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JTEM 7

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EXPENSE	AMOUNT	METHOD OF PAYMENT	WHEN DUE	TO WHOM PAYMENT IS TO BE MADE
Retail Fixtures12	$15,012 SI 6.508$ 15,9^-$17,251	Lump sum	As Incurred	Vendors
Opening Inventory13	�20,138 $27^92*22.769--$22^22	Per Provider	As Incurred	Suppliers
Mis Or Expenses44Gift Card Fee14	r-i orti��� ff. nni p-i	Pa? PmvtderLump sum
			r\ii "it rUUlTCU Jj^m] vou sion the GjjLCari Participation Agreement	^l^^ployeoi*,■ vj ov c m in &m Agencies,-Third Parties; Us
for-first-3 roonlhs^Misc. Expenses''	$5,000 $15.000$4.713-�7.842	As InourrodPer Provider	As Incurred	Employees, Suppliers; VendoFsGnvernmcnt Agencies, Third Parties, Us
Total-Opening Iwponaoo^AjdJU onal Funds for first-3 months"1	�99,534 $145,836 ($88,531 friinchi3ec)$5.000-$15.000	As Incurred	As Incurred	EmDiovecs. Suooliers. Parties
Total Onenine Expenses	S99.380-S148.520 ($88,380-$137,520 for an

 

NOTE 1���������� Unless otherwise stated, all amounts are non-refundable.� This initial investment phase is

estimated to be approximately three months.

NOTE 2����������� If you sign a Reservation Agreement, you pay $4,000, which we will credit toward the Initial

Franchise Fee and you will pay us the remaining $14,000 when you sign the Franchise Agreement. If you arc an existing franchisee purchasing a franchise for an additional store, you will pay half the Initial Franchise Fee, currently $9,000. See Item 5 for more information on the Initial Franchise Fee and the Reservation Agreement.

NOTE 3���������� If you are an existing franchisee and you arc granted an option to purchase a franchise for an

additional store, you pay $2,000 when you sign the Reservation Agreement, $2,000 when you sign the Franchise Agreement and the remaining $5,000 in ten monthly installments of $500, beginning in the second month of operating your additional store.

 

 

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NOTE 4���������� If you are an existing franchisee and are opening an additional franchise, you must attend our

training program if it has been more than 18 months since you attended the training program; however, you are not required to pay us the $2,000 training fee.

NOTE 5���������� Includes travel, for two of you, to our headquarters before you purchase a franchise and travel

and expenses related to the initial eight days of training. See Item 11 for more information on our training program.

NOTE 6���������� We encourage you to look for strip center sites or existing structures which could easily be

converted into a Wn.D birds unlimited store. Leasing or building costs vary according to the size, location and condition of the building. Our figures are estimates and the amounts are refundable only if provided in your lease agreement. Lease agreements often require a security deposit equal to one month''s rent. This amount is usually refunded when the lease terminates if you leave the premises undamaged. We do not require thai you purchase real estate or build a building for your store. If you do, however, your costs will exceed the estimated ranges,

NOTE 7���������� You will need to remodel or construct the interior of your store to comply with our standards.

The low estimate is for a location that needs little work, and the high estimate for one that needs extensive remodeling. Our estimates account for the recommendation that you do a substantial portion of the labor, including painting, putting up slat-wall and positioning fixtures.

NOTE 8���������� Your insurance costs will vary depending upon lease requirements, coverage and other factors.

Under section 10.02 of the Eranchisc Agreement, you must maintain a comprehensive liability insurance policy, including products and contractual liability ($1,000,000), bodily injury liability and property damage liability ($1,000,000). Generally, premiums arc due immediately to your insurer, with partial refunds upon early cancellation.

NOTE 9���������� Includes furniture, copier, front and backroom computers, software and Annua! Point of Sale fee

and other equipment you use in the management of your business.

NOTE 10 Our low estimate is based on the use of an existing sign with few modifications. Our high estimate is for a new sign, plus installation. Independent contractors provide signs. The signs must meet our standards and specifications. You may need to get a permit to erect or display the sign. Permit costs vary by municipality and are included in this estimate. If you decide to, or have the ability to, place two signs on your store, your sign costs will be higher than our high estimate.

NOTE II Advertising costs include pre-opening, opening, grand opening and the first three months of operation. Advertising costs also include the cost associated with printing in-store handouts.

NOTE 12 Retail fixtures include custom display fixtures that you may have built locally to our specifications or purchase directly from our approved suppliers. Wooden fixtures include a library unit, binocular case, seed bag stands, suet and seed stands, hummingbird arbor and wooden sales counter. Other standard fixtures include slatwall, decorative trim, doonnats, TV/VCR and stereo CD player and speakers. Vendor costs may vary.

NOTE 13 The inventory items generally include birdseed, birdlccders and gift items. Our estimates include merchandise and freight. The cost will vary according to the season, the length of time between birdseed deliveries and the size of the showroom.

 

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NOTE 14

The Gift Card Program is mandatory. You will incur a Gift Card Fee when vou sign and return the Authorization and Gift Card Participation Agreement, which you must do prior to opening Store for husiness. A conv of the Authorization and Gift Card Participation Agreement is

 

 

 

 

 

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NOTE 44�

attached as Exhibit F to the Disclosure Document. The estimate covers your purchase of 50 sift cards, including gift card holders, as well as display signage and a banner. Additionally, if vou are acquiring franchise rights for an existing Store or renewing franchise rights for your Store, vou mav incur expenses related to a hardware upgrade at the Store (i.e.. a new credit card terminal). In this case, you will pay a Gift Card Fee of $145 to $945, depending on the type of hardware currently installed at the Store. See Item 5 for more information on these fees.

_You must pay for licenses from local authorities under local or state statutes, utility deposits, miscellaneous supplies and wages for your employees for services performed before you open. This expense category reflects expenses for giveaways, labels, internet set up, gift cards, office

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expenditures that'' Mandatory Participants in the Daily Savings Club* Customer Loyalty Program-mttst-make for items like DSC Cards^cuslomer-application forms^-fl-Point-of-Ssle software-upgrado (if applicable),-and display signage, all at a oosl of $ 125 to $225 (depending on-whether-the -Store-uses -a-cash ■■ register- or-Point-of-Sale-system). (See Item 5 for more information on the Daily Savings Club_t Customer Loyally Program and Gift Card Program.)

-16 This estimates your initial start-up expenses, including payroll costs. ITiese figures are estimates and we cannot guarantee that you will not incur additional expenses in starting your store. Your costs will depend on factors such as: _how closely you follow our methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market; the prevailing wage rate; competition; and the sales level reached during the initial period.

-17 For certain estimated expenses (rent deposit, first month''s rent, leasehold improvements, signs, retail fixtures, opening inventory, miscellaneous expenses and working capital) the low end of the range reflects a typical 1400 sq. ft. store and the high end of the range reflects a typical 1800 sq. ft. store. If the size of your store will differ from these models, you should adjust your estimate accordingly. Additionally, you may choose to purchase items such as a backroom microwave, copier, refrigerator or other items of convenience that are not necessary to operate your store. 1 Tiesc items are not included in the start-up expenses, Vendor costs may vary,

We rely on our more than 20 years of experience and our franchisees'' experience, as well as industry trade data, to compile these estimates. You should review these figures carefully with a business advisor, accountant or attorney before making any decision to purchase the franchise. There may be additional expenses associated with the opening and operation of your store that wc are not able to identify at this lime.