What does the estimated initial investment chart in the Moes Southwest Grill FDD cover?

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Explanatory Notes:

The chart above provides an estimate of your initial investment for one Restaurant. The chart should be read in conjunction with the following notes. The chart includes estimated expenses for Restaurants located in in-line, endcap, and freestanding retail plaza spaces.

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 Restaurant.

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

• 1. Initial Franchise Fee. See Item 5.
• Construction and Build Out Costs. This estimate includes fees paid to a general contractor you engage to build out the Restaurant to meet our Standards. 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.

We have included an estimate for an in-line or endcap location and an estimate for a freestanding building. For a freestanding building, the construction costs include additional costs associated with "ground-up" construction (e.g., exterior shell, site work, parking lots, and lighting). The low estimate assumes the developer will supply all sitework beginning five feet outside of the building's walls. The high estimate assumes you will be responsible for both constructing the building and performing the sitework.

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• 1. On-Site Training and Assistance Fee. For your fourth and subsequent Restaurants (including Restaurants operated by your affiliates), if we, in our sole discretion, provide on-site training or assistance (at your request or because we determine such assistance is necessary), you must pay us our then-current On-Site Training and Assistance Fee (currently, $500 per trainer per day, plus their travel and living expenses). The low estimate assumes you will not need on-site assistance for such additional Restaurants. The high estimate includes the cost of three of our trainers traveling to provide 13 days of such on-site training and assistance, including their estimated travel and living expenses (estimated for each trainer to be $250 to $300 per day of hotel and living expenses and a $300 to $500 flight expense).
• 1. Opening Inventory. You must purchase an opening inventory of food and paper products, which will vary in cost based on the size, location, and projected sales of your Restaurant.
• 1. Additional Funds 3 Months. This estimates the additional funds you may need to cover expenses you will incur before your Restaurant opens and in its first three months of operation. These expenses may include, without limitation, employee salaries, wages, and benefits, payroll taxes (including payroll to cover the preopening training period for your staff), Royalty Fees, Advertising Contributions, additional advertising expenses, additional inventory, miscellaneous supplies and equipment, rent, bank charges, state tax and license fees, deposits, prepaid expenses, and other miscellaneous items. We have based these figures on our experience franchising Restaurants and our affiliate's experience opening and operating Restaurants. You may incur other categories of expenses or expenses in excess of this estimate.

1. Total Initial Investment. These figures are based on our experience franchising Restaurants and our affiliate's experience opening and operating Restaurants. Your actual investment and expenditures and initial cash outlay may vary from the amounts shown if you choose to purchase your Restaurant, if you choose to build a larger or smaller Restaurant than our standard design, or if your Restaurant is located in an expensive market. Restaurants located in non-traditional venues like office buildings, hospitals, stadiums or university food service facilities will likely experience lower initial investment expenditures than Restaurants in traditional locations like malls or strip centers.

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We may require you to pay these amounts to us or the Ad Fund for us to spend in accordance with a grand opening advertising plan that we designate or approve.

Legal and Accounting Fees.

This estimate includes the cost of legal and accounting fees that you may incur in establishing your business.

Such expenses may include fees payable to attorneys and accountants that you will need to use for the review of this Disclosure Document and the related agreements, as well as for entity formation and lease negotiation.

Insurance.

You must obtain and maintain during the term of your Franchise Agreement, at your expense, a comprehensive business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, workers' compensation, employment practices liability, cyber liability, and (if you serve alcohol) dram shop liability insurance.

The types and minimum amounts of insurance coverage that we currently require are described in Section 13.2 of the Franchise Agreement but are subject to change.

We may obtain a master insurance policy on behalf of the System for certain types of coverage and require you to pay all or a portion of your proportionate share of coverage under the master policy to us or our Approved Supplier.

This figure estimates the cost of your insurance premiums for your first year of operation based on our minimum requirements.

Your cost of insurance will vary depending on your Restaurant location, the claims experience of commercial businesses in your area, and your prior insurance claim experience.

You should be aware that this cost may increase in the future if we exercise our right to require you to obtain insurance with higher policy limits.

Misc.

Opening Costs/ Office Supplies.

This includes office supplies and other miscellaneous opening expenses, such as utility costs, business licenses and permits, opening assistance, and the cost of training your employees.

Security Deposits.

This estimate includes the cost of deposit expenses to obtain utility services, which includes deposits to initiate telephone, gas, electricity, water, and other services.

These costs will vary due to municipality requirements, local provider requirements, and your creditworthiness.

These deposits are generally refundable depending on the provider's policies.

This estimate does not include any security deposit under any lease for the Restaurant.

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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 back-lite channel letters of the sign and other specifications as we require.

Computer System.

You must purchase, lease and/or license and install at the Restaurant 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 back office PC, one monitor, one back office multi-function printer, between one and four POS System terminals, one firewall device, a dedicated iPad® or Windows® tablet/computer, 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.

The high estimate includes drive-thru timer and related equipment.

You may incur additional expenses if you require additional equipment.

You are required to purchase training software from a vendor that we designate.

Smallwares.

This estimate includes the cost of purchasing cooking utensils cutlery, small equipment, other smallwares, and other tools necessary to operate the Restaurant.

TV/Music.

We may require you to install televisions and audio equipment in the Restaurant and to enter into subscriptions for television and audio services.

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 Restaurant.

Your costs will vary depending upon the location of the Restaurant, its condition, and the need for additional designs, plans, and drawings, if applicable.

Rent.

The figures in the table reflect our estimates for leasing the Restaurant premises and include only one month of rent.

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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 $72,000, which is approximately the average tenant improvement allowance that franchisees have reported to us and our affiliates for similar units. 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 Restaurant'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. Your actual costs will vary depending on a number of factors including, without limitation, building codes and health requirements of the state where your Restaurant is located.

These amounts do not include the costs of any owned, hired or leased delivery motor vehicles that you may utilize in the operation of the Restaurant. If you offer delivery and catering services under the terms of the Franchise Agreement, you may need to purchase at least one branded catering vehicle equipped per our specifications, which will cost approximately $25,000 to $35,000 if purchased, or $500 to $700 per month if leased, although leased costs may vary significantly.

• 1. Millwork. You will incur expenses for millwork at the Restaurant, which may include the cost of purchasing cabinets and counters from Approved Suppliers and installing them in the Restaurant.
• 1. Furniture. You must purchase from Approved Suppliers furniture that meets our Standards, such as tables, chairs, and office furniture.

Menu Board, Graphics, and Interior Signage.

This estimate includes the cost of purchasing digital and/or static menu boards and interior signage from Approved Suppliers.

The cost will vary based on the size of your Restaurant.

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 back-lite channel letters of the sign and other specifications as we require.

Computer System.

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These deposits are generally refundable depending on the provider's policies.

This estimate does not include any security deposit under any lease for the Restaurant.

1. Management Training Fees and Expenses.

Management Training Program Fee. If we provide the Management Training Program to you for

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 41–47)