Jamba Juice 2007 Annual Report Download - page 138

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NOTE 1. ORGANIZATION
JJC Florida, LLC (the “Company”), is a Florida limited liability company established on August 13, 1999, pursuant to an operating agreement (the
“Agreement”) between Juice Partners Florida, LLC (JPF), a Florida limited liability company, and Jamba Juice Company (JJC), a California corporation
(herein referred to collectively as the “Members”). The Company was established for the purpose of developing, owning and operating Jamba Juice retail stores
in the State of Florida under an exclusive development and licensing agreement (the “License Agreement”) with JJC (Note 4). The Company offers a wide
variety of fresh blended-to-order smoothies, fresh-squeezed juices, baked goods and snacks through retail stores. The Company manages its operations by
store. The Company operated eleven stores as of December14, 2004.
JPF is the managing member and is responsible for administering the affairs of the Company. Certain major decisions, as defined, require the approval
of a management committee, which is comprised of representatives from JPF and JJC. Prior to the Agreement Amendments discussed below, the Members
committed to make up to $9 million in capital contributions if requested by JPF. As of December 14, 2004, accumulated Members capital contributions
approximated $6,704,000.
On October 20, 2003, the Company entered into two amendments to the Agreement and License Agreement (“Amendments”), whereby JJC shall provide
additional capital contributions of up to $2 million (“Additional Contribution”), thereby increasing the Members total commitment in capital contributions to
$11 million. Under the Amendments, profits and losses are to be allocated to the Members in proportion to their cash contributions to the Company until the
end of the fiscal year during which the cumulative profits of the Company equal or exceed the cumulative losses previously realized. Thereafter, profits shall
be allocated to the Members in proportion to their recalculated interests. Under the Amendments, the recalculated interests of the Members are based on the
commitment of the Additional Contribution, except that the commitment of the Additional Contribution made by JJC shall include a 25 percent premium.
At December 14, 2004, the allocation of profits and losses are based on cash contributions received by the Company are as follows:
JPF 66.8%
JJC 33.2%
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During the year ended December 14, 2004, members made capital contributions of $2,500,000. This caused the percentages of allocation of profit and
losses to vary during the year.
Concentrations of Risk
The Company maintains food distribution contracts primarily with one supplier. This supplier provided, during fiscal year 2004, 86% of product cost
included in cost of sales, which potentially subjects the Company to a concentration of business risk. If this supplier had operational problems or ceased
making product available to the Company, operations could be adversely affected.
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