FRANCHISE PROSPECTUS

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1 FRANCHISE PROSPECTUS

2 THE DOLCINO CONCEPT Founded by a local Italian family descended from three generations of ice-cream makers, Dolcino serves authentic Italian gelato, lifestyle and a whole range of waffles, crêpes and shakes to add a touch of sweetness to life. Our vision is great products, great people, great place. We are a friendly, hard-working and fun-loving bunch of people who are passionate about hospitality and making our guests day, every time. And that s not all. Dolcino is a new and innovative casual dining concept that has proved popular since the first store opened in 2015 in the East Midlands. Using the expertise of the founders who have managed coffee bars, gelaterias and restaurants in both Italy and UK for over twenty years, the first store in Loughborough combined funky Italian design, savvy marketing and operational excellence to create a wonderful new café gelateria brand and which made a deep impression on the local community. Using artisan gelato which is made on site, freshly made waffles and crepes and a delicious coffee blend chosen from a selection of over 40 alternatives, Dolcino provides its customers with the quality food and drink at value for money prices. Customers of all ages enjoy coming to our stores and we enjoy a large degree of repeat business. Families and students love the desserts, gelato, sundaes and shakes and our older customers like nothing better than to enjoy a perfect cup of coffee with one of our delicious cakes or fresh savoury snacks whilst they watch the world go by.

3 DOLCINO S OFFERING Over 40 different artisan-made gelato flavours, freshly made and transported to your store from our headquarters in the Midlands The best coffee blend you ll find on the high street Freshly made waffles and crepes available in large selection of sweet and savoury dishes A lifestyle brand comprising Italian innovation, design with fresh, quality food and drink combined with a funky ambience The ability to move with the times and keep abreast of customer requests for new products An innovative approach to food and drink that allows us to create new and exciting hybrid desserts and drinks An all-day casual dining experience that offers fast and freshly cooked food. Great location flexibility due to the lack of full back-of-thehouse kitchen requirements A wide appeal to several target markets.

4 OVERVIEW OF THE UK ICE CREAM SECTOR Ice cream is a growth market. In the US, ice cream and frozen desserts went into a new growth phase in 2011 with a 4.1 per cent increase in total US retail sales reaching $10.7 billion (source Mintel) in that year. Sales have continued to rise thereafter with the UK market following suit. From 2013 onwards the UK ice cream market entered a period of growth with a more than seven per cent rise in the value of sales year-on-year across the sector. Thirty-five per cent of consumers worry about the sugar content in their ice cream but despite this less than twenty-eight percent say they would prefer to eat less of it. This bodes well, not only for ice cream in general, but particularly for Italian gelato which is lower in fat but higher in natural ingredients, such as fruit, than traditional ice cream. Innovation A reduction in fat, sugar and calories are of prime importance for any ice cream brand competing today in the UK market. However, dairy-free and gluten-free are also fast-growing trends. Dairy-free, for example, doubled its share of the market in Fifteen percent of Mintel respondents say that these elements are very or somewhat important to them. At Dolcino we are able to provide our customers with both dairyfree and gluten-free food and drink. However, ice cream flavours also power consumer decision making. The gelato making process ensures the flavour of the ice cream is stronger and consumers appreciate this. Dolcino also produces its own ice cream on site allowing innovation and customer involvement in the request and development of new flavours. We feel that our ability to innovate quickly will be crucial to our success in 2016 and beyond.

5 Ice cream is also very popular as an accompaniment to other desserts with thirty-nine percent of all survey respondents eating ice cream in this way. Certainly, our experience at Dolcino backs this up many of our customers buy sundaes and sweet waffles and crepes, all served with gelato on the side. This trend helps us sale retain strong sales of ice cream year-round, despite our colder climate. Health The UK population is becoming increasingly health-conscious, in part due to the large amount of public health campaigns in the media. Portion sizes are important. Sixty-nine percent of the Mintel respondents who said they bought frozen desserts, especially the 18-24s (74 percent), said that the size of the portions were important to them. Portion control is a concern for many and at Dolcino we offer a variety of sizes in order to allay any fears people have with respect to this. We have three sizes of ice cream cups and cones for varying appetites and our sundaes, waffles and crepes are also available in small, regular or large portions. Consumer demographics Ice cream parlours and dessert diners are popular with 18-24s and young families (25-34s and parents are core demographics). However the ageing population presents a challenge in the long term, with the over 55s less likely to catch onto the dessert dining trend. At Dolcino we counter this trend by providing savoury snacks and drinks that cater to this sector of the market. In addition, although parents of young children are a target market, they tend to purchase the ice cream for their children rather than for themselves. We counter this at Dolcino with a range of other products designed to cater to parents accompanying their children to our diner.

6 OVERVIEW OF THE UK COFFEE SECTOR According to the latest Allegra Strategies Project Café report published December 2014, the total UK coffee shop market continues to show solid growth with estimated sales of over 7 billion in In a further report by Mintel, shifting attitudes in consumer behaviour signal a favourable but trickier trading climate for independent coffee shops in 2016 and beyond. Market overview The coffee market is one of the only profitable sectors left on the UK high street. The sector reaches 18,832 outlets with strong growth continuing Overall turnover is 7.2 billion 2 billion coffees are consumed each year. The favourite coffee beverage is latte. Challenges and opportunities Diversifying selling formats offers scope for growth Tapping into brand personality trends to foster loyalty Diversifying drinks ranges and menu offerings could help create stand out. The ageing population poses a challenge to coffee shops. Ethical and green are increasingly important concepts for consumers.

7 DOLCINO S GOALS AND STRATEGY Goals Gain a significant share of the casual dining gelato, dessert and coffee market Make the Dolcino brand synonymous with the next generation of casual dining stores and the brand of choice for several consumer segments Deliver fast returns on investment to store owners. Strategy Establish Dolcino as a brand that customers associate with high quality gelato and coffee, and funky, innovative ambience Streamline operations to enable fast growth around gelato-making hubs Expand to deliver small chains in selected hubs around the UK.

8 DOLCINO S PRODUCTS 40 FLAVOURS OF ARTISAN-MADE GELATO, CHANGED EVERY WEEK TO SUIT CUSTOMER TASTES A WIDE VARIETY OF SWEET AND SAVOURY WAFFLES AND CREPES INCLUDING A MAKE-YOUR-OWN OPTION A HIGH QUALITY SELECTION OF COFFEES AND HOT DRINKS USING TOP INGREDIENTS FRESH SAVOURY SNACKS INCLUDING BAGELS, TOASTIES, CIABATTAS, FOLDED PIZZAS, FRESH CAKES AND WRAPPED GOODS GLUTEN-FREE, DAIRY-FREE AND HEALTHY OPTIONS ALL AVAILABLE

9 DOLCINO FAQs What is the cost of investing in a Dolcino store? The start-up costs will be between 150,000 and 200,000 (excluding VAT) depending on the size and location and state of your store premises. What is the franchise free? The franchise fee is 7,000 for each franchise unit. In addition there is an annual royalty of 5% and a marketing fee of 1% of gross sales (excluding VAT). What do I get in return for my investment? On signing the franchise agreement an initial fee is payable per store which will give you the right to use the Dolcino registered trademark, its know-how, products and marketing materials as well as the right to confidential and proprietary information. You will also have access to management and staff training and marketing support. However, the majority of your start-up cost will be taken up by the refit of your chosen store premises. It will usually take around 6 months from identifying and agreeing a suitable premises to opening your first store.

10 RUNNING A DOLCINO STORE Do I need previous experience of running a coffee bar or gelateria? It will be helpful but we can provide you will all the support you need to get up and running, including help with the initial recruitment of suitable management and team members. What are the usual trading hours of a Dolcino store? Our business is seasonal and we find the most effective hours in the winter are between 9 a.m. and 6 p.m. whereas in the summer stores can stay open until 11 p.m. especially at weekends. How many staff do I need? In an average store you can expect to recruit a team of around 15 people, including your manager and team leaders/assistant managers. How can I be sure my Dolcino store will be profitable? We believe that our long experience in the sector is key to our success and we have developed a formula that caters to a wide variety of customers. However, individual store earnings are depending on a variety of factors such as overheads, operating costs and other market forces, such as new competition. Whatever the challenge, we will be here to help and advise you.

11 TYPICAL NEW STORE OPENING COSTS Franchise package Low range High range Franchise licence 7,000 7,000 Business manuals Store fit out 60,000 90,000 Equipment 60,000 80,000 External signage 4,000 6,000 Opening stock 6,000 6,000 Marketing launch 1,500 1,800 Subtotal 139, ,300 Other start-up costs Legals 4,000 4,000 Company formation Insurance 2,000 2,000 Subtotal 6,200 6,200 Total investment 151, ,700 This total investment cost is based on a typical Dolcino store. All prices exclude VAT.

12 PROPERTY CRITERIA Dolcino stores can be opened on local high streets and retail centres. They must fulfil the following criteria: Frontage minimum width 4 metres Minimum area 120 metres squared High visibility for pedestrians Positions with the ability to catch a high degree of daytime footfall Car parking near to premises or good transport links. If you have a site in mind, please contact the Dolcino head office on admin@dolcino.co.uk for further information and advice on the suitability of the property.

13 FRANCHISEE SUPPORT PRE-OPENING Help with site selection, design, business planning Pre-opening staff and management training Business and operations manuals Set up of supply chain Marketing planning and materials Launch campaign. ONGOING SUPPORT Field visits and audits Ongoing training Operations advice Menus and marketing materials Website and digital/social media marketing support Business planning advice.

14 WHY BUY A DOLCINO FRANCHISE? 1. Support network You ll have a full support network around you comprising business planning advice and support with marketing and training. 2. Increased brand awareness It s easier to market a known brand that already has earned a high degree of consumer trust. 3. Finance Banks are more likely to provide funds for a business that has a proven track record of success. 4. Marketing support Dolcino will provide you with a marketing plan and supporting materials that work. 5. Reduced risk A franchise unit is likely to be profitable. 6. Training support A Dolcino franchise can offer you operational advice and help with recruitment and training the right people, correctly trained, are vital to business success. 7. Business in a box Starting a new business can be daunting and time consuming. A Dolcino franchise makes the process of opening a café gelateria relatively hassle-free. 8. Purchasing power Whatever your purchasing needs we can provide economies of scale with our bulk buying power.

15 GET IN TOUCH If you want to know more about becoming a Dolcino franchisee, please contact us: Kirsten Arcadio, Director, Dolcino Limited kirsten.arcadio@dolcino.co.uk admin@dolcino.co.uk Mobile:

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