What factors can cause the initial investment costs to vary for an Auntie Annes franchise?

above are estimates of a franchisee's total initial investment in one Shop. These charts do not include an estimate for the cost of opening or operating an SRU, which is an optional add-on that may be offered after you have operated your Shop. The charts should be read in conjunction with the following notes.

You should review this information, including the footnotes, carefully, conduct your own investigation and seek the help of qualified advisors before making any decision about an initial investment in a Shop.

None of these fees or payments are refundable unless otherwise noted below.

• 1. Initial Franchise Fee. See Item 5. For Co-Branded Shops, the Initial Franchise Fee estimate includes both the Initial Franchise Fee paid to us ($35,500) and the initial franchise fee paid, as applicable, to Cinnabon under the Cinnabon® Franchise Agreement for the right to operate a Cinnabon® franchise ($30,500) or to Jamba under the Jamba® Franchise Agreement for the right to operate a Jamba® franchise ($35,500).
• 1. Construction and Build Out Costs. This estimate includes fees paid to a general contractor you engage to build out the Shop to meet our Standards (and for a Co-Branded Shop, the standards of the Co-Branded Franchisor too). Leasehold improvements include but are not limited to HVAC, electrical, carpentry, floor covering, and painting. The cost of a general contractor will vary widely depending on the size and condition of the premises, whether or not there are any existing and comparable leasehold improvements in the premises, the extent and quality of improvements you desire over and above our minimum requirements, your landlord's cash contribution to the cost of the improvements, and the local costs of material and labor. In certain major metropolitan markets such as Boston, Chicago, New York, Los Angeles, San Francisco, Seattle, and Washington, D.C., costs could be significantly higher than the estimates provided here due to local market rates for materials and labor.

For a Jamba Co-Branded Shop, the estimate is based on an endcap or free-standing location with a drive-thru. This estimate does not include leasehold improvements for new free-standing buildings with a drive-thru, as the costs for this format may vary significantly. For a Cinnabon Co-Branded Shop, the estimate is based on a mall or streetside location.

You may be able to negotiate tenant improvement allowances from your landlord. The estimate is presented net of estimated tenant improvement allowances. For the low estimate, we estimated a tenant improvement allowance of $2,500, which is approximately the average tenant improvement allowance that our franchisees have reported to us in recent years. For the high estimate, we assumed that a tenant improvement allowance was not available.

• 1. Permitting. This estimate includes the cost of acquiring construction permits, including permit fees. Your costs will vary depending upon your Shop's location. In some markets, the costs of required permits may significantly exceed our estimates.
• 1. Equipment Package. You must purchase or lease from an Approved Supplier certain equipment (like kitchen equipment) and machinery that complies with our Standards (and for a Co-Branded Shop, the standards of the Co-Branded Franchisor too). Your actual

• costs will vary depending on a number of factors including, without limitation, building codes and health requirements of the state where your Shop is located.
• 1. Millwork. You will incur expenses for millwork at the Shop, which may include the cost of purchasing cabinets and counters from Approved Suppliers and installing them in the Shop.
• 1. Furniture. You must purchase from Approved Suppliers furniture that meets our Standards, such as tables, chairs, and office furniture.
• 1. Menu Board, Graphics, and Interior Signage. This estimate includes the cost of purchasing a digital menu board and interior signage from Approved Suppliers. The cost will vary based on the size of your Shop. A digital menu board is required for a Full Shop. A static menu board is currently acceptable for a Concession Shop. Our requirements and the related costs are subject to change.
• 1. Exterior Signage. You must purchase exterior signage from Approved Suppliers. The cost of your exterior sign will vary depending on the size, color, quantity, and backlit channel letters of the sign and other specifications as we require. The cost of the signage for a kiosk could be as high as $18,000 because of the need for signs on multiple sides of the kiosk.
• 1. Computer System. You must purchase, lease, and/or license and install at the Shop the POS System, computer systems, mobile hardware, software, online ordering platform, associated computer hardware, telephone lines, network connections, communications equipment, high speed internet access (e.g. DSL or cable), credit card, gift card and loyalty card processing equipment, and other equipment that we require from time to time (collectively, the "Computer System"). The Computer System currently includes a backoffice PC, one monitor, one back-office multi-function printer, between one and four POS System terminals for a Full Shop (between one and two POS System terminals for a Concession Shop), one firewall device, a dedicated iPad® or Windows® tablet/computer (two tablets if you operate a Concession Shop), and one POS System server in addition to other related software, phone and network connections, and equipment. The estimate includes the cost of purchasing the POS System from our designated Approved Supplier under the CapEx Program. You may also be required to purchase training software training from a vendor that we designate. For Co-Branded Shops, the Computer System that we require meets both our and the Co-Branded Franchisor's standards.
• 1. Smallwares. This estimate includes the cost of purchasing cooking utensils, supplies, other smallwares, and other tools necessary to operate the Shop.
• 1. Architect/Engineer. You must engage a licensed architect that we accept in writing and licensed engineers (e.g., mechanical, electrical, plumbing, or structural engineers) as necessary to draft standard construction plans for your Shop. Your costs will vary depending upon the location of the Shop, its condition, and the need for additional designs, plans, and drawings, if applicable.
• 1. Rent. The figures in the table reflect our estimates for leasing the Shop premises and include only one month of rent. A typical Full Shop occupies about 400 to 600 square feet of space and is located in a high-traffic or retail mall area. A typical Jamba Co-Branded Shop occupies about 1,650 square feet of space and includes a drive-thru. A typical

Cinnabon Co-Branded Shop occupies about 1,600 square feet of space and does not include a drive-thru.

Your rent will depend on the site's size, condition, visibility, accessibility, and location, local market conditions, demand for the premises among prospective lessees, and the arrangement you negotiate with the landlord. In certain major metropolitan markets such as Boston, Chicago, New York, Los Angeles, San Francisco, Seattle, and Washington, D.C. and in certain other high demand districts, prevailing market rents could be significantly higher than the high estimate. Because of the wide variation in lease rates for retail space, you should consult with a local commercial real estate broker to get a more accurate estimate of costs in your market.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 44–54)