A FRANCHISE BUSINESS PROPOSAL

I. Introduction

A. Background of Company

■ Nature of the business

The franchise will be in kiosk-form, in which a variety of takoyaki

will be served. Takoyaki flavors will be based from different countries

such as: The Philippines, Japan, United States of America, and China. The

franchise aims to increase the potential of takoyaki to reach throughout the

world with the franchise name, Takoyummy. It is a franchise formed by

partnership of three parties.

■ Target market

Takoyaki, in the Philippines is considered as a morsel or a snack

that is delightful to the tastebuds of teenagers to adults. Takoyummy’s

target market are students from nearby universities and schools. It aims to

reside in places that are usually visited by students and young adults.

B. Management Profile

■ Mission Statement

The franchise’s mission is “To be the leading Takoyaki-serving

business in the Philippines.”

■ Vision Statement

The franchise’s vision is “To serve exceptional takoyaki meals,

made with high-quality ingredients.

C. Product Description
■ Filipino Takoyaki

Filipino Takoyaki is a takoyaki that has a flavor of pork adobo. It

has a salty sour sweet taste coming from the toyo, suka, and sugar that are

used in cooking it. Pork adobo is a Filipino dish that is serve throughout

the country. Filipino Takoyaki will be made with pork meat and topped

with adobo sauce.

■ Japanese Takoyaki

Takoyaki was first popularized in Osaka, where a street

vendor named Tomekichi Endo is credited with its invention in

1935. Takoyaki inspired by Akashiyaki, a small round dumpling

from the city of Akashi, Hyōgo Prefecture made of an egg-rich

batter and octopus. Takoyaki was initially popular in the Kansai

region, but later spread to the Kantō region and other areas of

Japan. It will be made with dried octopus or squid as its main

ingredient.

■ American Takoyaki

American citizens are in fond of eating beef, specifically burgers.

Takoyummy has infused ground beef to takoyaki topped off with gravy

sauce that are usually used in steak. As steak can be rich and flavorful but

consuming a steak makes a person full. American Takoyaki is created to

reach and satisfy the people who are in fond of eating steak and satisfy

their cravings without them having to eat much.

■ Chinese Takoyaki

Chinese restaurants oftenly keep their seafood fresh displaying the

 sea creatures outside their kitchen to show visitors and customers that they

are serving freshly cooked seafood dishes. This leads takoyummy to infuse

seafood, specifically fish, to be infused with their takoyaki. Chinese

takoyaki will be made of fish as its main ingredient topped off with a

sauce that matches the freshness of the fish.

■ Takoyummy Special

Chicken is widely used in fast food chains. Generally, fast food

chains have chicken meals on their menu. In the Philippines, most of the

population prefer chicken over other meat because it is cheaper. Filipinos

have grown to love chicken meat because they consume it almost 3 times

a week. Takoyummy infused chicken with it takoyaki to satisfy the daily

cravings of the consumers.

■ Drinks

There are three different kinds/flavors of drink: Black Gulaman,

Blue Lemonade, and Red Iced Tea. The idea of selling black gulaman

came from other kiosk type franchise. Most of these franchises offer black

gulaman as their beverage to complement the snack or meal that they are

selling. The Philippines is a tropical country wherein the temperature is

around 32 to 36 degrees in average. The idea of Blue Lemonade is to

quench the thirst of every customer it attracts. When a person thinks of

Red Iced Tea, the idea that comes to mind is that it came from Japan. This

drink is offered to complement the Japanese Takoyaki being served.

(1) SWOT Analysis

 STRENGTH OPPORTUNITIES
- There are a variety of flavors - Target market are students
that the business will be - Low intensity of competitive
offering. rivalry
- Offerings in the menu will not - New and innovative business
be limited to Takoyaki. concept in the market
- Ingredients used for the - Easily franchisable due to
takoyaki will be of high small capital needed.
quality.
- Takoyaki will be served fresh
from the pan.

WEAKNESSES THREATS
- Preparation and cooking time - Threat of substitution is high
are long due to several indirect
- Weak brand name competitors.
- Takoyaki is not a meal that can - Imposition of TRAIN Law
satisfy hunger may or may not raise prices of
- Limited inventory capacity. ingredients needed.
- Threat of new entrant is high
since the concept is easily
imitable
- Limited target market

(2) SWOT Strategies

STRENGTHS OPPORTUNITIES
- Ask for customer feedback - Place stalls near university
regarding flavor offerings areas
- Offer promo bundles or value - Place stalls in areas where
meals that include both takoyaki is not being sold, to
takoyaki and other menu items. easily penetrate market.
- Market and advertise the - Facilitate customer feedback.
takoyaki as fresh and of high - Establish as much branches as
quality possible with small franchise
fee.

WEAKNESSES THREATS
- Layout the preparation and - Offer low prices in comparison
cooking area in such a way that to the indirect competitors in a
it will be easier to access, thus specific time period
quickening the preparation and - Strengthen brand name and
cooking time. establish brand reputation
- Advertise by flyers, social - Broaden market segments once
media, and word of mouth. brand reputation has been
- Offer promo bundles or value established.
 meals with more inclusions.
- Smart arrangement and better
inventory planning
D. Company Logo

Figure 2: Takoyummy Logo

II. Technical Aspect

A. List of Equipment, Furniture and Fixtures

Very few equipment is usually needed, when it comes to stalls and kiosks. The

following are some equipment that may be required to put up the takoyaki

business:

1. Takoyaki pan

2. Cash Register

3. Refrigerator

4. Cabinets for storage

5. Stool

6. Electric Fan

7. Chilled Dispenser
 A. Operations Manual

I. Introduction

This operations manual or OSM is written for the employees of Takoyummy Franchise
Company, primarily for those employees involved in the day to day operations of our restaurants.
It is also written for the franchisees of Takoyummy Franchise Company who own and operate
Takoyummy Franchises under a franchise agreement, and their respective employees.

This document is designed to serve multiple purposes; it is a source of information, a reference, a

guide and training “tool,” in the effective and successful operation of a Takoyummy franchise.

This manual contains vital information as it relates to the standards, procedures, processes,
product, business methods and some key areas of operational support needed for the daily
operation Takoyummy franchises to ensure the expectations of customers are met or exceeded.

This operations manual is predominantly focused on kiosk operations and the support functions
to kiosk operations in Marketing and Human Resources. There is also a section on Key
Considerations for New Franchises.

This operations manual is written by the team members of Takoyummy franchise company who
work in the Operations and Support Department of the company.

It is the ongoing job of the Operations and Service Department to ensure that the operations
manual is regularly reviewed, updated, and that it accurately reflects changes to law, technology,
and equipment and product specifications and modifications.

This operations manual is approved by the management of Takoyummy Franchise Company.

II. Food Safety

Food safety is increasingly a top priority and focus area for all food service-based franchisors,
company employees, franchisees, and by extension, their employees. Food safety has always
been important throughout the restaurant industry. Recent changes to laws combined with
increased public awareness have combined to heighten the attention and importance of Food
Safety. This is very important, and in the opinion of the management of ABC Restaurant
Company, this is as it should be.

It is the duty and the responsibility of Takoyummy Franchise Company to ensure that the food
and beverages served daily in our franchises to our customers meets the highest standards
possible and are free of any and all contamination. It is all of our jobs to ensure the necessary
steps are taken for the “safety of food” served to our customers and the public on a daily basis.
The major purposes of this section are to:

● Identify Food Safety importance in providing food to customers that is both good and
safe to eat.
● Review the environment and conditions that allow food safety problems to exist.
● Demonstrate proper food safety procedures.

Preventive Procedures for Food Safety:

Human hands may carry viruses and bacteria. For prevention it is recommended that restaurant
staff wash their hands:

● Immediately before reporting to shift or work

● Immediately after handling raw products, trash or money
● After telephone or restroom usage
● Before and after eating at break

For proper hand washing the following is recommended:

1. The sink area must be properly stocked with disinfectant soap and paper towels.
2. Run your hands under warm water.
3. Lather your hands up to your elbows with disinfectant soap scrubbing between fingers
and around nails removing soil, dirt and bacteria.
4. Rotate and rub your hands together for twenty seconds to kill germs
5. Rinse hands thoroughly with warm water
6. Dry hands with a clean paper towel or hot air dryer
7. Do not touch anything (such as apron) post washing to avoid re-contamination

About personal hygiene:

Some suggested Personal Hygiene tips include:

● Please keep fingernails cleaned and trimmed

● Do not wear large jewelry items which may collect and retain dirt, dust or food
● To the greatest extent possible, please keep the restaurant uniform of Takoyummy
Franchise Company in the best condition possible in being clean, pressed, free of rips and
tears.
● Confine eating and drinking in the restaurant to those areas that are designated for these
purposes
● Do not handle food if you are ill or have exposed cuts, wounds, or infections of any kind

Quality Assurance:

Each store should have thermometer kits, which contain a digital thermometer and three probes
inclusive of a product, air and griddle surface probe.
Potentially Hazardous Foods:

Potentially hazardous foods which may cause food borne illness are inclusive of the following:

● Raw chicken
● Breaded, spicy, grilled chicken
● Chicken nuggets
● Diced tomatoes
● Raw seafood
● Raw and grounded beef
● Milk
● Raw bacon
● Sausage
● Sour cream

Pest Control Guidelines:

Food may be contaminated by pests. To maintain a pest-free franchise, the primary deterrents are
outstanding sanitation standards, an exceptional maintenance program, employee training and
observance of approved practices. The guidelines for remaining “pest free” include:

● Storage: Store all items off the floor

● Trash: Do not store trash by the entrance
● Doors: Keep the entrances closed when not used.
● Pest entry prevention: ensure any holes in the kiosk are sealed and cracks are repaired.
● Inspections: Regular and recorded pest control inspections of the restaurant.

Helpful tools for managing superior food safety:

The following management tools will assist Restaurant Managers with developing and
maintained a successful ongoing Food Safety program:

Product Cycle Checklist:

Some products need to be monitored and discarded during the week to prevent bacteria. The
following is a recommended Checklist format for discarded food items:

Product Cycle Checklist

Food Item Day checked Discard Date

III. Cleanliness

Customers expect food-service based businesses to be clean, free of contaminants, and without
any negative odors. They should expect this and as employees of Takoyummy Franchise
Company should expect this of themselves. The place of business is a direct reflection of the
employees of Takoyummy Franchise Company and the company itself.

A clean kiosk suggests that the empoyees of Takoyummy Franchise Company have pride in their
work and what they do every day on the job.

Cleanliness is a key factor, not only in supporting the business, but is a determinant in the overall
success and growth of the business.

In this section of the operations manual, Cleanliness Standards are addressed.

Cleanliness Standards:

When cleaning the kiosk, the cleanliness standards extend to:

● Eating area
● Chairs
● Condiments supplies and stands
● Tables
● Etc.

The recommended procedures for cleaning tables and eating area are inclusive of the following:

1. Use a white towel from the utility bucket and wring out excess sanitizer solution.
2. Spray clean the table top
3. Place all trash on one serving tray and stack the trays. Avoid trash spillage from the trays.
4. Wipe tops, sides, edges and beneath the tabletop.
5. Spray the chair seats with disinfectant.
6. Rinse out the white cleaning towel with sanitizer
7. Replace the white cleaning towel, rinse water and sanitize solution as they become dirty.
Repeate this procedure every 4 hours.

In the food preparation and assembly area:

● The team member will use a white towel stored in a sanitizer solution to maintain the
food preparation and assembly area.
 ● The sanitized tool will be used as required to wipe and clean the entire station as
necessary.
● Each hour, the team member will discard the sanitizer solution and replace it in a clean
pan.
● If the sanitizer solution becomes dirty within the hour, replace it.
● Rinse the towel in a sink.
● Towels should be inspected and replaced when dirty.
● Remove all foreign objects which have fallen into the pans.
● Place empty or contaminated pans or squeeze bottles in the reach in until taken to the
back for washing and refilling.
● Maintain cleanliness conditions even in rush periods.

IV. Customer Service

As an employee, positive attitude demonstrated towards the customer, and the resolution of
customer complaints, is vitally important in how we effectively manage the complaints of
customers

When a customer has a complaint, the company recommends the team to take the following
steps:

1. Begin by listening to the complaint. What exactly is the customer telling you and what
precisely are they dissatisfied about?
2. Do not interrupt and let the customer fully explain their complaint. It may be that it is
easily corrected.
3. Maintain eye contact with the customer as much as possible.
4. Apologize for errors and inconveniences. Do not blame anyone for the problem, take full
responsibility.
5. Answer with empathy. If you were the customer, how would you like the issue resolved?
6. Tell the customer that corrective action will be done swiftly, the problem will be resolved
as soon as possible and, if possible, indicate what actions will be taken to resolve the
problem.
7. If you require approval from a superior to resolve the issue, let the customer know this is
the case.
8. Thank the customer for bringing the complaint to your attention.
9. Repeat the apology if necessary.

Customer service at the register:

An important part of a positive customer service is the interaction at the register and in taking
and submitting the food order. In performing these duties, we recommend the standard team
member practices to include the following:

● Remember to ring in every single order

● Only accept authorized discounts on orders
● Check and only accept authorized coupons or gift cards
● Ensure you are checked into the register correctly with your name and employee number.
Both the restaurant manager and the team member on the register must count the cash
drawer at the beginning and end of shift.
● Ensure that each coupon is marked and defaced after usage and stored correctly

Standard order taking procedures should include the following:

● Greet every customer in a friendly fashion as they approach the register

● Smile upon ordering
● Ask, “may I take your order please?”
● Determine where the order will be eaten by the customer before the order is keyed in.
This will identify for the food maker how to properly wrap the food.
● If the food is take out , press the appropriate “to go” button on the register
● As the order is being given, enter the items into the register.
● Clarify the complete order after the customer has finished ordering to ensure accuracy

Completing the order:

We recommend the following for completing or fulfilling the customer order:

● Repeat the order to the customer to display listening and for accuracy
● Press the appropriate register keys and get the total amount of the order displayed
● Thank the customer and remind them of the total order amount
● Take money or monitor credit card transaction. The money should be placed immediately
to the correct drawer and small change slots
● Press the appropriate change key
● After completing the transaction say “thank you” to the customer
● Acknowledge the completion of the order by placing the tray or bag in front of the
customer
● Greet and call the next customer to the register area.

The importance of Customer Service:

● It is a leading indicator of customer intent to repurchase and loyalty

● It can be an important aspect and point of differentiation versus our competitors
● It reduces customer loss or churn
 ● It increases the lifetime value of customers
● It combats any negative feedback or negative public relations

V. Safety

Takoyummy Franchise Business is committed to the health and safety of its customers and its
employees. We will comply with all laws, health standards and laws, and all corresponding
ordinances. A healthy and a safe environment is a primary consideration for everyone.

We believe most accidents occur because of unsafe behavior. On the job, it is important to follow
safe work practices such as:

● Wearing personal protective equipment

● Properly reporting all accidents
● Complying with the proper safety hazard standards, rules and laws
● Making safety a priority and an integral part of restaurant operations and work

Employee Safety Rules:

All employees must use protective equipment such as:

● Heat resistant gloves and aprons

● Eye protection such as face shields and glasses

Fire protection:

Each kiosk must have fire extinguishers for potential fires in the cooking area where there are
vegetable or animal fats and oils present.

III. Product

Menu item: Takoyaki

Ingredients and Recipe:

Dashi
Egg
Soy Sauce
Salt
Flour
Oil
Benishoga
Green Onions
Mayo
Okonomiyaki Sauce
Aonori
Katsuobushi
Octopus
Squid
Pork
Fish
Beef
Chicken
Juice Powder
Utensils

Cooking Instruction:

1. In a bowl, mix the takoyaki mix and water.

2. Pour the mixture until the pan is filled half.
3. Put the cabbage and the meat.
4. Turn the takoyaki from time to time.
5. Wait until the outer is golden.

Product Presentation and Serving

1. In a small paper plate, put four pieces of takoyaki balls.

2. Add sauce on top.
3. Add garnish.
4. Serve.
 D. Franchise Agreement

FRANCHISE AGREEMENT

This Franchise Agreement is made and effective this 11th of October, 2018

BETWEEN: TAKOYUMMY, a company organized and existing under the laws of the
Metro Manila of CENTRAL LUZON, with its head office located at:

2401 TAFT AVENUE, MANILA..

AND: FRANCHISEE NAME, an individual with his main address located at OR

a company organized and existing under the laws of the (state/province) of
(STATE/PROVINCE), with its head office located at:

(COMPLETE ADDRESS)

WHEREAS, Franchisor and certain of its Affiliates own, operate and Franchise TAKOYUMMY
KIOSK throughout PHILIPPINES which, among other things, rent, sell and market THE
PRODUCTS OF TAKOYUMMY to the GENERAL PUBLIC; and

WHEREAS, Franchisor and certain of its Affiliates acquire, produce, license market and sell
TAKOYUMMY PRODUCTS; and

WHEREAS, Franchisor is willing to purchase on a per Location (the terms initially capitalized in
this Agreement and not otherwise defined herein shall have the respective meanings set forth in
Paragraph 18 of this Agreement) basis a specified number of TAKOYUMMY PRODUCTS; and

WHEREAS, Franchisor is willing to provide various marketing, advertising and promotional

services and activities in support of Franchisee;

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

SECTION 1: AGREEMENT TERM

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

SECTION 2: FRANCHISE FEE AND ROYALTY PERCENTAGE

2.1 The Franchise Fee: The Franchisee will pay a nonrecurring Franchise fee in the
amount of Php 200,000 upon execution of the Agreement. This Franchise fee will be fully earned
by the Franchisor when paid and is not refundable. The payment enables the Franchisee to enjoy
the use of the Franchisor’s system and name, as well as assistance for a limited time (2 years of
monthly visit)

2.2 Royalty Fee: Franchisee will pay a monthly royalty fee of 5% of the licensed store’s
gross revenues, payable at the end of the month. In the event that the Franchisee fails to pay the
monthly royalty fee in a timely fashion, Franchisor may require the Franchisee to pay the royalty
fee on a weekly basis, by which these weekly payments be done through electronic transfer.

SECTION 3: TERM OF THE FRANCHISE AGREEMENT

3.1 Initial Term of the Franchise Agreement: The term of this Agreement begins on the
date this Agreement is fully executed and ends 5 years later, unless sooner terminated as
provided herein. Either party may terminate this Agreement upon 30 days’ written notice or as
required by law. Following the expiration of the initial term and any renewal terms, Franchisee
may have the opportunity to obtain a successor Franchise Agreement.

3.2 Renewals: If the Franchisee is not in default at the time of exercise of a renewal
option and at the time the prior term expires, Franchisee may renew this Agreement for 2
successive 5-year terms, upon giving a written notice of intention to renew at least 120 days prior
to expiration of the then current term. The renewal will be upon the terms and conditions
contained in the form of Franchise Agreement which the Franchisor is using at the time the
renewal option is exercised. Franchisee will be given an execution copy of the form of Franchise
Agreement for the renewal term. If not executed within 30 days of receipt, it will be deemed that
the Franchisee have withdrawn the renewal and the Agreement will be terminated at the end of
the current term. The price of the renewal fee would be 185,000 Php.

SECTION 4: TERRITORY

Franchisee will be given a minimum required space of 6 square meters for the placement
of the kiosk and the facilities needed for inventory and preparation of the products. Each
Franchise must be at least 5 kilometers apart from each other to avoid the competition between
the same Franchise.
 SECTION 5: TYPE AND LENGTH OF TRAINING PROGRAM

After the Franchisee executes a lease for the Franchised location, the Franchisee or, if the
Franchisee is not an individual, the person designated by the Franchisee to assume primary
responsibility for the management of the Takoyummy Franchise is required to attend and
successfully complete the initial training program which is offered by the Franchisor at one of
the Franchisor’s designated training facilities.

The Franchisor’s initial training program shall consist of 3 full days of instruction at a
location designated by the Franchisor; provided, however, that the Franchisor reserves the right
to waive a portion of the Franchisor’s training program or alter the training schedule, if in the
Franchisors sole discretion, the Franchisee or general manager has sufficient prior experience or
training
From time tot time, the Franchisor may present seminars, conventions or continuing
development programs or conduct meetings for the benefit of the Franchisee

SECTION 6: PRODUCTS AND EQUIPMENTS

The Franchisee is required to purchase the supplies and the ingredients that the
Franchisor will provide. The company will deliver and provide supplies to the Franchisee that
will last only for a week. This Agreement is to ensure the quality of each product being sold in
the market.

SECTION 7: BUSINESS EXPERIENCE AND NET WORTH FRANCHISEES NEED

Franchisee must have attained a college degree and have a minimum net worth of
500,000 Php. This Agreement is to ensure the quality of the Franchise and its brand name.

SECTION 8: FRANCHISES’ MARKET STRATEGY

Each Takoyummy Franchisee is responsible for advertising and promoting the store in
their area. By consenting to this Agreement, Franchisee must spend on marketing and any related
programs and must do so in a clear and factual and not misleading manner, and will conform to
the highest standards of ethical marketing. Considering that advertising amounts may vary from
lease to lease, Franchisees will not be obligated to spend the same amount on local advertising
and marketing. Before any Franchisee executes their local marketing and promotions, Franchisee
must submit all press releases and policy statements and samples to the Franchisor for approval.
Pamphlets, cards or other promotional materials offering free products may only be used if it is
prepared or approved in advance by the Franchisor. If no written approval of any advertising or
other promotional materials will be given to the franchee from the Franchisor within 15 days
from the date of receipt means that it’s deemed as disapproved and any disapproved materials
must not be used.

SECTION 9: TERMINATION

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

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

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

SECTION 10: PUBLIC DISCLOSURE AND CONFIDENTIALITY

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

10.2 Confidential Information: During the Term and for a period of 10 Years thereafter.
Franchisee and Franchisor shall hold. and shall cause each of their directors, officers; employees
and agents to hold in confidence the terms of this Agreement (including the financial terms and
provisions hereof and all information received pursuant to, or developed in accordance with, this
Agreement) specifically including but not limited to the Franchisor. Franchisee and Franchisor
hereby acknowledge agree that all information contained in. relating to or furnished pursuant to
this Agreement. not otherwise confidential and proprietary and is not to be disclosed to third
parties without the prior written consent of both Franchisee and Franchisor. Neither Franchisee
nor Franchisor shall disclose such information to any third party (other than to officers. directors,
employees. attorneys, accountants and agents of Franchisee and Franchisor or the affiliates of
either, who have a business reason to know or have access to such information; and only after
each of whom agrees to being bound by this paragraph) except:

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

B. As part of the normal reporting or review procedure by its parent Franchisee,

its auditors and its attorneys;

C. To the extent necessary to obtain appropriate insurance, to its insurance agent

or carrier, that such agent or carrier agrees to the confidential treatment of such information; and

D. To actual or potential successors in interest, provided, however, that such

person or entity shall have first agreed in writing to the confidential treatment of such
information.

SECTION 11: NO RIGHT TO USE NAMES

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

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

Signed this 11th day of October , 2018

___________________________ __________________________
Franchisee Name Company Representative Name

___________________________ __________________________
Franchisee Signature Company Representative Signature

Notary Signature and Seal:

 E. Confidentiality Agreement

CONFIDENTIALITY AGREEMENT

This Confidentiality Agreement (Agreement) is executed on December 4, 2018 by and between

TAKOYUMMY and ____________________________ (Recipient).

1. Confidential Information.

Recipient is interested in obtaining information from Takoyummy on the sale of the

structures, plant equipment, auxiliaries and accessories of the franchise located in Manila City,
Philippines.

“Recipient” shall include but not be limited to the Interested Parties, officers, directors,
employees, affiliates, outside auditors and legal, technical, financial advisors, agents or other
representatives (collectively, Representatives).

In this regard, Takoyummy may disclose certain Confidential Information (as defined
below) to the Recipient, who acknowledges that Takoyummy has the exclusive right to
determine what information it may furnish.

Confidential Information refers to the information concerning the franchise, Takoyummy,

its officers, directors, employees, affiliates, outside auditors and legal, technical, financial
advisors, agents or other representatives, and other information (i) contained in the bidding
package; (ii) that Recipient obtained from the data room and site visits during the due diligence
process; (iii) contained in any other written material furnished or otherwise made available to
Recipient; (iv) furnished to Recipient electronically; (v) presented to Recipient or its
representatives orally, in any forum; and (vi) all analyses, compilations, forecasts, studies or
other documents that Takoyummy or its representatives prepared.

2. No Representation.

The Recipient acknowledges and agrees that Takoyummy or any of its representatives do
not expressly or impliedly represent or warrant the accuracy or completeness of the Confidential
Information or that such information will remain unchanged.

Takoyummy or any of its representatives shall not be liable to the Recipient, its
representatives or any other person arising out of or in connection with or related to the
Confidential Information or any interpretations or conclusions made or drawn from them by the
Recipient or on its behalf.

3. Recipient’s Obligations.
 Unless Takoyummy authorizes it in writing, the Recipient shall, during a period of 5
years from the date of disclosure of any Confidential Information:

(a) refrain from using the Confidential Information for any purpose other than sale of the
structures, plant equipment, auxiliaries and accessories of the franchise

(b) protect the Confidential Information against disclosure in the same manner and with the
same degree of care, but not less than a reasonable degree of care, with which it
protects confidential information of its own;

(c) limit circulation of the Confidential Information to: (i) its Representatives who need to
know such Information and only for the purpose of evaluating the Bidding Process;
and, (ii) subject to Section 4 below, third parties who have also executed and delivered
a confidentiality agreement with Takoyummy.

The Recipient shall not duplicate any Confidential Information furnished in tangible form
or on electronic media for any purpose except to evaluate the Bidding Process. Recipient shall,
within three Business days after notice of the Bidding results, return all Confidential Information
received in written, electronic or other tangible form, including copies, or reproductions or other
media containing such Confidential Information. Upon the Recipient’s written request and at its
own cost, Takoyummy may, at its discretion, provide the Recipient with a copy of certain
Confidential Information if required for regulatory purposes. In this regard, Takoyummy may
further inquire into the details of these regulatory requirements.

Recipient will be responsible for any breach of this Agreement.

During the course of its evaluation, the Recipient shall inquire and communicate directly
to Takoyummy in writing and addressed to the Takoyummy President and CEO at the address
provided below. Recipient agrees not to directly or indirectly seek any information in relation to
the Bidding from other Takoyummy directors, officers or employees without Takoyummy
written consent.

4. Communication with Other Bidders.

The Recipient shall refrain from directly or indirectly communicating with any Bidder
about the Bidding or any related subject.

5. Conditions Precedent.

The Recipient must submit proof of its signatory’s authority.

For non-resident Recipients, it must appoint a local agent with a Metro Manila business
address who shall be authorized to receive notices, summons and all other legal processes for and
in its behalf, for the duration of the term of this Agreement. The Recipient shall submit the sworn
appointment of its local agent and his acceptance of such appointment in the same form and
substance.

The proof of authority of the Recipient’s signatory and the appointment under oath of the
local agent and his acceptance must be submitted prior to PSALM’s release of the Bidding
Procedures.

6. Governing Law and Venue.

Philippine law shall govern this Agreement and the Recipient consents to the exclusive
jurisdiction of Manila City courts for any dispute arising out of or in connection with this
Agreement.

7. Final Agreement.

This Agreement terminates and supersedes all prior understandings or agreements on the
subject matter. The parties may modify this Agreement only in writing.

8. No Assignment.

Recipient may not assign this Agreement or any of its interest without Takoyummy’s
prior written consent.

9. Notices.

Any notice required by this Agreement or given in connection with it, shall be in writing
and shall be given to the appropriate party by personal delivery or by registered mail, postage
prepaid, or recognized courier service.

If to Takoyummy:

Takoyummy President and CEO

2401 Taft Avenue

Manila City

If to Recipient:

Recipient Name:

Attention:

Address:
 10. No Implied Waiver.

Takoyummy’s failure to insist strict performance of any of the terms of this Agreement
shall not be construed as a waiver of any delay or continuing or subsequent failure to perform
any other provisions of this Agreement.

11. No Commitment.

(a) Takoyummy reserves the right to terminate or suspend at any time the Recipient’s
access to the Confidential Information with or without cause.

(b) This Agreement does not constitute a solicitation of Bids.

(c) Nothing in this Agreement shall be construed as a commitment by PSALM to

execute further definitive agreements with the Recipient.

12. Breach of Agreement.

The Recipient is aware that its breach of the obligations under this Agreement’s
paragraph 3 may cause damage to Takoyummy and/or third parties, who are the source of, are
referred to in, or are themselves parties to, the Confidential Information. The Recipient shall be
solely responsible to Takoyummy and/or these third parties should it commit such breach.
Without prejudice to other available remedies, the Recipient agrees that these third parties shall
(i) have the right to rely upon and enforce paragraph 3 of this Agreement, and (ii) be entitled to
damages and other remedies under the law. No failure or delay by the third parties in exercising
any right, power or privilege under this Agreement shall operate as a waiver of such rights.

The Recipient agrees that it will not revoke this stipulation in favor of these third parties.

13. Severability.

A declaration by a court of competent jurisdiction that a provision of this Agreement is

invalid or unenforceable shall not affect other provisions which shall remain in full force and
effect.

SIGNED ON ______ AT ________.

TAKOYUMMY

By: HARLEY YAO Officer-In-Charge

Date: ________________
(NAME OF RECIPIENT)

By:

Name
Position

Date: ________________

Signed in the Presence of:

_________________________ _________________________

ACKNOWLEDGMENT

Republic of the Philippines)

________________________) S.S.

Before me, this _______ day of _______, 2018, at _____________, personally appeared the
following:

Date And Place Of

Name Identification Document Issue

Presente
d

Takoyummy

Represented by:
known to me to the same person who executed the foregoing instrument, and acknowledged to
me that the same is his voluntary acts and the entity that he represent.

SIGNED AND SEALED ON _______________.

Doc. _____ ;

Page _____ ;

Book _____ ;
Series of 2018.

NOTARY PUBLIC

ACKNOWLEDGMENT

Republic of the Philippines)

________________________) S.S.

Before me, this _______ day of _______, 2018, at _____________, personally

appeared the following:

Date And Place Of

Name Identification Document Issue

Presente
d

(Name of Recipient)
Represented by:

known to me to the same person who executed the foregoing instrument, and acknowledged to
me that the same is his voluntary acts and the entity that he represent.

SIGNED AND SEALED ON _______________.

Doc. _____ ;

Page _____ ;

Book _____ ;

Series of 2018.
 F. Memorandum of Agreement

Memorandum of Agreement

This Memorandum of Agreement (this “MOA” or this “Memorandum of Agreement”) is made

and entered into on this 27 day of November 2018 (“Effective Date”) by and between:

TAKOYUMMY, a TAKOYUMMY INC. company, with an office located at 2401 Taft Avenue,

Manila, Philippines.; and

RECIPIENT, a RECIPIENT’S company, with an office located at Recipient's address;

1. PURPOSE & SCOPE.

The purpose of this Memorandum of Agreement is to set forth the terms and conditions, scope of

work and responsibilities of the parties associated with their collaboration on franchising

TAKOYUMMY.

Specifically, both parties will cooperate to develop the franchise TAKOYUMMY.

2. BACKGROUND.

Both parties see the benefits of this project, have a desire to pursue the project and have

determined that each brings unique expertise and experience necessary to accomplish the

objectives outlined above.

TAKOYUMMY has unique expertise and experience in the following areas:

Handling the franchise; Knowledge of the products; Financials; Relationship with supplier.

RECIPIENT has unique expertise and experience in the following areas:

3. TAKOYUMMY RESPONSIBILITIES.

To provide support to the franchisees, etc.

TAKOYUMMY shall undertake the following activities under this MOA:

4. RECIPIENTS RESPONSIBILITIES.

To have the initiative to comply to each and every requirement of TAKOYUMMY.

RECIPIENT shall undertake the following activities under this MOA:

5. TERMS AND CONDITIONS.

It is mutually understood and agreed by and between the parties that:

1. Each party takes legal and financial responsibility for the actions of its respective

employees, officers, agents, representatives and volunteers. Each party agrees to

indemnify, defend and hold harmless the other to the fullest extent permitted by law from

and against any and all demands, claims, actions, liabilities, losses, damages, and costs,

including reasonable attorney’s fees, arising out of or resulting from the indemnifying

party’s acts or omissions related to its participation under this Memorandum of

Agreement, and each party shall bear the proportionate cost of any damages attributable
 to the fault of such party, its officers, agents, employees and independent contractors. It

is the intention of the parties that, where fault is determined to have been contributory,

principles of comparative fault will be applied.

2. Each party, at its sole cost and expense, shall carry insurance or self insure to cover its

activities in connection with this MOA, and obtain, keep in force and maintain, insurance

or equivalent programs of self-insurance, for general liability, workers compensation and

business automobile liability adequate to cover its potential liabilities hereunder.

3. This MOA may be amended from time to time by mutual agreement of the parties in a

written modification signed by both parties.

4. This MOA may be terminated by mutual agreement of the parties, and shall automatically

terminate upon completion of all responsibilities as stated herein, unless otherwise

amended.

6. FUNDING; COSTS.

The parties shall each be solely responsible for any and all costs associated with their

responsibilities under this MOA.

7. EFFECTIVE DATE AND SIGNATURE.

This Memorandum of Agreement shall be effective upon the date of the last party to sign this

MOA below. The parties indicate agreement with this Memorandum of Agreement by their

signatures below.

TAKOYUMMY
____________________________ ______________

Harley Yao, CEO DATE

RECIPIENT

____________________________ ______________

Recipient, Recipient’s title DATE

III. Market Study

A. Direct & Indirect Competitors

■ The direct competitors are companies that offers identical goods and/or

services to the market. These competitors offer relative pricing for similar

products. Some known competitors such as, Samurai, Krakuden Takoyaki,

Hokkaido Takoyaki, Octoboy offers the same product Takoyaki.

■ Indirect competitors are vendors whose products or services are not

identical but that could satisfy the same consumer need. Takoyummy is a

franchise that offers Takoyaki as a snack to the market. Numerous vendors

offer different kinds of snack that makes them an indirect competitor of

the franchise. These vendors offer food that are considered as snack in the

Philippines. Master Siomai, Hen Lin, Queggs, Siomai House, Waffle

Time, are indirect competitors of Takoyummy.

B. Supply & Demand

■ According to the Department of Trade and Industry (DTI), there are only

16 registered takoyaki business in the Philippines. 16 different takoyaki

business is quite fair for an over populated country. The population of the

Philippines garnered 104.9 million in the year 2017. Considering only 16

takoyaki business in the Philippines, these businesses will not be enough

to cater to 104.9 million. The supply of takoyaki is insufficient in the

Philippines.

C. Unsatisfied Demand
 ■ After a long day at school doing school activities, research papers, taking

quizzes studying, etc., students tend to buy food that will refuel their

energy that has been consumed in doing such activities. Apparently,

businesses that are raised nearby schools or universities are restaurants

that offer heavy meals that are quite costly. Some students have limited

allowances that do not satisfy their hunger. These unsatisfied demands

from the students shows that takoyaki, a snack from Japan, is marketable

in school/university areas.

D. Market Share

■ Usually inside the mall, the food stalls that have long queues of customers

are takoyaki franchise booths. Most of these booths offer low priced

takoyaki. Low priced takoyaki denotes poor quality and taste. Building

Takoyummy franchises would satisfy the demands of consumers that seek

high quality takoyaki and a tasty snack for a very affordable price. The

market share of the franchise would be students that crave for a snack that

is made out of high quality products and at the same time affordable.
IV. Sales Projection

A. Projected Financial Statements with Supporting Schedules

TAKOYUMMY
Quarterly Income Statement
For the year ended December 31, 2019
Sales P 1,673,901.00
Less: Cost of Sales 1,312,882.50
Gross Profit P 361,018.50
Less: Operating Expenses
Rent P 75,000.00
Electricity 30,000.00
SSS/Philhealth/PAGBIG 6,000.00
Insurance 17,721.00
Salaries & Wages 20,334.00
Taxes & Licenses 15,000.00
Maintenance 4,500.00
Water 9,000.00
Depreciation 6,000.00
Delivery 26,400.00 209,955.00
Net Income before Tax 151,063.50

Less: Provision for Income Tax P 20,567.94

Net Income after Tax P 130,495.56
 TAKOYUMMY
Financial Statement
For the year ended December 31, 2019
Sales P 6,710,022.00
Less: Cost of Sales 5,261,115.00
Gross Profit P 1,448,907.00
Less: Operating Expenses
Rent P 300,000.00
Electricity 120,000.00
SSS/Philhealth/PAGBIG 105,600.00
Insurance 81,336.00
Salaries & Wages 70,884.00
Taxes & Licenses 60,000.00
Maintenance 36,000.00
Water 24,000.00
Depreciation 24,000.00
Delivery 18,000.00 839,820.00
Net Income before Tax P 609,087.00

Less: Provision for Income Tax 82,271.76

Net Income after Tax P 526,815.24

Figure 7 : Financial statement supporting schedules

B. Projected Sales with Supporting Schedules
Figure 8 : Sales supporting schedules
C. Projected Cost of Sales with Supporting Schedules
 Figure 9: Cost of sales supporting schedules

D. Projected Production with Supporting Schedules

Figure 10: Production cost supporting schedule (Monthly)
Figure 11: Production cost supporting schedule (per product summary)
Figure 12: Production cost supporting schedule (per product supporting schedule)

E. Projected Purchases with Supporting Schedules

Figure 13: Projected purchases supporting schedule
F. Projected Payroll with Supporting Schedules

G. Projected Operating Expenses with Supporting Schedules

H. Financial Ratios

(1) Break-even point (in units & Peso)

BEP in peso = Fixed Cost / Contribution Margin ratio

Filipino Style 69,985 / .2948 = 237,398.24 Php

Chinese Style 69,985 / .3 = 233,289.33 Php

Takoyummy Specialty 69,985 / .1939 = 360,933.47 Php

Japanese Style 69,985 / .2755 = 254,029.04 Php

American Style 69,985 / .2091 = 334,696.32 Php

Blue Lemonade 69,985 / .4 = 174,962.5 Php

Red Iced Tea 69,985 / .4 = 174,962.5 Php

Black Gulaman 69,985 / .4667 = 149,957.15 Php

BEP in unit = Fixed Cost / Contribution Margin per unit

Filipino Style 69,985 / 11.5 = 6,086 units

Chinese Style 69,985 / 13.5 = 5,184 units

Takoyummy Specialty 69,985 / 9.5 = 7,367 units

Japanese Style 69,985 / 13.5 = 5,184 units

American Style 69,985 / 11.5 = 6,086 units

Blue Lemonades 69,985 / 6 = 11,664 units

Red Iced Tea 69,985 / 6 = 11,664 units

Black Gulaman 69,985 / 7 = 9,998 units

 (2) Desired Sales

(Fixed cost + Desired profit) / CMR

Filipino Style (69,985 + 100,000) / .2948 = 576611.26

Chinese Style (69,985 + 100,000) / .3 = 566616.67

Takoyummy Specialty (69,985 + 100,00) / .1939 = 876663.23

Japanese Style (69,985 + 100,000) / .2755 = 617005.44

American Style (69,985 + 100,000) / .2091 = 812936.39

Blue Lemonades (69,985 + 100,000) / .4 = 424962.5

Red Iced Tea (69,985 + 100,000) / .4 = 424962.5

Black Gulaman (69,985 + 100,000) / .4667 = 364227.56

(3) Fixed Costs

(4) Variable Costs

 (5) Contribution Margin Ratio

CMR = CM per unit / Selling Price

Filipino Style 11.5 / 39 = 29.48 %

Chinese Style 13.5 / 45 = 30 %

Takoyummy Specialty 9.5 / 49 = 19.39 %

Japanese Style 13.5 / 49 = 27.55 %

American Style 11.5 / 55 = 20.91 %

Blue Lemonade 6 / 15 = 40 %
 Red Iced Tea 6 / 15 = 40 %

Black Gulaman 7 / 15 = 46.67 %

CM/unit = Selling price - Variable cost/unit

Filipino Style 39 - 27.5 = 11.5 Php/unit

Chinese Style 45 - 31.5 = 13.5 Php/unit

Takoyummy Specialty 49 - 39.5 = 9.5 Php/unit

Japanese Style 49 - 35.5 = 13.5 Php/unit

American Style 55 - 43.5 = 11.5 Php/unit

Blue Lemonades 15 - 9 = 6 Php/unit

Red Iced Tea 15 - 9 = 6 Php/unit

Black Gulaman 15 - 8 = 7 Php/unit

V. Future Plans of the Franchisor

The future plans of the franchisor is to open a franchise near schools or

universities and observe if it will be successful. The franchisor will open more franchises

when the franchise has made a name for its own in the market. The franchisor plans to

expand and make the franchise big until it reaches globally. In addition, as the franchise

expands, the menu will also increase for each country it reaches.