Frequently Asked Questions (FAQs)

These FAQs will be of interest to any prospective franchisee, but the information presented here regarding terms and fees is geared toward single-unit franchisees. If you choose to join our franchise network as an Area Developer or Area Director, there are some differences in the terms and fees. (See the Area Director and Area Developerpages for further information on these programs.)

Please call our Franchise Sales Office at 888-988-9898 to get the franchising process started, or to obtain the answers to any additional questions you may have. We look forward to speaking with you soon.

> The Mustard Concept and Business Opportunity
> Franchisee Qualifications
> Restaurant Sites and Size
> Franchise Costs and Fees
> Franchisee Training
> Franchisee Services and Support
> Territories and Area Development
> Our Name

The Mustard Concept and Business Opportunity

What is the dining concept behind Mustard Café restaurants?
Offer selections prepared with the best quality, health-conscious ingredients, served in a comfortable atmosphere, at a reasonable cost. Every choice on the menu offers customers unparalleled nutrition and gourmet taste.

Why is a Mustard Café franchise such a good business opportunity?
For a multitude of economic and lifestyle reasons, Americans have made a dramatic shift in their eating habits. Paying extra for wait staff and tablecloths is not as popular a choice as it once was. Diners want food served quickly, but prepared in a health-conscious way. They want value, while still seeking top-quality ingredients, prompt service, and a comfortable, welcoming ambiance. The Mustard concept addresses each of these customer needs and concerns.

Mustard Café is an example of a “fast casual” restaurant, a dining category that offers consumers an alternative to fast-food burgers, tacos, pizza, etc. Fast casual eateries are characterized by higher-quality, more healthful ingredients prepared with care, and sold at a reasonable price. Fast casual restaurants fill the market space between fast food eateries (which offer lower-quality fare) and sit-down, full-service restaurants (which feature dramatically higher price points).

The growth of the fast casual restaurant industry has been meteoric, with 2005 revenues estimated in excess of $70 billion.* The Mustard Café menu features sandwiches, salads, soups and a European-style breakfast, placing it in the gourmet deli segment, one of the fastest-growing categories of fast casual restaurants. Mustard also offers multiple revenue streams for franchisees: walk-up business, takeout orders, onsite special events, gift card sales, and home/corporate offsite catering engagements. *Source: Fast Casual Magazine

Which dining establishments are in the same market space as Mustard Café restaurants?
Competitors sharing our space include eating establishments with similar menu offerings (such as Panera Bread and Corner Bakery), and fast casual restaurants such as Daphne’s, Chipotle, Baja Fresh, and Pasta Bravo. To a lesser extent, sandwich shops including Subway, Quiznos, TOGO’s, and Blimpies could possibly be considered our competition, although they clearly do not measure up when it comes to Mustard’s high-end ingredients, customer service and overall value.   

What differentiates Mustard Café from other fast casual restaurants and sandwich shops? How is Mustard superior to the competition?
Our menu is one of our clearest differentiators, and the food really sets us apart from the rest. The freshest, highest-quality ingredients, artfully combined, with signature sandwiches, salads, and soups you can’t find anywhere else: these characteristics of the Mustard Café menu have fostered a high degree of brand loyalty among our customers.

Another differentiator involves the franchiser-franchisee relationship. It’s very hands-on, in large part because of strong founder/owner involvement. Franchisees can easily touch base with the corporation’s founders and senior management, and get any questions or issues resolved quickly. We have made franchisee assistance and support a top priority at Mustard Franchise Corporation, and routinely provide franchisees with recommendations for avoiding common pitfalls and maximizing profits. As a smaller franchise operation, we have a much larger stake in your success than a mega-franchiser ever will.

How much money can a franchisee expect to make?
The Federal Trade Commission (FTC) prohibits businesses such as Mustard Franchise Corporation from disclosing earnings or projected earnings for any given franchised or corporate-owned unit. That’s why Mustard Franchise Corporation cannot predict sales and profits for any location. Profitability depends considerably upon the franchisee’s ability to manage a unit’s day-to-day operations and finances, and also upon location-specific factors such as occupancy, expenses, labor costs and revenue potential.

One of the steps to owning a franchise, however, involves the opportunity to speak with established franchisees about their experiences with Mustard Franchise Corporation. You will have the chance to ask them directly about financial and operational specifics, as well as any other aspects of the Mustard brand and concept.

What is the term of a Franchise Agreement?
The basic term is 10 years. Franchisees may opt to renew for two additional ten-year terms at the then-current agreement terms.

Can franchises be sold or transferred?
Yes. Franchisees may sell or transfer a franchise to a buyer or transferee pending approval from Mustard Franchise Corporation. The sale/transfer process is discussed in our Disclosure Document.

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Franchisee Qualifications

Which franchisee qualifications are the most important for achieving success with Mustard?

Our standards are extremely high, so it’s not easy for prospective franchisees to be approved. We are looking for franchisees who possess the following mission-critical attributes:

• A proven track record of business success
• Adherence to and agreement with Mustard’s high standards for quality and customer service
• Adequate financial resources and capital (including minimum net worth of $350,000)
• Entrepreneurial drive and spirit
• Both the willingness and the bandwidth to devote full-time efforts to this business
• Working knowledge of accounting and financial reports
• Strong communication, leadership and organizational skills
• Management experience
• Ability to recruit, train and motivate employees

Please refer to the Franchisee Qualifications section for more details.

Do you require franchisees to have years of previous experience in restaurant operations?
Many franchise operations place a high emphasis on operations experience within the restaurant industry, and this kind of background can admittedly be a huge plus to an owner/operator. On the other hand, our experience has shown that it’s much easier to teach restaurant operations to a successful business owner than it is to teach a person with broad restaurant experience how to be successful in business.

What are the minimum financial requirements to be approved as a Mustard Café franchisee?
Single-unit franchisees need to have a minimum net worth of $350,000, of which $80,000 is liquid and available. We encourage franchisee prospects with larger amounts of capital to invest to consider applying to become an Area Director or Area Developer.

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Restaurant Sites and Size

Can prospective franchisees purchase an existing Mustard Café location?
At this time, there are no existing Mustard Café locations for sale. This could, however, become an option in the future.

How is the site of a new Mustard Café location selected and approved?
Franchisees are responsible for site selection, and for ensuring that a site meets all criteria established by Mustard Franchise Corporation. During the selection process, franchisees can call on Mustard Franchise Corporation for assistance, and leverage Mustard’s existing relationships with leading regional real estate brokers and developers.

How does Mustard Franchise Corporation evaluate potential sites?
Sites are evaluated to ensure that economic activity in the chosen locale is very high, and that the proposed location offers superior visibility and accessibility. In evaluating a site, we may consider information gleaned from a number of sources, such as site visits, site plans, aerial photographs, demographic reports and market research.

Can franchisees sign up right away, and deal with site selection later?
Single-unit franchisees need to finalize site selection concurrent with the signing of a Franchise Agreement.
(Multi-unit franchisees, which we call Area Developers and Area Directors, are granted more flexibility in site selection.) More information is available under Steps to Ownership.  

What is the size of a typical Mustard Café location?
Typically, store sizes ranges from 1,400 to 2,200 square feet.

Once the Franchise Agreement has been signed, how much time does it take before a restaurant is ready to open?
We anticipate that the average length of time between signing of a franchise agreement and opening of a franchised business will be 120 to 180 days, not including site selection. Factors that may affect the length of time it takes to open include site availability, lease negotiations and construction.

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Franchising Costs and Fees

How much does it cost for build-out of a franchise location?

Build out costs are difficult to estimate, due to variations in store size, age of the building, and regional restrictions. Refer to the table below for some rough cost guidelines for construction and build-out. 

What are the initial start-up costs for single-unit franchisees?
The following table summarizes the estimated initial investment for single-unit franchisees. (Fees for multi-unit Area Developer andArea Directorare presented elsewhere on this site.)

Initial start-up costs for single-unit franchisees
EXPENSE	LOW	HIGH	METHOD OF PAYMENT	WHEN DUE	TO WHOM PAID
Initial Franchise Fee	$25,000	$25,000	Single Payment		Us
Architectural Fees	$5,500	$8,500	As arranged	As arranged	Architect
Lease and Rent Deposits	$10,000	$28,000	As arranged		Landlord
Construction	$125,000	$190,000	As arranged	As arranged	Architect and Contractor
Tenant Improvement and Signs	$5,500	$10,000	As arranged	As arranged	Contractor and Suppliers
Permits and Licenses	$2,000	$4,000	As incurred	Varies	Government Agencies
Grand Opening Advertising	$1,000	$3,000	As arranged	As arranged	Ad Agencies and Media
Equipment and Furniture	$90,000	$125,000	As arranged	As arranged	Suppliers
POS System	$12,550	$18,000	Two payments	Half on order, half on delivery	Supplier
Utility and Equipment Deposits	$1,000	$2,000	Varies	Varies	Utilities and Government Agencies
Opening Inventory	$5,000	$7,500	As arranged	As arranged	Us and Suppliers
Insurance	$3,000	$4,500	As arranged	As arranged	Broker, Insurers
Organizational Expenses	$1,000	$2,500	As incurred	As arranged	Attorney and Accountant
Working Capital	$25,000	$40,000	As incurred	As incurred	Employees, Others
TOTAL	$311,550	$468,000

What fees are franchisees required to pay to Mustard Franchise Corporation?
Here is a list of required fees, nonrecurring and recurring:

Nonrecurring Fees (One Time Only)

• Non refundable Pre-franchise Fee: $10,000. This fee covers site location assistance and related site inspections and evaluations. If you later enter into a Franchise Agreement with us, the full amount of the pre-franchise fee will be applied to your initial franchise fee.
• Initial Franchise Fee: $25,000, less any pre-franchise fees paid. This amount is reduced to $20,000 if this is your second franchise, and $15,000 for subsequent franchises. This fee is also non refundable.

Recurring Fees (Ongoing)

• Royalties: 5% of gross restaurant sales, payable weekly.
• Advertising: 2% of gross restaurant sales, payable weekly. This is a contribution to the Advertising Fund for ad campaigns conducted to benefit the entire franchise network.
• Local Advertising: Franchisees are required to spend 1% of gross restaurant sales on local advertising and promotion.

In addition to the above list, you may incur some expenses related to computer system maintenance, training, and required attendance at the annual meeting. You may also be liable for additional fees should you choose to relocate, renew, or transfer your franchise. Please refer to the Franchise Agreement* and Disclosure Document* for additional fees-related details. *Available once you have been qualified.

What is your policy regarding late payment of fees?
The interest rate applicable to any past-due fee payments is 18% annually.

Is financing available through Mustard Franchise Corporation?
While Mustard Franchise Corporation does not currently offer financing, we work closely with SBA lenders on behalf of our franchisees.

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Franchisee Training

How long does the operations training in Orange County take?
The training program totals 48 hours in the classroom and 76 hours on the job. In terms of business days, the program takes two weeks of hands-on training in a company-related restaurant, followed by two weeks of training at the franchisee’s restaurant. See below for more details.

What does your training program consist of?
We offer franchisees an Orientation class, a Development Orientation class, and in-depth Operations training. The latter training program is conducted at training facilities in Orange County, California. The table below shows the number of training hours devoted to each operational function.

Training hours per operational function
SUBJECT	CLASSRM HOURS	ON THE JOB HRS	FACILITY
Customer service	4	4	Training Facility/Franchised Restaurant
Catering	4	8	Training Facility/Franchised Restaurant
Operations	16	36	Company-Related Restaurant Franchised Restaurant
Management duties/back room	8	16	Company-Related Restaurant Franchised Restaurant
Hiring procedures	4	4	Company-Related Restaurant
Ordering goods	4	4	Company-Related Restaurant Franchised Restaurant
Human resources issues	8	4	Company-Related Restaurant
Accounting	4	4	Company-Related Restaurant
TOTAL HOURS	48	76

What is the cost of training?
Training is included in your franchise fees. Franchisees are, however, liable for certain costs related to training, such as travel and lodging expenses.

Do you distribute written training materials that franchisees can retain and use later for reference?
Absolutely. Franchisees are issued three manuals – the Operations Manual, the Recipes Manual and the Marketing Manual – containing detailed instructions covering every aspect of restaurant operations.

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Franchisee Services and Support

Besides the training offerings mentioned above, what other services does Mustard Franchise Corporation provide to franchisees?
Our franchisee services and support offerings comprise a lengthy list. Before a store even opens, franchisees receive assistance with site selection, store design and build-out, equipment and fixtures, computer and software systems, and comprehensive training programs. Operations manuals take the guesswork out of running a restaurant, and ongoing management and operations consulting is there when you need it. We also offer marketing assistance, and maintain vendor relationships to minimize expenses for food and other supplies.

For a more detailed explanation of our franchisee support programs, please go to Benefits of Becoming a Franchisee.

Don’t the big mega-franchisers have more financial resources to devote to franchisee support and marketing? What is the advantage of choosing a smaller brand like Mustard?
Don’t make the mistake of assuming that just because a franchiser is huge, they are going to spend large amounts of time and money helping you. Some large franchise operations spend lavishly on advertising and marketing, but at the same time oversell and over-saturate territories, hurting everyone’s chances for success. Mega-franchisers can have so many locations (25,000 plus), that they feel no pain when dozens of locations are forced to close their doors due to poor management, area saturation, lack of franchisee support or other factors. In the case of a smaller franchiser like Mustard, however, we are highly motivated to go the extra mile to support our franchisees, as our success is closely tied to your own.

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Territories and Area Development

Are franchisees allowed to purchase or build multiple locations?
Yes. We encourage franchisees to own and operate multiple locations.

Can a franchisee acquire the rights to develop an entire area?
Yes. Our term for an investor who purchases rights to a territory is Area Director. Further explanation of our franchising model appears below.

What kind of franchising business model do you use?
Mustard Franchising Corporation employs a three-tier franchising model. In the bottom tier are single-unit owner/operators (or franchisees who plan to secure one franchise at a time). In the middle tier are Area Developers, who possess the business savvy and resources to manage a multi-unit restaurant operation. In our top tier, Area Directors purchase the rights for an assigned territory, within which dozens of stores will be opened. 

Each tier operates under its own terms, conditions, and fee structure. Read more about the Area Developer and Area Director programs in our Investment Opportunity section.

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Our Name

How did you come up with the name for Mustard Café restaurants?
Mustard – distinct, colorful, smart, off the beaten path. The Mustard name serves as a continual reminder to us to keep our attention focused on every detail of how a perfect sandwich comes together—everything from the cheeses to the bread, and from the meats to the—well—mustard. That’s why a Mustard Café sandwich just tastes better.

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