Detailed Information on Zaxby’s Initial Franchise Fee, Royalty Fee + 23 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $35,000

• The initial franchise fee (the “Initial Franchise Fee”) is currently $35,000. You must pay to Zaxby’s the entire Initial Franchise Fee upon the execution of the Franchise Agreement for the Restaurant.

• Zaxby’s participates in the International Franchise Association’s VetFran Program where Zaxby’s offers a 20% discount (which is $7,000) off of the Initial Franchise Fee owed by veterans of the United States military. The discount will only be applied to the first 5 new Restaurants that a veteran opens.

2.  Development Fee:  50% of the aggregate Initial Franchise Fees to be paid for all Restaurants to be opened under the Development Agreement

• If you are a Developer, upon signing the Development Agreement, you will remit to Zaxby’s 50% of the aggregate Initial Franchise Fees to be paid for all Restaurants to be opened under the Development Agreement (the “Development Fee”).

• The Development Fee will be credited towards 50% of the Initial Franchise Fee due under each Franchise Agreement for each Restaurant that you commit to developing pursuant to the Development Agreement. Upon signing each Franchise Agreement (including the initial Franchise Agreement), the remaining 50% of the Initial Franchise Fee for such Franchise Agreement will be due.

3.  Initial Marketing Contribution:  $5,200 to $10,000

• You must pay to Zaxby’s at least 5 days prior to the opening of your Restaurant a sum (as determined by Zaxby’s, in its discretion) between $5,200 and $10,000, which Zaxby’s will spend on your behalf pursuant to your initial marketing plan (the “Initial Marketing Contribution”).

4.  Additional On-Site Inspection Fee:  Zaxby’s actual costs and expenses

• If Zaxby’s determines, in its sole discretion, that you require more than 2 on-site inspections during the construction of your Restaurant, you must pay Zaxby’s a construction and pre-opening operational inspection fee equal to Zaxby’s actual costs and expenses (including costs of personnel, meals, lodging, travel, and related expenses), which shall be no less than $500 per additional inspection.

5.  Additional Training Fee:  $2,500 per additional attendee for manager training

• If more than 4 of your managers attend initial training, you must pay Zaxby’s $2,500 per additional attendee for manager training.

6.  Royalty:  6% of your Gross Sales for the preceding week

• Due Date:  Currently, due weekly on each Monday for the preceding week’s Gross Sales.

7.  National Marketing Contribution:  currently, 1.37% of Gross Sales per week (may be increased or decreased by Zaxby’s within a range between 0.75% and 1.5% of Gross Sales, in Zaxby’s discretion)

• Due Date:  Same as Royalty.

• Currently, the National Marketing Contribution is contributed to the Zaxby’s National Marketing Fund (the “Marketing Fund”), which is administered by ZNMF.

8.  Co-op Marketing Contribution or Multi-DMA Advertising Contribution:  1.5% to 3.5% of Gross Sales per week (as determined by Co-op, Zaxby’s, or Zaxby’s designated affiliate)

• Due Date:  Same as Royalty.

• If Zaxby’s establishes a local marketing cooperative (“Co-op”) in your designated market area (“DMA”), you must contribute this fee (in an amount determined by the Co-op) to such Co-op as the “Co-Op Marketing Contribution.”

• If Zaxby’s does not establish a Co-op in your DMA, you must contribute this fee (in an amount determined by Zaxby’s or ZMAA) to ZMAA or its designee as the “Multi-DMA Advertising Contribution.”

• The fee charged may be modified from time to time.

9.  Technology Fee:  currently, not charged

• Due Date:  Weekly or monthly, as Zaxby’s may designate.

• Payable if Zaxby’s requires you to pay to it, or a third party that it designates, a technology fee for various technology products and services, which products and services are subject to change over time (a “Technology Fee”).

• Currently, Zaxby’s does not charge a Technology Fee, but it reserves the right to implement or change the fee (which may be based on a percentage of Gross Sales, fixed fees, or usage fees) by providing you with 30 days’ written notice.

10.  Extension Fee:  $1,000 for each month (or portion of a month) that a deadline is extended

• Due Date:  Upon demand.

• Payable if Zaxby’s, in its sole discretion, agrees to extend the deadline to open your Restaurant under the Franchise Agreement or any deadline under your Development Agreement.

11.  Accounting Services Fee:  (1) $650 per month for bookkeeping services and payroll processing services, (2) $475 per month for either bookkeeping services only or payroll processing services only, (3) $225 per month for accounts payable services (available if you also pay for bookkeeping services), and/or (4) $15 annually per employee for Affordable Care Act reporting

• Due Date:  On the first day of each month in advance.

• Payable if you choose to enter into an Accounting Services Agreement in which Zaxby’s agrees to provide you with bookkeeping services, payroll processing services, accounts payable services, and Affordable Care Act reporting.

• Zaxby’s reserves the right to increase these amounts at any time in its discretion.

12.  Supplier Approval:  Zaxby’s reasonable cost of the inspection and Zaxby’s actual cost of testing, including personnel and travel costs

• Due Date:  Upon demand.

• Payable if you wish to offer products or use any supplies, equipment, or services that Zaxby’s has not approved or wish to purchase from a supplier or service provider that Zaxby’s has not approved, whether or not Zaxby’s approves the item, service, supplier, or service provider.

13.  Initial Training for Replacement Managers:  the then-current fee. Currently, $2,500 per person.

• Due Date:  Before training begins.

• Payable if you replace your manager that has completed Zaxby’s training program (a “Certified Manager”) or Designated Principal.

14.  On-Site Additional or Remedial Training of Consulting Services:  actual travel and living expenses of Zaxby’s employees or agents

• Due Date:  Upon demand.

• Payable if Zaxby’s provides any additional training, remedial training, or consulting services at your Restaurant.

15.  Franchised Managed Training Program Fee:  $500 to $1,500 per Restaurant annually

• Due Date:  Upon demand.

• Payable if Zaxby’s permits you to train your own managers at your Restaurants and you sign a Franchisee Managed Training Program Agreement.

16.  Conference Fee:  reasonable registration fee, which will vary by event

• Due Date:  Prior to conference.

• Payable for any meetings or conferences that you or your representatives attend that Zaxby’s specifies.

• Zaxby’s may require your Designated Principal to attend up to 2 meetings per year in-person at a location that requires travel. You are responsible for travel and living expenses of your representatives.

17.  Transfer Fee (Franchise Agreement):  50% of then-current Initial Franchise Fee

• Due Date:  Prior to transfer.

• Payable if you transfer an interest in your Restaurant, Entity, the Franchise Agreement, or substantially all of the assets of the Restaurant. Zaxby’s may reduce the Transfer Fee for transfers that do not result in a change of control.

18.  Transfer Fee (Development Agreement):  $7,500

• Due Date:  Prior to transfer.

• Payable if you transfer an interest in your Entity or Development Agreement.

19.  Late Fees and Interest:  $100 per week for late Royalty payments and $25 per week for marketing-related fees, plus 18% per annum (or highest rate allowed by law)

• Due Date:  Upon demand.

• Payable if you fail to timely make payments.

20.  Audit Fee:  cost of audit

• Due Date:  Upon demand.

• Payable if an audit shows an overstatement or understatement of 3% or more in any month in such report, or if an audit is performed as a result of your failure to submit financial reports in a timely manner.

21.  Indemnification/Attorneys’ Fees and Costs/Damages:  amount of Zaxby’s liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys’ fees)

• Due Date:  Upon demand.

• Payable if Zaxby’s incurs losses that arise out of your development or operation of the Restaurant, including any breach of the Franchise Agreement.

• You must indemnify, defend, and hold Zaxby’s harmless against any third-party claims related to your development or operation of the Restaurant and reimburse Zaxby’s for any costs it incurs enforcing the Franchise Agreement.

22.  Inspection Fee:  actual costs and expenses, but no less than $500 per additional inspection

• Due Date:  Upon demand.

• Payable if Zaxby’s reinspects your Restaurant after a (1) failed food and health safety inspection, (2) an initial inspection confirms that you have failed to complete the Restaurant modifications required upon renewal, or (3) you have failed a Restaurant evaluation or similar report (other than a food and health safety inspection) and a follow-up inspection confirms that you have failed to remedy any deficiencies revealed by such evaluation or report.

23.  Document Fee:  Zaxby’s actual costs and expenses (including cost of personnel and attorneys’ fees and expenses)

• Due Date:  Upon demand.

• Payable if you request that Zaxby’s (1) amend the Franchise Agreement or any ancillary or other agreement to which it is a party or (2) prepare or review for Zaxby’s consent or agreement any documents in connection with various transactions for which a specific fee is not imposed elsewhere in the Franchise Agreement.

24.  Renewal Fee:  50% of then-current Initial Franchise Fee

• Due Date:  Upon renewal.

• Payable if you enter into Zaxby’s then-current Franchise Agreement for a renewal term.

25.  Substitute Royalty Fees and Marketing Fees:  greater of (1) the average annual amount of the Royalty Fees and Marketing Fees for the 2 years immediately preceding the Relocation Event or (2) the Royalty Fees and Marketing Fees paid to Zaxby’s and its Affiliates for the 12-month period preceding the Relocation Event

• Due Date:  During relocation process.

• Payable if you relocate the Restaurant during the period that your Restaurant is not open.

• “Marketing Fees” includes the National Marketing Contribution, Co-op Marketing Contribution, and Multi-DMA Advertising Contribution.

• If your Restaurant has not been open for 12 months, the amount will be calculated on a weekly basis based on the average monthly amount of the Royalty Fees and Marketing Fees you paid to Zaxby’s and its Affiliates for the months in which the Restaurant has been open multiplied by 12.