Monicals_Pizza 2025 Franchise FAQ - FDD Ninja

Question 1

As of December 31, 2023, how many total Monicals Pizza restaurants were there, and how many were company-owned versus franchised?

Accepted Answer

Monical Pizza Corporation (the Company) comprises 59 and 60 restaurants located in central Illinois, Indiana and Wisconsin as of December 31, 2023 and 2022, respectively, with 32 and 31 Company-owned locations and 27 and 29 franchised locations as of December 31, 2023 and 2022, respectively.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 2

As of December 31, 2024, how many total Monicals Pizza restaurants were in operation?

Accepted Answer

[Item 20: OUTLETS AND FRANCHISE INFORMATION] ^\* This chart includes both franchised and company-owned Monical's Pizza restaurants. As of our last fiscal year ending December 31, 2024, there are a total of 58 Monical's Pizza restaurants in operation. Table No. 2 Source: Item 20 — OUTLETS AND FRANCHISE INFORMATION (FDD pages 42–44)

Question 3

What is the total estimated initial investment range for a Monicals Pizza franchise?

Accepted Answer

| Type of Expenditure              | Amount             | Method of Payment | When Due                             | To Whom Payment Is To Be Made |
|-------------------------------------|--------------------|----------------------|--------------------------------------|-------------------------------------|
| Franchise Fee1 | 25,000 45,000 | Cashier's Check | At Signing of Franchise Agreement | Us |
| Real Estate/Rent2 | 2,000 14,400 | As Arranged | Before Beginning Operations | Lessor |
| Utility Deposits3 | 500 4,000 | As Arranged | Before Beginning Operations | Utilities |
| Leasehold | 25,000 | As Arranged | Before Beginning | Suppliers |
| Improvements4 | 400,000 |  | Operations |  |
| Furniture, Fixtures & | 275,000 | As Arranged | Before Beginning | Suppliers |
| Equipment5 | 365,000 |  | Operations |  |
| Initial Inventory6 | 20,000 | As Arranged | Before Beginning | Approved Suppliers, |
|  | 25,000 |  | Operations | Suppliers |
| Office Equipment & | 5,000 | As Arranged | Before Beginning | Suppliers |
| Supplies7 | 6,000 |  | Operations |  |
| Insurance8 | 7,000 15,000 | As Arranged | Before Beginning Operations | Suppliers |
| Type of Expenditure           | Amount                     | Method of Payment | When Due                       | To Whom Payment Is To Be Made        |
|----------------------------------|----------------------------|----------------------|--------------------------------|--------------------------------------------|
| Signage9 | 15,000 30,000 | As Arranged | Before Beginning Operations | Suppliers |
| Training10 | 5,000 10,000 | As Arranged | Before Beginning Operations | Suppliers |
| Grand Opening11 | 5,000 10,000 | As Arranged | First 3 Months of Operation | Suppliers |
| Dues & Subscriptions12 | 50 2000 | As Arranged | Before Beginning Operations | Suppliers |
| Licenses & Permits13 | 1,000 3,000 | As Arranged | Before Beginning Operations | Licensing Authorities |
| Legal & Accounting14 | 2,000 4,000 | As Arranged | Before Beginning Operations | Attorney, Accountant |
| Additional Funds15 | 100,000 | As Arranged | As Necessary | Employees, Utilities, |
| (3 months) | 200,000 |  |  | Lessor, Suppliers |
| TOTAL |

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 12–17)

Question 4

What is the total projected number of new Monicals Pizza franchised outlets to open in the next fiscal year across all states listed?

Accepted Answer

| PROJECTED NEW FRANCHISED OUTLETS AS OF DECEMBER 31, 2024 |                                                             |                                                                |                                                                   |  |  |  |  |
|----------------------------------------------------------|-------------------------------------------------------------|----------------------------------------------------------------|-------------------------------------------------------------------|--|--|--|--|
| State | Franchise Agreements Signed But Outlet Not Yet Opened | Projected New Franchised Outlets In The Next Fiscal Year | Projected New Company Owned Outlets in the Next Fiscal Year |  |  |  |  |
| Illinois | 0 | 0 | 0 |  |  |  |  |
| Indiana1 | 0 | 1 | 0 |  |  |  |  |
| Missouri | 0 | 0 | 0 |  |  |  |  |
| Wisconsin | 0 | 0 | 0 |  |  |  |  |
| Total2 | 0 | 1 | 0 |  |  |  |  |

Source: Item 20 — OUTLETS AND FRANCHISE INFORMATION (FDD pages 42–44)

Question 5

How does the area of primary responsibility granted to a Monicals Pizza franchisee in Item 12 relate to the potential for competition from other channels of distribution or competitive brands, as also mentioned in Item 12?

Accepted Answer

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. The area that you will receive (called an "area of primary responsibility" or "area") will be described and depicted in a map attached to the Franchise Agreement. We determine the boundaries of the area based on a variety of factors, including population, median population age, proximity to competitors, median income characteristics, proximity to other franchisees and natural, physical or political boundaries.

We reserve the right to establish other franchised or company-owned businesses in your area under other systems using other trademarks at locations inside and outside of your area that may compete with your franchised restaurant. We also reserve the right to establish other channels of distribution for the sale of Monical's Pizza menu items, including Internet sales, catalog sales, telemarketing, or other direct marketing sales while using our principal trademark or any other of our trademarks. These activities may compete with your franchised restaurant. We will not compensate you for any sales made in your area through an alternate channel of distribution. You may not focus your marketing on customers located outside your area of primary responsibility, although you may collect e-mail addresses and cellphone numbers from guests of your restaurants for use in future e-mail or text marketing activities. Any sales you make of any products to be resold will be made only in strict compliance with the provisions of the Confidential Operations Manual. Unless you are advertising cooperatively with another franchisee, you may not advertise in any media primarily circulated within another franchisee's area of primary responsibility without our permission.

Question 6

What is the difference in initial franchise fee for Monicals Pizza between a new franchisee and a current employee, as detailed in Item 5?

Accepted Answer

You must pay a \$45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a \$30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent

franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of \$45,000, less \$1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of \$25,000. Otherwise, the franchise fee is uniform for all franchisees.

Question 7

How does the Monicals Pizza employee discount on the franchise fee in Item 5 relate to the estimated initial investment in Item 7?

Accepted Answer

You must pay a \$45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a \$30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent

franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of \$45,000, less \$1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of \$25,000. Otherwise, the franchise fee is uniform for all franchisees.

We will refund 50% of the franchise fee you paid if we terminate the franchise for your failure to perform your pre-opening obligations under the Franchise Agreement. We do not give refunds under other circumstances.

We previously offered a standard royalty of 2% to one franchisee who renewed the Franchise agreement. We are no longer offering discounted royalties.

### Development Agreement

You must pay a development fee if and when you sign a Development Agreement. The development fee is paid to us in a lump sum and is nonrefundable. The development fee is equal to \$15,000 for each Monical's restaurant you agree to develop in addition to the franchise fee.

Question 8

What are all the fees a Monicals Pizza franchisee must pay, considering both the initial fees in Item 5 and the other fees listed in Item 6?

Accepted Answer

[Item 5: INITIAL FEES]

### ITEM 5. INITIAL FEES

### Franchise Agreement

You must pay a $45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a $30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent

franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of $45,000, less $1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of $25,000. Otherwise, the franchise fee is uniform for all franchisees.

We will refund 50% of the franchise fee you paid if we terminate the franchise for your failure to perform your pre-opening obligations under the Franchise Agreement. We do not give refunds under other circumstances.

We previously offered a standard royalty of 2% to one franchisee who renewed the Franchise agreement. We are no longer offering discounted royalties.

### Development Agreement

You must pay a development fee if and when you sign a Development Agreement. The development fee is paid to us in a lump sum and is nonrefundable. The development fee is equal to $15,000 for each Monical's restaurant you agree to develop in addition to the franchise fee. The number of Monical's restaurants you will open will be determined before you sign the Development Agreement.

For example, assuming you agree to develop 5 Monical's restaurants, your initial investment will include a franchise fee of $30,000 for the first Monical's restaurant and a development fee of $60,000 for the remaining 4 Monical's restaurants to be developed in the future.

Each time you sign a Franchise Agreement for one of the additional Monical's restaurants, you must pay us $15,000 which is the balance of the discounted franchise fee for that franchise.

The development fee is calculated uniformly for all developers, but the amount of the actual fee will vary based on the number of Monical's restaurants you agree to develop.

---

[Item 6: OTHER FEES]

### ITEM 6. OTHER FEES

Except for the initial fees described in Item 5, you must pay the following fees to us or our affiliates during the term of the Franchise Agreement, if applicable:

| **Fees**          | **Amount**

Question 9

How does the initial franchise fee for Monicals Pizza (Item 5) compare to the potential costs of real estate and improvements (Item 7), and what financing options are available to cover these expenses, given the information in Item 10?

Accepted Answer

¹ Franchise Fee. The franchise fee and its refund policy are described in greater detail in ITEM 5. We do not finance any fee or any part of the initial investment. ² Real Estate/Rent. You must lease or otherwise provide a suitable facility for the operation of the franchised restaurant. Typically, the facility will range in size from approximately 3,000 to 4,000 square feet. It is difficult to estimate lease acquisition costs or acquisition costs because of the wide variation in these costs between various locations. Lease costs will vary based upon square footage, cost per square foot and required maintenance costs. The low estimate is based on an assumption that you will have to pay a security deposit equal to one month's rent to lease the facility and is based on leasing a facility of 3,000 square feet. The high estimate is based on the assumption that you will have to pay a security deposit equal to 2 month's rent to lease the facility and is based on leasing a facility of 4,000 square feet at a higher cost per square foot. Some lessors may refund the security deposit if you cancel the lease before you occupy the premises. The estimated range of costs in this category only includes your costs to enter into a lease for the facility. Estimated rental costs for 3 months are included with the category "Additional Funds" (See Note 15 below). ⁴Leasehold Improvements. To adapt a newly acquired facility for the operation of the franchised restaurant, it must be renovated. The cost of the leasehold improvements will vary depending on factors including the size and location of the facility, local wage rates and the cost of materials. The low estimate assumes that your landlord will provide the build-out. The amounts you pay for leasehold improvements are ### Franchise Agreement You must pay a $45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a $30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of $45,000, less $1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of $25,000. Otherwise, the franchise fee is uniform for all franchisees.

Question 10

What was the percentage change in operating revenues for Monicals Pizza from the prior year, as of December 31, 2023?

Accepted Answer

| Performance Measures: December 31, 2023 |  |  | December 31, 2022 |  |
|---|---|---|---|---|
| Operating Revenues | $46,821,183 |  |  | $46,155,468 |
| Change in Operating Revenues over Prior Year | 1.4% |  | -0.6% |  |
| Consolidated Net Income | $1,680,571 |  |  | $894,285 |
| Basic and Diluted Earnings per Share |  | $4.30 |  | $2.29 |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 11

What is the relationship between the initial franchise fee for Monicals Pizza outlined in Item 5 and the estimated total initial investment detailed in Item 7?

Accepted Answer

[Item 5: INITIAL FEES]

### ITEM 5. INITIAL FEES

### Franchise Agreement

You must pay a $45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a $30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent

franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of $45,000, less $1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of $25,000. Otherwise, the franchise fee is uniform for all franchisees.

We will refund 50% of the franchise fee you paid if we terminate the franchise for your failure to perform your pre-opening obligations under the Franchise Agreement. We do not give refunds under other circumstances.

We previously offered a standard royalty of 2% to one franchisee who renewed the Franchise agreement. We are no longer offering discounted royalties.

### Development Agreement

You must pay a development fee if and when you sign a Development Agreement. The development fee is paid to us in a lump sum and is nonrefundable. The development fee is equal to $15,000 for each Monical's restaurant you agree to develop in addition to the franchise fee. The number of Monical's restaurants you will open will be determined before you sign the Development Agreement.

For example, assuming you agree to develop 5 Monical's restaurants, your initial investment will include a franchise fee of $30,000 for the first Monical's restaurant and a development fee of $60,000 for the remaining 4 Monical's restaurants to be developed in the future.

Each time you sign a Franchise Agreement for one of the additional Monical's restaurants, you must pay us $15,000 which is the balance of the discounted franchise fee for that franchise.

The development fee is calculated uniformly for all developers, but the amount of the actual fee will vary based on the number of Monical's restaurants you agree to develop.

---

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of Expenditure              | Amount             | Method of Payment | When Due                             | To Whom Payment Is To Be Made |
|-------------------------------------|--------------------|----------------------|--------------------------------------|-------------------------------------|
| Franchise Fee1 | 25,000 45,000 | Cashier's Check | At Signing of Franchise Agreement | Us |
| Real Estate/Rent2 | 2,000 14,400 | As Arranged | Before Beginning Operations | Lessor |
| Utility Deposits3 | 500 4,000 | As Arranged | Before Beginning Operations | Utilities |
| Leasehold | 25,000 | As Arranged | Before Beginning | Suppliers |
| Improvements4 | 400,000 |  | Operations |  |
| Furniture, Fixtures & | 275,000 | As Arranged | Before Beginning | Suppliers |
| Equipment5 | 365,000 |  | Operations |  |
| Initial Inventory6 | 20,000 | As Arranged | Before Beginning | Approved Suppliers, |
|  | 25,000 |  | Operations | Suppliers |
| Office Equipment & | 5,000 | As Arranged | Before Beginning | Suppliers |
| Supplies7 | 6,000 |  | Operations |  |
| Insurance8 | 7,000 15,000 | As Arranged | Before Beginning Operations | Suppliers |
| Type of Expenditure           | Amount                     | Method of Payment | When Due                       | To Whom Payment Is To Be Made        |
|----------------------------------|----------------------------|----------------------|--------------------------------|--------------------------------------------|
| Signage9 | 15,000 30,000 | As Arranged | Before Beginning Operations | Suppliers |
| Training10 | 5,000 10,000 | As Arranged | Before Beginning Operations | Suppliers |
| Grand Opening11 | 5,000 10,000 | As Arranged | First 3 Months of Operation | Suppliers |
| Dues & Subscriptions12 | 50 2000 | As Arranged | Before Beginning Operations | Suppliers |
| Licenses & Permits13 | 1,000 3,000 | As Arranged | Before Beginning Operations | Licensing Authorities |
| Legal & Accounting14 | 2,000 4,000 | As Arranged | Before Beginning Operations | Attorney, Accountant |
| Additional Funds15 | 100,000 | As Arranged | As Necessary | Employees, Utilities, |
| (3 months) | 200,000 |  |  | Lessor, Suppliers |
| TOTAL | $ 487,550 $ 1,133,400 |  |  |  |

---

| Type of Expenditure | Amount   | Method of Payment | When Due                              | Who You Have to Pay |
|---------------------|----------|----------------------|---------------------------------------|------------------------|
| Development Fee* | $60,000 | Cashier's Check | Upon Signing Development Agreement | Us |
| Franchise Fee | $30,000 | Cashier’s Check | Upon Signing 1st Franchise Agreement | Us |
|---|---|---|---|---|
| Other Expenditures* for | $462,550 | As Disclosed in | As Disclosed in | As Disclosed in |
| 1st business | to $1,088,400 | Preceding Table | Preceding Table | Preceding Table |
| TOTAL | $552,550 to $1,178,400 |  |  |  |

Question 12

What is the relationship between the initial franchise fee for a second Monicals Pizza franchise in Item 5 and the ongoing royalty fees outlined in Item 6?

Accepted Answer

You must pay a \$45,000 lump sum franchise fee when you sign the Franchise Agreement. You pay a \$30,000 lump sum franchise fee when you sign the Franchise Agreement for a second and subsequent

franchise. If you are a Monical's Pizza employee, you pay a lump sum franchise fee of \$45,000, less \$1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of \$25,000. Otherwise, the franchise fee is uniform for all franchisees.

We will refund 50% of the franchise fee you paid if we terminate the franchise for your failure to perform your pre-opening obligations under the Franchise Agreement.

Question 13

Under what circumstances must I combine advertising with other Monicals Pizza franchises?

Accepted Answer

Franchisor has the right, but not the obligation, to create a Cooperative Advertising program for the benefit of Monical's Restaurants located within a particular region. Franchisor has the right to collect and designate all or a portion of the Local Advertising to payments or contributions to Franchisor for the funding of a Cooperative Advertising program. Franchisor has the right to determine the composition of all geographic territories and market
areas for the implementation of each Cooperative Advertising program and to require that Franchisee participate in any Cooperative Advertising program established with respect to Franchisee's region. If a Cooperative Advertising program is implemented in a particular region, Franchisor has the right to administer the Cooperative Advertising program or to establish an advertising council of franchisees to administer the Cooperative Advertising program. Franchisee shall participate in the council according to the rules and procedures established by the council and Franchisee shall abide by the council's decisions. Should Franchisor establish a Cooperative Advertising program or programs with or without an advertising council, Franchisor has the right, but not the obligation, to change, dissolve or merge such program(s) and/or council(s) at any time.

Source: Item 12 — TERRITORY (FDD pages 27–28)

Question 14

Unless advertising cooperatively, under what conditions is a Monicals Pizza franchisee prohibited from advertising in media primarily circulated within another franchisee's area of primary responsibility?

Accepted Answer

Unless you are advertising cooperatively with another franchisee, you may not advertise in any media primarily circulated within another franchisee's area of primary responsibility without our permission.

Source: Item 12 — TERRITORY (FDD pages 27–28)

Question 15

During each 5-year renewal term for a Monicals Pizza franchise, what is the maximum amount a franchisee may be required to spend to bring their restaurant into compliance?

Accepted Answer

System

10.2.1 Franchisor has the right to change or modify the System from time to time including, without limitation, the adoption and use of new or modified Marks or copyrighted materials, and new or additional computer hardware, software, equipment, inventory, supplies or sales and marketing techniques. Franchisee shall promptly accept and implement any such changes in, or additions to, the System. Franchisee shall make such expenditures as such changes, additions or modifications in the System may reasonably require; provided, however, Franchisee shall not be required to implement or conform to any such changes, additions or modifications if the cost to do so would exceed (a) ONE DOLLAR (\$1.00) during the first (1st) year of the term of this Agreement; (b) FIFTY THOUSAND DOLLARS (\$50,000.00) in the aggregate during the initial term or during any one (1) renewal term of this Agreement (which amounts may be increased consistent with increases to the Consumer Price Index, [U.S. City Average, all items, 1982-84=100], as published by the United States Department of Labor, Bureau of Labor Statistics); or (c) ONE DOLLAR (\$1.00) during the final year of the term of this Agreement if Franchisee provides written notice of its intention not to operate a successor franchise. Any required expenditure for changes or upgrades to the System shall be in addition to expenditures for repairs and maintenance as required in Secti

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 16

For Monicals Pizza, is it acceptable for an employee to make promises about marketing support that are different from what's in the Disclosure Document?

Accepted Answer

DEVELOPER REPRESENTS AND ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR RELIED ON ANY GUARANTEE, EXPRESS OR IMPLIED, AS TO THE REVENUES, PROFITS OR LIKELIHOOD OF SUCCESS OF ANY MONICAL'S RESTAURANT TO BE DEVELOPED PURSUANT TO THIS DEVELOPMENT AGREEMENT. DEVELOPER ACKNOWLEDGES AND AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS BY FRANCHISOR OR ANYONE ON BEHALF OF FRANCHISOR THAT ARE NOT CONTAINED IN, OR ARE INCONSISTENT WITH, THE STATEMENTS MADE IN THE FRANCHISE DISCLOSURE DOCUMENT AND THIS DEVELOPMENT AGREEMENT.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 17

According to the addendum, what law governs the Monicals Pizza Area Development Agreement in the event of a conflict of laws with Illinois law?

Accepted Answer

e: |                                                                                 | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                         |     |

### FOR THE STATE OF HAWAII

|        |    | between Monical Pizza Corporation and                                              | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                        |
|--------|----|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 1. |  | In recognition of the requirements of the Hawaii Franchise Investment Law, Hawaii Revised Statutes, |
|  |  |  | Title 26, Chapter 482E et seq., the Area Development Agreement for Monical Pizza Corporation is amended as follows: |
|  |  | Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control. | The Hawaii Franchise Investment Law provides rights to you concerning non-renewal, |
|  |  |  | termination and transfer of the Area Development Agreement. If the Area Development |
|  |  |  | Agreement, and more specifically its Section 8, contains a provision that is inconsistent with |
|  | 2. |  | Each provision of this Addendum shall be effective only to the extent that the jurisdictional |
|  |  |  | requirements of the Hawaii Franchise Investment Law applicable to the provisions are met independently of this |
|  |  |  | Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said |
|  |  |  | Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. |
|        |    | understands and consents to be bound by all of its terms.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 18

According to Exhibit I of the Monicals Pizza Disclosure Document, what should be done if 'No' is answered to questions 7 through 10?

Accepted Answer

| 11.                  | If you have answered "Yes" to any of questions 7 through 10, please provide a full explanation of your answer in the following blank lines. (Attach additional pages, if necessary, and refer to them below.) If you have answered "No" to each of such questions, please leave the following lines blank. |                                  |      |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|------|
|                      |                                                                                                                                                                                                                                                                                                                  |                                  |      |
|                      |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 19

According to the Monicals Pizza FDD, what are the consequences if an employee makes a statement about training that is contrary to the Disclosure Document?

Accepted Answer

DEVELOPER ACKNOWLEDGES AND AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS BY FRANCHISOR OR ANYONE ON BEHALF OF FRANCHISOR THAT ARE NOT CONTAINED IN, OR ARE INCONSISTENT WITH, THE STATEMENTS MADE IN THE FRANCHISE DISCLOSURE DOCUMENT AND THIS DEVELOPMENT AGREEMENT.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 20

According to the Monicals Pizza FDD, can the franchisor assign the agreement to any assignee?

Accepted Answer

Landlord agrees that MONICAL PIZZA CORPORATION, or a Franchisee of MONICAL PIZZA CORPORATION selected by MONICAL PIZZA CORPORATION, shall have the right to receive an assignment of this Lease upon the transfer, termination or expiration of the Franchise Agreement between MONICAL PIZZA CORPORATION and Tenant.

Upon such transfer, termination or expiration of said Franchise Agreement, Landlord shall promptly execute an acknowledgment of and consent to the assignment of the Lease.

Any such assignment shall be acknowledged without payment of any assignment fee or similar charge and without a requirement for the payment of an additional security deposit or any increase in rent or other fees.

Landlord agrees that, before the effective date of any assignment of the lease to MONICAL PIZZA CORPORATION or its designee, Tenant shall be solely responsible for all obligations, debts and payments under the lease.

Tenant shall not be entitled to a return of its security deposit;

- 2.

Landlord shall provide MONICAL PIZZA CORPORATION, its Franchisee, or its agents, employees or contractors, full access to the Premises upon the expiration or termination of either the Lease or Franchise Agreement, for a period of fifteen days to de-identify and remove from the Premises any trademarked property, proprietary software, equipment, and any and all furniture and fixtures installed by the Tenant or installed in connection with the Lease.

MONICAL PIZZA CORPORATION, or an approved franchisee for the Premises, shall have the right, but not the obligation to repaint any portion of the interior of the Premises.

Landlord acknowledges that MONICAL PIZZA CORPORATION has a prior right, title and interest in and to any such trademarked property, proprietary software, equipment, and furniture and fixtures, notwithstanding any agreement between the Landlord and any lender of the Landlord with respect thereto.

- 3.

Landlord shall provide any written Notice of Default of Tenant to MONICAL PIZZA CORPORATION simultaneously with the delivery thereof to Tenant.

Such notice shall be delivered to MONICAL PIZZA CORPORATION in writing by overnight delivery by FedEx or other nationally recognized overnight courier.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 21

According to the Monicals Pizza FDD, what should I do if someone provides revenue projections outside of the FDD?

Accepted Answer

DEVELOPER REPRESENTS AND ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR RELIED ON ANY GUARANTEE, EXPRESS OR IMPLIED, AS TO THE REVENUES, PROFITS OR LIKELIHOOD OF SUCCESS OF ANY MONICAL'S RESTAURANT TO BE DEVELOPED PURSUANT TO THIS DEVELOPMENT AGREEMENT. DEVELOPER ACKNOWLEDGES AND AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS BY FRANCHISOR OR ANYONE ON BEHALF OF FRANCHISOR THAT ARE NOT CONTAINED IN, OR ARE INCONSISTENT WITH, THE STATEMENTS MADE IN THE FRANCHISE DISCLOSURE DOCUMENT AND THIS DEVELOPMENT AGREEMENT.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 22

According to Hawaii Franchise Investment Law, what happens if a provision in the Monicals Pizza Franchise Agreement is inconsistent with the law?

Accepted Answer

- THIS FRANCHISE WILL BE/HAVE BEEN FILED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF HAWAII.

FILING DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS OR A FINDING BY THE DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING.

- THE FRANCHISE INVESTMENT LAW MAKES IT UNLAWFUL TO OFFER OR SELL ANY FRANCHISE IN THIS STATE WITHOUT FIRST PROVIDING TO THE PROSPECTIVE FRANCHISEE, OR SUBFRANCHISOR, AT LEAST SEVEN DAYS PRIOR TO THE EXECUTION BY THE PROSPECTIVE FRANCHISEE, OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST SEVEN DAYS PRIOR TO THE PAYMENT OF ANY CONSIDERATION BY THE FRANCHISEE, OR SUBFRANCHISOR, WHICHEVER OCCURS FIRST, A COPY OF THE DISCLOSURE DOCUMENT , TOGETHER WITH A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE.

- THIS DISCLOSURE DOCUMENT CONTAINS A SUMMARY ONLY OF CERTAIN MATERIAL PROVISIONS OF THE FRANCHISE AGREEMENT AND THE CONTRACT OR AGREEMENT SHOULD BE REFERRED TO FOR A STATEMENT OF ALL RIGHTS, CONDITIONS, RESTRICTIONS AND OBLIGATIONS OF BOTH THE FRANCHISOR AND THE FRANCHISEE.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 23

According to the North Dakota Securities Commission addendum, what happens if the covenant not to compete in the Monicals Pizza Area Development Agreement is inconsistent with North Dakota law?

Accepted Answer

|        | between Monical Pizza Corporation and                                                  | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of The North Dakota Securities Commission, the following provisions contained in the Area Development Agreement are amended to be consistent with North Dakota law, including the North Dakota Franchise Investment Law, North Dakota Century Code Addendum, Chapter 51-19, §51-19-01 et seq.: |
|  | with North Dakota law, the covenant may not be enforceable. | Covenants not to compete upon termination or expiration of the Area Development Agreement are generally enforceable in the State of North Dakota in limited instances as provided by law. If the Agreement contains a covenant not to complete that is inconsistent |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 24

For Monicals Pizza, what action should I take if an employee made a statement about the franchise that contradicts the Disclosure Document?

Accepted Answer

## EXHIBIT I TO DISCLOSURE DOCUMENT

## FRANCHISEE DISCLOSURE QUESTIONNAIRE

As you know, MONICAL PIZZA CORPORATION and you are preparing to enter into a Franchise Agreement for the operation of a Franchised Restaurant. In this Franchisee Disclosure Questionnaire, MONICAL PIZZA CORPORATION will be referred to as "we" or "us." The purpose of this Questionnaire is to determine whether any statements or promises were made to you that we did not authorize and that may be untrue, inaccurate or misleading. Please review each of the following questions carefully and provide honest and complete responses to each question.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 25

Does this addendum apply if the jurisdictional requirements of Rhode Island law are not met independently of the addendum for Monicals Pizza?

Accepted Answer

|            | between Monical Pizza Corporation and                                                  | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                               |
|------------|----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of The Rhode Island Franchise Investment Act §19-28.1-14 the |
| Law: |  | following provision contained in the Area Development Agreement is amended to be consistent with Rhode Island |
|  | under this Act. | Sections 13.1 and 13.2 of the Area Development Agreement are amended to provide that restricting jurisdiction or venue to a forum outside the state of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable |
| 2. | Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Rhode Island Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 26

What is the annual interest rate applied to amounts due from the Developer to Franchisor for a Monicals Pizza franchise, or what is the alternative if the specified rate is not legally permissible?

Accepted Answer

Any amounts due from Developer to Franchisor shall accrue interest at a rate equal to eighteen percent (18%) per annum, or the maximum rate allowed by applicable law, from the date such payment is due until it is paid in full.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 27

When answering questions 7 through 10 in Item 23 for Monicals Pizza, what should be done if the space provided is insufficient?

Accepted Answer

| 1. | Have you received and personally reviewed MONICAL PIZZA CORPORATION Franchise Agreement and each exhibit, addendum and schedule attached to it? Yes No |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Do you understand all of the information contained in the Franchise Agreement and each exhibit and |
|  | schedule attached to it? |
|  | Yes |
|  | No |
|  | If "No", what parts of the Franchise Agreement do you not understand? (Attach additional pages, if |
|  | necessary.) |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 28

Does Monicals Pizza charge franchisees for general advice and guidance under normal circumstances?

Accepted Answer

Franchisor shall make a reasonable effort to discuss problems and offer general guidance to Franchisee by telephone, e-mail, facsimile, or other methods with respect to planning, opening and operating the Franchised Restaurant. However, Franchisee shall use its independent judgment to make all business decisions and should not rely solely upon any advice given or statements made by Franchisor. Franchisor shall not charge for this service, however, Franchisor retains the right to refuse to provide, or to charge a fee for, this service should Franchisor deem Franchisee to be utilizing this service too frequently or in an unintended manner. Franchisor's advice or guidance to Franchisee relative to prices for products and services that, in Franchisor's judgment, constitutes good business practice is based upon the experience of Franchisor and its franchisees in operating Monical's Restaurants and an analysis of costs and prices charged for competitive products and services. Franchisee shall have the sole right to determine the prices to be charged by the Franchised Restaurant.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 29

Concerning Monicals Pizza, what should I do if an employee made a statement about revenues or profits that was not in the FDD?

Accepted Answer

DEVELOPER REPRESENTS AND ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR RELIED ON ANY GUARANTEE, EXPRESS OR IMPLIED, AS TO THE REVENUES, PROFITS OR LIKELIHOOD OF SUCCESS OF ANY MONICAL'S RESTAURANT TO BE DEVELOPED PURSUANT TO THIS DEVELOPMENT AGREEMENT. DEVELOPER ACKNOWLEDGES AND AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS BY FRANCHISOR OR ANYONE ON BEHALF OF FRANCHISOR THAT ARE NOT CONTAINED IN, OR ARE INCONSISTENT WITH, THE STATEMENTS MADE IN THE FRANCHISE DISCLOSURE DOCUMENT AND THIS DEVELOPMENT AGREEMENT.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 30

What conditions must a Monicals Pizza franchisee meet to be reimbursed for defense costs related to the use of the Marks in Minnesota?

Accepted Answer

As required by the Minnesota Franchise Act, Minn. Stat. Sec. 80C.12(g), Franchisor will reimburse the Franchisee for any costs incurred by the Franchisee in the defense of the Franchisee's right to use the Marks, so long as the Franchisee was using the Marks in the manner authorized by Franchisor, and so long as Franchisor is timely notified of the claim and is given the right to manage the defense of the claim including the right to compromise, settle or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 31

What constitutes an acceptable reason for a Monicals Pizza franchisee to be unable to demonstrate that understatements of royalty fees resulted from inadvertent error?

Accepted Answer

- 16.2.1.10 submits to Franchisor on two (2) or more separate occasions at any time during the term of this Agreement and any renewals or extensions, any reports or other data, information or supporting records that understate any Royalty Fee or any other fees owed to Franchisor by more than three percent (3%) for any accounting period and Franchisee is unable to demonstrate that such understatements resulted from inadvertent error;

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 32

Is the covenant not to compete in Section 9.4 of the Monicals Pizza Area Development Agreement always enforceable under California law?

Accepted Answer

|  | Section 9.4 of the Area Development Agreement contains a covenant not to compete that |
|  | covenant may not be enforceable under California law. | extends beyond the expiration or termination of the Area Development Agreement; this |  |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 33

What is the dependency of a Monicals Pizza franchisee's successor franchise on compliance with the franchisor's then-current qualifications for a new franchisee?

Accepted Answer

- 4.2.8 Franchisee has complied with Franchisor's then-current qualifications for a new franchisee and has agreed in writing to comply with any training requirements Franchisor may determine necessary; and

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 34

Is a Monicals Pizza developer required to have employees sign a non-disclosure agreement if the developer wishes to disclose trade secrets or confidential information to them?

Accepted Answer

Except as hereinafter provided, Developer shall not, during the term of this Development Agreement or at any time thereafter, communicate, divulge or use for the benefit of any other person or entity, any Trade Secrets or other Confidential Information which may be communicated to Developer or of which Developer may learn by virtue of Developer's activities under this Development Agreement. Developer may divulge Trade Secrets and other Confidential Information only to such of its employees as deemed necessary by Developer. At Franchisor's request, Developer shall require its employees and any other person to whom Developer wishes to disclose any Trade Secrets or other Confidential Information to execute a nondisclosure agreement in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached to the Initial Franchise Agreement ("Nondisclosure and Non-Competition Agreement").

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 35

What is the effect of the addendum on the Monicals Pizza Area Development Agreement?

Accepted Answer

tle: |                                                                                 | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                         |     |

### FOR THE STATE OF HAWAII

|        |    | between Monical Pizza Corporation and                                              | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                        |
|--------|----|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 1. |  | In recognition of the requirements of the Hawaii Franchise Investment Law, Hawaii Revised Statutes, |
|  |  |  | Title 26, Chapter 482E et seq., the Area Development Agreement for Monical Pizza Corporation is amended as follows: |
|  |  | Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control. | The Hawaii Franchise Investment Law provides rights to you concerning non-renewal, |
|  |  |  | termination and transfer of the Area Development Agreement. If the Area Development |
|  |  |  | Agreement, and more specifically its Section 8, contains a provision that is inconsistent with |
|  | 2. |  | Each provision of this Addendum shall be effective only to the extent that the jurisdictional |
|  |  |  | requirements of the Hawaii Franchise Investment Law applicable to the provisions are met independently of this |
|  |  |  | Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said |
|  |  |  | Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. |
|        |    | understands and consents to be bound by all of its terms.                          | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and                                                                                                                                                                                                                                                                                                                                               |
|        |    | MONICAL PIZZA CORPORATION:                                                         | Developer:                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| By:    |    |                                                                                    | By:                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Title: |    |                                                                                    | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                      |

### FOR THE STATE OF ILLINOIS

|        | between Monical Pizza Corporation and                                            | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                        |
|--------|----------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. | Illinois law governs the Franchise Agreement. |  |
| 2. | agreement may provide for arbitration to take place outside of Illinois. | In conformance with Section 4 of the Illinois Franchise Disclosure Act, any provision in a franchise agreement that designates jurisdiction and venue in a forum outside of the State of Illinois is void. However, a franchise |
| 3. | with the Illinois Franchise Disclosure Act or any other law of Illinois is void. | Your rights upon Termination and Non-Renewal of an agreement are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act. In conformance with section 41 of the Illinois Franchise Disclosure Act, any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance |
| 4. | RENEWAL TERM) TO BRING YOUR RESTAURANT INTO COMPLIANCE. | IF THE FRANCHISOR DECIDES TO MAKE CHANGES TO ITS SYSTEM (SUCH AS NEW EQUIPMENT, FIXTURES, SOFTWARE AND/OR TRADEMARKS), YOU MAY BE REQUIRED TO SPEND UP TO \$50,000 DURING THE 5-YEAR TERM OF YOUR FRANCHISE AGREEMENT (AS WELL AS EACH 5-YEAR |
|  | understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and |
|  | MONICAL PIZZA CORPORATION: | Developer: |
| By: |  | By: |
| Title: |  | Title: |
### FOR THE STATE OF INDIANA

|        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and between Monical Pizza Corporation and                                                                                                                                                                                                                                                                                           |            |  |  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--|--|
| 1. | In recognition of the requirements of the Indiana Deceptive Franchise Practices Law, IC 23-2.2.7 and the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |  |  |  |
|  | Section 8 of the Area Development Agreement is amended to prohibit unlawful unilateral termination of a franchise unless there is a material violation of the Area Development Agreement and termination is not in bad faith. |  |  |  |
|  | Section 9.4 of the Area Development Agreement is amended subject to Indiana Code 23-2- 2.7-1(9) to provide that post-term non-competitor covenants shall have geographic limitation of the territory granted to Developer. |  |  |  |
|  | Section 11.3 of the Area Development Agreement is amended to provide that Developer will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Developer's reliance upon or use of procedures or products, which were required by Franchisor, if such procedures or products were utilized by Developer in the manner required by Franchisor. |  |  |  |
|  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict between the laws of Indiana and Illinois, the Indiana Franchise Disclosure Law and/or the Indiana Deceptive Franchise Practices Law will prevail. |  |  |  |
|  | Section 13.2 of the Area Development Agreement is amended to provide that Developer may commence litigation in Indiana for any cause of action under Indiana law. |  |  |  |
|  | Section 13.7 of the Area Development Agreement is amended to provide that arbitration between Franchisor and Developer, shall be conducted in Indiana or a site mutually agreed upon. |  |  |  |
| 2. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Indiana Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and understands and consents to be bound by all of its terms. MONICAL PIZZA CORPORATION: | Developer: |  |  |
| By: |  | By: |  |  |
| Title: |  | Title: |  |  |
### FOR THE STATE OF MARYLAND

|                   | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                     |
|-------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. |
| as follows: |  | Code Ann., Bus. Reg. §§14-201-14-233, the Area Development Agreement for Monical Pizza Corporation is amended |
|  |  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict of laws, the Maryland Franchise Registration and Disclosure Law will prevail. |
|  | Franchise Registration and Disclosure Law. | Any litigation between Developer and Franchisor may be instituted in any court of competent jurisdiction, including a court in the State of Maryland for claims arising under the Maryland |
|  | brought within 3 years after the grant of the franchise. | Any claims arising under the Maryland Franchise Registration and Disclosure Law must be |
| 2. | or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Maryland Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement |
|  | understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and |
|  | MONICAL PIZZA CORPORATION: | Developer: |
| By: |  | By: |
| Title: |  | Title: |
| between Monical Pizza Corporation and                                              | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. follows:                                                                     | In recognition of the Minnesota Franchise Law, Minn. Stat., Chapter 80C, §80C.01 through 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Commission of Securities, Minnesota Rule 2860.4400, et seq., the Area Development Agreement for Monical Pizza Corporation is amended as                                                                                                                                             |
|  days' notice of non-renewal of the Area Development Agreement.                | Section 8 of the Area Development Agreement is amended to state that with respect to franchises governed by the Minnesota Franchise Law, the Franchisor will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4 and 5, which require, except in certain specified cases, that a Developer be given 90 days' notice of termination (with 60 days to cure) and 180                                                                                                |
|  | Developer is not required to consent to liquidated damages because Minn. Rule 2860.44005 |
| prohibits requiring a Developer to consent to liquidated damages. |  |
|  giving rise to the claim.                                                     | Section 13.4 of the Area Development Agreement is amended to state that any claim concerning the Franchised Restaurant or this Development Agreement or any related agreement shall be barred unless an arbitration or an action for a claim that cannot be the subject of arbitration is commenced within three (3) years from the date on which Developer or Franchisor knew or should have known, in the exercise of reasonable diligence, of the facts |
|  litigation to be conducted outside Minnesota.                                 | Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit Developer from requiring In addition, nothing in the Disclosure Document or Area Development Agreement can abrogate or reduce any of Developer's rights as provided for in Minnesota Statutes, Chapter 80C, or Developer's rights to any procedure, forum or remedies provided for by the laws of the jurisdiction.                                                                                 |
| 2. or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Minnesota Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement                                                                                                                              |
| understands and consents to be bound by all of its terms.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 36

In the event of a conflict of laws, which law prevails according to the Maryland addendum for Monicals Pizza?

Accepted Answer

|                   | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                     |
|-------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. |
| as follows: |  | Code Ann., Bus. Reg. §§14-201-14-233, the Area Development Agreement for Monical Pizza Corporation is amended |
|  |  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict of laws, the Maryland Franchise Registration and Disclosure Law will prevail.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 37

In the event of a conflict of laws, which law prevails for the Monicals Pizza Area Development Agreement in Maryland?

Accepted Answer

|                   | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                     |
|-------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. |
| as follows: |  | Code Ann., Bus. Reg. §§14-201-14-233, the Area Development Agreement for Monical Pizza Corporation is amended |
|  |  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict of laws, the Maryland Franchise Registration and Disclosure Law will prevail. |
|  | Franchise Registration and Disclosure Law. | Any litigation between Developer and Franchisor may be instituted in any court of competent jurisdiction, including a court in the State of Maryland for claims arising under the Maryland |
|  | brought within 3 years after the grant of the franchise. | Any claims arising under the Maryland Franchise Registration and Disclosure Law must be |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 38

In the event of a conflict of laws regarding the Monicals Pizza Area Development Agreement in Washington, which provisions will prevail?

Accepted Answer

|                              | between Monical Pizza Corporation and                                                  | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                             |
|------------------------------|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Washington Franchise Investment Protection Act, |
| is amended as follows: |  | Washington Rev. Code §§19.100.010 – 19.100.940, the Area Development Agreement for Monical Pizza Corporation |
|  | Investment Protection Act will prevail. | Section 13.1 of the Area Development Agreement requires that the franchise be governed by Illinois Law; in the event of a conflict of laws, the provisions of the Washington Franchise |
|  | Washington. | Sections 13.2 and 13.7 of the Area Development Agreement require litigation or arbitration to be conducted in Illinois, the requirement shall not limit any rights Developer may have under the Washington Franchise Investment Protection Act to bring suit in the State of |
|  | not be enforceable. | Provisions as such as those that unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 39

In Exhibit I of the Monicals Pizza Disclosure Document, if 'Yes' is answered to any of questions 7 through 10, what action is required?

Accepted Answer

## EXHIBIT I TO DISCLOSURE DOCUMENT

## FRANCHISEE DISCLOSURE QUESTIONNAIRE

As you know, MONICAL PIZZA CORPORATION and you are preparing to enter into a Franchise Agreement for the operation of a Franchised Restaurant. In this Franchisee Disclosure Questionnaire, MONICAL PIZZA CORPORATION will be referred to as "we" or "us." The purpose of this Questionnaire is to determine whether any statements or promises were made to you that we did not authorize and that may be untrue, inaccurate or misleading. Please review each of the following questions carefully and provide honest and complete responses to each question.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 40

To what extent is each provision of the Addendum to the Monicals Pizza Area Development Agreement effective in Hawaii?

Accepted Answer

|        |    | between Monical Pizza Corporation and                                              | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                        |
|--------|----|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 1. |  | In recognition of the requirements of the Hawaii Franchise Investment Law, Hawaii Revised Statutes, |
|  |  |  | Title 26, Chapter 482E et seq., the Area Development Agreement for Monical Pizza Corporation is amended as follows: |
|  |  | Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control. | The Hawaii Franchise Investment Law provides rights to you concerning non-renewal, |
|  |  |  | termination and transfer of the Area Development Agreement. If the Area Development |
|  |  |  | Agreement, and more specifically its Section 8, contains a provision that is inconsistent with |
|  | 2. |  | Each provision of this Addendum shall be effective only to the extent that the jurisdictional |
|  |  |  | requirements of the Hawaii Franchise Investment Law applicable to the provisions are met independently of this |
|  |  |  | Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said |
|  |  |  | Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. |
|        |    | understands and consents to be bound by all of its terms.                          | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and                                                                                                                                                                                                                                                                                                                                               |
|        |    | MONICAL PIZZA CORPORATION:                                                         | Developer:                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| By:    |    |                                                                                    | By:                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Title: |    |                                                                                    | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                      |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 41

To what extent is each provision of the addendum effective for Monicals Pizza?

Accepted Answer

itle: |  | Title: |
### FOR THE STATE OF INDIANA

|        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and between Monical Pizza Corporation and                                                                                                                                                                                                                                                                                           |            |  |  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--|--|
| 1. | In recognition of the requirements of the Indiana Deceptive Franchise Practices Law, IC 23-2.2.7 and the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |  |  |  |
|  | Section 8 of the Area Development Agreement is amended to prohibit unlawful unilateral termination of a franchise unless there is a material violation of the Area Development Agreement and termination is not in bad faith. |  |  |  |
|  | Section 9.4 of the Area Development Agreement is amended subject to Indiana Code 23-2- 2.7-1(9) to provide that post-term non-competitor covenants shall have geographic limitation of the territory granted to Developer. |  |  |  |
|  | Section 11.3 of the Area Development Agreement is amended to provide that Developer will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Developer's reliance upon or use of procedures or products, which were required by Franchisor, if such procedures or products were utilized by Developer in the manner required by Franchisor. |  |  |  |
|  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict between the laws of Indiana and Illinois, the Indiana Franchise Disclosure Law and/or the Indiana Deceptive Franchise Practices Law will prevail. |  |  |  |
|  | Section 13.2 of the Area Development Agreement is amended to provide that Developer may commence litigation in Indiana for any cause of action under Indiana law. |  |  |  |
|  | Section 13.7 of the Area Development Agreement is amended to provide that arbitration between Franchisor and Developer, shall be conducted in Indiana or a site mutually agreed upon. |  |  |  |
| 2. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Indiana Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and understands and consents to be bound by all of its terms. MONICAL PIZZA CORPORATION: | Developer: |  |  |
| By: |  | By: |  |  |
| Title: |  | Title: |  |  |
### FOR THE STATE OF MARYLAND

|                   | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                     |
|-------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. |
| as follows: |  | Code Ann., Bus. Reg. §§14-201-14-233, the Area Development Agreement for Monical Pizza Corporation is amended |
|  |  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict of laws, the Maryland Franchise Registration and Disclosure Law will prevail. |
|  | Franchise Registration and Disclosure Law. | Any litigation between Developer and Franchisor may be instituted in any court of competent jurisdiction, including a court in the State of Maryland for claims arising under the Maryland |
|  | brought within 3 years after the grant of the franchise. | Any claims arising under the Maryland Franchise Registration and Disclosure Law must be |
| 2. | or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Maryland Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement |
|  | understands and consents to be bound by all of its terms. | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and |
|  | MONICAL PIZZA CORPORATION: | Developer: |
| By: |  | By: |
| Title: |  | Title: |
| between Monical Pizza Corporation and                                              | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. follows:                                                                     | In recognition of the Minnesota Franchise Law, Minn. Stat., Chapter 80C, §80C.01 through 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Commission of Securities, Minnesota Rule 2860.4400, et seq., the Area Development Agreement for Monical Pizza Corporation is amended as                                                                                                                                             |
|  days' notice of non-renewal of the Area Development Agreement.                | Section 8 of the Area Development Agreement is amended to state that with respect to franchises governed by the Minnesota Franchise Law, the Franchisor will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4 and 5, which require, except in certain specified cases, that a Developer be given 90 days' notice of termination (with 60 days to cure) and 180                                                                                                |
|  | Developer is not required to consent to liquidated damages because Minn. Rule 2860.44005 |
| prohibits requiring a Developer to consent to liquidated damages. |  |
|  giving rise to the claim.                                                     | Section 13.4 of the Area Development Agreement is amended to state that any claim concerning the Franchised Restaurant or this Development Agreement or any related agreement shall be barred unless an arbitration or an action for a claim that cannot be the subject of arbitration is commenced within three (3) years from the date on which Developer or Franchisor knew or should have known, in the exercise of reasonable diligence, of the facts |
|  litigation to be conducted outside Minnesota.                                 | Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit Developer from requiring In addition, nothing in the Disclosure Document or Area Development Agreement can abrogate or reduce any of Developer's rights as provided for in Minnesota Statutes, Chapter 80C, or Developer's rights to any procedure, forum or remedies provided for by the laws of the jurisdiction.                                                                                 |
| 2. or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Minnesota Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement                                                                                                                              |
| understands and consents to be bound by all of its terms.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 42

To what extent is each provision of the addendum effective regarding the Monicals Pizza Area Development Agreement in New York?

Accepted Answer

|        | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of New York's General Business Law, Article 33, §§680 through |
|  |  | 695, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |
|  |  | Section 7.1 of the Area Development Agreement is amended to provide that Franchisor will |
|  |  | not transfer and assign its rights and obligations under the Area Development Agreement |
|  |  | unless the transferee will be able to perform the Franchisor's obligations under the Area |
|  |  | Development Agreement, in Franchisor's good faith judgment, so long as it remains subject |
|  |  | to Article 33 of the General Business Law of the State of New York. |
|  |  | No provision in the Area Development Agreement shall be construed as requiring Developer |
|  | General Business Law of the State of New York. | to waive any right conferred upon the Developer by the provisions of Article 33 of the |
|  |  | Section 8 of the Area Development Agreement is amended to provide that the Developer may |
|  |  | terminate the Area Development Agreement on any grounds available by law. |
| 2. | or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional |
|  |  | requirements of the New York Law applicable to the provisions are met independently of this Addendum. To the extent |
|  |  | this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement |
|        | understands and consents to be bound by all of its terms.                    | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and                                                                                                                                                                                                                                                                                                                                                        |
|        | MONICAL PIZZA CORPORATION:                                                   | Developer:                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| By:    |                                                                              | By:                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Title: |                                                                              | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                               |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 43

To what extent is each provision of the Maryland Addendum effective for the Monicals Pizza Area Development Agreement?

Accepted Answer

|                   | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                     |
|-------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. |
| as follows: |  | Code Ann., Bus. Reg. §§14-201-14-233, the Area Development Agreement for Monical Pizza Corporation is amended |
|  |  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict of laws, the Maryland Franchise Registration and Disclosure Law will prevail. |
|  | Franchise Registration and Disclosure Law. | Any litigation between Developer and Franchisor may be instituted in any court of competent jurisdiction, including a court in the State of Maryland for claims arising under the Maryland |
|  | brought within 3 years after the grant of the franchise. | Any claims arising under the Maryland Franchise Registration and Disclosure Law must be |
| 2. | or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Maryland Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement |
|  | understands and consents to be bound by all of its terms.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 44

To what extent is each provision of the North Dakota Addendum effective for Monicals Pizza?

Accepted Answer

|        | between Monical Pizza Corporation and                                                  | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of The North Dakota Securities Commission, the following provisions contained in the Area Development Agreement are amended to be consistent with North Dakota law, including the North Dakota Franchise Investment Law, North Dakota Century Code Addendum, Chapter 51-19, §51-19-01 et seq.: |
|  | with North Dakota law, the covenant may not be enforceable. | Covenants not to compete upon termination or expiration of the Area Development Agreement are generally enforceable in the State of North Dakota in limited instances as provided by law. If the Agreement contains a covenant not to complete that is inconsistent |
|  | conflict of laws, North Dakota Law shall control. | Section 13.1 of the Area Development Agreement is amended to state in the event of a |
|  | Dakota law. | Sections 13.2 and 13.7 are amended to state that a provision requiring litigation or arbitration to be conducted in a forum other than North Dakota is void with respect to claims under North |
| 2. | Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the North Dakota Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 45

Does the FDD contain a list of company-owned Monicals Pizza units?

Accepted Answer

[Item 20: OUTLETS AND FRANCHISE INFORMATION] ^\* The 32 company-owned units refer to our Monical's Pizza restaurants. Exhibit H contains a list of our company-owned units. Source: Item 20 — OUTLETS AND FRANCHISE INFORMATION (FDD pages 42–44)

Question 46

In the Monicals Pizza FDD, what is the expected outcome if an employee makes an agreement about support services that differs from the Disclosure Document?

Accepted Answer

DEVELOPER REPRESENTS AND ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR RELIED ON ANY GUARANTEE, EXPRESS OR IMPLIED, AS TO THE REVENUES, PROFITS OR LIKELIHOOD OF SUCCESS OF ANY MONICAL'S RESTAURANT TO BE DEVELOPED PURSUANT TO THIS DEVELOPMENT AGREEMENT. DEVELOPER ACKNOWLEDGES AND AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS BY FRANCHISOR OR ANYONE ON BEHALF OF FRANCHISOR THAT ARE NOT CONTAINED IN, OR ARE INCONSISTENT WITH, THE STATEMENTS MADE IN THE FRANCHISE DISCLOSURE DOCUMENT AND THIS DEVELOPMENT AGREEMENT.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 47

How is the franchise fee determined for a Monicals Pizza employee who becomes a franchisee?

Accepted Answer

If you are a Monical's Pizza employee, you pay a lump sum franchise fee of \$45,000, less \$1,000 for every year of your employment with Monical's Pizza, with a minimum franchise fee of \$25,000. Otherwise, the franchise fee is uniform for all franchisees.

Source: Item 5 — INITIAL FEES (FDD pages 9–10)

Question 48

Is a Monicals Pizza franchisee allowed to own an interest in a Competitive Business under any circumstances?

Accepted Answer

- 7.3.2 Own an interest in, manage, operate, or perform services for any Competitive Business wherever located. Notwithstanding the foregoing, any franchisee holding a franchise agreement

on April 1, 2008 who owns an interest in, manages, operates, or performs services for a Competitive Business as of April 1, 2008 shall be permitted to continue to own an interest in, manage, operate, or perform services for that/those specific Competitive Business(es) only.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 49

To whom can a Monicals Pizza franchisee divulge trade secrets and confidential information?

Accepted Answer

We have developed certain trade secrets and other confidential information, including methods of business management, sales and promotion techniques, and know-how, knowledge of, and experience in, operating a Monical's restaurant. We will provide our trade secrets and other confidential information to you during training, in the Confidential Operations Manual and as a result of the assistance we furnish you during the term of the franchise. You may only use the trade secrets and other confidential information for the purpose of operating your franchised restaurant. You may only divulge trade secrets and other confidential information to employees who must have access to it in order to operate the franchised restaurant. You are responsible for enforcing the confidentiality provisions as to your employees.

Certain individuals with access to our trade secrets or other confidential information, including your owners (and members of their immediate families and households), officers, directors, executives, managers, members of your professional staff, all employees and other individuals having access to trade secrets or other confidential information may be required to sign nondisclosure and non-competition agreements in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached to the Franchise Agreement. We will be a third-party beneficiary of these agreements and we have the independent right to enforce their restrictive covenants.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 30–31)

Question 50

Is a Monicals Pizza franchisee required to establish broadband or high-speed internet access for the Franchised Restaurant?

Accepted Answer

essary. Franchisee shall cause the Approved Location to be developed, equipped and improved in accordance with such plans and specifications and shall begin operating the Franchised Restaurant within three hundred sixty-five (365) days after the Effective Date. In connection with the development of the Approved Location, Franchisee shall:

- 5.4.1 employ an approved competent licensed architect and engineer to prepare, for Franchisor's approval, preliminary specifications for improvement of the Approved Location adapted from the specifications furnished by Franchisor;

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 51

What is a Monicals Pizza franchisee required to do if the Franchisor requires Royalty Fees to be paid through electronic transfer?

Accepted Answer

Franchisor has the right to require all Royalty Fees, Marketing Fund Contributions, amounts due for purchases by Franchisee from Franchisor and other amounts due to Franchisor to be paid through an Electronic Transfer Account. At Franchisor's request, Franchisee shall open and maintain an Electronic Transfer Account, and shall provide Franchisor with continuous access to such account for the purpose of collecting any payments due to Franchisor or depositing residual payments or other payments due to Franchisee. Every month, Franchisee shall make timely deposits to the account sufficient to cover amounts owed to Franchisor prior to the date such amounts
are due. Franchisee shall be responsible for any fees or charges resulting from failure to make timely deposits. Franchisee shall execute any documents Franchisor's or Franchisee's bank requires to establish and implement the Electronic Transfer Account. Once established, Franchisee shall not close the Electronic Transfer Account without Franchisor's prior written consent.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 52

Is a Monicals Pizza franchisee required to obtain a fictitious or assumed name registration?

Accepted Answer

You must use the Marks as the sole trade identification of the franchised restaurant, but you may not use any Mark or part of any Mark as part of your corporate or other business entity name in any modified form. You may not use any Mark in connection with the sale of any unauthorized products or services, or in any other manner that we do not authorize in writing. You must obtain a fictitious or assumed name registration if required by your state or local law.

Source: Item 13 — TRADEMARKS (FDD pages 28–30)

Question 53

For Monicals Pizza franchises in Maryland, what is the effect of the addendum if it is inconsistent with any terms of the Franchise Agreement?

Accepted Answer

Each provision of this Addendum is effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 54

For Monicals Pizza franchises in Maryland, which state's laws prevail in the event of a conflict of laws between Illinois and Maryland?

Accepted Answer

| Pizza Corporation and | This Addendum to the Franchise Agreement is agreed to this day of, 20, between Monical                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. | In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code Ann., Bus. Reg. §§14-201-14-233, the Franchise Agreement for Monical Pizza Corporation is amended as follows: |
|  | Sections 4.2.9, 8.3 and 18.2.3 require Franchisee to sign a general release as a condition of renewal or transfer of the franchise and Sections 5.2, 5.5 and 8.3 require Franchisee to sign a general release as a condition to receiving a refund of a portion of the Franchise Fee following a termination

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 55

For Monicals Pizza franchises in Wisconsin, to what extent is each provision of the Addendum effective?

Accepted Answer

This Addendum to the Franchise Agreement is agreed to this day of, 20, between Monical Pizza Corporation and to amend and revise said Franchise Agreement as follows: 1. The Wisconsin Fair Dealership Law Title XIV-A Ch. 135, Sec. 135.01-135.07 shall supersede any conflicting terms of the Franchise Agreement. 2. exhibits or attachments thereto, the terms of this Addendum shall govern. This provision of this Addendum is effective only to the extent that the jurisdictional requirements of the Wisconsin Fair Dealership Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or understands and consents to be bound by all of its terms. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum and MONICAL PIZZA CORPORATION:

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 56

For Monicals Pizza franchises in Wisconsin, when does the Wisconsin Fair Dealership Law provision of the addendum become effective?

Accepted Answer

This provision of this Addendum is effective only to the extent that the jurisdictional requirements of the Wisconsin Fair Dealership Law applicable to the provisions are met independently of this Addendum.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 57

For Monicals Pizza franchises in Wisconsin, what Wisconsin law supersedes any conflicting terms of the Area Development Agreement?

Accepted Answer

| between Monical Pizza Corporation and amends and revises the Area Development Agreement as follows: | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and , and                                                                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. | The Wisconsin Fair Dealership Law Title XIV-A Ch. 135, Sec. 135.01-135.07 shall supersede any |
| conflicting terms of the Area Development Agreement. |  |
| 2. Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern.           | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Wisconsin Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development |
| understands and consents to be bound by all of its terms.                                              | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and                                                                                                                                                                                                                                  |
| MONICAL PIZZA CORPORATION:                                                                             | Developer:                                                                                                                                                                                                                                                                                                                      |
| By:                                                                                                    | By:                                                                                                                                                                                                                                                                                                                             |
| Title:                                                                                                 | Title:                                                                                                                                                                                                                                                                                                                          |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 58

What happens if the franchisee does not comply with all provisions of the Monicals Pizza franchise agreement when transferring to a Controlled Entity?

Accepted Answer

18.3.1 If Franchisee wishes to transfer this Agreement or any interest herein to a corporation, limited liability company or other legal entity which shall be entirely owned by, or controlled by, Franchisee ("Controlled Entity"), which Controlled Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the satisfaction of the following requirements:

- 18.3.1.1 the Controlled Entity is newly organized or the Franchise Operating Entity and its charter provides that its activities are confined exclusively to the operation of the Franchised Restaurant;

- 18.3.1.2 Franchisee or all holders of a legal or beneficial interest in Franchisee own all of the equity and voting power of the outstanding stock or other capital interest in the Controlled Entity;

- 18.3.1.3 Franchisee is in compliance with all of the provisions of this Agreement, and all obligations of Franchisee to Franchisor or any Affiliate are fully paid and satisfied; provided, however, that neither Franchisee nor the Controlled Entity shall be required to pay a transfer fee as required pursuant to Section 18.2.8;

- 18.3.1.4 the Controlled Entity has entered into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of the Franchised Restaurant.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 59

What happens if a Monicals Pizza franchisee fails to meet the conditions for renewal?

Accepted Answer

| Provision                                               | Section in Franchise or Other Agreement | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------------------------------------------------------|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a. Length of franchise | Section 4.1 | The initial term is 5 years. |
| term |  |  |
| b. Renewal or extension of the term                  | Section 4.2                                | You may renew for 3 additional terms of 5 years each. If you fail to meet any one of the conditions in (c) below, we may refuse to renew or extend the terms of your Franchise Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| c. Requirements for franchisee to renew or extend | Section 4.2 and Exhibit 6               | You may renew the then current Franchise Agreement if you: have substantially complied with the provisions of the Franchise Agreement; have made capital expenditures as necessary to maintain uniformity with the System; have satisfied all monetary obligations owed to us; are not in default of any provision of the Franchise Agreement or any other agreement between you and us; have given timely written notice of your intent to renew; sign a current Franchise Agreement, which may have materially different terms and conditions than your original Franchise Agreement; comply with current qualifications and training requirements; and sign a General Release in a form satisfactory to us and similar to the General Release attached to the Franchise Agreement. |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)

Question 60

What happens if a Monicals Pizza franchisee does not satisfy all monetary obligations owed to the franchisor throughout the term of the agreement regarding successor terms?

Accepted Answer

- 4.2.4 Franchisee has satisfied all monetary obligations owed by Franchisee to Franchisor (or any Affiliate), and has timely met these obligations throughout the term of this Agreement;

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 61

What happens if a provision in Sections 4.2, 16.2, or 18 of the Monicals Pizza Franchise Agreement is inconsistent with the Hawaii Franchise Investment Law?

Accepted Answer

The Franchise Agreement has been amended as follows:

- The Hawaii Franchise Investment Law provides rights to the franchisee concerning nonrenewal, termination and transfer of the Franchise Agreement.

If the Franchise Agreement, and more specifically, Sections 4.2 and 16.2 and 18, contains a provision that is inconsistent with the Hawaii Franchise Investment Law, the Hawaii Franchise Investment Law will control.

- Sections 4.2.9, 18.2.3 and 18.2.6 of the Franchise Agreement require franchisee to sign a general release as a condition of renewal or transfer of the franchise and Sections 5.2, 5.5 and 8.3 require franchisee to sign a general release as a condition to receiving a refund of a portion of the Franchise Fee following a termination of the franchise; such release shall exclude claims arising under the Hawaii Franchise Investment Law.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 62

If the Addendum is inconsistent with the Monicals Pizza Area Development Agreement, which terms govern?

Accepted Answer

|        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and between Monical Pizza Corporation and                                                                                                                                                                                                                                                                                           |            |  |  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--|--|
| 1. | In recognition of the requirements of the Indiana Deceptive Franchise Practices Law, IC 23-2.2.7 and the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |  |  |  |
|  | Section 8 of the Area Development Agreement is amended to prohibit unlawful unilateral termination of a franchise unless there is a material violation of the Area Development Agreement and termination is not in bad faith. |  |  |  |
|  | Section 9.4 of the Area Development Agreement is amended subject to Indiana Code 23-2- 2.7-1(9) to provide that post-term non-competitor covenants shall have geographic limitation of the territory granted to Developer. |  |  |  |
|  | Section 11.3 of the Area Development Agreement is amended to provide that Developer will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Developer's reliance upon or use of procedures or products, which were required by Franchisor, if such procedures or products were utilized by Developer in the manner required by Franchisor. |  |  |  |
|  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict between the laws of Indiana and Illinois, the Indiana Franchise Disclosure Law and/or the Indiana Deceptive Franchise Practices Law will prevail. |  |  |  |
|  | Section 13.2 of the Area Development Agreement is amended to provide that Developer may commence litigation in Indiana for any cause of action under Indiana law. |  |  |  |
|  | Section 13.7 of the Area Development Agreement is amended to provide that arbitration between Franchisor and Developer, shall be conducted in Indiana or a site mutually agreed upon. |  |  |  |
| 2. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Indiana Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 63

If the addendum is inconsistent with the Area Development Agreement for Monicals Pizza, which terms govern?

Accepted Answer

|        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and between Monical Pizza Corporation and                                                                                                                                                                                                                                                                                           |            |  |  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--|--|
| 1. | In recognition of the requirements of the Indiana Deceptive Franchise Practices Law, IC 23-2.2.7 and the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |  |  |  |
|  | Section 8 of the Area Development Agreement is amended to prohibit unlawful unilateral termination of a franchise unless there is a material violation of the Area Development Agreement and termination is not in bad faith. |  |  |  |
|  | Section 9.4 of the Area Development Agreement is amended subject to Indiana Code 23-2- 2.7-1(9) to provide that post-term non-competitor covenants shall have geographic limitation of the territory granted to Developer. |  |  |  |
|  | Section 11.3 of the Area Development Agreement is amended to provide that Developer will not be required to indemnify Franchisor for any liability imposed upon Franchisor as a result of Developer's reliance upon or use of procedures or products, which were required by Franchisor, if such procedures or products were utilized by Developer in the manner required by Franchisor. |  |  |  |
|  | Section 13.1 of the Area Development Agreement is amended to provide that in the event of a conflict between the laws of Indiana and Illinois, the Indiana Franchise Disclosure Law and/or the Indiana Deceptive Franchise Practices Law will prevail. |  |  |  |
|  | Section 13.2 of the Area Development Agreement is amended to provide that Developer may commence litigation in Indiana for any cause of action under Indiana law. |  |  |  |
|  | Section 13.7 of the Area Development Agreement is amended to provide that arbitration between Franchisor and Developer, shall be conducted in Indiana or a site mutually agreed upon. |  |  |  |
| 2. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional requirements of the Indiana Law applicable to the provisions are met independently of this Addendum. To the extent this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement or exhibits or attachments thereto, the terms of this Addendum shall govern.

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Question 64

If the Addendum is inconsistent with the terms of the Monicals Pizza Area Development Agreement, which terms govern?

Accepted Answer

|        | between Monical Pizza Corporation and                                        | This Addendum to the Area Development Agreement is agreed to this day of, 20, by and                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. |  | In recognition of the requirements of New York's General Business Law, Article 33, §§680 through |
|  |  | 695, the Area Development Agreement for Monical Pizza Corporation is amended as follows: |
|  |  | Section 7.1 of the Area Development Agreement is amended to provide that Franchisor will |
|  |  | not transfer and assign its rights and obligations under the Area Development Agreement |
|  |  | unless the transferee will be able to perform the Franchisor's obligations under the Area |
|  |  | Development Agreement, in Franchisor's good faith judgment, so long as it remains subject |
|  |  | to Article 33 of the General Business Law of the State of New York. |
|  |  | No provision in the Area Development Agreement shall be construed as requiring Developer |
|  | General Business Law of the State of New York. | to waive any right conferred upon the Developer by the provisions of Article 33 of the |
|  |  | Section 8 of the Area Development Agreement is amended to provide that the Developer may |
|  |  | terminate the Area Development Agreement on any grounds available by law. |
| 2. | or exhibits or attachments thereto, the terms of this Addendum shall govern. | Each provision of this Addendum shall be effective only to the extent that the jurisdictional |
|  |  | requirements of the New York Law applicable to the provisions are met independently of this Addendum. To the extent |
|  |  | this Addendum shall be deemed to be inconsistent with any terms or conditions of said Area Development Agreement |

Source: Item 23 — RECEIPTS (FDD pages 46–257)

Monicals_Pizza 2025 FDD FAQ