ANSWERS - FRANCHISING QUESTIONS ABOUT FRANCHISING

· What type of franchise are you offering?

Farmer Boys Foods, Inc. offers individual start-up franchises for family-oriented, quick service restaurants. FARMER BOYS® Restaurants offer carry-out and drive-through service as well as on-premises dining, serving breakfast, lunch, and dinner. Our food is made from scratch and we specialize in freshly-cooked, made-to-order hamburgers while offering a number of other foods and beverages. Farmer Boys also grants options for development and operation of multiple units within defined geographic territories under area development agreements

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· How much does the franchise cost?

The initial franchise fee is $45,000. This fee helps cover the substantial cost of giving you business opening assistance, initial training, and other support and franchise development services during the start-up period.

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· How much will my total investment be?

We estimate that your initial investment to establish a FARMER BOYS® Restaurant will range from $518,024 to $736,218. This includes the initial franchise fee, working capital, and other expenses, assuming you will lease the land and own building and equipment. To qualify, you will need approximately $350,000 in liquid assets and a $750,000 net worth, not including the value of your home.

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· How much is the royalty?

You will pay a weekly royalty of 5% of your adjusted gross revenue (gross sales less discounts, refunds, and sales tax). This fee entitles you to continued use of the FARMER BOYS® trade name and trademarks, operating systems, professional marketing assistance, ongoing business development, consulting, volume purchasing discounts, and other benefits of being a part of the FARMER BOYS® network.

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· What about advertising costs?

The FARMER BOYS® name and reputation for quality is an important part of your business. To benefit from it, you will spend about $4,000 on a grand opening advertising campaign during your first month of operation. You also will spend one percent of your adjusted gross income on local advertising on an on-going basis and contribute three percent of your weekly adjusted gross revenue to the advertising fund, which benefits all Farmer Boys® franchisees.

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· What kind of training does Farmer Boys provide?

You or your general manager will participate in an intensive ten (10) weeks initial training course. Training will take place both in the classroom and on-the-job and will cover all aspects of running a FARMER BOYS® restaurant.

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· What on-going guidance do you offer?

One week before your restaurant opens, Farmer Boys, at its own expense, will send a representative to your restaurant for about a month to assist and further train you during the opening of your restaurant. After that, our knowledgeable franchise representatives will visit you periodically to guide you, provide quality control, and answer any questions you may have. We will also lend you a copy of the FARMER BOYS® Confidential Operations Manual, covering all aspects of the franchised business, for your use throughout the term of the franchise.

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· Will I have an exclusive territory?

Under an individual franchise agreement, we will grant you a protected area around your restaurant within which no other FARMER BOYS® restaurant will be developed. If you enter into an area development agreement, your territory will be exclusive until you complete your development schedule. If you undertake additional development with our consent, we will grant you an additional period of exclusivity.

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· How much money can I make?

Many factors may affect your restaurant's results, including the economy, your restaurant's length of time in operation, the location, the weather, your ability to keep costs down and to apply the operational techniques Farmer Boys teaches you, the amount of your investment in advertising and promotion, the size of your restaurant, and more. Farmer Boys does provide information in the Uniform Franchise Offering Circular as to the average sales, food cost, and payroll costs of forty-six (46) of our units.

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· What is the term of a FARMER BOYS® franchise?

The term is 20 years. If you meet all our conditions for renewal, you may renew the franchise agreement for two additional ten-year terms.

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· What is the next step?

Review this information carefully. Then if you would like to learn more, call us at our toll free number,
888-930-FARM (888-930-3276). We would be happy to give you a tour of one of our restaurants. Or, on your own, you may visit a FARMER BOYS® Restaurant for breakfast, lunch or dinner. If you would like to go further after investigating, please complete a no-obligation confidential Request for Consideration form and fax or mail it back to us. If, after reviewing your qualifications, we think you have the potential to join the FARMER BOYS® franchise system, we will invite you to meet with us in person at our corporate headquarters. At that time, we will give you a copy of our Franchise Disclosure Document ("FDD"), a prospectus containing information about Farmer Boys and the franchise it offers. You should study the FDD and contact some or all of the current franchisees whose names and telephone numbers are listed in it. Meanwhile, we will be reviewing your qualifications. If both you and Farmer Boys are interested in going further, we will discuss how to proceed at that point.

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