FDD Talk 2013: Gross Sales and Certain Expenses for Corporate and Franchised Frost Gelato Shoppes (2013 FDD)

Highlights of Frost Gelato’s Item 19 Financial Performance Representations (2013 FDD)

• Frost Gelato franchisees operate retail centers featuring frozen Italian gelatos, sorbets, gelato cakes, gelato confections, and/or various coffee and/or other beverage products and related products (“Frost Gelato Shoppe”).

• The total investment necessary to begin operation of a Frost Gelato franchise is estimated to be between $320,300 to $777,200, including between $190,000 and $281,500 that must be paid to the franchisor or its affiliates.

• Franchisees may also choose to become an Area Developer earning the right to establish and operate a certain number of Frost Gelato Shoppes in a specified area. Area Developers must sign the Area Development Agreement at the same time as the Franchise Agreement.

• Area Developers must, in addition to purchasing a single Frost Gelato Shoppe franchise, pay an up-front development fee of $10,000 for the second and each additional Frost Gelato Shoppe franchise, which will be credited towards the initial franchise fee for each additional Frost Gelato Shoppe to be developed.

• The information provided in the following chart consists of the actual performance of three affiliate-owned Frost Gelato Shoppes and two franchised Frost Gelato Shoppes for 2012.

• The corporate locations pay less for the proprietary Frost Gelato products than a franchisee will pay, and the corporate locations do not pay a royalty or contribute marketing fees.

• Your individual results may differ. There is no assurance that you’ll earn as much. A new franchisee’s individual financial results may differ from the result stated in the financial performance representation.

• The earnings claims figures do not reflect all of the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.