What is the required commercial general liability limit per occurrence for a Carbones Pizzeria franchise?

• (1) None of these amounts are refundable. Other than the initial franchise fee these are estimates only. Actual amounts could be more or less than those noted.
• (2) See Item 5 for the conditions under which this fee may be waived.

• (3) You must obtain the land and building for your Restaurant. We recommend leasing property for your Restaurant. Our estimate for improvements assumes you will lease a "vanilla shell" or "as is" space, which, at a minimum, includes the required areas for the Restaurant, demised exterior walls, HVAC, roof, and utilities stubbed to the premises sufficient for the Restaurant. Costs will vary in relation to the physical size and location of the Restaurant. The amount of your leasehold improvements will vary based on existing conditions, size, design, including the availability and prices of labor and materials. You should carefully investigate all of these costs in the area where you wish to establish your Restaurant. In addition, we assumed the general contractor will include permitting fees in the construction costs. The estimates assumes standard tenant improvements within a structure, designed for commercial use, and excludes items such as structural modifications, site work, energy studies, surveys and/or exterior improvements.
• (4) The typical franchise restaurant for full service, which can include a bar, is 2,500 to 4,000 square feet, for fast casual 2,000 to 3,000 square feet (40-60 seats), and for express 1,100- 1,300 square feet. Rent is estimated to be between $30,000 to $75,000 per year depending on factors such as size, condition and location of the leased premises. The amounts above include your security deposit and the first 3 months of operation after opening.
• (5) These estimates are for furniture, fixtures, equipment and smallware's depend on various factors, including the equipment you select for installation (whether it is used or new), the use of the existing space before you took it over (which will affect necessary infrastructure for power), size of your kitchen operations, number of ovens you choose to install, and size of model you have chosen to operate.
• (6) Security deposits, utility costs, and payment of the first year insurance premiums upon placement. See Item 8.
• (7) This is payable to vendors including vendors distributing M & T Pizza supplies.
• (8) This estimates your initial start-up expenses or "working capital." These expenses do not include payroll costs as employee compensation and benefits vary greatly depending upon your location. 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 how much you follow our methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market for the prevailing wage rate; competition; and the sales level reached during the initial period. These estimates include a monthly fee of between $300 to $500 for the point-of sale. We relied on our 50 plus years' experience in the pizza restaurant business to compile these estimates.
• (9) Your actual investment could be different from our estimates. Neither we nor our affiliates offer financing for any part of the initial investment. (See Item 10). The availability and terms of financing will depend on factors like the availability of financing generally, your creditworthiness, your relationship with local banks, and any additional collateral you may offer to a lender to secure the loan. Our estimates do not include any finance charges, interest or debt service obligations. You should have additional funds available to you to fund your operations. Your actual expenses of establishing and operating your Restaurant

could vary significantly from these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the Franchise.

ITEM 8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Because of the unique character of Carbone's pizza, you may only purchase from our approved suppliers various items including all food ingredients in the production of pizzas. The reason for the requirement is that the recipes for these products are unique and original, and it is in your interest and the interest of other franchisees and of M & T Pizza that the taste, texture and other qualities of these products be as consistent as possible. The grant or revocation of approval for a particular supplier will be communicated directly to you. Revocation will generally only occur upon the failure of the supplier to meet our standards. If you would like us to consider approving a supplier or an alternative item that we have not approved, or for which we have not revoked our approval, you must provide us with all information we request regarding the supplier or item. We will then have 30 days from the date you provide us the information to consider the supplier. We do not make our criteria available for approving suppliers or items. We do not charge a fee for our investigation or approval. We will not consider approving a supplier or item for which we only have a single supplier or item.

We have the right to designate a single source or sources from whom you must purchase any required products and services, and we and/or our affiliates may be that single source or one or more of the sources. We and our affiliates may derive revenue from your purchases or leases of goods, services, supplies, fixtures, equipment, inventory, products and other items from our suppliers. We and our affiliates may receive rebates from various suppliers based upon franchisee purchases from the suppliers. These rebates may be based on a flat amount or percentage of franchisee purchases. Currently, these rebates range from $1 to $10 per case purchased depending upon the item purchased to 1-7% of the amount paid by the franchisee for the product, depending on the product. Our affiliate also receives a flat amount from one supplier to our franchise system. During our fiscal year ended October 31, 2024, our affiliate received $159,266 in revenue from rebates paid to it based on franchisee purchases, of which $30,000 was contributed to our Advertising Fund. This information is taken from our affiliate's internal financial statements.

We have sole suppliers for pizza and spaghetti sauce packets, certain seasonings, frozen doughballs, pizza sausage and all products or other items that are branded with our name or trademarks. Additionally, you may only use our sole approved design firm for creating and publishing advertising for your Restaurant.

All items to be purchased by you in the operation of your Restaurant, including ingredients, food stuffs, other food items, apparel, pizza boxes and other packaging, linens, flatware, supplies, furnishings, fixtures, insurance, point of sale system and other miscellaneous items must meet our standards as we may change them from time to time. Such standards typically relate to the quality and appearance of products so as to promote uniformity in all franchised restaurants. Any changes in the standards will be communicated to you. You may not deviate from the specific ingredients, or the recipes for the items you sell unless we otherwise approve those changes.

You must carry the types and amounts of insurance we specify and you must name us an additional incurred (other than the workers compensation policy), and provide us 30 days notice before any change,

cancellation or termination of any policy. You must carry the following policies and minimum amounts of coverages:

| Commercial General Liability |  $1,000,000 limit per occurrence  $2,000,000 aggregate |

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 12–13)