Detailed Information on Teriyaki Madness’s Initial Franchise Fee, Royalty Fee + 22 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial Franchise Fee:  $45,000 to $150,000

• Teriyaki Madness offers three traditional franchise packages. Teriyaki Madness’s traditional franchise packages are as follows:

• Platinum Franchise (5 Teriyaki Madness Businesses):  $150,000 Initial Franchise Fee
• Standard Franchise (3 Teriyaki Madness Businesses):  $99,000 Initial Franchise Fee
• Single Franchise (1 Teriyaki Madness Business):  $45,000 Initial Franchise Fee

• If you fail to open the Teriyaki Shops in accordance with the terms of the Development Schedule for your Standard Franchise, you will forfeit the right to open any remaining undeveloped Teriyaki Madness Businesses.

• The Initial Franchise Fee is fully earned by Teriyaki Madness and payable when you sign your Franchise Agreement, and is non-refundable under any circumstances, even if you fail to open any Teriyaki Madness Businesses.

• The Initial Franchise Fee is payment for all of Teriyaki Madness’s pre-opening assistance and training that it provides to allow you to open your Teriyaki Madness Business and also offsets some of its franchisee recruitment expenses.

2.  Shop Opening Assistance Fee:  $0 to $27,500

• In addition to the Initial Franchise Fee, you must pay Teriyaki Madness’s affiliate, MH International, a “Shop Opening Assistance Fee” of $27,500 for the first Teriyaki Shop that you develop, which offsets Teriyaki Madness’s costs in supporting your efforts to find, develop, and open the Teriyaki Shop (“Shop Opening Assistance”).

• You will pay the Shop Opening Assistance Fee when you sign the Franchise Agreement.

• If you purchase a Multi-Unit Franchise, the Shop Opening Assistance Fee for the second and each additional Teriyaki Shop is optional and will be payable only if you request that Teriyaki Madness provide Shop Opening Assistance for the applicable shop.

• Shop Opening Assistance Fees are fully earned by Teriyaki Madness when paid and are not refundable under any circumstances.

• Unless otherwise agreed to, by way of example, through a franchise sales promotion, or otherwise, all Shop Opening Assistance Fees are uniform.

3.  Opening Extension Fee:  $250 per week

• If you fail to open your Teriyaki Shop within 53 weeks of the effective date of the Franchise Agreement or the applicable Teriyaki Shop Rider, you will be required to pay Teriyaki Madness an “Opening Extension Fee” of $250 per week until the Teriyaki Madness Shop is open and Teriyaki Madness will have the right to terminate the Franchise Agreement.

• In its sole discretion, Teriyaki Madness may waive the extension fee if requested in writing no less than 90 days prior to the date your Teriyaki Shop is required to open if Teriyaki Madness believes in its sole discretion that you are making a satisfactory attempt to comply with the terms of the Franchise Agreement.

4.  Royalty Fee:  6% of Net Sales

• Due Date:  Tuesday of each week.

• The “Royalty Fee” is based on Net Sales during the previous week.

• Payments are made via an electronic funds transfer (“EFT”).

• Your Royalty Fee is an ongoing payment that allows you to use the marks and the intellectual property of the System and pays for Teriyaki Madness’s ongoing support and assistance.

5.  Marketing Fund Contribution:  3% of Net Sales

• Due Date:  Same as Royalty Fee.

• Teriyaki Madness has established a marketing fund (“Marketing Fund”) which is discussed in more detail in Item 11.

6.  Technology Fee:  up to $600 per month per Teriyaki Shop (currently $99.95 per month until your first Teriyaki Shop opens and then $217 per month per opened Teriyaki Shop thereafter)

• Due Date:  Monthly on the first Tuesday of each month.

• For use of Teriyaki Madness’s application development and service, online systems, email, data sharing, loyalty program, restaurant management platform, and other Internet-related functions.

• Teriyaki Madness collects this fee on the first Tuesday of each month.

• Teriyaki Madness reserves the right to increase this fee upon 30 days written notice.

• If you purchase a Multi-Unit Franchise, you are only required to pay a total of $99.95 per month until your first Teriyaki Shop opens.

• In addition, franchisees may be responsible for paying Teriyaki Madness’s approved third-party vendors directly for certain technology.

7.  Additional Training or Assistance Fees:  an amount set by Teriyaki Madness (currently $500 per person per day for additional training, plus all travel expenses)

• Due Date: Payable in advance of the training or assistance.

• Teriyaki Madness provides the initial training and hands-on training program at no cost for your first Teriyaki Shop and for any initial Designated Manager for any additional Teriyaki Shops authorized by a Teriyaki Shop Rider.

• Teriyaki Madness may charge you for training newly-hired personnel, refresher training courses, and additional consultations or special assistance or training you need or request. The fee amount will depend on the training required.

• If Teriyaki Madness provides additional training at your Teriyaki Shop, you may be required to pay for its instructors’ travel expenses as well.

8.  Conference Fee:  an amount designated by Teriyaki Madness for the annual convention; currently, $2,000 for up to 2 attendees, plus expenses; and $1,000 for each additional attendee, plus expenses. You will receive a $500 royalty credit if at least 1 of your required participants attends the annual convention.

• Due Date:  As incurred.

• A “Conference Fee” is payable to Teriyaki Madness to help defray the cost of your attendance at any conference(s) including the cost of the hotel (based on double occupancy).

• Teriyaki Madness reserves the right to charge this fee whether or not you attend the conference.

9.  Transfer Fee:  $25,000

• Due Date:  At time of approved transfer.

• Payable or waivable at Teriyaki Madness’s sole discretion in connection with the transfer of your Teriyaki Shop, a transfer of ownership of your legal entity, or a transfer of the Franchise Agreement.

10.  Renewal Franchise Fees:  $5,000

• Due Date:  At the time you sign the renewal Franchise Agreement.

• This fee is payable if you qualify for a renewal franchise and choose to enter into a renewal Franchise Agreement.

11.  Relocation Fee:  $5,000 per Teriyaki Shop

• Due Date:  Upon submission of request to relocate.

• Payable if you relocate your Teriyaki Shop.

12.  Food Safety Audit:  cost of audit (estimated to be approximately $300)

• Due Date:  As incurred.

• If you fail a food safety audit, Teriyaki Madness will require you to undergo an additional food safety audit at your own expense within 45 days. You will pay the third-party auditor directly upon invoicing.

13.  Audit:  cost of audit, plus lesser of the daily equivalent of 15% per year simple interest or the highest rate allowed by law (Teriyaki Madness estimates this cost to be between $1,000 and $15,000)

• Due Date:  Upon demand.

• Payable only if audit shows an understatement of any Royalty Fees, Marketing Fund Contributions, or other fees owed to Teriyaki Madness for any month or if you fail to fully cooperate with Teriyaki Madness’s third-party auditors or inspectors, as determined by the third-party auditors or inspectors.

14.  Taxes:  amount assessed by federal, state, and local tax authorities on any payments you make to Teriyaki Madness

• Due Date:  Upon demand.

• Payable if Teriyaki Madness is assessed any taxes on any payments you make to it (including sales, gross receipt, excise, use, or similar taxes, but not income taxes).

15.  Indemnification:  varies under circumstances

• Due Date:  As incurred.

• You must indemnify and reimburse Teriyaki Madness for any expenses or losses that it or its representatives incur related in any way to your Teriyaki Madness Business or the operation of your Teriyaki Madness Business.

16.  Legal Costs and Professional Fees:  will vary under circumstances

• Due Date:  As incurred.

• You will be required to pay any costs that Teriyaki Madness incurs as a result of any breach or termination of your Franchise Agreement.

• This fee will include a minimum administrative cost of $250 to cover Teriyaki Madness’s expenses.

17.  De-Identify Premises:  will vary under circumstances

• Due Date:  As incurred.

• If you do not de-identify your Teriyaki Shop following expiration or termination of the Franchise Agreement, you will be required to reimburse Teriyaki Madness the cost to re-enter the premises and perform de-identification.

18.  Insurance:  reimbursement of Teriyaki Madness’s costs, plus a 20% administration charge

• Due Date:  On demand.

• If you fail to obtain insurance, Teriyaki Madness may obtain insurance for you and you must reimburse it for the cost of insurance obtained, plus 20% of the premium for an administrative cost of obtaining the insurance.

19.  Liquidated Damages:  will vary under the circumstances

• Due Date:  15 days after termination of the Franchise Agreement.

• Payable if Teriyaki Madness terminates the Franchise Agreement for cause.

20.  Failure to Submit Required Reports:  $100 per occurrence and $100 per week

• Due Date:  Your bank account will be debited for failure to submit any requested report within 5 days of request.

• Fines collected are paid to the Marketing Fund.

21.  Supplier and Product Evaluation Fee:  cost of inspection (estimated to be approximately $100 to $500)

• Due Date:  As incurred.

• Payable if Teriyaki Madness inspects or tests product samples from proposed suppliers nominated by you.

• Teriyaki Madness currently does not charge this fee, but reserves the right to do so in the future.

22.  Customer Satisfaction Reimbursement:  varies under circumstances

• Due Date:  As incurred.

• Teriyaki Madness may, in its sole discretion, remedy any issues with customers of your Teriyaki Madness Business, including full reimbursement of any fees paid to you. You are required to reimburse Teriyaki Madness for any such remedy.

23.  Interim Manager Fee:  $500 per day plus the Interim Manager’s direct out-of-pocket costs and expenses

• • Due Date:  As incurred

• Payable if Teriyaki Madness or its affiliate manages the Teriyaki Madness Business after you materially breach the Franchise Agreement, or upon you or your Designated Manager’s absence, termination, death, or disability.

24.  Broker Fees:  Teriyaki Madness’s actual cost of the brokerage commissions, finder’s fees, or similar charges

• Due Date:  As incurred.

• If you transfer your Teriyaki Madness Business to a third party or purchaser, you must reimburse Teriyaki Madness for all of its actual costs for commissions, finder’s fees, and similar charges, if any.