What are the specific obligations of a Brueggers Bagels franchisee regarding pre-opening purchases and leases, as detailed in Item 9, and how do these relate to the estimated costs outlined in Item 7?

Lease. If you lease the site for your Bakery, you must submit the proposed lease to us for approval before you sign it. We may require the Landlord to sign an agreement with us providing us certain rights. We will provide a template of this agreement when your site is approved. See Item 11 under the heading "Site Selection" for more details.

Design and Construction. For your first two Bakeries, you must engage an architect from our approved list to prepare preliminary and final architectural drawings and specifications consistent with our representative plans for a Bakery. In addition, for your first two Bakeries, you must use a general contractor from our approved list or receive our written approval of your general contractor. After your second Bakery is open and operational, you can choose your own architect and general contractor, but we must approve the final drawings and specifications before you begin the permitting process.

Technology Suite. Under the Franchise Agreement, you must subscribe to and install an approved technology suite of computer hardware, software and other technology components for the Bakery. We do not require a specific system, but your system must meet industry standards and be approved by us.

• (6) This estimate includes both exterior and interior signage.
• (7) This estimate includes the equipment typically needed for a Licensed Bakery, including foodservice equipment and smallwares.
• (8) This estimate is to allow for atypical site conditions or restrictions that you may encounter in a host facility.
• (9) This estimate is for the current Approved Software and hardware for a Bakery. See Items 6 and 11 for additional information on the Technology Suite.
• (10) This estimate is for inventory and supplies in quantities typically sufficient for the first week of operations operation of a Licensed Bakery.
• (11) This estimate is for the first year's premiums for insurance meeting our current requirements. Insurance costs will vary depending upon the size and location of the Bakery, your claims history, and other factors. See Item 6 and Item 8 for further information about your obligations with respect to insurance.
• (12) Some utility companies may require you to provide deposits or pay installation charges for utility services, including electrical, gas, water, sanitation, and telephone service. Local, municipal, county and state regulation may require that you obtain licenses and permits to operate your Bakery.
• (13) We strongly recommend that you engage the services of an attorney and/or accountant to assist you in evaluating this franchise offering. You may also wish to use an attorney to assist you in lease negotiations and/or to form an entity to own the franchise. This item is the estimated cost of basic legal and accounting services.
• (15) Within 120 days before your first Bakery opens for business, you (or your approved Operator), your manager, and your baker must complete our management training program to our satisfaction. This is an estimate of the cost of your and your trainees' lodging, meals, travel expenses, wages and uniforms (Bruegger's Designated Logo Manager shirt, blue jeans and certified slip resistant shoes). Please see Item 11 for further details on training.
• (16) This is an estimate of the additional funds you will need during the initial period of operation, which we define as three months from the opening of the Bakery. The estimate includes items such as rent, payroll costs, food costs, utilities, licenses and permits. The estimate does not include royalties, Marketing Contributions, or any compensation that you may choose to pay yourself. We relied on the experience of the company-owned Bakeries in formulating the estimate of additional funds.