SIGNS BY TOMORROW - FDD UFOC ITEM 7 Detail

Item 7

ESTIMATED INITIAL INVESTMENT

Note 1:� These expenses are non-refundable, except that the utility deposits may be refunded to you after you establish a credit history. See Item 10 for information on financing.

Note 2: These figures are estimates. We make no representation that your costs will come within the ranges estimated and cannot guarantee that you will not incur additional expenses starting your business. Your actual costs will depend on: region; time of year; number of customers serviced; sales promotions; how much you follow our methods and procedures; your management skill, experience and acumen; local economic conditions; the local market for SIGNS BY TOMORROW products and services; prevailing wage rates; competition; and sales levels that you reach during the initial phftsep^riwi of your business.

Note 3: See Item 5 for additional information about the initial franchise fee. We may approve each franchise application, in our sole and absolute discretion, based on our assessment of your qualifications to operate the business. Generally, you must attend a personal interview with us at our location before we will approve your application to acquire a SIGNS BY TOMORROW franchise.

Note 4: Inventory includes items such as vinyl, substrates (aluminum, acrylics, etc.), application tape, supplies (frames, paint, digital print consumables, etc.), and a trade show booth package. The minimum initial inventory may fluctuate as a function of seasonal sales variations, industry trends and the local market. We work with you to establish and balance inventories.

Note 5: We will specify the signs and graphics, and only those we approve may be used. You must maintain the signs and graphics in a condition acceptable to us at all times.

Note 6: You must purchase and/or lease and install the fixtures (work tables, counters, shelves, etc.) necessary to operate your SIGNS BY TOMORROW store under our specifications (see Item 11). The costs of purchasing and installing fixtures varies according to market conditions, the size of the premises, your selections made from our approved lines of items, price differences among suppliers, the location of the premises and other related factors.

Note 7: For purposes of estimating your initial investment, we assume that you will lease a store space, rather than purchase real estate and construct a building. Lease costs will vary based on: size in square feet to be leased; cost per square foot; amount of percentage rent, if any; sales figure at which percentage rent begins to apply ("break point"); common area maintenance costs; and merchant''s association costs. These variances are determined by location, length of the lease, age of the leased property, local market conditions, size of the premises and bargaining power of the developer or any property management company. A typical SIGNS BY TOMORROW store has h&&lMb to 2^0002000 square feet. Rent varies significantly by location, but usually ranges from $10 to $25 per square foot.

Note 8: The cost of leasehold improvements (interior walls, carpet, painting, etc.) will vary as a function of size, condition and location of the premises, price differences among contractors, local wage rates and material costs, other local conditions, and the nature of your leasehold improvements. The previous tenant or landlord may have installed leasehold improvements that are very compatible, thereby reducing costs. Included in the estimate is the $125 to $400 that you will pay us for showroom display materials (see Item 5) and a possible architect''s fee of $600 to $800.

Note 9: See Item 5The low estimate includes only the equipment and items that vou must purchase from us. See Items 5 and 8 for more information about equipment and other items that you wiU purchase from us. See Item 11 for more information about computers and software and other equipment. In some instances, vou mav be ahle to lease this equipment from an approved supplier-See Item 8 for more information.

Note 10: See Items 5, 6r-8 and 11 for more information about the Quick Start advertising program.

Note 11: You must pay us this amount before opening to allow us to connect you to our Intranet and set up your portion of our website. See Items 5 and 11 for more information.

Note 12: You may sign the franchise agreement individually or on behalf of a legal entity, subject to certain conditions^ including the requirement that the sole purpose of the entity is to own and operate the franchised busienss. If you sign the franchise agreement individually, with our consent you may transfer the obligations associated with operating your business to a legal entity, as long as you personally guaranty all obligations under the franchise agreement. If you sign the franchise agreement on behalf of a legal entity, you must personally guaranty all obligations under the franchise agreement. Whether you operate your business individually or through a legal entity, you must comply with any fictitious, assumed or trade name statutes of the state in which your business is located.

Note 13: See Item 8 for additional information on insurance.

Note 14: If you have operated a SIGNS BY TOMORROW store for at least 6 monthsJmtjiQt more than 5 years, subject to our consent, within 5 years after the signing of your 1^st franchise agreement, vou canvou mav reserve 1 or 2 contiguous protoctodadditional territories for future development by signing a deposit agreement for additional protected territories and paying a $5,000 deposit to us for each additional protected territory. See Item 5 and Exhibit D for additional information.

Note 15: You may need these additional funds to operate your business during its 1^st year to cover operating expenses that exceed start-up revenues. These expenses may include marketing, promotional, travel, supply, printing and telephone expenses.

Note 16: In preparing these figures, we have relied on more than 20 years of experience. You should review these figures carefully with a business advisor before making any decision to purchase a franchise.