Highlights of Toppers Pizza’s Item 19 Financial Performance Representations (2013 FDD) – Part 1

Explanatory Notes for Table A – 2012 Average Profit and Loss for Affiliate-Owned Restaurants

The following table contains profit and loss information for the fiscal year ended December 30, 2012 for affiliate-owned restaurants that were open for the entire fiscal year.

These expenses do not reflect a 5% management fee paid to the principal owner of each restaurant.

The Gross Sales of these Toppers Pizza restaurants are impacted by the recognition and goodwill that Toppers Pizza restaurants benefit from in the Midwest of the United States. Although the franchisor believes Toppers Pizza restaurants will have consumer appeal that will extend well beyond the Midwest, the concept has had only limited operating history outside of its core market.

The percentages in each column reflect the expense figure for that particular category divided by Gross Sales.

Gross Profits is calculated by subtracting Cost of Goods Sold from Gross Sales.

Cost of Labor covers employees’ actual wages and manager’s salary and does not include any labor taxes or benefits.

Employee Benefits include health insurance, 401(k) contributions, vacation pay, and discretionary bonuses for managers and employees.

Mileage is a per-delivery fee paid to delivery drivers. Currently, the franchisor’s affiliate stores pay delivery drivers $0.60 per delivery, although some franchisees pay more than this.

Restaurants owned by the franchisor’s affiliate will contribute to the Advertising and Marketing Fund on the same basis as franchisees.

Restaurants owned by the franchisor’s affiliate will pay the Continuing Royalty on the same basis as franchisees.

Table A – 2012 Average Profit and Loss for Affiliate-Owned Restaurants

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