Detailed Information on Uptown Cheapskate’s Initial Franchise Fee, Royalty Fee + 22 Other Fees (Items 5 and 6, 2021 FDD)

1.  Franchise Fee:  $20,000 to $25,000

• You will pay a $25,000 lump sum franchise fee (“Franchise Fee”) when you sign the Franchise Agreement. The Franchise Fee for additional stores is $20,000.

• Uptown Cheapskate will refund the entire fee in 10 days if it does not approve your application.

• If Uptown Cheapskate accepts your application (by signing and returning the Franchise Agreement to you) and after 120 days you have been unable to obtain financing or find a suitable site for your franchise, you may terminate the Franchise Agreement and receive a refund of the Franchise Fee less $5,000 and the amount, if any, paid to a franchise broker.

• There are no refunds under other circumstances.

2.  Royalty:  for 1 store: 5% of gross sales; for 2 or more stores: 4.5% of gross sales (applies to multiple Uptown Cheapskate and/or Kid to Kid stores that are generating sales)

• Due Date:  Payable monthly on the 10th day of the next month.

• Gross sales includes all revenue from the franchise location, and online sales, except sales or use tax.

3.  Post Termination Royalty:  150% of stated Royalty rate

• Due Date:  Payable monthly on the 10th day of the next month.

• Only charged if you are operating after franchise termination and new agreement hasn’t been signed.

4.  Marketing Fund:  0.5% of gross sales

• Due Date:  Same as Royalty Fee.

• For development and management of marketing and advertising materials and programs.

• In addition to Advertising Expenditure.

5.  Advertising Grand Opening or Reopening:  at least $20,000

• Due Date:  Around grand opening or reopening.

• Must be spent 2 months prior to and 1 month after grand opening or reopening.

6.  Advertising After Transfer of Ownership or Relocation:  at least $10,000

• Due Date:  Around time of transfer or relocation.

• Must be spent within 2 months of relocation or transfer of ownership.

7.  Advertising Expenditure:  the greater of 5% of gross sales or $2,000 per month (in addition to grand opening, reopening, relocation, and transfer store expenditures, and Marketing Fund Fee)

• Due Date:  Payable over the first and last 6 months of each year.

• Advertising Expenditure may be modified yearly.

8.  Advertising Penalty:  1% of gross sales (from sales of prior month)

• Due Date:  Payable monthly on the 10th day of the next month for the next 6 calendar months.

• Only charged if you fail to spend required Advertising Expenditure each 6-month period to market your store; does not count toward required 5% Advertising Expenditure.

9.  Cooperative Fees:  4% of gross sales with a monthly minimum of $2,000 and maximum of $5,000. Minimum and maximum amounts may increase each year.

• Due Date:  Payable monthly on the 20th day of the next month.

• Collected and deposited into an account managed by Cooperative.

• Members determine how funds are spent.

• Counts toward the 5% Advertising Expenditure requirement.

10.  Late Fees – Failure to Respond:  $200 per month late fee for failure to respond; $200 per month for late registration for annual meeting; $200 per month for failure to submit other reports

• Due Date:  Payable 1 day after fee is incurred, payable monthly until cured.

• For failure to report gross sales or other reports on time.

11.  Late Fees – Failure to Pay on Time:  additional Royalty Fee of $200 and additional Marketing Fund Fee of $100 for Royalties, Cooperative Fees, Marketing Fund, Computer Support Fees, or any other invoice

• Due Date:  Payable on the 11th day of each month.

• For failure to make proper funds available for transfer.

12.  Interest on Unpaid Royalty and Other Fees:  1.5% interest per month on the unpaid balance (maximum annual interest of 10% in California)

• Due Date:  When Royalty or other fee is due.

13.  Renewal Fee:  25% of the then-current Initial Franchise Fee

• Due Date:  When new Franchise Agreement is signed.

14.  Relocation Fee:  $5,000

• Due Date:  Upon request for a new store design.

15.  Expansion Fee:  $1,000

• Due Date:  Upon request for expanded store design.

• Only applies to expansion in current premises.

16.  Assignment Fee:  $20,000 to transfer to a new franchisee; $10,000 to transfer to an existing franchisee

• Due Date:  Payable when assignment is signed.

• Charge for selling your franchise to a third person.

17.  Annual Meeting Non-Attendance Penalty Fee:  $1,200; may be increased each year

• Due Date:  Payable on the 10th day of month following annual meeting.

• For failure to attend annual meeting.

18.  Computer Support Fee:  $250 per month; may be increased each year

• Due Date:  Payable on the 10th day of the month.

• Affiliate BaseCamp provides software upgrades and tech support if you meet Computer System Standards.

19.  Tech Support Fee:  $50 per hour with 30-minute minimum; may be increased each year

• Due Date:  Payable on the 10th day of the month following service.

• Computer support rate for all Baseline point-of-sale and IMAP software if you don’t meet Computer System Standards.

20.  Standards Violation Fees:  $200 for each initial and ongoing violation

• Due Date:  The day after fee is assessed.

• For failure to cure a standards violation after 14 days’ notice.

21.  Bookkeeping Service:  $175 per month; second and subsequent stores, $150 per month; may be increased each year

• Due Date:  10th day of the month following service.

• Required for the first year of operation, and may be later required if financial reports are not submitted.

22.  Philanthropy Fee:  no greater than 0.5% of gross sales

• Due Date:  The 10th of each month.

• For system-wide philanthropy program, when developed.

23.  Additional Onsite Assistance:  $300 per day, plus transportation and lodging (3-day maximum); may be increased each year

• Due Date:  15 days after billing.

• Uptown Cheapskate provides opening assistance free.

24.  Audit:  cost of audit, 13.5% Royalty Fee, and 1.5% Marketing Fund Fee of underpayment, plus 18% interest from date of underpayment

• Due Date:  2 days after billing.

• Payable only if audit shows an understatement of at least 1% of gross sales for any month, quarter, or year.