ITEM 7 ESTIMATED INITIAL INVESTMENT. The following charts provide an estimate of your initial investment for a Franchise

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1 ITEM 7 ESTIMATED INITIAL INVESTMENT The following charts provide an estimate of your initial investment for a Franchise YOUR ESTIMATED INITIAL INVESTMENT EXPENDITURE Initial Franchise Fee Travel and Living Expenses During Training (See Note 2) Real Estate Rent and Security Deposit (See Note 3) Initial Inventory (See Note 4) $35,000 $35,000 Lump Sum Payable on signing Franchise Agreement Us $5,000 $7,000 As Incurred As Incurred Various third parties $7,500 $36,000 As Incurred As Incurred Lessor $50,000 $60,000 Lump Sum or Financed At Training Furniture, fixtures, and décor (See Note 5) $130,000 $150,000 Lump Sum or Financed Before Restaurant Equipment (See Note 6) Pre- Salaries (See Note 7) $200,000 $300,000 Lump Sum Before $30,000 $50,000 As Incurred Before employees 1 NPCHLT1: DOC-(TPEARCE)

2 EXPENDITURE Business Licenses (See Note 8) Point of Sale Software and Computer Hardware (See Note 9) $2,000 $15,000 As Incurred Before $25,000 $40,000 Lump Sum Before Governmental third parties Signage (See Note 10) Leasehold improvements (See Note 11) Architectural Fees (See Note 12) Insurance deposit (See Note 13) Grand Marketing (See Note 14) Legal and Accounting Expenses (See Note 15) Pre-Paid Expenses (See Note 16) TOTAL PRE- OPENING EXPENSES (See Note 17) $7,500 $20,000 Lump Sum Before $250,000 $400,000 Lump Sum Before $7,500 $15,000 Lump Sum Before $1,000 $2,000 Lump Sum Before Insurance Company $500 $5,000 As Incurred As Incurred Local Advertisers and Vendors $5,000 $10,000 As Incurred As Incurred Your Attorney and Accountant $500 $2,000 As Incurred Before $499,000 $998,500 Lessors, s, Utilities, Tradespeople 2 NPCHLT1: DOC-(TPEARCE)

3 EXPENDITURE Additional Funds - 3 Months (See Note 18) $225,000 $500,000 As Incurred As Incurred Employees, s, Utilities, etc. TOTAL COST PROJECTION, LEASED LOCATION NOTE 1: NOTE 2: NOTE 3: NOTE 4: NOTE 5: $724,000 $1,498,500 The Initial Franchise Fee is $35,000 and is non-refundable. If you purchase an Area Development you will be required to pay us an Area Development Fee equal to $35,000 times the number of restaurants to be opened in the area development territory granted to you. You will incur travel costs for each person that you bring to the initial training course as allowed by the Franchise Agreement. In addition to the travel costs, we estimate that you will spend $ per person per day in lodging, food, and miscellaneous expenses. The numbers presume that you will rent your restaurant facility. The amount of rent for each leased facility will vary substantially based on a number of factors including size and geography. The initial start-up expenses are estimated to include the first month s rent paid in advance. The amount of space needed for the restaurant is estimated to be approximately 4,500 square feet and 5,500 square feet. We will provide you with guidance regarding a potential location to a restaurant although such guidance does not ensure the success of a particular location. These numbers do not include insurance and real estate taxes. The initial inventory consists of food, beverages, paper items and cleaning products. This estimate is for the first 30 days of your restaurant s operations, and for the foods utilized in your initial training. Furniture, fixtures and décor include millwork, countertops and flooring, fabrication, lighting, chairs, staff uniforms, patio furniture and décor. You must purchase certain furniture, fixtures and décor items from approved vendors. As stated in item 8, you must purchase your fixtures, furniture, and décor from approved suppliers, which may be us. 3 NPCHLT1: DOC-(TPEARCE)

4 NOTE 6: All equipment must be purchased from approved vendors. The restaurant equipment will consist of items such as walk-in coolers, grills, warmers, freezers, sinks, shelving, char-broilers, computers, cameras, cash registers, etc. NOTE 7: NOTE 8: NOTE 9: Note 10: This estimate includes salaries for your manager during initial training and at least two of your employees during opening assistance. Several business licenses must be obtained by the Franchise including state and local retail licenses. This estimate does not include alcoholic beverage service licenses. Please consult your local permit office for license fees as the costs of such business licenses may vary from location to location. In order to operate your Franchise, you will need to use a point-of-sale system either approved by us. See Item 11 of this document to learn about the computer requirements for your Franchise. Exterior signage may include open channel neon signs over the restaurant, a small sign for the restaurant on the pole sign for the shopping center (if applicable), and interior and exterior signs. Pole-mount or marquee signs are not included in this estimate and would cost more. We must approve all signs before you purchase them for your Franchise. Signage will vary from location to location depending on the lessor s requirements and local code ordinances. The estimate given reflects the cost range from one to three exterior signs plus the costs of the digital menu board system. Note 11: Note 12: Note 13: Note 14: Leasehold improvements may include work conducted by a general contractor to supervise the build-out of the restaurant (plumbing, electrical, mechanical). The costs of such improvements will vary substantially from location to location. If the lessor makes some of the leasehold improvements, it is possible that your cost of leasehold improvements can be reduced and possibly included in your monthly lease payment. Some jurisdictions may require your building plans to be prepared by a local architect before leasehold improvements can be approved. You may be required to pay an insurance deposit for your first year s insurance premium. In those cases where you are required to do so, such deposit could be 20%- 25% of your first year s premium. The coverage includes general liability, fire, workers compensation, theft, property, and contents, and is detailed in Item 8 of this Franchise Disclosure Document. The Grand Marketing fee is estimated to be $5,000. The fee is payable to vendors in accordance with the grand opening marketing that you will develop 4 NPCHLT1: DOC-(TPEARCE)

5 in conjunction with us. These fees will be expensed over the course of the first ninety (90) days of operation. Note 15: Note 16: Note 17: Note 18: Legal fees will be paid by you, if appropriate, in order to retain an attorney to help form the legal entity for your business. You will also need to retain an accounting or payroll service to assist in keeping necessary books and records of income and expenses. It is also suggested that you use an attorney to negotiate the terms of your lease for the Restaurant Premises. These expenses would include those customary expenses that a business owner would be required to pay prior to opening their business such as office supplies, utility deposits and other deposits that are not listed in this Item 7. These expenses are a composite of the expenses listed in Item 7, but do not include any expenses that you will incur during the first ninety (90) days of the operation of your Franchise. You will need additional capital to support on-going expenses. New businesses often generate a negative cash flow. We estimate that the amount given will be sufficient to cover on-going expenses for the start-up phase of the business (3 months). This is only an estimate, however, and there is no assurance that additional working capital will not be necessary during the start-up phase. We estimate that, in general, you may expect to inject additional cash into your Franchise, but we cannot estimate when, or whether, you will achieve a positive cash flow or profits. Except as otherwise noted, none of these payments are refundable. These payments are only estimates and your costs may be higher, depending on your particular circumstances. You should review these figures carefully with a business advisor, accountant, or attorney before making any decision to purchase a franchise. 5 NPCHLT1: DOC-(TPEARCE)