JO TO GO COFFEE - FDD UFOC ITEM 7 Detail

Item 7

ESTIMATED INITIAL INVESTMENT

Due to the wide variation in the initial investment estimate depending upon whether you purchase or lease the land and the building, whether you are opening a Double Drive Thru, In-line Restaurant, or Drive Thru Restaurant, and whether you are a start-up business or conversion, we have included 3 different charts of initial investment estimates. Note the headings above each chart.

YOUR ESTIMATED INITIAL INVESTMENT Chart #1 - Double Drive Thru Dual Concept

TOTAL ESTIMATED INITIAL INVESTMENT:

$325,495 - $508,419 plus real estate and related costs (See Note 10)

YOUR ESTIMATED INITIAL INVESTMENT Chart #2-In-line Caf� Dual Concept

TOTAL ESTIMATED INITIAL INVESTMENT: $173,900 - $384,389

YOUR ESTIMATED INITIAL INVESTMENT Chart #3 - Drive Thru Cafe, End-Cap Dual Concept

TOTAL ESTIMATED INITIAL INVESTMENT: $185,050 - $404,079

(See note 10 for purchase of real estate)

NOTES:

1.        Initial Franchisee Fee. A non-refundable fee of $12,500 is paid to us when you sign the Development Agreement and is credited against the initial franchise fee. The $12,500 balance of the initial franchise fee is payable to us when you sign the Franchise Agreement. See Item 5. For additional franchises, the initial franchise fee charged is $20,000.

2.        Construction. For Chart #1 only. This item reflects our estimate for the cost of constructing the building. The building, building foundation, mechanicals, electrical and plumbing will vary depending upon contractor, municipality and region. The high end of the range includes areas that require higher labor and material costs. Site work is not included in the construction cost of the building. Site work is included in the related costs of the real estate (See Note 10).

You may purchase development ($35,000) and construction administration services ($10,000) from our affiliate Turnkey Development, LLC. (See Item 5 and the Development Package Agreement at Exhibit 3 to the Franchise Disclosure Document.) If you chose not to purchase this optional service, you may hire your own contractor or handle the site selection and oversee the construction process yourself.

3.        Rent and Leasehold Improvements. For Charts #2 and 3 only. The rent estimate covers the security deposit and first month''s rent for leasing the business premises. For the In-line Caf�, you will need between 400 and 2,200 square feet of space. For the Drive-Thru Caf�, End-Cap you will need between 1,000 and 2,200 feet of space either in a free-standing building or the end unit of a shopping center or strip center. The rent will vary, primarily depending on the size of the space and the location.

This estimate for leasehold improvements covers your costs to build-out the premises of the Jo to Go In-Line Caf� or Drive-Thru Caf�, End Cap. The cost of improvements will vary depending on the extent of the improvements required to comply with our standards and specifications, whether the lessor provides a build-out allowance, and location, local wage rates and cost of materials.

4.        Equipment. This estimate covers furniture, fixtures and equipment necessary to operate the Jo to Go Business, including espresso machines, grinders, refrigerator, freezer, dishwasher, shelving, security equipment, audio equipment, and small appliances. The higher estimate includes additional fixtures, equipment and supplies necessary if you are also offering Mexican food, including two-bay fryer, steamer-cookers, oven, small wares, food warmers, steam table, reach-in coolers, food preparation tables and an approved air exchange ventilation hood system with fire suppression system. The cost of these items varies as a result of price differences between suppliers and shipping distances from suppliers. The low estimate is based on purchasing some of the items and leasing the majority of the items which would require a down payment and 3 months of lease payments. The amount of lease payments will vary based on current interest rates, your financial condition, the length of the lease and the buy-out terms and other lease terms. The high estimate assumes that all items will be purchased. The POS System/Computer Hardware and Software/Video

Surveillance System are included in the equipment. See Item 11 for a more detailed description of the required point-of-sale and computer systems.

5.       Signage. This estimate covers the cost of menu boards, indoor and outdoor signage. Your cost will vary depending on the size and type of signage allowed by local ordinance or code and local cost of installation. The high estimate is based on the purchase of an elevated pole sign with a computer controlled message board.

6.       Inventory. The cost of opening inventory of coffee, syrups, and other food and drink ingredients, trademarked merchandise, uniforms, containers, packaging materials, and other supplies and materials will vary depending on the price differences between suppliers and shipping distances from suppliers.

7.       Grand Opening Advertising. You must spend a minimum of between $6,500 and $8,500 on a grand opening advertising campaign during the first 3 months of operation. You may choose to spend more. You must follow our guidelines for grand opening advertising. The cost will depend upon the cost of required media, including billboards and radio advertising in your geographic area.

8.       Pre-Opening Expenses. Pre-opening expenses include such items as professional fees, organizational expenses, salaries during training, travel, living and miscellaneous expenses while attending training, utility deposits and salaries for a manager and some crew members during the 15 day period before opening.

9.       Additional Funds. This estimate covers working capital for the first 3 months and includes general operating expenses, such as lease payments, inventory, payroll, payroll expenses, facility expenses, insurance, pest control, security, repairs and maintenance, and complimentary sales and other costs. These figures are estimates and we cannot assure you that you will not have additional expenses in starting the business. Your actual costs will depend on factors such as your management skill, experience and business acumen; local economic conditions; the local market for the coffee drive thru; prevailing wage rate; competition n the market place; and the sales level reached during the start-up phase. These amounts do not include any estimates for a draw for you or for any debt service.

10.    Real Estate Purchase or Ground Lease. The total estimated initial investment for the Double Drive-Thru does not include real estate related costs. Jo to Go Double Drive-Thru business is typically a free-standing street location. The cost of purchasing or ground leasing and developing a site for a Jo to Go Business will vary considerably depending on such factors as location and size of the site and the local real estate market. You will need to purchase or lease a site of approximately 13,000 to 25,000 square feet and pay the cost of site preparation. Land acquisition costs can range from $170,000 to $650,000 for quality sites, with lease costs from $1700 to $7000 per month, and site preparation costs from $85,000 to $289,000. If you decide to construct a Jo to Go Business using conventional on-site construction (i.e. not a modular unit), then we will provide you with a set of our prototypical architectural plans and drawings, which you will need to conform to all applicable laws and regulations, including local codes and permits. We estimate the cost of architectural services to conform such plans, as well as permit expenses, to range from $5000 to $17,000. Another option is to secure a third party developer to locate, build and lease back the building. The lease terms will be negotiated between you and the third party developer.

The total estimated initial investment for the In-Line Cafe and the Drive-Thru Cafe, End Cap include only amount for leasing the premises and no amount for a purchase of real estate.

In preparing the above charts, we relied on the experience of our affiliate in operating Jo to Go Businesses and on the experience of our franchisees. You should review these figures carefully with a business or financial advisor before deciding whether to purchase the franchise. These figures are estimates only and we cannot guarantee that you will not have additional expenses in starting the Jo to Go Business. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing from independent third parties will depend on factors such as the availability of financing generally, your creditworthiness, the amount and type of collateral you may have and the lending policies of the financial institutions concerning the type of business you will operate.

Any fees paid to us or our affiliate are non-refundable except as outlined in Items 5 and 6 of this Franchise Disclosure Document. Fees paid to any third party may be refundable, depending upon the contracts, if any, between that third party and you.

Single Concept

If you choose to not offer Mexican food under the second brand "TACO FLAMINGO," your initial investment for the Jo to Go Business will be less than the amounts estimated in Charts 1, 2 and 3 above. More specifically, it is expected that the estimates for leasehold improvements, equipment, signage and inventory will be less.

Conversion

If you are a conversion franchisee (See Franchise Agreement (Exhibit 2) Conversion Addendum to Franchise Agreement (Exhibit F)) the franchise fee is $20,000. You may incur expenses and capital costs that range from $20,100 to $144,600. This estimate would include expenditures for leasehold improvements, new fixtures and equipment including computer system to conform to our requirements, new inventory, signage, grand opening advertising, professional fees and expenses, and travel expenses for training. It is likely that you will have some equipment and inventory items that meet our specifications so that your cost for these items may be lower than for a new franchisee without an existing business.

Multi-Unit Development Agreement

If you sign a Multi-Unit Development Agreement, you should anticipate the initial costs listed above for the first franchise you will open plus the Development Fee due under the Multi-Unit

Development Agreement. See Item 5 for information on the calculation of the Development Fee.