Detailed Information on Great Harvest’s Initial Franchise Fee, Royalty Fee + 17 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial Franchise Fee:  $20,000

• The initial franchise fee for your first Great Harvest Bakery Cafe is $35,000. The initial franchise fee for your second or subsequent Bakery Cafe currently is $15,000.

• You must pay the franchise fee to Great Harvest when you sign the Franchise Agreement.

• Great Harvest offers a 15% discount for honorably-discharged veterans of the United States Armed Forces who control at least 50% of the Bakery Cafe when the Franchise Agreement is signed.

2.  Initial Training:  $2,500 for each additional person, after the first 2, attending the initial training program

• Great Harvest provides initial training for 2 people at no additional charge. It charges you $2,500 for each additional person attending the initial training program. This payment is not refundable.

3.  Layout Revisions:  currently $65 per hour

• Great Harvest provides 2 Bakery Cafe layout revisions as part of your franchise fee. However, if you request additional assistance beyond what Great Harvest typically gives franchisees, it has the right to charge you its then-current hourly rate for that service (currently $65 per hour). This payment is not refundable.

4.  Continuing Fee:  5% of Bakery Cafe’s monthly Gross Sales

• Due Date:  Due by 15th day of each calendar month on previous month’s Gross Sales.

• “Gross Sales” means the sales of all products, goods, services, and wares, whether for cash or on a charge, credit, or time basis, in connection with your Bakery Cafe’s operation; they do not include sales taxes collected from customers.

5.  Marketing Fee:  2.5% of Bakery Cafe’s monthly Gross Sales

• Due Date:  Due by 15th day of each calendar month on previous month’s Gross Sales.

6.  Opening Marketing:  $12,000

• Due Date:  As incurred.

• You must spend at least $12,000 on approved opening marketing within 4 months after your Bakery Cafe opens. If you do not and fail to cure default within 30 days, Great Harvest may transfer the unspent amount from your account and execute a marketing plan for you.

7.  Transfer:  75% of Great Harvest’s then-current initial franchise fee charged to first-time Great Harvest Bakery Cafe franchisees for their first Bakery Cafe franchise, not to exceed $25,000

• Due Date:  Due when Franchise Agreement is signed.

• This is the transfer fee due for a transfer involving or relating to the Franchise Agreement attached to the current disclosure document. If you are buying a Great Harvest Store operating under an older form of Franchise Agreement, the transfer fee will be determined by selling the franchisee’s Franchise Agreement and might be lower.

8.  Additional Training or Assistance:  $40 per hour (plus reasonable expenses)

• Due Date:  As incurred.

• Great Harvest provides initial training for 2 people as part of your initial franchise fee; however, if you request additional assistance beyond what Great Harvest typically gives franchisees, it has the right to charge you for its services.

9.  Renewal Extension:  $3,000

• Due Date:  Before expiration date of your Franchise Agreement.

10.  Relocation:  $5,000

• Due Date:  As incurred.

• Due if you wish to relocate the Bakery Cafe’s premises and Great Harvest is involved in the process.

11.  Hold Harmless:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Great Harvest if it is held liable for claims from your Bakery Cafe’s operation.

12.  Liquidated Damages:  Maximum Continuing Fee due under your Franchise Agreement

• Due Date:  As incurred.

• Due during period you violate non-competition provisions.

13.  Annual Convention:  $500 or less for registration fee

• Due Date:  Before you attend.

• You will pay convention fee and your own expenses to attend Great Harvest’s optional yearly convention.

14.  Audit Costs: costs incurred in conducting audit (depends on extent of your noncompliance but should not exceed $2,500)

• Due Date:  As incurred.

• Due if you understate Gross Sales by more than 2% or do not send Great Harvest required information.

15.  Interest:  12% per year

• Due Date:  15 days after you receive inspection or audit report.

• Due on overdue amounts.

16.  Taxes:  as required by law

• Due Date:  As incurred.

• You must pay Great Harvest all taxes that it must collect or pay on account of services or goods it provides you or fees it collects from you.

17.  Attorneys’ Fees and Expenses:  will vary under circumstances (depends on extent of your noncompliance)

• Due Date:  As incurred.

• You must reimburse Great Harvest if it incurs these expenses after terminating your franchise for cause.

18.  Mill Dressing (only for hub locations):  $1,200

• Due Date:  As invoiced.

• Fee paid to Great Harvest for mill dressing provided on-site by an independent contractor of Great Harvest (mill dressing is maintenance where stones are pulled apart for re-sharpening to give them better teeth to grind wheat berries into flour).

19.  Reimbursement of Gift Card Deficiencies:  amount of deficiency (depends on extent of your non-compliance)

• Due Date:  Within 10 days after notice from Great Harvest.

• You must reimburse Great Harvest for any deficiencies in your gift card bank account that it covers for you.