Detailed Information on Wing Zone’s Initial Franchise Fee, Royalty Fee + 21 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $40,000

• The initial franchise fee due under each Franchise Agreement (where no development rights are granted) is a lump sum payment of $40,000, payable in full when you sign the Franchise Agreement.

• The initial franchise fee is fully earned when paid and non-refundable in consideration of Wing Zone’s administrative and other expenses incurred in granting the franchise and for its lost or deferred opportunity to franchise others.

2.  Development Services Fee:  $6,000

• You also must pay a Development Services Fee for each Restaurant you develop for Wing Zone’s costs incurred in site selection assistance, layout and design assistance, plan review, and lease review assistance.

• This fee is $6,000 and is due in a lump sum when you sign the Franchise Agreement. This fee is fully earned and non-refundable.

3.  Shop Launch Marketing Plan:  $12,000 to $30,000

• Unless your Restaurant operates at a Virtual Kitchen location or at or within a “Non-Traditional Venue,” you must spend at least $30,000 on a Shop Launch Marketing Plan.

• You must pay Wing Zone this amount in 2 equal installments. The first $15,000 installment is due no later than 4 weeks before the Restaurant opens. The second $15,000 installment is due no later than 10 weeks after the Restaurant opens.

• Wing Zone will create the Shop Launch Marketing Plan in collaboration with you and implement the Plan on your behalf. This payment is non-refundable.

• If your Restaurant operates at a Virtual Kitchen location or at or within a Non-Traditional Venue, you must spend at least $12,000 on a Shop Launch Marketing Plan. This amount is due no later than 4 weeks before the Restaurant opens.

• A “Non-Traditional Venue” means a captive-venue location, including airports, hospitals or medical centers, limited-access highway food facilities, bus or train locations, entertainment and sports complexes, convention centers, military facilities, schools, colleges and universities, office facilities, department and retail superstores, mobile units, off-site sales accounts, convenience stores, supermarkets, shopping malls, home improvement retailers, and any type of location known colloquially as “virtual kitchens,” “ghost kitchens,” “ghost operations,” or locations that operate on a delivery and/or pick-up-only basis.

4.  Development Fee:  the sum of the following amounts: (1) the $30,000 initial franchise fee for the first Restaurant to be developed under the Area Development Agreement (for which you concurrently sign the Franchise Agreement); (2) the $6,000 Development Services Fee due for the first Restaurant to be developed under the Area Development Agreement; and (3) a deposit equal to $10,000 for each additional Restaurant (after the first Restaurant) which the Area Development Agreement grants you the right to develop

• If you sign an Area Development Agreement because you commit to develop at least 3 Wing Zone Restaurants, the initial franchise fee due for each Restaurant slated for development, including the first Restaurant, is $30,000.

• When you sign the Area Development Agreement, you also must sign a Franchise Agreement for the first Restaurant to be developed and pay Wing Zone a development fee.

• The development fee is the sum of the following amounts: (1) the $30,000 initial franchise fee for the first Restaurant to be developed under the Area Development Agreement (for which you concurrently sign the Franchise Agreement); (2) the $6,000 Development Services Fee due for the first Restaurant to be developed under the Area Development Agreement; and (3) a deposit equal to $10,000 for each additional Restaurant (after the first Restaurant) which the Area Development Agreement grants you the right to develop.

• Wing Zone will identify the number of Restaurants you must develop, the deadlines for developing them, and the applicable development fee before you sign the Area Development Agreement.

• The development fee is not refundable under any circumstances, even if you do not comply or attempt to comply with the Development Schedule and Wing Zone then terminates the Area Development Agreement.

• While the Development Fee is not refundable, each time you sign a Franchise Agreement for another Restaurant to be developed within the Designated Territory, Wing Zone will apply the deposit related to that Restaurant (which is part of the Development Fee) toward the initial franchise fee due for that Restaurant (leaving $20,000 of the initial franchise fee due at time of signing).

• Wing Zone participates in the VetFran program, offering a 15% discount on the initial franchise fee to military veterans providing a copy of their DD214.

5.  Royalty Fee:  6% to 7% of weekly Gross Sales

• Due Date:  Due weekly on Wednesday (“Due Date”) on account of Gross Sales for the 7 days ending on the preceding Monday.

6.  Marketing Fund:  up to 4% of weekly Gross Sales; currently, 2.5% of weekly Gross Sales

• Due Date:  Due weekly on Wednesday (“Due Date”) on account of Gross Sales for the 7 days ending on the preceding Monday.

7.  Technology Fee:  0.65% of Gross Sales

• Due Date:  Payable when you pay your Royalty Fee.

• While Wing Zone does not currently charge this fee, Wing Zone may begin collecting it on 30 days’ prior written notice to you.

• Tech Fees are for technology expenditures Wing Zone deems best for the franchise system (as well as company- and affiliate-owned Wing Zone Restaurants), including mobile training and operational performance software, cloud-based franchise management solutions, IT phone support and database maintenance, digital marketing, online ordering and loyalty subscriptions, iPad mobile device management, and e-learning solutions.

8.  Cooperative Advertising:  up to 2% of your monthly Gross Sales; currently, 2%

• Due Date:  As determined by the Cooperative.

9.  Training for Additional Team Members/Managers in Las Vegas, Nevada:  $1,000 per person per 5 days; Wing Zone may increase this to $5,000 per person per 5 days

• Due Date:  Upon commencement of training.

• You pay for additional training if you request it.

10.  Training for Additional Team Members/Managers at Your Location:  $2,000 per 5 days; Wing Zone may increase this to $7,500 per person per 5 days

• Due Date:  Upon commencement of assistance.

• You pay for additional training if you request it.

11.  Extensive On-Site Training Program:  $10,000

• Due Date:  Upon demand.

• Wing Zone has the right to require your managerial personnel to participate in, and complete successfully, an additional extensive onsite training program at the Restaurant for up to 6 weeks after the Restaurant has opened for business.

12.  Copy of Manual Paper Copy:  $1,000 (electronic copy available at no charge)

• Due Date:  10 days after billing.

• Cost of replacement copy.

13.  Approval of New Supplier:  Wing Zone’s costs incurred in approving supplier

• Due Date:  Upon submission of sufficient background information on the supplier.

14.  Transfer Fee:  greater of $10,000 or 5% of the sales price (but not to exceed $20,000)

• Due Date:  At time of approved transfer.

• No transfer fee if 100% of interest in franchise is transferred to a corporation, partnership, or limited liability company controlled by you.

15.  Renewal Fee:  $10,000

• Due Date:  Upon signing new successor Franchise Agreement.

16.  Relocation Fee:  $5,000

• Due Date:  As incurred.

• Due if you wish to relocate the Restaurant’s premises.

17.  Audit:  costs of audit, plus interest

• Due Date:  10 days after billing, with interest beginning from the date of underpayment.

• Costs of audit payable only if audit shows an underpayment of any amount owed to Wing Zone of 3% or more.

18.  Bookkeeping Services:  $100 per hour

• Due Date:  When billed.

• Payable if you fail to provide timely financial reports twice in a 24-month period and Wing Zone requires you to use its bookkeeper.

19.  Guest Complaint Resolution:  currently, $50 per hour (not to exceed $150 per hour)

• Due Date:  As incurred.

• Due if you do not resolve guest complaints twice in a 24-month period, and Wing Zone requires you to use its complaint resolution system.

20.  Administrative/Late Fee:  $250

• Due Date:  When billed.

• Due for each late or dishonored payment.

21.  Interest:  lesser of 1.5% per month or highest commercial contract interest rate law allows

• Due Date:  When billed.

• Due on past due amounts.

22.  Costs and Attorneys’ Fees:  will vary based on circumstances

• Due Date:  As incurred.

• Due when you do not comply with Franchise Agreement or Area Development Agreement.

23.  Indemnification:  will vary based on circumstances

• Due Date:  As incurred.

• You must reimburse Wing Zone if it is held liable for claims arising from its operation of your franchise.