MURPHY BUSINESS AND FINANCIAL - FDD UFOC ITEM 7 Detail

ITEM 7

ESTIMATED INITIAL INVESTMENT

Location Franchises.

Explanatory Notes:

1. All fees payable to us or our affiliates are non-refundable. Fees paid to third-party vendors are only refundable if agreed to by you and that vendor. Neither we nor our affiliates finance your initial franchise fee or any other fees or expenses payable to us or our affiliates (see Item 10).

2.                   These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating your Murphy� Business. Our estimates are based on the experience of our affiliate, MBFS, in operating its business brokerages (see Item 1), and our current requirements for a Murphy� Business. The availability and terms of financing from third parties depend on many factors, including the availability of financing generally, your creditworthiness and collateral, and the lending policies of financial institutions from which you request a loan. The factors underlying our estimates may vary depending on a number of variables, and the actual investment you make in developing and opening your Murphy� Business may be greater or less than the estimates given depending upon the location of your franchise, and current relevant market conditions.

3.                   See Item 5 for additional information about your initial Franchise Fee. The Franchise fee varies depending on whether you are seeking a territory in a premium market area, which we will determine, in our sole discretion, based on statistical, demographic and economic factors, including the number and type of businesses in proximity to the site. See Item 5 and Item 11 for information regarding the QSMP Fee.

4.                   This estimate includes security deposits required by landlord or utility companies, but not your telecommunications service.

5.                   Your proposed Site may be a commercial office site or a personal residence located in an area allowing home-based businesses. However, if you are a Regional Developer you must operate your Murphy� Business from a commercial office site. While you are not required to (unless you are a Regional Developer), if you decide to rent a office space as opposed to using your personal residence, we estimate you will need between 500 to 1000 square feet of air-conditioned space. Our business model suggests franchisees seek to obtain rental rates of $15 to $50 per square foot, triple net. But, because rental rates vary by local, market condition,,and your credit, we do not estimate your rental expenses. It is possible that you may choose to buy, rather than rent, real estate on which to operate your Murphy� Business. We estimate that, based on the Tampa, Florida market, purchasing space may range between $100 to $200 per square foot. But, real estate costs depend on location, size, visibility, economic conditions, accessibility, market conditions and the type of ownership you are buying. Because of the numerous variables that may affect the value of a particular piece of real estate, this estimated initial investment table does not reflect the costs of rent or purchasing land if you choose to do so.

6.                   These estimates assume you will purchase your signage. The type and size of the signage you actually install will be based upon the zoning and property use requirements and restrictions. There could be an occasion where signage is not permitted because of zoning or use restrictions.

7.                   This estimate includes workstations and chairs, shelving, an initial inventory of forms and stationery, and other items.

8.                   This estimate includes the cost of obtaining our required computer system. See Item 11 for-additional information.

9.                  You must obtain and maintain, at your own expense, the insurance coverage that we periodically require, and satisfy other insurance-related obligations. You must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as we periodically specify). We may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances. All insurance policies you purchase must name us and any affiliate we designate as additional insureds, and provide for 30 days'' prior written notice to us of a policy''s material modification or cancellation. If you fail to obtain or maintain the insurance we specify, we may (but need not) obtain the insurance for you and the Location on your behalf (see Item 6). The cost of your premiums will depend on the insurance carrier''s charges, terms of payment, and your insurance and payment histories.

10.               This estimate includes the travel and living expenses, including airfare, which you will incur when you and 1 other person attend the initial training program for Murphy� Businesses described in Item 11. It does not include any wages or salary for you or your employees during this training.

11.               This estimate includes the security deposits and service fees for your telecommunications system, and telephone directory advertising fees. See Item 11 for additional information about our advertising requirements.

12.               This estimate assumes a minimum of 1 franchisee at $300 per month, and a maximum of 2 agents/brokers/employees or other persons associated with your business (the first at $300 per month, the other two at $50 each per month), for the first 3 months of operation.

13.               This estimate includes your initial start-up expenses (other than the items identified separately in the table) during the Location''s first 5 months of operation. These expenses include payroll costs during the Location''s operation, but not any draw or salary for you. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs for initial start-up expenses during this 5-month period will depend on how closely you follow our methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market for your products; the prevailing wage rate; your competition; and the sales level you reach during the initial period. This includes the cost of leasing or buying a vehicle, if you do not already have when. We are assuming you can acquire a lease for $2,000 down plus $800 per month.

14.               You should review these figures with a business advisor before making any decision to purchase the franchise.

Regional Developer Franchises.

YOUR ESTIMATED INITIAL INVESTMENT

Explanatory Notes:

1.                   All fees payable to us or our affiliates are non-refundable. Fees paid to third-party vendors are only refundable if agreed to by you and that vendor. Neither we nor any of our affiliates finance your initial development fee or any other fees or expenses payable to us or our affiliates (see Item 10).

2.                   These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating your Murphy� Regional Developer Business. Our estimates for your Regional Developer franchise are based on both the experience of our affiliate, MBFS, in operating its business brokerage offices (see Item 1), and our current requirements for a Murphy� Regional Developer franchise and Regional Location. The factors underlying our estimates may vary depending on a number of variables, and the actual investment you make in developing and opening your Regional Developer franchise may be greater or less than the estimates given depending upon the location of your Regional Developer franchise and Location, and current relevant market conditions.

3.                   See Item 5 for additional information about your development fee.

4.                   If your state law classifies Regional Developers as franchise brokers, then you will also need to register as a franchise broker with the state. These estimates include your estimated attorneys'' fees to prepare the required disclosures, any regulatory fees that you may need to pay for state regulatory registration of your disclosures, and registration fees to register as a franchise broker. You will need to contact an attorney to determine whether your state requires you to register as a franchise broker with the state.

5.                   Your must operate your Murphy� Regional Developer Business from a commercial office site. If you decide to rent an office space, we estimate you will need between 500 to 1500 square feet of air-conditioned space. Our business model suggests franchisees seek to obtain rental rates of $15 to $50 per square foot, triple net. But, because rental rates vary by local, market condition, and your credit, we do not estimate your rental expenses. It is possible that you may choose to buy, rather than rent, real estate on which to operate your Murphy� Regional Developer Business. We estimate that, based on the Tampa, Florida market, purchasing space may range between $100 to $200 per square foot. But, real estate costs depend on location, size, visibility, economic conditions, accessibility, market conditions and the type of ownership you are buying. Because of the numerous variables that may affect the value of a particular piece of real estate, this estimated initial investment table does not reflect the costs of rent or purchasing land if you choose to do so.

6.                  This estimate includes security deposits required by the landlord and utility companies for your Regional Location, but not your telecommunications service.

7.                  This estimate does not include any construction allowances that may be offered by your landlord. Building and construction costs will vary depending upon the condition of the premises for the Regional Location, the size of the premises, and local construction costs.

8.                  These estimates assume you will purchase your signage. The type and size of the signage you actually install will be based upon the zoning and property use requirements and restrictions. There could be an occasion where signage is not permitted because of zoning or use restrictions.

9.                  This estimate includes workstations and chairs, shelving, an initial inventory of forms and stationery, and other items.

10.               This estimate includes the cost of obtaining our required computer system. See Item 11 for additional information.

11.               You must obtain and maintain, at your own expense, the insurance coverage that we periodically require, and satisfy other insurance-related obligations. You must buy insurance only from carriers rated A-VIII or better by A.M. Best and Company, Inc. (or similar criteria as we periodically specify). We may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, changing economic conditions, or other relevant changes in circumstances. All insurance policies you purchase must name us and any affiliate we designate as additional insureds, and provide for 30 days'' prior written notice to us of a policy''s material modification or cancellation. If you fail to obtain or maintain the insurance we specify, we may (but need not) obtain the insurance for you and the Location on your behalf (see Item 6). The cost of your premiums will depend on the insurance carrier''s charges, terms of payment, and your insurance and payment history.

12.               This estimate includes the travel and living expenses, including airfare, that you will incur when you and one other person attend the initial training program for Locations described in Item 11. It does not include any wages or salary for you or your employees during this training.

13.               This includes the QSMP Fee you are required to pay for your Murphy� Business and an estimate of an initial supply of corporate brochures, marketing kits, product and services brochures, presentation covers and folders, client handouts, stationary packages, and direct mail and telemarketing campaigns. We are an approved supplier of direct mailing and telemarketing campaigns (see Item 8).

14.               This estimate includes the security deposits and service fees for your telecommunications system, and telephone directory advertising fees. See Item 11 for additional information about our advertising requirements.

15.               This estimate assumes a minimum of 1 franchisee at $300 per month, and maximum of 2 agents/brokers/employees or other persons associated with the business (the first at $300 per month, the other two at $50 each per month), for the first 3 months of operation.

16.               This estimate includes your initial start-up expenses (other than the items identified separately in the table) during your Regional Location''s first 5 months of operation. These expenses include payroll costs during the Regional Location''s operation, but not any draw or salary for you. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs for initial start-up expenses during this 5-month period will depend on how closely you follow our methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market for your products; the prevailing wage rate; your competition; and the sales level you reach during the initial period.

17.               You should review these figures with a business advisor before making any decision to purchase the franchise.