FAMOUS DAVES - FDD UFOC ITEM 7 Detail

7. ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT

The following table provides an estimate of your initial investment for a Famous Dave''s� Restaurant operated from premises leased by you:

The following table provides an estimate of your initial investment for a Famous Dave''s� Restaurant operated from premises where you purchase the land and building and construct or remodel the premises:

(1)               
For the estimated range of costs, Famous Dave''s relied on eurover 13 years of experience in the restaurant business, as discussed in Item 1 of this Offering CircuIarDisclosure Document.'' You should carefully review these figures with your business advisor before making any decision to purchase a franchised Famous Dave''s� Restaurant.

(2)                Payments are not refundable unless otherwise noted. Famous Dave''s does not offer direct or indirect financing.

(3)                Lease only: These figures represent the cost to lease and remodel an existing building to a Famous Dave''s� Restaurant. Famous Dave''s� Restaurants are generally located in free�standing buildings and require from 5,800 square feet to 6,200 square feet of floor space with seating for from 180 to 210 guests. The rental rate will generally be between $15 and $30 per square foot.

(4)                Purchase only: If you choose to purchase the land and building for your Famous Dave''s� Restaurant, your initial costs likely will be significantly higher than if you choose to lease the premises. The land required for your Famous Dave''s� Restaurant will require from 1.6 acres to 2 acres and the building will require from 5,800 square feet to 6,200 square feet of floor space with seating for from 180 to 210 guests. Your initial investment if you chose to purchase the land and building will range from $950,000 to $1,500,000 for the cost of the property and $500,000 to $1,300,000 for the cost of construction or remodeling (not including equipment costs). In addition, you may be required to landscape or make other improvements to your site which may range from $200,000 to $350,000. Thus, your total estimated expenditures to purchase the land and building for your Restaurant may range from $1,550,000 to $2,950,000. Some of your costs for the property, construction or remodeling and other site improvements may be financed through a bank or other financial institution. The cost to purchase land on which to construct a Restaurant may vary widely depending upon the location of the land, the demand for the site, the zoning, the assessed value of the parcel, the attributes of the parcel and related area, such as parking availability, accessibility and traffic flow, and the general economic conditions. These estimates are based upon the experience of Famous Dave''s in the Midwestern United States; depending upon your area, your costs may be higher.

(5)                You must pay for the travel expenses and other expenses while you and your management staff attend the training program. Salaries and benefits are not included.

(6)                This includes the cost of the computer hardware, peripherals, and software that will serve as your point-of-sale system, and the maintenance agreement for that system (see Item 11), and also includes the costs for decor items and installation services that may be provided by Famous Dave''s (see Item 5). Your furniture, fixtures, decor and equipment may be financed through a bank or other financial institution, leased or purchased outright.

(7)                Liquor license costs generally are less than $35,000. However in isolated instances, Famous Dave''s or one of its developers has had to pay up to $900,000 for a liquor license. You should check with the local licensing board to determine the cost of your liquor license.

(8)                Lease only: The monthly rental if you lease the premises for your Franchised Location may include common area maintenance fees and real estate taxes. The amount indicated also includes a one month advanced rental payment, security deposit and prepaid expenses. Isolated instances could be higher.

(9)                This estimate does not include the salaries for you or your management staff during training.

(10)             Miscellaneous fees include such items as security, utility and license deposits, impact fees, insurance premiums for three months, and professional services such as attorneys and accountants. You should check with the local agency that issues building permits to determine what impact, connection, or other site development fees might be required for

the specific site for your Famous Dave''s� Restaurant. Environmental impact fees vary significantly for each location, and may range from .5% to 3% of the value of the land. You must maintain general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 aggregate coverage, liquor liability insurance with coverage of at least $2,000,000 per occurrence if your Famous Dave''s� Restaurant serves any alcoholic beverages, automobile insurance with coverage of at least $500,000 per occurrence, property insurance with replacement cost coverage, business interruption insurance with coverage of at least $300,000 per occurrence, building insurance with coverage of at least replacement cost if you or any of the developer''s owners own the building or the business premises for the Franchised Location, umbrella liability insurance with coverage of at least $3,000,000 per occurrence, and all insurance required by law, such as workers'' compensation insurance.

(11)             You must spend a minimum of $10,000 on the grand opening celebration for your Restaurant. Although you are not required to do so, Famous Dave''s strongly recommends that you also spend up to $20,000 for an initial marketing and advertising campaign for your Restaurant.

(12)             During the first three months of operations, you will need additional funds to cover your expenditures for supplies, food and beverage inventories, local advertising, utilities, and other miscellaneous operating costs. This estimate has not been offset by any allowance for your operating revenues during this three month period. Your working capital requirements may increase or decrease depending upon your geographic area, number of employees, labor rates, minimum wage laws, operating revenues and other economic factors.

(13)             These figures are estimates only, and it is possible that you may have additional or greater expenses during this period. Your costs will vary depending on the size of your Famous Dave''s� Restaurant, your geographic area, economic and market conditions, competition, interest rates, wage rates, sales levels attained, and other economic factors.

(14)             If you sign an Area Development Agreement, you must also pay Famous Dave''s a nonrefundable Development Fee equal to $10,000 multiplied by the number of Famous Dave''s� Restaurants that you must develop under the Area Development Agreement. You must pay the Development Fee in full when you sign the Area Development Agreement. You must sign a separate Franchise Agreement for each Famous Dave''s� Restaurant you develop under the Area Development Agreement and in addition to the Development Fee, you must pay a nonrefundable Initial Fee of $40,000 for each Famous Dave''s� Restaurant you develop. You will pay the Initial Fee each time you sign a Franchise Agreement for a Restaurant you develop according to the development schedule in the Area Development Agreement. You must sign your first Franchise Agreement when you sign the Area Development Agreement.