does Flowerama currently have a Franchise Advisory Board?

Accepted Answer

We no longer have a Franchise Advisory Board, but reserve the right to re-establish one in the future.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 44

Does Flowerama currently have a separate Flowerama Marketing Fund established?

Accepted Answer

As of the date of this Disclosure Document, we have not established a separate Flowerama Marketing Fund (the "**Flowerama Marketing Fund**"), but we reserve the right to do so at any time in the future upon 90 days' written notice to you. When the Flowerama Marketing Fund is implemented, company-owned and affiliate-owned Standard Flowerama Centers will make contributions to the Flowerama Marketing Fund equal to the amounts required of comparable Centers for each of our or our subsidiaries' or affiliates' companyowned units operating in any market or region in which there are 5 or more Standard Flowerama Centers in operation. If a Flowerama Marketing Fund is established, all franchisees will be uniformly required to pay to us on or before the 10th day of each calendar month an amount equal to 2% of their Gross Sales for the preceding calendar month. (**Franchise Agreement - Section 22 B**).

The Flowerama Marketing Fund monies will be used by us for the purpose of advertising, promoting and enhancing the total Flowerama image. (**Franchise Agreement - Section 22 B**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 45

What is the deadline for the two appraisers to jointly choose a third appraiser if their initial appraisals for a Flowerama franchise are not in substantial agreement?

Accepted Answer

- (ii) If the two appraisals are not in substantial agreement, the two appraisers will jointly choose a third appraiser within ten (10) days of the date that the last appraisal is delivered to the parties who shall conduct his appraisal of the tangible assets within thirty (30) days.

If a third appraiser is utilized, the purchase price will be the average of the two appraisals which are closest to each other.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 46

Does the Flowerama definition of Confidential Information include unpublished financial statements?

Accepted Answer

By way of illustration, but not limitation, Confidential Information includes tangible and intangible information (whether or not in electronic form) relating to the System, the Trade Practices, the Marks and Franchisor's business operations (all as they may be defined herein or in any Franchise Agreement between Franchisor and Candidate), products and services, equipment, sources of materials and equipment, information management, computer hardware and software, data, other content, formulations, patterns, compilations, programs, devices and processes, know-how, business relationships, contact information for industry professionals, designs, developmental or experimental work and services, improvements, discoveries, plans for research, potential new or supplemental products and services, web sites, advertisements or ancillary products and services, marketing and selling methods and/or plans, business plans, budgets and unpublished financial statements, licenses, prices and costs, vendors, collaborators and customers, prices charged to customers, customer lists and other customer data, information regarding the skills and compensation of employees of Franchisor and contractors of Franchisor, designs, drawings, specifications, source code, object code, documentation, diagrams, flowcharts, research, development, marketing techniques and materials, trademarks, trade secrets, sales/license techniques, inventions, copyrightable material, trademarkable material, databases, relationship between Franchisor and other companies, persons or entities, and any other information or material considered proprietary by Franchisor, whether or not designated as Confidential Information by Franchisor but that is not generally known by the public, or which derives independent economic value (actual or potential) from not being generally known to the public or persons unaffiliated with Franchisor and which is subject of efforts by Franchisor that are reasonable under the circumstances to maintain its secrecy or any other information in oral, written, graphic or electronic form which, given the circumstances surrounding such disclosure, would be considered confidential.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 47

What depreciation method does Flowerama use for equipment?

Accepted Answer

Property and equipment are stated at cost with depreciation computed under the methods and over the useful lives as follows:

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 48

Does the Flowerama Disclosure Document or Agreement reduce any rights franchisees have under Minn. Stat. Sec. 80C, or their rights to any procedure, forum, or remedies provided by the laws of the jurisdiction?

Accepted Answer

- 5. Minnesota law prohibits us from requiring you to consent to us obtaining injunctive relief. However, we may seek injunctive relief. In addition, a court will determine if a bond is required.
- 6. Any provisions that pertain to a limitation of claims must comply with Minn. Stat. Sec. 80C.17, Subd. 5.
- 7. Each provision of this Addendum shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Minnesota Franchise Law are met independently without reference to this Addendum.
- 8. In the event of any conflict between the terms of this Addendum and the terms of the Franchise Agreement, the terms of this Addendum shall prevail.
- 9. No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 49

What documents must a Flowerama franchisee sign if they receive financing from the franchisor?

Accepted Answer

anchise Agreement on or before October 1, 2025, we will waive payment of the entire Fruit Bouquets Initial Franchise Fee.

### **Franchisor Financing**

If you meet our criteria, including a minimum credit score of 650, we may offer you the opportunity to finance up to \$30,000, which may be used for build-out of your Center and/or purchase and installation of signage. In addition, if you choose to purchase the Fruit Bouquets Program, we may offer you the opportunity to finance up to an additional \$30,000, which may be used for build-out costs and signage related to the Fruit Bouquets Business. We may also offer you the opportunity to finance up to an additional \$30,000 of remodeling costs and/or signage costs, if you are granted a renewal term. We may also offer you the opportunity to finance up to an additional \$30,000 of the Renewal Franchise Fee if you are granted a renewal term. Offers of financing are made to franchisees in our sole discretion on a case-by-case basis. If we offer financing to you, you must
![](_page_14_Picture_0.jpeg)

sign our form of Promissory Note attached to this Disclosure Document as **Exhibit G-1**. If you are an entity, your owners must guarantee payment of the Promissory Note under a Guarantee attached to this Disclosure Document as Exhibit G-2, and you must also grant us a security interest in the assets of your Flowerama Center under our form of Security Agreement attached to this Disclosure Document as **Exhibit G-3**. Financing is generally repaid over 1 year with interest at the rate of 7% per annum. The length of time to repay and the interest rate may vary on a case by-case-basis.

Source: Item 5 — INITIAL FEES (FDD pages 13–15)

Question 50

What documents outline

Accepted Answer

[Item 9: FRANCHISEE'S OBLIGATIONS]

# **ITEM 9 FRANCHISEE'S OBLIGATIONS**

**This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligation in these agreements and in other items of this Disclosure Document.**

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 32–36)

Question 51

What document's representations are not

Accepted Answer

- e. **Entire Agreement.** This Addendum represents the entire understanding between the parties regarding the subject matter of this Addendum and supersedes all other negotiations, agreements, representations and covenants, oral or written; provided, however, that nothing herein shall disclaim the representations made in the Franchise Disclosure Document that was provided to Franchisee by Franchisor.

This Addendum may not be modified except by a written instrument signed by Franchisor and Franchisee.

The parties intend this Addendum to be the entire integration of all of their agreements of any nature regarding the subject matter of this Addendum.

No other agreements, representations, promises, commitments or the like, of any nature, regarding the subject matter of this Addendum exist between the parties.

- f. **No Warranties**.

Franchisee acknowledges and agrees that Franchisor has made no promises, representations, warranties or assurances to Franchisee which are inconsistent with the terms of this Addendum concerning the future profitability or likelihood of success of the Franchised Unit at the Franchised Location, that Franchisee has been informed by Franchisor that there can be no guaranty of success in the Franchised Unit and that Franchisee's business ability and aptitude is primary in determining Franchisee's success.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

Question 52

Does Flowerama have

Accepted Answer

(c) termination of this Agreement (regardless of the cause for termination); or (d) a final court order (after all appeals have been taken) with respect to any of the foregoing events or with respect to enforcement of Section 21.G, in addition to all other remedies available to us, you shall pay us, throughout the two (2) year period, five percent (5%) of all revenue derived from the operation of the Competitive Business, including the sale of any merchandise, other products and services at or from the Competitive Business, and all other income of every kind and nature of the Competitive Business ("**Post Termination Gross Revenue**") in violation of Section 21.H.

The covenants described in Sections 21.G and 21.H shall not apply to ownership by you of less than a five percent (5%) ownership interest in any publicly traded company that operates a competing business.

The liquidated damages as contained in this Agreement pertain only to a breach of the covenants in this Section 21 and do not constitute a waiver of any other rights the Company may have under this Agreement.

### **22. ADVERTISING.**

To protect the System, the Trademarks, the Flowerama trade secrets and the goodwill associated with the same:

- A. During each calendar year, or portion thereof, of this Agreement, you agree to spend a minimum of one percent (1%) of Gross Sales, as defined in this Agreement, for local advertising and promotion of your Flowerama Center. The media and content of said advertising is subject to our prior approval.
- B. In lieu of the above advertising requirement, we, at our sole option, may establish a Flowerama Marketing Fund ("**Marketing Fund")** upon ninety (90) days' written notice to you. When the Marketing Fund is implemented, company-owned and affiliate-owned, Flowerama Centers will make contributions to the Marketing Fund equal to the amounts required of comparable Flowerama Centers for each of our or our subsidiaries or affiliates company-owned units operating in any market or region in which there are five (5) or more Flowerama Centers in operation. In the event such a fund is established, you agree to pay to us on or before the tenth (10th) day of each calendar month an amount equal to two percent (2%) of Gross Sales for the preceding calendar month. The Marketing Fund will be utilized by us for the purpose of advertising, promoting and enhancing the total Flowerama of America image, which shall include the cost of maintaining, administering, directing and preparing advertising, including but not limited to, the cost of preparing and conducting television, radio, magazine and newspaper advertising and other public relations activities, and the cost of employing advertising agencies and additional employees of ours to assist in said promotion. From time to time, the advertising program may also feature special items, and monies derived from the Marketing Fund will be used to pay for such advertisements, whether or not you choose to offer such items for sale. Such advertisements may provide for a "suggested" sales price or that advertised special prices are available only at "participating Flowerama of America Centers". It will be your sole decision whether or not to offer any items of merchandise for sale at a specially advertised price.
![](_page_98_Picture_0.jpeg)

C. We or our Parent or affiliates may also maintain and administer a marketing fund for franchisees that purchase the Fruit Bouquets program (the "**Fruit Bouquets Marketing Fund**"). If you purchase the Fruit Bouquets program, you will pay into the Fruit Bouquets Marketing Fund an amount equal to two percent (2%) of your Fruit Bouquets Gross Sales (the **"Fruit Bouquets Marketing Fund Fee**") each month.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 53

What is the effect of the Flowerama Release Agreement on the Franchise Agreement?

Accepted Answer

- 1.3 "**Excluded Matters**" means Franchisor's continuing contractual obligations which arise or continue under and pursuant to the Franchise Agreement and this Release Agreement on and after the Effective Date.

This Release Agreement is not intended to terminate or amend the Franchise Agreement.

- 1.4 "**Franchisor Released Parties**" means Franchisor, BloomNet, Inc., a Delaware corporation, 1-800-Flowers Retail, Inc., a Delaware corporation, 800-Flowers, Inc., a New York corporation, 1- 800-Flowers.Com, Inc., a Delaware corporation, 1-800-Flowers.Com Franchise Co., Inc., a Delaware corporation, and Conroy's, Inc., a California corporation, and each of their Constituents.

- 1.5 "**Losses**" means all damages, debts, liabilities, accounts, suits, awards, judgments, payments, diminutions in value and other losses, costs and expenses, however suffered or characterized, all interest thereon, all costs and expenses of investigating any Claim, reference proceeding, lawsuit or arbitration and any appeal therefrom, all actual attorneys' fees incurred in connection therewith, whether or not such Claim, reference proceeding, lawsuit or arbitration is ultimately defeated and, all amounts paid incident to any compromise or settlement of any such Claim, reference proceeding, lawsuit or arbitration.

- 1.6 "**Releasing Parties**" means Franchisee, Owner and any additional parties undersigned below.

Releasing Parties make and undertake all representations, warranties, acknowledgments, agreements, commitments, and obligations in this Release Agreement on behalf of themselves and each of their Constituents.

- 2. **General Release Agreement**.

Releasing Parties, for themselves and their Constituents hereby absolutely and irrevocably waive, release and forever discharge Franchisor Released Parties and their Constituents from any and all Claims, whether asserted or unasserted, known or unknown, suspected or unsuspected, based upon anything that has occurred or existed, or failed to occur or exist, or otherwise, from the beginning of time to the Effective Date, except for the Excluded Matters.

This waiver, release and discharge is effective immediately in its fullest and most comprehensive sense.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 54

What efforts are Flowerama franchisees required to make in selecting a franchised location?

Accepted Answer

tial Center operations for a period of seven (7) to ten (10) days.
- D. We will furnish to you, on loan, a confidential operations manual ("**Operations Manual**"). The Operations Manual shall remain our property at all times, is subject to change during the term of this Agreement, and you shall comply with any such changes. Upon expiration or termination of this Agreement, the Operations Manual, and any copies thereof, must be returned to us.
  - E. We will aid you in obtaining sources of supply.
- F. Provide a complete list of the equipment, fixtures, supplies and inventory necessary for the Center to open for business. We will also assist you in ordering and the display of your initial inventory.
- G. We will provide assistance in your pre-opening promotion and advertising efforts to promote the opening of your Center.
- H. We may provide any or all portions of the initial training program, pre and postopening on-site opening assistance, post-opening consultations and/or post-opening inspections remotely over a virtual communication platform designated by us.

### **5. SITE SELECTION – FRANCHISED LOCATION.**

- A. **Selection of Franchised Location**. You shall exert your best efforts to select the Franchised Location.
- (i) You shall diligently exert your best efforts to select a Franchised Location in your geographic area of interest whether presented by us or identified by you, in accordance with our site selection criteria.
- (ii) You shall submit proposed sites for our approval in the manner designated by us from time to time. Proposed sites will be submitted to us only after you have determined that the site is available on generally acceptable terms.
- (iii) We will review each proposed site and approve, reject or provide comments to you regarding the site within thirty (30) days after our receipt of each site proposal. We will have the sole and absolute discretion to reject sites we deem inappropriate as a location for a Flowerama Center.
- (iv) We will provide you with our site selection criteria and with a sample layout for the interior of a typical Flowerama Center, and with a typical set of preliminary plans and décor specifications promptly following your request for these items after the Franchised Location is selected by you and approved by us.
![](_page_84_Picture_0.jpeg)

- (v) We will bear all expenses in connection with our review of proposed sites only for such period of time as you, in good faith, submit carefully investigated and selected sites for our review and approval.
- (vi) If you have not selected an approved Franchised Location within twelve (12) months from the date of this Agreement, we may terminate this Agreement.
- (vii) You shall submit a proposed "**Third-Party Lease**" (as defined below) to us to allow us at least fifteen (15) days to confirm that the provisions set forth in subsection (viii) below have been included in the proposed Third-Party Lease and that the landlord (the "**Third-Party Landlord**") and you have executed an Option to Obtain Lease Assignment in the form specified by us. You shall then execute the Third-Party Lease only after you obtain our written approval of the site and the terms and conditions of the Third-Party Lease.
- (viii) Following the selection and approval of the site, we shall require you to enter into a direct lease (a "**Third-Party Lease**") for the Franchised Location with a Third-Party Landlord of an approved site.

Source: Item 23 — RECEIPTS (FDD pages 77–300)

Question 55

What efforts will Flowerama make to establish and maintain standards for the required computerized point-of-sale hardware, software and/or webbased systems?

Accepted Answer

-Flowers are not required to conduct any grand opening campaign, but we encourage you to do so to promote the co-brand. (**Co-Branding Addendum to Franchise Agreement for a Start-Up Flowerama Center - Paragraph 6**).

### **Franchise Advisory Board**

We no longer have a Franchise Advisory Board, but reserve the right to re-establish one in the future.

# **POS Systems**

During the term of your Franchise Agreement, we will exert our best efforts through our affiliates to establish and maintain standards for the required computerized point-of-sale hardware, software and/or webbased systems ("**POS Systems**") for the Flowerama Center and provide you either directly through our affiliates, or indirectly through the use of approved third party vendors, with ongoing technical support,
![](_page_44_Picture_0.jpeg)

maintenance and repair services, upgrades and updates for these systems. (**Franchise Agreement – Section 18 E**).

We will specify the currently approved POS Systems in the list of designated and approved suppliers that we give you, and we have the right to change the approved POS Systems in the future. We currently approve the BloomNet Business Management System (BloomNet BMS) POS System and the Visual Ticket POS System, but these POS Systems may not be the only systems we will approve. The hardware distributor of the BloomNet BMS POS System is PC Connection Sales Corp., 730 Milford Road, Merrimack, NH 03054, Telephone: (603) 683-2000. The manufacturer of the Visual Ticket POS System is FloralSystems.com, Inc., 497 Main Road, Corfu, New York 14036, 866-797-2428. The software vendor for the BloomNet BMS POS System is BloomNet, Two Jericho Plaza, Suite 200, Jericho, New York 11753, telephone: 516-237-6000.

# **BloomNet Business Management System:**

| BLOOMNET BUSINESS MANAGEMENT SYSTEM HARDWARE REQUIREMENTS                                                  | DESCRIPTION                        |
|---------------------------------------------------------------------------------------------------------------|------------------------------------|
| Dell Optiplex 3090 Workstation (WS360010) (or similar model) | Workstation |
| Brother Laser Printer (HL-L6200DW) (or similar model) | Printer |
| Dell Point of Sale (POS) Kit: Keyboard/Swiper, Cash Drawer & Receipt | POS Kit |
| Printer (OM300010) (or similar model) |  |
| BloomNet Technologies BMS Software: All inclusive, multi-user license | License Agreements and Software |
The estimated cost to purchase or lease the BloomNet POS System is approximately \$150 to \$10,000. The estimated cost for monthly lease, maintenance, upgrades and updates is approximately \$200 per month.

The estimated cost to purchase or lease the Visual Ticket POS System is approximately \$5,000 to \$50,000. The estimated cost for monthly lease, maintenance, upgrades and updates is approximately \$200 to \$500 per month, depending on the number of stations and features chosen.

We reserve the right to specify the POS System or any component thereof you must purchase at any time. We also have the right to change the approved POS System in the future. You must, upon 90 days' notice from us, upgrade your POS System, but no more frequently than every 3 years during the term of your Franchise Agreement. When we require you to purchase our approved POS System, the information below will apply. If you are a start-up franchise, you must purchase the POS System we designate or approve. (**Franchise Agreement, Section 18 E**).

You must update and upgrade the POS System and any component thereof during the term of the Franchise Agreement. You must pay a monthly charge for technical support as established by your service provider. You must use the POS System in your business as a cash register system, a customer data system, an inventory system, an employee payroll and time maintenance system, a wire service reconciliation system and a daily sales reporting system.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 56

Does Flowerama have to ensure that each Standard Flowerama Center benefits from advertising in proportion to their contributions to the Flowerama Marketing Fund?

Accepted Answer

We do not have to make sure that any Standard Flowerama Center benefits from the placement of advertising in proportion to their contributions to the Flowerama Marketing Fund. (**Franchise Agreement - Section 22 D**).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 57

What is the estimated cost to purchase or lease the BloomNet POS System for a Flowerama franchise?

Accepted Answer

| BLOOMNET BUSINESS MANAGEMENT SYSTEM HARDWARE REQUIREMENTS                                                  | DESCRIPTION                        |
|---------------------------------------------------------------------------------------------------------------|------------------------------------|
| Dell Optiplex 3090 Workstation (WS360010) (or similar model) | Workstation |
| Brother Laser Printer (HL-L6200DW) (or similar model) | Printer |
| Dell Point of Sale (POS) Kit: Keyboard/Swiper, Cash Drawer & Rece

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 58

What is the estimated cost range for the initial inventory of system-specific items a Flowerama franchisee may be required to purchase?

Accepted Answer

If we offer you financing for multiple purposes, you may have to sign multiple Promissory Notes, Guarantees and Security Agreements.

# **Product Purchases**

We may require you to purchase an initial inventory of items that are specific to the System, such as branded signature products, branded packaging, and gift items. As described in Item 8 below, you will purchase these products from our affiliates, BloomNet and/or Napco. We estimate that the cost of this initi

Source: Item 5 — INITIAL FEES (FDD pages 13–15)

Question 59

What is the estimated monthly cost for lease, maintenance, upgrades, and updates for the BloomNet POS System for a Flowerama franchise?

Accepted Answer

| BLOOMNET BUSINESS MANAGEMENT SYSTEM HARDWARE REQUIREMENTS                                                  | DESCRIPTION                        |
|---------------------------------------------------------------------------------------------------------------|------------------------------------|
| Dell Optiplex 3090 Workstation (WS360010) (or similar model) | Workstation |
| Brother Laser Printer (HL-L6200DW) (or similar model) | Printer |
| Dell Point of Sale (POS) Kit: Keyboard/Swiper, Cash Drawer & Rece

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 60

What is the estimated monthly cost for lease, maintenance, upgrades, and updates for the Visual Ticket POS System for a Flowerama franchise?

Accepted Answer

| BLOOMNET BUSINESS MANAGEMENT SYSTEM HARDWARE REQUIREMENTS                                                  | DESCRIPTION                        |
|---------------------------------------------------------------------------------------------------------------|------------------------------------|
| Dell Optiplex 3090 Workstation (WS360010) (or similar model) | Workstation |
| Brother Laser Printer (HL-L6200DW) (or similar model) | Printer |
| Dell Point of Sale (POS) Kit: Keyboard/Swiper, Cash Drawer & Receipt | POS Kit |
| Printer (OM300010) (or similar model) |  |
| BloomNet Technologies BMS Software: All inclusive, multi-user license | License Agreements and Software |
The estimated cost to purchase or lease the BloomNet POS System is approximately \$150 to \$10,000. The estim

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 61

What is the estimated range for the initial opening inventory payable to BloomNet and/or Napco for a Flowerama franchise?

Accepted Answer

**. For many items, the difference between the low and high ranges is attributable to the size

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–29)

Question 62

What is the estimated range for leasehold and improvements expenses for a standard Flowerama center with leased real estate?

Accepted Answer

icipate in this program, if reinstated, you will be billed monthly for your participation if 1-800-Franchise charges a marketing fee.

**ITEM 7 ESTIMATED INITIAL INVESTMENT**

| Your Estimated Initial Investment Standard Flowerama Center Real Estate Leased                   |                      |                    |                                      |                                     |  |
|--------------------------------------------------------------------------------------------------------|----------------------|--------------------|--------------------------------------|-------------------------------------|--|
| Method Of |  |  |  |  |  |
| To Whom Payment Is |  |  |  |  |  |
| Type Of Expenditure |  |  |  |  |  |
| Amount4 |  |  |  |  |  |
| Payment |  |  |  |  |  |
| When Due |  |  |  |  |  |
| To Be Made |  |  |  |  |  |
| Initial Franchise Fee1                                                                                 | \$17,500 - \$35,000  | Cashier's Check | On signing Franchise Agreement | Us                                  |  |
| Travel and Living | \$1,000 - \$8,000 | As incurred | During training | To Airlines, Hotels, |  |
| Expenses while Training2 |  |  |  | Restaurants |  |
| Leasehold and | \$40,000 - \$325,000 | As incurred | Before opening | To supplier |  |
| Improvements3 |  |  |  |  |  |
| Equipment                                                                                              | \$35,000 - \$75,000  | As arranged        | Before opening                       | To supplier                         |  |
| Fixtures                                                                                               | \$20,000 - \$40,000  | As arranged        | Before opening                       | To supplier                         |  |
| Signs                                                                                                  | \$10,000 - \$15,000  | As arranged        | Before opening                       | To supplier                         |  |
| Awnings                                                                                                | \$7

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–29)

Question 63

What is the estimated time between signing the Franchise Agreement and opening a start-up Co-Brand Flowerama Center?

Accepted Answer

We estimate that the time between when you sign the Franchise Agreement and the opening of your Flowerama Center will be between 3 and 12 months or 18 to 24 weeks for a start-up Co-Brand Flowerama Center. This interval may vary based upon factors such as the time required to secure a lease or purchase real property, the condition of the site, the construction of your Flowerama Center, how much an existing location must be remodeled, the delivery schedule for equipment or supplies, delays in securing your financing arrangements, pandemics, and completing training. Delays may also occur based upon your compliance with local laws and regulations.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)

Question 64

What does Flowerama expect franchisees to acknowledge regarding the addendum and related documents?

Accepted Answer

Franchisee acknowledges that Franchisee has carefully read this Addendum and all other related documents to be executed concurrently or in conjunction with the execution hereof, that Franchisee has obtained the advice of counsel in connection with entering into this Addendum, that Franchisee understands the nature of this Addendum, and that Franchisee intends to comply herewith and be bound hereby. Franchisee acknowledges that it has read and understood this Addendum and agreements relating thereto, and that Franchisor has accorded Franchisee ample time and opportunity to consult with advisors of Franchisee's own choosing about the potential benefits and risks of entering into this Addendum.

- e. **Entire Agreement.** This Addendum represents the entire understanding between the parties regarding the subject matter of this Addendum and supersedes all other negotiations, agreements, representations and covenants, oral or written; provided, however, that nothing herein shall disclaim the representations made in the Franchise Disclosure Document that was provided to Franchisee by Franchisor.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)

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