Highlights of Uno Pizzeria & Grill’s Item 19 Financial Performance Representations (2014 FDD) – Part 2

Statement of Average Sales and Expenses for Parent-Owned Full Service Uno Restaurants

• The following table sets forth the average sales and expenses (unaudited) for parent-owned Uno Restaurants for the fiscal year ended September 29, 2013.

• Each of the 81 parent-owned Full Service Uno Restaurants utilized a uniform accounting system and the data pertaining to such Full Service Uno Restaurants was prepared on a basis consistent with generally accepted accounting principles during the covered period.

• The information contained in this analysis has not been audited.

• Net Sales. The net sales are based on the average volume of the Full Service Uno Restaurants that fall into each revenue range. Net sales means total gross sales less taxes, employee meals, coupons, and house charges.

• Total Cost of Sales. This includes cost of food and alcoholic and non-alcoholic beverages, excluding rebates. You will have the opportunity to take advantage of volume discounts on particular items negotiated by Uno; however, availability of such volume discounts may be limited to geographic areas in which the parent-owned Restaurants currently operate.

• The cost of items such as produce, which are often purchased locally, may vary according to the location of the Uno Restaurant. Additionally, freight and shipping costs and the amount of mark-up imposed by suppliers will also vary.

• Direct Labor. Labor for a Full Service Uno Restaurant generally necessitates a range of 40-80 employees, including both full-time and part-time hourly workers.

• Management Salary. This category assumes one designated general manager, one manager, and one assistant manager and includes an amount for bonuses. The number of managers may increase based on sales volume.

• Payroll Taxes and Benefits. This category includes amounts for workers’ compensation, group insurance expenses, payroll taxes, and vacation pay.

• Other Controllables. Other controllable expenses include the following costs:  janitorial service; office supplies; entertainment; laundry; telephone; cash shortages; and miscellaneous.

• Advertising and Business Coop. These expenses represent advertising expenditures and business coop contributions. Specifically, you are required to pay a weekly fee of up to 1% of Gross Revenues, for business coop services. You are also required to expend a minimum of 2% of Gross Revenues on local marketing.

• Royalties. You will be required to pay a contributing royalty fee equal to the greater of 5% of Gross Revenues or $4,000 per month or as described and provided for in Item 6.

• Other Non-Controllables. This category of expenses includes amounts for bank processing charges, dues, licenses, subscriptions, recruitment, fuel surcharges, and property taxes.

• Earnings Before Repairs and Maintenance, Utilities, Rent, Depreciation, Administration, Insurance, Interest, and Taxes. These earnings do not include the following:  repairs and maintenance; utilities; rent, CAM, and property taxes; administration expenses including bill paying, payroll processing, and other typical accounting tasks; and insurance.

• Due to factors such as quantity discounts for goods and services, franchisor approval costs, reduced training and labor costs, and insurance discounts, your costs of operation may be higher than the costs for parent-owned Full Service Uno Restaurants, and as a result, parent-owned Full Service Uno Restaurant data is not an indication of how your Full Service Uno Restaurant will perform.

Sales Under $2 Million (33 Restaurants)

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