Chetan Mistry

Gayatri Enterprise
24, Parmeshwar Park,
B/H Panna tower
Anand Mahal Road
11/09/2010
To,
STERLING RESTAURANT PVT. LTD
Ground Floor. Krishna Complex,
Bhatar Road,
Surat.

Sub: Wrappido Franchise.

Dear Sir,

This has reference to your email Dt. 08/09/2010, reading as under

“As far as the 1st option that u has suggested, sorry sir but we cannot
allow you to sell other products than the products from our Menu. If at all u
does the same we shall be forced to withdraw our Brand Name and
services with you.

The 2nd option is for you to decide. You may or may not continue without
Brand, but if you wish to discontinue please do inform us and remove our
Brand Name "WRAPPIDO" from the Sign-age of your premises.

As far as the refunding of the franchise fee, I would like to inform you that it
is not possible, but still I shall consult the Management and reply as soon
as possible.”
 It is observed that company is not allowing introducing new products
as we proposed. We have already requested in past to allow us to
introduce the new common product to satisfy the customers need. By doing
this we would be able to improve our sale which is not reach up to
breakeven point though 1 year has been passed.

It is also learnt that the franchise fee cannot be refunded by the

company. I would like to put the following facts

1. Wrappido is being introduced to us by Franchise Mart. We had a

detail discussion covering the following points.

a) Fast food is the growing business in surat

b) The food of Wrappido is of JAPL a leading organization in food and

hotel, and hotel management line. They also export the frozen food in
more than 7 countries. Over and above they are running two
restaurants at Baroda and one at Ahmadabad and one kiosk at
Himalaya mall.

c) I was asked to visit Baroda outlet. FM arranged the visit to Baroda I,

my wife and my sister visited Baroda outlet for a full day,
Representative of outlet did explain in detail the functioning of outlet

d) Representative from FM and Wrappido Baroda visited our site and

approve the location.

e) FM also explains that they have carried out the scientific survey and
observe that there are 2000 no’s of foot falls in this area. Considering
only 10% of the total visits to our restaurant and food bill amount per
head of Rs. 100/-. Thus the total sale per day would be around
Rs. 20000/-However we being a new in this line we consider only 100
no’s of foot falls and food bill amount per head is of Rs.70/- the sale
per day is estimated at Rs. 7000/-.Even then the project is found
viable.
 f) FM also inform that 2 additional outlets, one at Rander and one at
Varachha, are expected. Over and above five no’s of kiosk are under
processed at Mumbai.

g) Looking to the above facts we signed LOI on 21/04/2009 with FM

where in WRAPPIDO RESTAURENT PVT. LTD Baroda is a
franchisor.

h) The interior, furniture, equipment. Utensil etc. all are provided by us

as per the requirement of Wrappido.

2) The agreement was given to us in the last week of July ’09.When we

were ready for inaugural of our restaurant. It was observed that the
agreement is to be executed with SRPL instead of WRAPPIDO
RESTAURANT PVT LTD. Till then we were in the impression that
Wrappido restaurant pvt ltd.is the Franchisor. Since we were ready for
inaugural of restaurant we have no other alternative except to sign the
agreement

3) No support from SRPL for inaugural function though this is the 1st
franchise of the company. FM arranged an exhibition on 7th, 8th, 9th
August’09 for their other franchisors including WRAPPIDO, so we took the
opportunity to start our restaurant.

4) WE have raised our sale from Rs 700/- per day to Rs.4000/- by our
personal contacts to the Banks Shops etc on Ghod DOD road, pamphlets
in news paper, ODC, Kitty parties and birthday parties, home deliveries etc.

5) Since our sale is not reached to breakeven point after a year I have
requested the company on 06/08/2010 to introduce verities of Sandviches,
burgers, different verities of coffee, brownie, ice creams etc which are the
requirement of the customers, and requested to give the recipe and
MRP.But there is no reply from the company and the same reply is
received today on 08/09/2010.We are informed that if we do the same then
company will withdraw the brand name.
6) Initially the food was supplied by the company to our door step charging
very high logistic therefore we have to bring the food from Baroda at our
own cost. Moreover the food bill was raised by JAPL initially then after it
was raised by SRPL and then again now it is raised by JAPL.Recently it is
observed that the food is not delivered as per our indent but it is spitted in 2
or 3 installments this has increase our logistic charges.

7) The MRP is revised twice during a very short period .the recipe was also
revised by reduction in the quantity.

8) Two outlets of Baroda and one at Ahmadabad are closed since 3 to 4

months .The two kiosk recently started in Raj Empire theater is also closed.
Now our is only outlet that is running. Thus company has not taken the
promotional activity to establish the brand name .Instead of that, the
existing outlet are closed.

WE preferred the WRAPPIDO brand for the following reasons

a) Frozen food concept is good for smooth running of restaurant and it is

the export quality food provided by JAPL, which is a renowned
company in food business.

b) The man power required is less so running cost is reduced

c) The computerized accounting system covers the day to day billing,

expenditure and stock details.

Looking to the above facts since company is not allowing us to

introduce other food products for sale and not taken action to establish the
brand name and promoting new outlets and we do not see any action from
company for promoting the brand in near future .Over and above the three
outlets of Baroda and Ahmadabad are closed and 2 kiosks recently started
at Surat, are also closed. This also creates adverse effect to our sale. Thus
we have no other alternative except to close our outlet.
 Under this circumstance I would request you to consider the above
facts and think sympathetically for giving a compensation for the
expenditure incurred by me to establish the outlet as per your requirement,
including the loss incurred during the year for running the outlet.

Thanking you.

With regards.

Gayatri Enterprise.

Chetan Mistry.