ALL AMERICAN SPECIALTY RESTAURANTS - FDD UFOC ITEM 7 Detail

ESTIMATED INITIAL INVESTMENT

7.A Initial Investment For Single Unit Of Any Of An AH American Ice Cream And Frozen Yogurt Shop�, An All American Deli Ice Cream Shop�, A Sertinos� Coffee Shop And A

Sertinos� Cafe

7.B Initial Investment For A Co-Location/Mini Store In An All American Ice Cream And Frozen Yogurt Shop�, An All American Deli Ice Cream Shop�, A Sertinos� Coffee Shop

And A Sertinos� Cafe

All figures in Item 7 are estimates only. Actual costs will vary for each franchisee and each location depending on a number of factors.

1.                    Franchise Fee. The franchise fee is $30,000 ($35,000 for Sertinos) for your first standard franchise store, $22,000 ($25,000 for Sertinos) for your second franchise store, and $18,000 ($23,000 for Sertinos) for your third franchise store (and each store thereafter). The franchise fee is $10,000 for a Co-Location/Mini Store. See Item 5 of the Franchise Disclosure Document for additional information about the initial franchise fee.

2.                    Real Property/Rent. Real estate costs vary widely from place to place, and All American gives you a range of choices in selecting a Location. Your Location must be in a general area that will allow you to provide services to customers in your territory efficiently and conveniently. You will need between 700 to 2,800 square feet of space for your business. Most All American franchisees find suitable space in a retail district or a regional shopping mall located relatively close to residential areas. Most All American franchisees lease their space, at an average annual rent per square foot ranging from $11 to $180. Most landlords require a security deposit of at least one month''s rent. Commercial rental rates vary from place to place.

If you lease a Location, you may incur buildout expenses. You may also incur real estate broker fees, additional prepayments (e.g., last months rent), "additional rent," common area maintenance (CAM) fees, operating fees, real estate taxes, utilities, promotional funds, advertising funds or other costs, depending on the terms of your lease.

All American is unable to estimate your costs for buying or leasing land and constructing a building as these costs vary widely depending on location and the design and construction of the building.

3.                    Equipment and Fixtures. You will need restaurant equipment and fixtures including such items as display and storage freezers, refrigerators, mixers, sinks, cabinetry, tables, chairs, menu boards, signage and other supplies. You will need a desk, chair, telephone, shelves, files and computers. All American requires you to purchase a personal computer meeting its minimum specifications for use at your franchise store. (See Item 8.) All American requires you to keep financial records and accounting information on this computer using accounting software programs approved by All American and that will provide reports compatible with reports used system wide.

4.                    Tenant Improvements. You may incur costs for buildout of your store. If you lease your location, you may be able to negotiate a construction allowance from the landlord that may cover a portion of the buildout/leasehold improvement expenses.

5.                    Inventory. You will need an initial supply of inventory, including such items as: ice cream, meats, cheeses, breads, frozen yogurt mix, paper goods, beverages and cleaning supplies. The estimated cost should cover approximately two months of operation. All supplies and inventory must meet the franchisor''s standards and specifications.

6.                    Office Supplies. You will need miscellaneous forms designated by All American. If you purchase these items from All American, the price will be at All American''s cost for such items plus freight.

7.                    Deposits, Prepaid Expenses, Utilities. The estimate includes deposits that may be refundable to you at a later time. In most cases, your lease will require you to pay electric, gas, water and other utilities directly; however, some landlords cover some utility charges through CAM fees or operating fees (See Note 2 above).

8.                    Business License. You should consult your CP.A., your lawyer, or your local county and state authorities about the specific legal requirements for business licenses and related types of expenses in your local area.

9.                    Insurance Cost. Insurance costs may vary in different localities. The estimate is for 1 year of liability insurance coverage. If you have employees, you may incur expenses for worker''s compensation insurance. All American is unable to estimate amounts for worker''s compensation insurance. The requirements and rates vary widely from place to place. All American reserves the right to require additional types of insurance and coverage as provided under the Franchise Agreement.

10.                 Training Expenses. This estimate does not include additional training fees that would apply if you decide to send more than two people to the initial training course (see Item 5 of the Franchise Disclosure Document ("FDD"). For training requirements generally (see Item 10 of the Franchise Disclosure Document). The estimate includes auto mileage within 200 miles of Portland, Oregon, the cost of commercial transportation from Chicago and room and board for 5 days.

11.                 Miscellaneous Expenses. Miscellaneous expenses include opening advertising and promotional activities.

12.                 Additional Funds. This is an estimate only of the range of initial start-up expenses you may incur. The actual amount of additional funds you will need depends on a variety of factors, including the size of your territory, the time of year when you start your business, your own management skill, economic conditions,

competition in your area, and other factors. You should not plan to draw income from the operation during the start up and development stage of your business.

The estimate of additional funds is based on an owner-operated business and does not include any salaries or benefits for employees or any allowance for an owner''s draw. The estimate is for a period of 3 months. All American estimates that, in general, a franchisee can expect to put additional cash into the business during at least the first 3 to 6 months, and sometimes longer depending on the time of year, but All American cannot estimate or promise when, or whether, any individual franchisee will achieve positive cash flow or profits.

13.                Grand Opening Advertising. Unless you are opening a Co-location, All American requires you to spend at least $5,000 in grand opening advertising and promotional activities within 30 days of your store''s grand opening. Upon request, you must pay All American $5,000 upon execution of the Franchise Agreement. These funds will be used by AH American to pay for grand opening advertising and promotions for the sole benefit of your store without offset or deduction. All American will furnish you with invoice copies of advertising and promotional activities using these funds on your behalf.

14.                Net Worth. All American will not ordinarily grant a franchise to a prospective franchisee unless it has a net worth of at least $600,000 of which $150,000 is in cash, cash equivalents or securities that can be collateralized, which capital will be required to meet security deposits, insurance requirements, rent deposits, inventory, initial franchise fees, leasehold improvements, restaurant equipment and startup costs, all of which deposits, requirements and costs vary depending upon the parties with whom the franchisee is doing business.

All American will not ordinarily grant a franchise to a prospective franchisee unless the prospective franchisee has made a "Discovery Day" at All American''s Corporate Office in Portland, Oregon.

All American has not and does not offer financing arrangements, although All American will, if such is available, introduce you to financial sources and suppliers who may offer credit arrangements. You may obtain financing from any source of franchisee''s choice upon such terms and conditions as may be negotiated. All American will not derive income from the placement of financing.

The following expenses are not included: owner''s salary, workers'' compensation cost, rent, and real estate acquisition cost.

Notes:

1.                    Franchise Fee. See Item 5 of the Franchise Disclosure Document for additional information about the initial franchise fee. The fees for a territory vary based on the size of the territory. The fee for the required unit is $30,000 or $35,000 depending on the concept utilized.

2.                    Real Property/Rent. No office is required, though it is recommended.

3.                    Equipment and Fixtures. All American requires you to keep financial records and accounting information on hardware using accounting software programs approved by All American and that will provide reports compatible with reports used system wide.

4.                    Tenant Improvements. We anticipate none will be required.

5.                   Inventory. N/A

6.                    Office Supplies. You will need miscellaneous forms designated by All American for use by and with Subfranchisees and your single unit.. If you purchase these items from All American, the price will be at All American''s cost for such items plus freight.

7.                    Deposits, Prepaid Expenses, Utilities. The estimate includes deposits that may be refundable to you at a later time. In most cases, your lease will require you to pay electric, gas, water and other utilities directly.

8.                   Business License. You should consult your C.P.A., your lawyer, or your local county and state authorities about the specific legal requirements for business licenses and related types of expenses in your local area.

9.                    Insurance Cost. Insurance costs may vary in different localities. Under the terms of the Area Subfranchise Agreement, you are required to purchase errors and omissions coverage. The estimate does not include one year of errors and omissions insurance coverage. If you have employees, you may incur expenses for worker''s compensation insurance. All American is unable to estimate amounts for worker''s compensation insurance. The requirements and rates vary widely from place to place. All American reserves the right to require additional types of insurance and coverage as provided under the Franchise Agreement.

10.                 Training Expenses. This estimate does not include additional training fees that would apply if you decide to send more than two people to the initial training course (see Item 5 of the Franchise Disclosure Document ("FDD"). For training requirements generally (see Item 10 of the Franchise Disclosure Document). The estimate includes auto mileage within 200 miles of Portland, Oregon, the cost of commercial transportation from Chicago and room and board for 5 days.

11.��������� Miscellaneous Expenses.�� Miscellaneous expenses include opening advertising and promotional

activities.

12.                Additional Funds. This is an estimate only of the range of initial start-up expenses you may incur. The actual amount of additional funds you will need depends on a variety of factors, including the size of your territory, the time of year when you start your business, your own management skill, economic conditions, competition in your area, and other factors. You should not plan to draw income from the operation during the start up and development stage of your business.

The estimate of additional funds is based on an owner-operated business and does not include any salaries or benefits for employees or any allowance for an owner''s draw. The estimate is for a period of 3 months. All American estimates that, in general, a franchisee can expect to put additional cash into the business during at least the first 3 to 6 months, and sometimes longer depending on the time of year, but All American cannot estimate or promise when, or whether, any individual franchisee will achieve positive cash flow or profits.

13.                Grand Opening Advertising for Territory. N/A

14.                Net Worth. All American will not ordinarily grant an Area Subfranchise to a prospective Area Subfranchisee unless it has a net worth of at least $1,000,000 of which $200,000 is in cash, cash equivalents or securities that can be collateralized.

All American will not ordinarily grant a franchise to a prospective franchisee unless the prospective franchisee has made a "Discovery Day" at All American''s Corporate Office in Portland, Oregon.

All American has not and does not offer financing arrangements, although All American will, if such is available, introduce you to financial sources and suppliers who may offer credit arrangements. You may obtain financing from any source of franchisee''s choice upon such terms and conditions as may be negotiated. All American will not derive income from the placement of financing.

The following expenses are not included: cost of a unit, owner''s salary, workers'' compensation cost, rent, and real estate acquisition cost.