Glossary of Terms Used by Chocolate Graphics International

Business Model
Business Opportunity
Chocolate Graphics International Pty Ltd (CGI)
Chocolate Graphics Pty Ltd
Estimated Capital Expense (ECE)
Expression of Interest (EOI)
Heads of Agreement (HOA)
International Business Overview (IBO)
License
Licensee
Licensor
Master License (ML)
Non-Disclosure, Non-Use (NDNU)
Product
Production Centre Licence (PCL)
Production Centre Licence Manual
Professional Partners
Regional Master License (RML)
Territory

Business Model - Back to Top
Term used to describe what type of Licensing arrangement the potential Licensee wishes to adopt for their Territory.
Following are three examples:

• Licensing Model –
The Master Licensee (ML) sells Production Centre Licenses and Regional Master Licenses within their Territory.
The Licensees manufacture and distribute the product while the ML oversees the administration and support.

• Centralised Manufacturing –
Larger semi-automated manufacturing systems for ML to produce for their entire Territory.

• Combination of both –
Adoption of both the centralized and Licensing strategy.

Business Opportunity - Back to Top
The Licensing opportunity presented to potential investors to purchase into Licensing of the Chocolate Graphics International’s unique intellectual property and Licensing system.

Chocolate Graphics International Pty Ltd (CGI) - Back to Top
A company duly incorporated and having its registered office in Queensland, Australia.
CGI is the International marketing arm of Chocolate Graphics®.

Chocolate Graphics Pty Ltd - Back to Top
The company who is the owner of all the Intellectual property that is marketed by Chocolate Graphics International.

Estimated Capital Expense (ECE) - Back to Top
The Estimated Capital Expense (ECE) is a document outlining the costs for the potential Licensee to consider with their chosen business model. It will outline costs such as:

• Licensing Fee
• Royalties
• Production Centre Set-up
• Patent protected computer technology
• Pre launch Marketing program
• Training
• Website
• Operational Capital (for the first three months)

Expression of Interest (EOI) - Back to Top
The Expression of Interest form (EOI) is a strictly confidential document for the potential Licensee to complete.
This is sent to Licensee applicants as the Second Stage of information.
This document outlines:

• Financial situation
• Personal details
• Investment capabilities

To reinforce the commitment from both Chocolate Graphics International and the potential Licensee, a deposit from the client to CGI is requested with this form.

Heads of Agreement (HOA) - Back to Top
The Heads of Agreement (HOA) outlines the terms and conditions of the offer made to the Licensee applicant.
This is a legally binding document and is required to be signed by the Directors of the proposed Licensee.

International Business Overview (IBO) - Back to Top
The International Business Overview (IBO) is the overview of the company.
This document details:

• Company’s history,
• Business opportunities with Chocolate Graphics®,
• Target markets, and
• Licensing structure

Licensee - Back to Top
A person or business who has been appointed as a Licensee by CGI.

License - Back to Top
A term used to describe all levels of business opportunities within Chocolate Graphics®.

Licensor - Back to Top
Chocolate Graphics International (CGI) is the International Licensor of the business.
The business is the manufacturing and distribution of personalised embossed chocolates.
CGI has the international rights to use, appoint Licensees and commercialise Chocolate Graphics Pty Ltd's Industrial Property.

Master License (ML) - Back to Top
A ML is contracted with the manufacturing and distribution rights for a country.
A ML has the right to appoint:

ML is the most senior position for a country.

Non-Disclosure, Non-Use (NDNU) - Back to Top
The Non Disclosure Non Use form (NDNU) is a legally binding contract between the potential Licensee and CGI.
This document ensures that all the information provided during discussions and all the exchange of documentation between both CGI and the potential Licensee will remain strictly confidential.
Information relating to the Patents and Patent Applications can not be discussed until this document is appropriately signed, dated and returned to CGI.

Product - Back to Top
Refers to the Patent Protected unique products that are personalised embossed chocolates with raised design.

Production Centre Licence (PCL) - Back to Top
Produces chocolate for its own sales organisation.
There are three types of PCLs:

1. Manual - all equipment is operated by hand.
2. Semi-Automated - part of the production process is automated with machinery.
3. Fully Automated - all of the production process is automated with machinery.

Most Production Centres begin with the manual process then progressing to semi-automation and finally, full automation.

Production Centre Licence Manual - Back to Top
The manual containing documentation on the Production Centre describes:

• Overview of the Production Centre;
• Floor Plan;
• Investment;
• Supporting systems from Chocolate Graphics International;
• Prodution Centre Equipment List;
• Fully approved Patents and Patent Applications;
• Financial projections for the PC; and
• Expression of Interest form.

Professional Partners - Back to Top
The list of Professional Partners contains contact details of the companies with whom Chocolate Graphics® and Chocolate Graphics International conduct business. The list also includes details of the company’s shareholders.

Regional Master License (RML) - Back to Top
A RML is contracted with the manufacturing and distribution rights to a territory that may include a number of states or countries.
A RML has the right to appoint:

RML is the most senior position within a state or territory.

Territory - Back to Top
The area specified for the Licensee, granted by the Licensor CGI.