Detailed Information on Cousins Subs’ Initial Franchise Fee, Royalty Fee + 20 Other Fees (Items 5 and 6, 2022 FDD)

1.  Application Deposit:  $2,500

• As a condition to accepting your application for a franchise, you will be required to sign the Qualification and Deposit Agreement and pay a deposit of $2,500.

• Cousins will refund the deposit if it elects not to proceed with the franchise after it has evaluated all data as to personal abilities, aptitudes, and financial qualifications submitted by you and your Designated Managers.

• Cousins will make this evaluation within 60 days after signing the Qualification and Deposit Agreement.

• If Cousins determines you qualify for a franchise and you elect not to proceed with the franchise, the deposit will not be refundable.

2.  Initial Franchise Fee:  $17,500 to $25,000

• Cousins charges an initial franchise fee of $25,000 for the first franchise you purchase.

• If you paid a deposit, Cousins will apply the deposit to the initial franchise fee.

• If you are an existing franchisee, you may purchase additional franchises for Cousins Subs Shops during the term of the Franchise Agreement if you comply with your Franchise Agreement and meet Cousins’ then-current qualifications for new franchisees. The initial franchise fee for additional franchises is $17,500 for each additional franchise you purchase.

• This initial franchise fee is payable upon the signing of the Franchise Agreement.

• The initial franchise fee is the same for Cousins Subs Shops located in non-traditional locations.

• The initial franchise fee is not refundable under any circumstances.

• Cousins is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program, which provides a $5,000 discount on the initial franchise fee for veterans of the U.S. Armed Forces who meet the requirements of the VetFran Program.

3.  Store Marketing Fee:  $10,000

• When you sign the lease or purchase agreement for the premises of the Shop, you must deposit with Cousins the sum of $10,000 (“Store Marketing Fee”) to be applied to your Shop advertising and promotional expenses.

• The entire Store Marketing Fee must be expended within one year of the opening of the Shop. Any amount not expended within that year may be deposited into the Advertising and Development Fund.

• If the Franchise Agreement is terminated for any reason prior to the opening of the Shop, any amount not expended will be returned to you. Once the Shop opens, the Store Marketing Fee is not refundable under any circumstances.

4.  Development Fee:  $8,750 multiplied by the number of Shops (other than the first Shop) you agree to develop

• If you sign a Multi-Unit Development Agreement with Cousins, you will pay Cousins, on execution of the Agreement, a development fee (“Development Fee”) equal to $8,750 multiplied by the number of Shops (other than the first Shop) you agree to develop.

• Depending on the size of the approved market, you will develop 3 to 10 Shops. That means the typical Development Fee would range from $17,500 to $78,750.

• Concurrently with the execution of the Multi-Unit Development Agreement, you will sign a Franchise Agreement for the 1st Shop and pay the $25,000 franchise fee for such Shop.

• For the second and subsequent Shops developed under the Multi-Unit Development Agreement, Cousins will credit the Development Fee, in $8,750 increments, toward the initial franchise fee of $17,500 per Shop.

• The Development Fee is fully earned when paid and is not refundable under any circumstance.

5.  Lease Addendum Review Fee:  up to $2,000

• It is your responsibility to obtain a fully executed Lease Addendum in connection with executing the lease for the Shop. Cousins’ current form of Lease Addendum is attached as Exhibit E to the disclosure document.

• Cousins’ approval of the lease is subject to its receipt of the Lease Addendum without modification or negotiation, signed by you and the landlord. If you or the landlord requests that Cousins consider any modifications to the Lease Addendum, and it agrees to do so, it may also require you to reimburse it all expenses that it incurs (including attorneys’ fees) in connection with the review.

• Cousins estimates this review may cost up to $2,000, depending on the extent of the changes to the Lease Addendum requested. This reimbursement is not refundable under any circumstances.

6.  Continuing Service Fee:  6% of gross receipts of Shop

• Due Date:  Payable on or before Wednesday of each week on gross receipts for the preceding week (Sunday through Saturday) unless otherwise specified in the Confidential Operations Manual.

• “Gross receipts” means the aggregate amount of all sales of food products, beverages, and other merchandise and products of every kind or nature sold from, at, or in connection with your Shop or arising out of the operation or conduct of business by your Shop, including any revenues from all vending machine, video game machine, and juke box sales, less any customer refunds up to the amount of the sales price and excluding all sales, use, or service taxes collected and paid to the appropriate taxing authority.

• “Gross receipts” shall include: (a) all amounts redeemed from gift certificates, gift cards, or similar mediums, (b) all insurance proceeds received by you for loss of business due to a casualty or similar event at your Shop, and (c) the fair market value of any services or products received by you in barter or exchange for your services or products.

7.  Advertising and Development Fund Contribution:  2% of gross receipts of Shop

• Due Date:  Same time as Continuing Service Fee.

• Can be increased to 3% of gross receipts on 90 days’ notice to you.

8.  Local Advertising:  3% of gross receipts of Shop

• Due Date:  Must be spent each calendar quarter based upon gross receipts of prior calendar quarter.

• Spent by you; accounting must be made monthly to Cousins.

9.  Cooperative Advertising Program:  up to 3% of gross receipts of Shop

• Due Date:  Periodic.

• Payable when Cousins establishes local, regional, or national coverage area cooperatives. Acts as a credit to 3% Local Advertising expenditure obligation.

10.  Late Payments:  highest applicable legal rate for open account business credit, not to exceed 1.5% per month

• Due Date:  From the date payments are due.

• Charged on any late payments of Continuing Service Fees, advertising contributions, amounts due for product purchases, or any other amounts due Cousins or its affiliates.

11.  Audit Expenses:  cost of audit and inspection, plus any reasonable accounting and legal expenses

• Due Date:  Upon receipt of invoice.

• Payable if 2% or more discrepancy in amounts owed Cousins or if you fail to submit required reports.

12.  Transfer Fee (Franchise Agreement):  the greater of (a) 20% of the then-current standard initial franchise fee or (b) $5,000

• Due Date:  At the time of approval of transfer.

• No fee charged for transfers among owners of the franchisee or their immediate family members. For purposes of calculating the transfer fee, the standard initial franchise fee shall not include any special promotions or discounts.

13.  Transfer Fee (Multi-Unit Development Agreement):  $5,000

• Due Date:  At the time of approval of transfer.

• No fee charged for transfers among owners of the franchisee or their immediate family members.

14.  Renewal Fee (Franchise Agreement):  50% of the then-current standard initial franchise fee

• Due Date:  Upon signing renewal Franchise Agreement.

• For purposes of calculating the renewal fee, the standard initial franchise fee shall not include any special promotions or discounts.

15.  Renovation and Maintenance Fund:  $200 per month

• Due Date:  Commences 12 months after Shop opens.

• Payable into fund established by you; you are not required to maintain in excess of $25,000 in fund.

16.  Annual Meeting Fee:  $1,000

• Due Date:  As incurred.

• You or your Designated Managers must attend an annual meeting, at a location Cousins designates, or virtually, if Cousins so chooses, which may last up to 3 days.

• If you (or your Designated Managers) fail to attend the annual meeting, Cousins may charge you a fee.

17.  Product or Supplier Testing:  variable (estimated to be $2,500 to $5,000)

• Due Date:  As incurred.

• If you request approval of a new product or supplier.

18.  Attorney’s Fees:  will vary under circumstances

• Due Date:  As incurred.

• • Due prevailing party in any legal proceeding.

19.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You have to reimburse Cousins for its costs and if Cousins is held liable for claims arising out of the operation of your Shop or business.

20.  Shop Service Fee:  $400 per day

• Due Date:  Upon invoice.

• If Cousins assumes operation of Shop in the event of default.

21.  Management Fee:  2% of gross receipts of all Shops covered by a Management Agreement

• Due Date:  Same time as Continuing Service Fee.

• This fee will apply only if you have executed a Management Agreement with Cousins.

22.  Liquidated Damages (Franchise Agreement):  will vary under circumstances

• Due Date:  As incurred.

• If the Franchise Agreement is terminated because of your default, or if it is terminated by you prior to its expiration without cause, you will pay Cousins the then net present value of the Continuing Service Fees, Fund contributions, and cooperative local or regional advertising fees that would have become due from the date of termination to the scheduled expiration date of the Franchise Agreement.

• For this purpose, Continuing Service Fees, Fund contributions, and cooperative local or regional advertising fees shall be calculated based on gross sales of the Shop for the 12 months preceding the termination date.

• If you have not operated the Shop for at least 12 months preceding the termination date, Continuing Service Fees, Fund contributions, and cooperative local or regional advertising fees will be calculated based on the average monthly gross sales of all Cousins Subs Shops during Cousins’ last fiscal year.