Children's Orchard, Inc. Operations Manuals ORGANIZATION TABLE OF CONTENTS Page Use of Children's Orchard Manuals...................................................................................... 1 Statement of Confidentiality ................................................................................................. 3 Responsibilities of a Children's Orchard Franchisee............................................................ 4 Responsibilities to your Customers ...................................................................................... 5 Responsibilities to your Employees ...................................................................................... 6 Responsibilities to Yourself................................................................................................... 7 Responsibilities to the Franchisor ........................................................................................ 8 Children's Orchard, Inc., Franchise Organization................................................................ 9 Services of the Franchise Organization ................................................................................ 10 Franchise Relations............................................................................................................... 12 Ordering Supplies from the Home Office ............................................................................. 13 Visits from the Home Office.................................................................................................. 14 Store Review and Consultation............................................................................................. 15 Children's Orchard Operations Manual Organization Corporate Mission To build prosperous retailers and valuable businesses. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Children's Orchard Operations Manual Organization Children’s Orchard Mission To redefine and lead the children’s resale category All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Children's Orchard Operations Manual Organization USE OF THE CHILDREN'S ORCHARD MANUALS Each Children's Orchard manual is provided for the purpose of supplying you with specific guidelines for administering and managing a Children's Orchard business based on the evolution of carefully thought out and practiced policies and procedures. They are here for you to study and question; you will then develop knowledge of the rudiments of this business so that success may be yours. Our manuals are designed so that each section is independent from the others; certain components can be extracted and copied for distribution to your employees as is appropriate. New staff members should be given copies of only those sections pertinent to their particular job functions. Employees should be encouraged to reread these sections from time to time to ensure that the performance of their duties is in accordance with the specifications in our manual. We also expect that you will reread our manuals periodically to ensure that your operations are in order. We and our representatives from Children's Orchard, Inc., will be quick to point out any discrepancies between manual specifications and your actual operations. Use of our manuals is the only practical method for maintaining uniformity among all the individual franchise operations. The success of our franchise system depends upon consistency, and therefore, all the details in our books become necessary. We all need to work with the same method. The advertising, services provided, and operations must be substantially the same in all franchise operations. Although the materials may appear overwhelming at first, due solely to their volume, bear in mind that you will become familiar and at ease with its contents after you spend time training on-site. When you do complete your training period, you will not only have the knowledge of the business, but you will be more confident about venturing out on your own. Your confidence in running your business will be built upon the solid foundation of information provided in these manuals and time spent in training. You will succeed when you apply all that you have learned All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 1 Children's Orchard Operations Manual Organization and absorbed, and you will always have the assurance that you can call upon the home office for advice and counsel should you encounter any difficult situations. If in the future more practical or efficient procedures are developed for any specific function, the manuals will be revised or augmented in light of the new developments. One of the major assets of our franchise system is that the individual franchise owner reaps the benefits from the collective experience of the entire organization. The knowledge of what works well elsewhere in our system will also be given to you. Accordingly, you are invited to make suggestions on the improvement of methods and procedures that you discovered through your experience with your own franchise. Please address all suggestions, comments, requests, or questions to: Children's Orchard, Inc. 900 Victors Way, Suite 200 Ann Arbor, MI 48108 All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 2 Children's Orchard Operations Manual Organization STATEMENT OF CONFIDENTIALITY The purpose of these manuals is to set forth standardized policies to provide you, the franchise owner, with the information and guidelines that will assist you in operating a successful Children's Orchard franchise. These publications, all enclosures herein, and future supplements contain strictly CONFIDENTIAL information, and are prepared for the express purpose of supporting our franchise owners in running their business. In accordance with your franchise agreement, you must honor this confidentiality by not making this information available to anyone outside your business for any purpose. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 3 Children's Orchard Operations Manual Organization RESPONSIBILITIES OF A CHILDREN'S ORCHARD FRANCHISEE As a Children's Orchard franchisee, you have four very significant responsibilities: 1. 2. 3. 4. To your customers To your employees To yourself, and To the franchisor. Your total responsibility for your business is detailed in the following pages including your responsibility to comply with all applicable local, county, state and federal laws, codes and regulations. You must know what these are BEFORE you begin operations, and we will assist you as much as possible in this regard. The sections that follow provide guidelines for procedures and practices that will make all your responsibilities easier to fulfill. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 4 Children's Orchard Operations Manual Organization RESPONSIBILITIES TO YOUR CUSTOMERS 1. 2. 3. 4. Maintain a friendly, courteous and welcoming attitude. Provide quality service at all times, striving for customer delight. Provide a pleasant and enjoyable environment. Be courteous and helpful to all customers when responding to their questions and concerns. Be prompt in handling all customer inquiries. 5. Upgrade and continue your education and training in order to better serve your customers' needs. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 5 Children's Orchard Operations Manual Organization RESPONSIBILITIES TO YOUR EMPLOYEES 1. Properly train and supervise them, as your representatives, to fulfill all responsibilities of the business to the customer. 2. Provide a pleasant environment. 3. Be honest with all staff members. 4. Deal with all employees on a fair and impartial basis. 5. Treat all employees, as you would like to be treated. 6. Explain the procedures and policies of Children's Orchard. 7. Use your management skills to the best of your ability to provide necessary leadership. 8. Be certain you encourage open communication and feedback. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 6 Children's Orchard Operations Manual Organization RESPONSIBILITIES TO YOURSELF 1. Believe that Children's Orchard's policies and procedures are your road maps to success. 2. Devote your full-time energies to your business to ensure its success. 3. Continue to learn by seeking educational opportunities relating, in any way, to your business; pass on that new knowledge to your staff. 4. Conduct your business always in a manner consistent with the policies and procedures of Children's Orchard. You, as a franchisee, have the responsibility to yourself to make your investment in Children's Orchard pay off. You cannot assume that everything is taken care of if only the minimum has been done. It is your job to see those problems as opportunities and call upon Children's Orchard, Inc.'s support organization to help you monitor those opportunities. You are the person in charge, you have taken control, and though you must work harder than anybody else, the rewards are great. You are your own boss, but at the same time, you have a strong, experienced, professional team behind you when you need it. You are in a position to earn an excellent living and you are making it happen yourself, through your own effort. Ultimately, the responsibility to make it all happen is your own. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 7 Children's Orchard Operations Manual Organization RESPONSIBILITIES TO THE FRANCHISOR 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Maintain the image and reputation of Children's Orchard, Inc. Subscribe to Children's Orchard, Inc.'s, policies and maintain them in all your operations. Serve all your customers well. Abide by the terms of the Franchise Agreement. Maintain the highest standards of service. Make all payments and submit all reports and documents as required by Children's Orchard, Inc. Follow the advertising program and other guidelines established by Children's Orchard, Inc. Present a certificate of insurance to us before beginning operations. Protect our confidential information and keep your franchise within our organization for as long as you own it. Refurbish and renovate as necessary to maintain your facilities. Communicate your ideas and experiences to us. As required by your Franchise Agreement, return all company owned property, including these manuals, upon termination of your relationship with Children's Orchard, Inc. Attend semi-annual regional meetings, refresher training programs, and seminars as required by Children's Orchard, Inc. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 8 Children's Orchard Operations Manual Organization CHILDREN'S ORCHARD, INC., FRANCHISE ORGANIZATION When you bought a Children's Orchard franchise, you purchased the right to practice a unique business system in an exclusive territory. You also purchased the continuing supportive services of the Children's Orchard, Inc., franchise organization. The work of the support organization is as important to your business as your territorial rights. Your reciprocal obligations with the Children's Orchard, Inc., franchise organization are stated in detail in your Franchise Agreement, but in this manual we will look at the relationship from a business operation, rather than a legal, point of view. We will consider how the franchise organization and its staff function in relation to your business. Children's Orchard, Inc., is presently staffed with a group of highly experienced executives who have played an integral part in the development of the program. Each executive is ready to assist you in operating your Children's Orchard franchise, and each is equally important to you as a franchisee. All of the staff members at Children's Orchard, Inc., bring their unique experience and expertise to the organization. Together, they provide a full range of support to each franchisee in the network. Remember, you are not in business alone. The franchise organization exists to assist you in any way necessary to ensure your success. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 9 Children's Orchard Operations Manual Organization SERVICES OF THE FRANCHISE ORGANIZATION The Children's Orchard, Inc., franchise organization provides these essential services for your business on a continuing basis. 1. Research and Development The Children's Orchard, Inc. franchise organization will continually research new products and procedures for franchisees. Additionally, we will constantly monitor the quality of new products supplied by our vendors to guarantee consistently high quality products to your customers. 2. Advertising and Sales Aids Children's Orchard, Inc., pursues a vigorous advertising campaign to generate awareness of the Children's Orchard network. This program is intended to maximize public recognition and acceptance of Children's Orchard, and all advertising and promotional programs are directed toward this goal. 3. Operations Consulting Children's Orchard, Inc., continues to provide you with expert consulting services in all aspects of your business operation. These manuals, which will be updated whenever improvements are made in the System, are one part of this service. Your field consultants, who are in regular contact with you, are your personal consultants. The resources of the entire Children's Orchard, Inc., organization are available to support you and help you find solutions to your business challenges. 4. Confidential Operations Manuals These manuals are your textbooks. They address in detail all the beginning and ongoing concerns of the Children's Orchard franchisee and outline all the daily procedures you will need to conduct. They document the secrets to our success and make it possible for you to duplicate that success in your own location. 5.Training and Seminars You will participate in an initial training program designed to make you familiar with all the aspects of running a Children's Orchard store. Additional training seminars will be made available from time to time and will be devoted to new procedures and developments in the field as well as to troubleshooting ongoing concerns. 6. Communications The home office will provide regular, ongoing communication via our website, email, and the telephone. Please take a few minutes each week to jot down and pass along any techniques you may have discovered or new ideas you may have to improve store operations. These will be shared with other franchise owners. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 10 Children's Orchard Operations Manual Organization Feel free to relate anything of interest to the Children's Orchard franchise network. Include photos, if possible. Our cumulative experience and amazing ingenuity are among our greatest assets. We really want to hear from you! All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 11 Children's Orchard Operations Manual Organization FRANCHISE RELATIONS One of the most important aspects of the Children's Orchard, Inc. network is the relationship between the franchisor and the franchisee. At Children's Orchard, Inc., it is our firm belief that maintaining good relationships with our franchisees is critical to the success of their individual businesses. That is why we place such high emphasis on the standards of quality for our products, for our facilities and for our personnel. All of this combines to present a first-class image to the consumer as well, but this image needs constant attention. Our open communication is what keeps the system alive and vibrant. We must all remember that through the constant interchange of information and creative ideas we stay "fresh" and continue to grow. We maintain that the sum of the parts can be the essence of what makes us great. Thus, we stress the importance of maintaining good franchise relations. Please feel free to contact the home office as often as you like We are here to provide you with the assistance and support you need to make your Children's Orchard store reflect the best it can be. We hope you will feel comfortable in helping us continue to assist you through open communication, honest appraisals of our franchisees' mutual problems and genuine desire to strive for excellence in all our endeavors. Together, we can only get better. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 12 Children's Orchard Operations Manual Organization ORDERING SUPPLIES FROM THE HOME OFFICE The Operations Manuals will provide you with complete information regarding all products and supplies which are available for purchase from us. Price reductions obtained through our ability to purchase in large quantities have been passed on to you, the franchisee. All orders for products and supplies from the home office are placed on the on-line warehouse site. MasterCard or Visa is required for payment. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 13 Children's Orchard Operations Manual Organization VISITS FROM THE HOME OFFICE A representative from Children's Orchard, Inc., will be visiting you at your location periodically. These visits are designed to help you optimize your business and to exchange ideas and information. Visits for the purpose of review and consultation will be scheduled in advance so that you can arrange to spend quality time with the home office representative. The visits will help you determine if your sales are where they should be, and provide you with ideas and suggestions as to how to increase sales and profits. We recommend that you carefully review your weekly records and projections with the home office representative. In reviewing all aspects of your business, we can help you increase your sales volume and profits and address any problems or concerns. These consultations are meant to be a constructive tool to ensure that your Children's Orchard franchise is operating at its best on a consistent basis. Each documented store visit is carefully reviewed by you and your advisor as well as the Vice President of Operations and becomes a permanent part of your franchise file. Another purpose of store visits is to ensure that standards are met. Maintaining standards raises the value of every Children's Orchard unit and helps us accomplish our mission of leading the upscale resale category. Taking advantage of the expertise and knowledge the Children's Orchard staff provides is one of the most valuable assets you have as a franchise owner. We are here as your business partner and look forward to a long and harmonious relationship. Please, never hesitate to call the home office for any assistance you may need. All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 14 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable EXTERIOR View of interior from street Sidewalk and Entrance clear and clean Doors and windows clean Equipment on display Signage visible and in good condition Hours posted A U N/A INTERIOR - PHYSICAL AND ENVIRONMENTAL ASPECTS Lighting at 4, 4-foot cool white fluorescent tubes for every 48 sq. ft. Track lighting in new merchandise area and other low light areas Multi-level round racks used Red trimmed shelves above hang rail and in toy and new areas Children's Orchard department and size signage in use Fairly loud easy listening or soft contemporary music playing Kids’ play area or video tapes available Children's Orchard shelf-talker and posters displayed and current Logo bags in use Logo tags in use Children's Orchard wallpaper border in place Cash-wrap condition Carpet clean and in good condition Store has “mall quality” upscale environment A U N/A INTERIOR – NEW AREA Merchandise well displayed Merchandise fully stocked Attractive new clothing available Nice selection of brightly colored novelties and accessories Current seasonal inventory Old inventory marked down Fast selling styles reordered Clean and neat New equipment sales Coordinated and approved display fixtures Adequate professional signage Approved merchandise Quantity of inventory for size of store and designated area A U N/A NON-APPROVED MERCHANDISE: APPROVED MERCHANDISE ON DISPLAY: COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 15 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable CHECKOUT AREA Checkout counter clean, neat above and below Point of purchase merchandise available Store policy displayed Customer mail and email list sign up on display Sales tax certificate displayed (required by law) Shelf talkers and posters displayed Cash flyers or other bag stuffers in use Sales floor clear of food and drink A U N/A A U N/A COMMENTS: DISPLAYS Behind Counter: Current theme Color Coordinated Range/quantity of inventory on display Rounder Tops: Theme Quantity of inventory Overall appearance Above double and triple racking: Quantity of inventory Attractively arranged for easy eye flow Clean and neat COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 16 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable CLOTHING: Clothing Calculations Linear Rack Space Triple Racking Double racking Rounders* - Enter Number of Rounders Total - Enter Number of feet per Rounder (9' or 10') * (9 feet per rectangular rail rounder), (10 feet per round rail rounder) Count Feet Items Approximate number of items per foot* Total number of items Total number of items, last visit Store’s item capacity* Approximate quantity of off-season merchandise in storage Approximate number of clearance items: * (optimum is 22 pieces per foot of rail) Count Feet 0 #DIV/0! A U 0 0 COMMENTS: CLOTHING Quantity of merchandise (At Capacity) Quality of merchandise Selection (outdated styles, “do not buys”, parts of sets, etc.) Adherence to pricing guidelines Opportunity pricing and prices adjusted to market Adherence to markdown schedule Clothing categorized Clothing colorized Mix of seasons Overall appearance Off-season storage inventory tagged with size and price? N/A COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 17 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable PLAYCLOTHES Quantity of merchandise Quality of merchandise Adherence to pricing guidelines Segregated from regular clothing Seasonal markdowns A U N/A Count Feet $ EQUIPMENT Quantity of merchandise Quality, style and appearance Clean and free of stains Meets standards for safety Adherence to pricing guidelines Displayed attractively and efficiently A U N/A TOYS Quantity of merchandise Quality of toys Clean Adherence to pricing guidelines Shrink wrap system used Well displayed A U N/A PLAYCLOTHES FIGURES Approximate number of pieces Number of feet devoted to playclothes Dollars sold over last four-week period COMMENTS: COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 18 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable EQUIPMENT FIGURES Highchairs Cribs Strollers Swings Pack n Play Changing Tables PERSONNEL Uniforms used Neat and professional appearance Name tags used Employment Law and Wages posters posted Count $ A U N/A COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 19 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review x A = Acceptable U = Unacceptable N/A = Not Applicable CUSTOMER SERVICE Greeting customers promptly Customers approached for assistance Phone voice and presentation Thorough appointment scheduling Seller greeted by name Register transactions friendly, accurate and efficient Customers asked to sell to store Suggestive selling and add on sales techniques used “Customer is always right” attitude Rapport with adult customers Rapport with children In-store marketing of upcoming events, new products, etc. Customer complaints made to corporate (past 6 months) Franchisee complaints made to corporate (past 6 months) A U N/A A U N/A A U N/A COMMENTS: WORK ROOM Organized and efficient Drop off system in place Off season and promotional items separated COMMENTS: BATHROOM Available to customers Working, clean and stocked Hazardous products out of reach COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 20 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable BUYING REQUIREMENTS Annual Sales Goal Annual Buying (Subtract $36,000 from Annual Sales Goal and divide result by 2.87) Current Annual Buying Level (CABL) Estimated Annual Sales (Multiply CABL by 2.87 and add $36,000) 75% of Annual Sales Goal in resale clothing Store's average Sales/Item Approximate annual number of items of resale clothing to be sold Average number of pieces per Buy (last 4 weeks) Approximate number of Buys required to achieve Annual Sales Goal Adjust for off-season merchandise Buys (25%) Average number of Buys required per week to meet Annual Sales Goals Current Buying status (above or below reuirements) BUYING FIGURES Dollars spent buying per week last four weeks Dollars spent buying same weeks last year/visit Number of buys per week last four weeks Number of buys same weeks last year/visit Number of pieces bought per week last four weeks Number of pieces bought same weeks last year/visit All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Organization 01/00/00 0 12:00 AM 0 0 $ ($12,544) Weekly $0 ($241) Monthly $0 ($1,045) $36,000 $0 #DIV/0! #DIV/0! #DIV/0! #DIV/0! $ Count Page 21 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Organization 01/00/00 0 12:00 AM 0 0 BUSINESS PROCEDURES Buying to meet Annual Sales Goals Business Planner use Using email and Internet Applications according to guidelines Bookkeeping system (bills paid on time and filed for a later reference) Current budget and cash flow plan used Daily sales goal posted CO Intranet checked regularly Attended last Regional meeting Checked local competition A U N/A BUYING AND PROCESSING Accu-Fair use Bin system use Buy cards used and properly filed Resale piece count tracked (buying and selling) Off-season clothing count tracked Interaction with sellers Brand names on tags Correct tag colors used Charity program for clothing rejects in place A U N/A All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 22 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable 1 REPORTING PROCEDURES Last quarter’s P&L and B/S prepared and available to CO Reporting procedures (accurate and timely) Royalties paid to date Ad Fund paid to date Proof of insurance with CO as additional insured Organization 1/0/00 0 12:00 AM 1/0/00 1/0/00 A U N/A COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 23 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable 1 ADVERTISING Current ad plan for upcoming season Ads and promotional materials approved by Children's Orchard, Inc. Ad responses tracked Advertising log up-to date and expenditures reported to Home Office Flyers distributed to child related businesses and organizations Participates in all promotions Participates in major promotions Follows approved promotional calendar Dollars Spent on Advertising Last 4 Weeks Dollars Spent on Advertising Same Weeks Last Year/Visit Dollar coupons/discount programs in use Organization 1/0/00 0 12:00 AM 1/0/00 1/0/00 A U Date Count $ Discount Programs in use: If deviating from schedule or not participating specify reason(s) MAILINGS Date Last Mailing Sent (Any) Last Buy Mailing Sent Last Email Sent Date Current List was Purchased Number of Mailers Sent Number of Buy Mailers Sent Total Number on Store Mailing List Total Number on Purchased Mailing Lists Total Number on Email List All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Page 24 Children's Orchard Operations Manual Organization x Date Store Number Time CR Field Service Representative Owner/Manager at Review SALES PERFORMANCE Goal Pace, year-to-date Pace, Previous Year Percentage over (or under) last year Average customer count/day last four weeks Average customer count/day same weeks last year All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. 1/0/00 0 12:00 AM 1/0/00 1/0/00 $ #DIV/0! Page 25 Children's Orchard Operations Manual Organization STORE REVIEW AND CONSULTATION Date 1/0/00 Store Number 0.00 Time 12:00 AM CR Field Service Representative 1/0/00 Owner/Manager at Review 1/0/00 Store Summary General Buys Reporting Advertising Total A Error Error Error Error 0 U Error Error Error Error 0 N/A Error Error Error Error 0 Total 0 0 0 0 0 All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Points 0 0 0 0 0 Max 204 143 95 33 475 % 0.0% 0.0% 0.0% 0.0% 0.0% Page 26 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Keys EXTERIOR View of interior from street Sidewalk and Entrance clear and clean Doors and windows clean Equipment on display Signage visible and in good condition Hours posted INTERIOR - PHYSICAL AND ENVIRONMENTAL ASPECTS Lighting at 4, 4-foot cool white fluorescent tubes for every 48 sq. ft. Track lighting in new merchandise area and other low light areas Multi-level round racks used Red trimmed shelves above hang rail and in toy and new areas Children's Orchard department and size signage in use Fairly loud easy listening or soft contemporary music playing Kids’ play area or video tapes available Children's Orchard shelf-talker and posters displayed and current Logo bags in use Logo tags in use Children's Orchard wallpaper border in place Cash-wrap condition Carpet clean and in good condition Store has “mall quality” upscale environment INTERIOR – NEW AREA Merchandise well displayed Merchandise fully stocked Attractive new clothing available Nice selection of brightly colored novelties and accessories Current seasonal inventory Old inventory marked down Fast selling styles reordered Clean and neat New equipment sales Coordinated and approved display fixtures Adequate professional signage Approved merchandise Quantity of inventory for size of store and designated area Notes Image/ Branding Marketing 1st Impression, Attract customers Sales / Customer Service Image/ Branding Bright and Cheerful, Upscale & Appealing Image/ Branding Sales / Customer Service Sales / Customer Service Image/ Branding Image/ Branding / Sales Select items from preferred vendors, Keep a wide variety for maximum sales. Fresh Selection Pnts 1 1 1 2 5 1 11 3 1 1 2 3 2 1 2 2 2 1 2 2 12 36 2 2 1 1 1 1 1 3 1 2 1 2 3 21 NON-APPROVED MERCHANDISE: System / Compliance APPROVED MERCHANDISE ON DISPLAY: System / Compliance COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Keys CHECKOUT AREA Checkout counter clean, neat above and below Point of purchase merchandise available Store policy displayed Customer mail and email list sign up on display Sales tax certificate displayed (required by law) Shelf talkers and posters displayed Cash flyers or other bag stuffers in use Sales floor clear of food and drink Notes Image/ Branding Sales / Customer Service Marketing Legal Image/ Branding Sales / Customer Service Image/ Branding Professional look, Impression made to customers. Email addresses = inexpensive advertising. Pnts 2 2 3 4 1 2 2 1 17 COMMENTS: DISPLAYS Behind Counter: Current theme Color Coordinated Range/quantity of inventory on display Rounder Tops: Theme Quantity of inventory Overall appearance Above double and triple racking: Quantity of inventory Attractively arranged for easy eye flow Clean and neat Image/ Branding Sales / Customer Service Image/ Branding Sales / Customer Service Image/ Branding Sales / Customer Service COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Showcase merchandise, silent salesperson, Displays should always tell a story, present a "mall quality" atmosphere. Photo library soon available on the website. 1 1 1 1 1 2 1 1 1 10 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Keys Notes Sales / Customer Service Full stores maximize sales! Pnts CLOTHING: Clothing Calculations Linear Rack Space Triple Racking Double racking Rounders* - Enter Number of Rounders Total - Enter Number of feet per Rounder (9' or 10') * (9 feet per rectangular rail rounder), (10 feet per round rail rounder) Count Items Approximate number of items per foot* Total number of items Total number of items, last visit Store’s item capacity* Approximate quantity of off-season merchandise in storage Approximate number of clearance items: * (optimum is 22 pieces per foot of rail) Count Sales / Customer Service Know your inventory COMMENTS: CLOTHING Quantity of merchandise (At Capacity) Quality of merchandise Selection (outdated styles, “do not buys”, parts of sets, etc.) Adherence to pricing guidelines Opportunity pricing and prices adjusted to market Adherence to markdown schedule Clothing categorized Clothing colorized Mix of seasons Overall appearance Off-season storage inventory tagged with size and price? Sales / Customer Service Image/ Branding Sales / Customer Service Sales / Customer Service Image / Branding Sales / Customer Service COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Fresh Selection, Quality for upscale impression 7 4 2 2 1 3 2 1 2 1 1 26 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable PLAYCLOTHES Quantity of merchandise Quality of merchandise Adherence to pricing guidelines Segregated from regular clothing Seasonal markdowns Keys Notes Image/ Branding Sales / Customer Service Increase selection to maximize sales, ability to buy the most from your sellers. Pnts 2 1 1 3 1 8 PLAYCLOTHES FIGURES Approximate number of pieces Number of feet devoted to playclothes Dollars sold over last four-week period COMMENTS: EQUIPMENT Quantity of merchandise Quality, style and appearance Clean and free of stains Meets standards for safety Adherence to pricing guidelines Displayed attractively and efficiently TOYS Quantity of merchandise Quality of toys Clean Adherence to pricing guidelines Shrink wrap system used Well displayed Image/ Branding Sales / Customer Service Legal / Liability Image/ Branding Sales / Customer Service Image/ Branding Sales / Customer Service COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Additional selection. Clean and recleaned. Check for recalls. Additional selection. Clean and recleaned. Displayed in an upscale way. 3 3 3 5 1 2 17 3 2 2 1 1 2 11 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Keys EQUIPMENT FIGURES Highchairs Cribs Strollers Swings Pack n Play Changing Tables PERSONNEL Uniforms used Neat and professional appearance Name tags used Employment Law and Wages posters posted Notes Pnts Count Build awareness that we buy them Image/ Branding Sales / Customer Service Build brand image. Posters dictated by state. Legal / Liability www.complianceposter.com COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. 3 1 2 3 9 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Keys CUSTOMER SERVICE Greeting customers promptly Customers approached for assistance Phone voice and presentation Thorough appointment scheduling Seller greeted by name Register transactions friendly, accurate and efficient Customers asked to sell to store Suggestive selling and add on sales techniques used “Customer is always right” attitude Rapport with adult customers Rapport with children In-store marketing of upcoming events, new products, etc. Customer complaints made to corporate (past 6 months) Franchisee complaints made to corporate (past 6 months) Notes Sales / Customer Service Efficiencies Sales / Customer Service Making customers feel good. Time Management, promoting store events. Teamwork within franchise system. Image / Branding Pnts 4 2 1 1 2 1 3 3 3 3 1 2 1 1 28 COMMENTS: WORK ROOM Organized and efficient Drop off system in place Off season and promotional items separated Customer impression, Efficiencies Efficiencies/ Cust.Service/Sales confidence. Employee comfort & safety. Efficiencies 2 3 1 6 COMMENTS: BATHROOM Available to customers Working, clean and stocked Hazardous products out of reach Sales / Customer Service Liability COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Upscale impression, Safety of children. 1 1 2 4 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable BUYING REQUIREMENTS Annual Sales Goal Annual Buying (Subtract $36,000 from Annual Sales Goal and divide result by 2.87) Organization 01/00/00 0 12:00 AM 0 0 Keys $ Notes Sales Controlling your business Current Annual Buying Level (CABL) Estimated Annual Sales (Multiply CABL by 2.87 and add $36,000) 75% of Annual Sales Goal in resale clothing Store's average Sales/Item Approximate annual number of items of resale clothing to be sold Average number of pieces per Buy (last 4 weeks) Approximate number of Buys required to achieve Annual Sales Goal Adjust for off-season merchandise Buys (25%) Average number of Buys required per week to meet Annual Sales Goals Current Buying status (above or below reuirements) BUYING FIGURES Dollars spent buying per week last four weeks Dollars spent buying same weeks last year/visit Number of buys per week last four weeks Number of buys same weeks last year/visit Number of pieces bought per week last four weeks Number of pieces bought same weeks last year/visit All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Pnts Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable Organization 01/00/00 0 12:00 AM 0 0 Keys BUSINESS PROCEDURES Buying to meet Annual Sales Goals Marketing Using email and Internet Applications according to guidelines Bookkeeping system (bills paid on time and filed for a later reference) Current budget and cash flow plan used Daily sales goal posted CO Intranet checked regularly Attended last Regional meeting Checked local competition BUYING AND PROCESSING Accu-Fair use Bin system use Buy cards used and properly filed Resale piece count tracked (buying and selling) Off-season clothing count tracked Interaction with sellers Brand names on tags Correct tag colors used Charity program for clothing rejects in place Notes Sales Sales & Efficiencies Marketing Efficiencies Sales E-MYTH - Building your machine Competitive opportunities System / Compliance Image / Branding Systems / Compliance Sales All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Maximizing use of system Legal Pnts 42 4 8 4 4 4 4 13 4 87 8 4 4 8 8 12 4 4 4 Children's Orchard Operations Manual Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable 1 REPORTING PROCEDURES Last quarter’s P&L and B/S prepared and available to CO Reporting procedures (accurate and timely) Royalties paid to date Ad Fund paid to date Proof of insurance with CO as additional insured Organization 1/0/00 0 12:00 AM 1/0/00 1/0/00 Keys Notes Systems / Compliance Accurate Support Information COMMENTS: All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Pnts 10 25 25 25 10 95 Children's Orchard Operations Manual Organization Date Store Number Time CR Field Service Representative Owner/Manager at Review A = Acceptable U = Unacceptable N/A = Not Applicable 1/0/00 0 12:00 AM 1/0/00 1/0/00 Keys 1 ADVERTISING Current ad plan for upcoming season Ads and promotional materials approved by Children's Orchard, Inc. Ad responses tracked Advertising log up-to date and expenditures reported to Home Office Flyers distributed to child related businesses and organizations Participates in all promotions Participates in major promotions Follows approved promotional calendar Dollars Spent on Advertising Last 4 Weeks Dollars Spent on Advertising Same Weeks Last Year/Visit Dollar coupons/discount programs in use Image / Branding Efficiencies Sales Notes Building and controlling your business. Staff networking. 5 15 5 1 1 1 1 2 2 33 Discount Programs in use: If deviating from schedule or not participating specify reason(s) System / Compliance MAILINGS Date Last Mailing Sent (Any) Last Buy Mailing Sent Last Email Sent Date Current List was Purchased Number of Mailers Sent Number of Buy Mailers Sent Total Number on Store Mailing List Total Number on Purchased Mailing Lists Total Number on Email List Pnts Date Sales/ Marketing All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Controlling your business. Accurate information for support services. Children's Orchard Operations Manual Organization x Date Store Number Time CR Field Service Representative Owner/Manager at Review SALES PERFORMANCE Goal Pace, year-to-date Pace, Previous Year Percentage over (or under) last year Average customer count/day last four weeks Average customer count/day same weeks last year All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. 1/0/00 0 12:00 AM 1/0/00 1/0/00 $ Children's Orchard Operations Manual Organization STORE REVIEW AND CONSULTATION Date 1/0/00 Store Number 0.00 Time 12:00 AM CR Field Service Representative 1/0/00 Owner/Manager at Review 1/0/00 Store Summary A U N/A 0 0 0 General Buys Reporting Advertising Total Total 102 18 5 9 134 All information contained on this page is proprietary and confidential information of Children's Orchard, Inc. Points 0 Max 204 143 95 33 475 %