SIGN SETTERS - FDD UFOC ITEM 7 Detail

ITEM 7

YOUR ESTIMATED INITIAL INVESTMENT

The amounts of all of the non-fixed expenditures, other than the permits and licenses, will be determined when you contact and negotiate with the respective vendor, supplier, etc. The costs of permits and licenses will be determined by contacting the appropriate governmental entity.

None of these expenditures, other than the initial franchise fee, the rental security deposit, the telephone and utility deposits and the insurance premiums, is refundable. One-half of the initial franchise fee will be refunded if you do not complete, to our satisfaction, our training program and certain other conditions are satisfied (see Item 11); the balance will be retained by us and used to defray our training and other expenses. The rental security deposit will be refunded in accordance with the terms of the lease. The utility deposits will generally be refundable in accordance with the terms fixed by the utility companies. The insurance premiums may be refundable for future periods in accordance with the terms fixed by the insurance carrier.

No part of your initial investment in the franchise will be financed by us.

Footnotes

¹ If you desire to purchase additional Sign Setters Businesses, The initial franchise fee for your second and subsequent Sign Setters Businesses will be $10,000 for each additional Sign Setters Business.

² If you do not own adequate space, you must lease storage and office space for your Sign Setters Business. Your office must be open to the public. Typical locations are warehouse, industrial and other commercial non-retail space. The typical Sign Setters Business will have between 1,200 and 1,500 square feet of space, including between 150 and 200 square feet of office space. Your real estate costs will vary, depending upon your geographic area and the location of your storage premises. Rental rates are estimated to range between $0.60 to $2.00 per square foot per month and the security deposit is estimated to equal to one month''s rent. We have not included any amount that may be payable as a real estate broker''s fee, which will typically be paid by your landlord.

³ In addition, if you sign the Franchise Agreement with respect to your second and subsequent franchise agreements or in connection with a renewal or a transfer to a Majority-owned Transferee (as defined below), the cost of attendance and participation in our training program is not included in the initial franchise fee. If you are required to, or desire to, attend our training program in connection with those Franchise Agreements, or if you desire additional people to attend our training program, the fee will be $500 per additional training program per person.

⁴ If you do not own a truck that meets our specifications, you must purchase or lease a white pick-up truck, V* ton or larger. The figures in the above table assume that you finance your truck, that the purchase price is between $10,000 and $12,000 (assuming a used truck) or between $15,000 and $17,000 (assuming a new truck), with between 10% and 15% down payment, a 6%-8% interest rate interest rate and a 24 to 60-month repayment term.

⁵ See Items 5 and 6.

⁶ Includes the initial semi-annual amount payable by you to the company hosting our software (between $300 and $600 per year, payable in two equal installments). See also Item 11.

⁷ The Franchise Agreement requires you to carry insurance of the types and in the amounts set forth in our Operating Manual. In addition, you must comply with the insurance requirements of your lease or other agreements, if any, and applicable worker''s compensation laws must be complied with. These insurance policies must name us (and our Affiliates designated by us) as an additional insured.

The insurance policies must insure you and us (and our Affiliates designated by us) against any liability in connection with the operation of your Sign Setters Business. The insurance must be placed with an insurance carrier or carriers satisfactory to us and may not be subject to cancellation or any material change except after 30 days'' prior written notice to us. The insurance policies must provide that your failure to comply with any term, condition or provision of the contract, and any other conduct by you, will not void or otherwise affect the protection afforded to us (or our Affiliates) under the policy. Certificates of insurance with respect to the insurance policies must be provided to us for all insurance policies in effect during the term of the Franchise Agreement.

If you sustain a loss by reason of fire, flood or other casualty of a type typically covered by insurance, and that casualty is caused wholly or partially by us (or our Affiliates'') acts or omissions, you must look solely to the proceeds of your insurance policy for reimbursement of the loss, and neither you nor any insurance carrier may recover damages against us (or our Affiliates) by way of direct action, subrogation, assignment of claims or otherwise. You will waive all rights of recovery by you, any insurance carrier or other person, and must notify each insurance carrier of that waiver.

If you fail to pay any premium when due or any policy is in default, we may, but are not obligated to, pay any premium and/or take any action necessary to cure that default. In this event, you must immediately pay to us the amount paid or expended by us to cure that default, plus interest. See Item 6.

⁸� Includes miscellaneous items, such as legal fees and expenses in connection with incorporating and reviewing your lease, accounting fees, yellow pages listings, employee shirts and hats, signage for your vehicle, permits and licenses and postal box.

⁹� Includes the salaries of one full-time employee and one part-time employee, gasoline and other working capital items. Does not include any amount for your compensation or, except as state in Footnote 4, debt service of any financing you may obtain from third parties. Will vary depending upon the level of sales that your Sign Setters Business realizes during your initial operating period.

¹⁰�������� Assuming that you recognize sales in your Sign Setters Business during your initial operating
period, you must pay royalties and advertising payments to us and you may be required to
purchase additional sign posts, stakes, brochure boxes and other items to restock your
inventory. See Item 6. All costs (other than the royalties and advertising payments) will be up
to 10% higher in Alaska and Hawaii.

Note that we make no representation or warranty regarding the period within which your Sign Setters Business will break even and/or have positive cash flow, which may exceed three months. See Item 19. We relied upon SSLLC''s experience operating a Sign Setters Business to compile these figures.

These figures are estimates only and it is possible to significantly exceed costs in any of the areas listed. We cannot guarantee that you will not have additional expenses starting and operating the business. Your costs will depend upon such factors as how much you follow our methods and procedures; your management skill, experience and business acumen; whether you personally manage your Sign Setters Business or hire a manager; the region in which your Sign Setters Business is located; population density; local economic conditions; the skill and experience of your staff; the local market for the services and products offered by your Sign Setters Business; the prevailing wage rate; competition and the sales level reached during the initial period. You should review these figures carefully with a business advisor before making any decision to purchase a franchise.