VILLA PIZZA - FDD UFOC ITEM 7 Detail

ITEM 7

YOUR ESTIMATED INITIAL INVESTMENT FOOD COURT LOCATION

The following chart provides an estimate of your initial investment for a Villa Pizza restaurant, Villa Fresh Italian Kitchen restaurant, Villa Pronto restaurant or a Cozzoli''s restaurant located in a food court.

TOTAL ESTIMATED INITIAL INVESTMENT (exclusive of real estate and related costs)¹⁰: $296,950 to $572,000.

NOTE 1 If you do not sign the appropriate lease documentation within nine months after execution of the Franchise Agreement, you or we may terminate the Franchise Agreement, and related agreements, if any. In this event, we will refund the initial franchise fee, less the costs and expenses we incurred in connection with the search for a site, travel and living expenses and legal and other related expenses, as long as you and your owners sign a general release satisfactory to us.

If, for any reason, you have not opened your restaurant within six months after the date the site is available to you, (or a different date if specified in the lease), we may terminate your Franchise Agreement at any time thereafter and before the opening of the restaurant, by giving you written notice. If your Franchise Agreement is terminated in these circumstances, we will refund the initial franchise fee, less the costs and expenses we incurred in connection with your franchise including expenses incurred in the search for a site, advertising and negotiating the lease for the restaurant, construction expenses, if any, and expenses incurred in training you and your employees, including travel and living expenses, compensation of our employees and other legal fees and expenses we have incurred, as long as you and your owners sign a general release satisfactory to us.

NOTE 2��� You will need to purchase or lease a site of approximately 600 to 900 square feet.

NOTE 3 If the Franchisor, or one of its affiliates negotiates a lease for the premises on your behalf, which lease, in the Franchisor''s reasonable judgment, would be acceptable for the operation of a Villa Pizza, Villa Fresh Italian Kitchen, Villa Pronto or Cozzoli''s restaurant, you may have to pay the Franchisor a lease negotiation fee, which may include both legal costs (including time spent by in-house counsel) and brokerage fees.

NOTE 4 This item does not include rent deposits for leased premises. In some areas, some utility companies do not require utility deposits. Where required, these deposits are generally refundable.

NOTE 5 The insurance you must maintain is described in Item 8. Our estimate does not include other insurance policies you may have to maintain under the terms of your lease. The unearned portions of the insurance premiums are generally refundable.

NOTE 6 This sum includes all necessary equipment and fixtures, signs, beverage systems, menu display boards, cash registers and related items.

NOTE 7 Travel and living expenses while attending the Franchisor''s training programs are not included in the fees you pay to the Franchisor. At the present time, we provide training of approximately three to five weeks duration in the Minnesota area and other certified training locations throughout the country, subject to change from time to time at our discretion. Hotel, food and local travel expenses range from about $100 to $200 per day.

NOTE 8 This expense includes architectural fees, legal fees, accounting services, licenses, permits and administrative expenditures.

NOTE 9 This is an estimate, based on our experience of opening and operating Villa Pizza and Villa Fresh Italian Kitchen restaurants, of your working capital requirements for the first three (3) months of operations. Working capital for the first three (3) months is estimated to range between $4,000 and $10,000 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 restaurant. Your actual cost will depend on factors such as your management skill, experience, and business acumen; local economic conditions; the local market for the restaurant; the prevailing wage rate; competition in the market place; and the sales level reached during the start-up phase. These amounts do not include any estimates for any debt service.

NOTE 10�� The total estimated initial investment does not include real estate and related costs.

Except as otherwise noted, none of these payments are refundable. These payments are only estimates and your costs may be higher, depending on your particular circumstances, for example whether you are located within an airport or some other non-traditional location. You should review these figures carefully with a business advisor, accountant or attorney before making any decision to purchase a franchise. We do not offer any financing for your initial investment. The availability and terms of financing with third-party lenders will depend on factors such as the availability of financing generally, your credit-worthiness and policies of lending institutions concerning the type of business to be operated.

IN-LINE RESTAURANT

The following chart provides an estimate of your initial investment for an in-line Villa Pizza restaurant, Villa Fresh Italian Kitchen restaurant, Villa Pronto restaurant or a Cozzoli''s restaurant.

NOTE 1 If you do not sign the appropriate lease documentation within nine months after execution of the Franchise Agreement, you or we may terminate the Franchise Agreement, and related agreements, if any. In this event, we will refund the initial franchise fee, less the costs and expenses we incurred in connection with the search for a site, travel and living expenses and legal and other related expenses, as long as you and your owners sign a general release satisfactory to us.

If, for any reason, you have not opened your restaurant within six months after the date the site is available to you, (or a different date if specified in the lease), we may terminate your Franchise Agreement at any time thereafter and before the opening of the restaurant, by giving you written notice. If your Franchise Agreement is terminated in these circumstances, we will refund the initial franchise fee, less the costs and expenses we incurred in connection with your franchise including expenses incurred in the search for a site, advertising and negotiating the lease for the restaurant, construction expenses, if any, and expenses incurred in training you and your employees, including travel and living expenses, compensation of our employees and other legal fees and expenses we have incurred, as long as you and your owners sign a general release satisfactory to us.

NOTE 2��� You will need to purchase or lease a site of approximately 1,200 to 3,000 square feet.

NOTE 3 If the Franchisor or one of its affiliates negotiates a lease for the premises on your behalf, which lease, in the Franchisor''s reasonable judgment, would be acceptable for the operation of a Villa Pizza, Villa Fresh Italian Kitchen, Villa Pronto or Cozzoli''s restaurant, you may have to pay the Franchisor a lease negotiation fee, which may include both legal costs (including time spent by any in-house counsel) and brokerage fees.

NOTE 4 This item does not include rent deposits for leased premises. In some areas, some utility companies do not require utility deposits. Where required, these deposits are generally refundable.

The insurance you must maintain is described in Item 8. Our estimate does not include other insurance policies you may have to maintain under the terms of your lease. The unearned portions of the insurance premiums are generally refundable.

This sum includes all necessary equipment and fixtures, signs, beverage systems, menu display boards, cash registers and related items.

Travel and living expenses while attending the Franchisor''s training programs are not included in the fees you pay to the Franchisor. At the present time, we provide training of approximately three to five weeks duration in the Minnesota area and other certified training locations throughout the country, subject to change from time to time at our discretion. Hotel, food and local travel expenses range from about $100 to $200 per day.

This expense includes architectural fees, legal fees, accounting services, licenses, permits and administrative expenditures.

This is an estimate, based on our experience of opening and operating Villa Pizza and Villa Fresh Italian Kitchen restaurants, of your working capital requirements for the first three (3) months of operations. Working capital for the first three (3) months is estimated to range between $6,000 and $15,000 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 restaurant. Your actual cost will depend on factors such as your management skill, experience, and business acumen; local economic conditions; the local market for the restaurant; the prevailing wage rate; competition in the market place; and the sales level reached during the start-up phase. These amounts do not include any estimates for any debt service.

NOTE 10�� The total estimated initial investment does not include real estate and related costs.

Except as otherwise noted, none of these payments are refundable. These payments are only estimates and your costs may be higher, depending on your particular circumstances. You should review these figures carefully with a business advisor, accountant or attorney before making any decision to purchase a franchise. We do not offer any financing for your initial investment. The availability and terms of financing with third-party lenders will depend on factors such as the availability of financing generally, your credit-worthiness and policies of lending institutions concerning the type of business to be operated.