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

The following table lists (by type of Unit, and for traditional Units by “Quartile,” as that term is defined below) both: (a) the high and low end of the range of annual “Gross Sales” (defined below) achieved during the company’s fiscal year 2012 (which began on January 1, 2012 and ended on December 31, 2012), and (b) the average annual Gross Sales achieved during the company’s fiscal year 2012, for all Paciugo Units that were open and operating continuously throughout the entire fiscal year of 2012.

As of the end of fiscal year 2012, there were 36 total Paciugo Units open and operating. Of those 36 Units, 30 were continuously in operation throughout the fiscal year 2012. Of those 30 Units, 20 are traditional Units, 4 are mall kiosk Units, 4 are mall in-line Units, and 2 are non-traditional Units.

All Units used to calculate the figures shown in the table below are franchised Units (except for two units operated by the franchisor’s affiliates as “company-owned” Units, one of which was operated by a franchisee until November 2012).

With the exception of the information obtained from the two “company-owned” Units operated by affiliates, the amounts shown in the following table are based on information reported to the franchisor by franchisees in their weekly royalty reports. The franchisor has not audited, reviewed, or verified the information received from franchisees and included in Item 19.

In instances where a franchisee failed to submit a weekly royalty report during fiscal year 2012, the prior week’s Gross Sales figures were used to estimate the missing week’s Gross Sales totals.

“Quartile” refers to the relative performance of the traditional Units based on Gross Sales. The “Traditional 1st Quartile” refers to the top 25% performing traditional Units; the “Traditional 2nd Quartile” refers to the second highest 25% performing traditional Units; the “Traditional 3rd Quartile” refers to the third highest 25% performing traditional Units; and the “Traditional 4th Quartile” refers to the lowest 25% performing traditional Units.

“Gross Sales” includes all revenue from the sale of products and services, including the sale of food, beverages, and merchandise, and all other income of whatever nature relating to a Unit, whether for cash or credit, and regardless of collection in the case of credit.

1 of the 2 non-traditional Units, or 50%, met or exceeded the average Gross Sales figures shown for non-traditional Units in the table below.

2 of the 4 mall in-line Units, or 50%, met or exceeded the average Gross Sales figures shown for mall in-line Units in the table below.

2 of the 4 mall kiosk Units, or 50%, met or exceeded the average Gross Sales figures shown for mall kiosk Units in the table below.

1 of the 5 first Quartile traditional Units, or 20%, met or exceeded the average Gross Sales figures shown for the first Quartile traditional Units in the table below (and 2 of the 5 first Quartile traditional Units met or exceeded $526,000 in Gross Sales in 2012).

3 of the 5 second Quartile traditional Units, or 60%, met or exceeded the average Gross Sales figures shown for the second Quartile traditional Units in the table below.

2 of the 5 third Quartile traditional Units, or 40%, met or exceeded the average Gross Sales figures shown for the third Quartile traditional Units in the table below.

3 of the 5 fourth Quartile traditional Units, or 60%, met or exceeded the average Gross Sales figures shown for the fourth Quartile traditional Units in the table below.

The ranges and averages of annual Gross Sales presented below represent gross sales before deductions for Royalty and Marketing Fees payable to the franchisor and all other operating expenses.

Average Gross Sales for Paciugo Gelato Units During Fiscal Year 2012

Non-Traditional

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