What factors can affect the actual costs of starting a Bojangles Express Restaurant?

ing our training program.

4 Upfitting costs. The costs for upfitting an existing facility to accommodate a Bojangles Express Restaurant will vary depending on several factors, including whether an existing food or deli type facility is being converted, whether a drive-thru window is being added to the facility if none exists, the square footage and dimensions of the Bojangles Express Restaurant, which may vary from approximately 800 square feet to 3,800 square feet, whether a seating addition is added, the size required for the kitchen depending on the menu format adopted for the Bojangles Express Restaurant and the existence of adequate hood systems and HVAC. In some cases, part of the upfitting cost may be paid by the landlord with the expectation of increased rents based upon a percentage of sales.

5 Equipment, furniture, signage and fixtures. You must purchase or lease certain items of equipment including kitchen and serving line equipment, point of sale system and related software, technology equipment, components and software, a decor package, refrigeration and installation, point of sale materials, a sound system, a safe, digital interior and drive-thru (if required) menu boards, miscellaneous smallwares and equipment and signage. The equipment package required for a Bojangles Express Restaurant will vary depending on factors, including the presence of existing food service or deli type facilities, the square footage and anticipated volumes of the Bojangles Express Restaurant, the menu format adopted for the Bojangles Express Restaurant and the addition of a drive-thru window. We require that for your first Bojangles Restaurant you pay in full for the equipment package and avoid equipment financing. We may, at our option, extend this requirement for additional Restaurants that you develop.

6 Initial inventory. The estimate covers the initial inventory of products, including food and paper products, and cleaning, office and general supplies for the opening of the Restaurant.

7 Utility deposits and business licenses. Generally, you will need to submit deposits for utilities. The amount of the deposits will vary depending upon the practices of the utility companies. Generally, these deposits are refundable under the utility company's terms. The locality in which you place your Restaurant may also require a business license which may require you to pay a fee. There may also be impact fees or other like development fees charged by the municipal authority or utility company.

8 Additional funds (3 months initial phase). You will need capital to support on-going and miscellaneous expenses to the extent these costs are not covered by sales revenue. New businesses often generate a negative cash flow for some period of time. These figures are an estimate of the additional funds that you may require for operating expenses during the initial three months of business. They include payroll, taxes, insurance, food, paper, supplies, utilities, point of sale system maintenance and support fees, licenses and permits, bank charges and repair and maintenance expenses. They do not include advertising or royalty fee payments made to us. They also do not include real estate or leasehold costs. These figures

are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your costs will depend on factors such as: the size of your Bojangles Express Restaurant; how closely you follow our methods and procedures; your management skill, experience and business acumen; financing costs; local economic conditions; the local market for restaurants; the prevailing wage rate; competition; and the sales level reached during the initial period.

9 Real estate acquisition or leasehold costs. We cannot estimate your initial investment for acquiring or leasing real estate for a Bojangles Express Restaurant as that cost varies based on multiple factors. If you currently own the building in which a Bojangles Express Restaurant is placed, you will not incur any additional rental costs. If you lease space within a facility owned by a third party landlord your monthly rental will vary and may require percentage rent based on Restaurant Gross Sales. The cost of renovation of the facility for inclusion of the Bojangles Express Restaurant in some cases may be paid in whole or in part by the owner of the facility, which will generally increase the amount of rent required. If utilities, taxes and insurance for casualty to the facility are included within the rent, the rents may also be higher than the amounts shown. Typical retail rents vary within different markets, depending on a variety of factors, including, geographic location, type of venue, build to suit costs or landlord passthroughs of various development costs, which can all have an impact on the rental rate. Pre-opening rent figures will vary and can be paid for a certain number of months before being open to the public. For example, if preopening rent is required for three months prior to opening to the public, it may range from approximately $12,000 to $27,000 or more, depending on your rental rate and negotiated terms impacting your rental rate.

10 Total. We relied on our affiliate's experience in operating Bojangles Express Restaurants and outside sources of consultation to derive our estimates for these additional funds.

Source: Item 9 — Initial inventory. The estimate covers initial inventory of products, including food and paper products, and cleaning, office and general supplies for the opening of the Restaurant. (FDD pages 27–30)