FDD Talk 2013: Average Monthly Gross Sales and Occupancy Costs for Roosters Men’s Grooming Centers (2013 FDD)

Highlights of Roosters Men’s Grooming Center’s Item 19 Financial Performance Representations (2013 FDD) – Part 1

• Chart One of Item 19 states certain historical average monthly gross sales data from 23 of the company’s Franchised Businesses (“Included Franchisees”) which are substantially similar to those being offered through the Franchise Disclosure Document and which have been operating for at least two years as of June 30, 2013.

• In addition, 21 of the 23 Included Franchisees provided the franchisor with their monthly occupancy costs.

• The average gross sales and average monthly costs detailed in the chart below are based solely upon information submitted to the franchisor by the Included Franchisees (and in the case of occupancy costs, 21 of the 23 Included Franchisees).

• The information is for the period July 1, 2012 through June 30, 2013 (the “Reporting Period”).

• Included Franchisees that have implemented the mandated “Super Salon” software provided the franchisor with certain historical average ticket information, which is described in Chart Two of Item 19. As a franchisee, you will be required to purchase and utilize the “Super Salon” software package.

• Excluded from this financial performance representation are average monthly gross sales, average monthly occupancy costs, and average ticket information of 38 Franchised Businesses that have been in operation less than two years as of June 30, 2013.

• An additional 2 Franchised Businesses have been excluded as such businesses are owned and operated by licensed barbers and personnel that personally provide grooming services and are, therefore, not directly comparable to the business being offered under the Franchise Disclosure Document.

• In addition, 1 store has been excluded due to lack of adequate reported performance information.

• For purposes of this Financial Performance Representation, “Gross Sales” includes all revenues generated from all business conducted at or from the business during the Reporting Period, including amounts received from the sale and delivery of services, products, merchandise, and tangible property of any nature whatsoever, whether in cash or for credit, and whether collected or uncollected.

• Gross Sales does not include the amount of any applicable sales tax imposed by any federal, state, municipal, or other governmental authority if such taxes are stated separately when the customer is charged and Franchisee pays such amounts as and when due to the appropriate taxing authority.

• Also excluded from Gross Sales are the amount of any documented refunds, chargebacks, credits, and allowances given to customers in good faith according to the company’s standard procedures for issuing such refunds.

• Average Monthly Occupancy Cost is defined as the sum of all rent; common area maintenance; real estate taxes; percentage rent paid, if any; lease related charges such as maintenance, security, trash removal, merchant association dues or charges, or shopping center promotional expenses of the Included Franchisees within the group during the Reporting Period divided by the number of Included Franchisees within the group divided by 12.

• The financial data has not been audited and no assurance can be offered that the data does not contain inaccuracies that an audit might disclose.

• The Included Franchisees were divided into 3 Groups according to their average monthly gross sales.

Chart 1 – Average Gross Sales and Certain Expenses for Included Franchisees

Group A – Top Seven Included Franchisees