THE FANCY FRANKS GOURMET HOT DOGS RESTAURANT CONCEPT I AM VERY PROUD OF

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1 FRANCHISE GUIDE

2 THE FANCY FRANKS GOURMET HOT DOGS RESTAURANT CONCEPT WAS INSPIRED BY ONE OF AMERICA S MOST FAMOUS HOT DOG EATING DESTINATIONS, CONEY ISLAND. THE VERY FIRST FANCY FRANKS RESTAURANT OPENED IN 2012 AT 326 COLLEGE ST IN TORONTO, ACROSS FROM THE VERY COOL KENSIGNTON MARKET; WITH THE VISION OF APPEALING TO EVERYONE AND BRINGING A LITTLE NEW YORK TASTE TO CANADA. THE MAIN GOAL IS SIMPLY TO CREATE DELICIOUS, LOCALLY SOURCED HOT DOGS THAT WOULD PLEASE EVEN THE PICKIEST OF EATERS. FROM A GREEK SALAD ON A HOT DOG FRANKATHENAPOLIS TO THE NOW POPULAR FANCY WITH AVOCADO, TOMATO AND BACON, THERE IS A SPECIAL THEMED HOT DOG FOR EVERYONE. THESE KOSHER STYLE HOT DOGS ARE HAND TWISTED WITH 100% ALL BEEF SHOULDER-CUT MEAT THEN HOUSED IN AN ALL-NATURAL LAMB CASING, AND MANY OF THE SIGNATURE TOPPINGS ARE MADE IN-HOUSE. I AM VERY PROUD OF THE QUALITY OF THE FOOD AT EVERY FANCY FRANKS RESTAURANT AND KNOW THAT AFTER YOU VE TRIED A FANCY FRANKS HOG DOG YOU WON T LOOK AT FAST FOOD THE SAME WAY AGAIN! Angelos Economopoulos Founder, CEO Fancy Franks Gourmet Hot Dogs Inc.

3 CREATED TO BE TORONTOS PREMIERE GOURMET HOT DOG TAKE-AWAY RESTAURANT. market & opportunity AS IT STARTS TO FOCUS MORE ON THE PREMIUMISATION OF HOT DOGS, IT S A CONVENIENT FOOD WHICH DRIVES THE FOOD SERVICE TREND I THINK WE WILL SEE CONSUMPTION ALMOST DOUBLE! CBC NATIONAL NEWS. concept FANCY FRANKS IS CHANGING THE WAY CITY FOODIES VIEW FRANKFURTERS. WE BELIEVE OFFERING FRESH AND DELICIOUS FOOD THAT IS AFFORDABLE FILLS A VOID IN THE MARKET BETWEEN FAST FOOD AND RESTAURANT QUALITY MEALS. THE ORIGINAL RESTAURANT DESIGN CALLS FOR HIGH CEILINGS IN LOCATIONS WHERE AVAILABLE AND SHOWCASE A DISTRESSED RECLAIMED BARN WOOD COMMUNAL TABLE WITH IRON FINISHES, SLICING OUR LOFTY STYLE RESTAURANTS IN TWO. UPON ENTERING THERE IS AN EYE CATCHING MURAL GREETING ALL GUESTS. WE AIM TO HAVE SEATING FOR 20 GUESTS AND A GREAT FLOW TO HANDLE THE HIGH VOLUME OF TAKE-AWAY CUSTOMERS. THE LOOK OF OUR STORES IS EASILY REPRODUCIBLE AND THEY ARE DESIGNED TO MAXIMIZE EFFICIENCY AND PROFITABILITY. A RECENT TECHNOMIC REPORT STATES THE GOURMET HOT DOG TREND IS HERE TO STAY. THE ONLINE SURVEY OF MORE THAN 2,250 U.S. AND CANADIAN CONSUMERS CLAIMS, M A R K ET R ES EA R CH S H O WS H O T D O G CO N S UM P T I O N I S O N T H E R I S E. Renne Filippone CBC National News. GOURMET HOT DOGS ARE ONE OF THE HOTTEST TRENDS ON TODAY S DINING SCENE. OF THOSE SURVEYED, 75 PERCENT SAID THEY EAT A HOT DOG AT LEAST ONCE A MONTH. THE FAST-FOOD INDUSTRY IN CANADA GENERATES OVER $12 BILLION DOLLARS A YEAR. THE ABILITY TO ENTER AND SUCCEED IN THIS MARKET IS BASED ON PROVIDING CONSUMERS WITH AN ALTERNATIVE THAT IS MORE ATTRACTIVE THAN THE EXISTING OPTIONS BASED ON IMAGE, TASTE AND QUALITY. FANCY FRANKS HAS SEEN 100% FRANCHISE GROWTH OVER THE LAST FEW YEARS WITH THE PUBLIC BECOMING MORE AWARE OF THE FOOD THEY CONSUME AND THE OPTIONS AVAILABLE TO THEM. FANCY FRANKS IS PERFECTLY POSITIONED TO TAKE ADVANTAGE OF THIS AND IS POISED FOR EXPANSIVE SALES WITH FRANCHISE GROWTH IN THE COMING YEARS. FANCY FRANKS IS READY TO PENETRATE THE CANADIAN FAST-FOOD MARKET BY PROVIDING AN AFFORDABLE FOOD OPTION THAT IS HIGH QUALITY AND CONSIDERABLY BETTER TASTING THAN COMPETING BRANDS.

4 11 IT ALL BEGINS WITH OUR HAND TWISTED HOT DOGS AND SAUSAGES: FANCY FRANKS IS A HIGHLY PROFITABLE BUSINESS FOR MANY REASONS. THE RETAIL CONCEPT WAS DESIGNED SPECIFICALLY TO WORK IN SMALLER LOCATIONS, WHICH REDUCES RENT, OVERHEAD, STAFFING AND INSURANCE COSTS. THE MENU PRICE POINTS ARE ACCESSIBLE FOR CUSTOMERS BUT STILL PROVIDE HIGH MARGINS FOR THE OPERATOR. ADDITIONALLY, THE BUYING POWER THAT COMES FROM ALIGNING YOURSELF WITH A LARGE ORGANIZATION ENSURES THAT YOU GET THE LOWEST PRICES ON YOUR PURCHASES, LOWERING YOUR COSTS AND INCREASING YOUR PROFITS. product innovation AS A PROGRESSIVE AND FAST GROWING FRANCHISE WE STRIVE TO STAY AHEAD OF THE TRENDS WHILE STILL MAINTAINING HIGH PROFIT MARGINS. THAT S WHY AT FANCY FRANKS. WE ARE ALWAYS DEVELOPING NEW DELICIOUS MENU ITEMS LIKE OUR FANSHI HOTTO-DOGGU A JAPANESE INSPIRED HOT DOG WITH TRADITIONAL JAPANESE TOPPINGS AND UNIQUE PRESENTATION. OUR POPULAR ULTIMATE GRILLED CHEESE POUTINE HAS A LOYAL CULT-LIKE FOLLOWING SINCE IT S ADDITION TO OUR MENU AS DO OUR ALWAYS FRESH MINI DONUT CREATIONS. WHEN CREATING AND DEVELOPING NEW MENU ITEMS WE ARE ALWAYS LOOKING AT FOOD TRENDS AND EXTREMELY CONSCIOUS OF FOOD COSTS FANC Y HOT DOG OP TIONS WE START WITH 100% SHOULDER BEEF, HAND TWISTED INTO A LAMB CASING, THIS BEEF HAS THE PERFECT BLEND OF SPICES AND YOU GET THAT GOOD OL SNAP WHEN YOU BITE INTO IT. COMPLIMENTARY SAUCES 47 COMPLIMENTARY TOPPINGS UNIQUE POUTINE CHOICES WE START WITH OUR FRESH CUT FRIES THEN TOP THEM WITH TRADITIONAL QUEBEC CHEESE CURDS FOR THAT SQUEAKY GOOINESS AND DELICIOUS BEEF OR VEGETARIAN GRAVY, WHICH GIVES OUR POUTINE A RICH FLAVOUR. THE FRIES PREMIUM POTATOES, HAND CUT DAILY, DOUBLE BLANCHED IN NON HYDRONATED TRANS FAT CANOLA OIL, WHICH GIVES OUR FRIES A SOFT BUTTERY TEXTURE INSIDE AND A GOLDEN CRISPY EXTERIOR. 4 FRESH & MEATY SAUSAGES MADE IN SMALL BATCHES AND HAND TWISTED FOR US PER ORDER REQUEST. 6 3 FRESH MADE TO ORDER MINI DONUT CREATIONS DELICIOUS, HOT AND FRESH. THERE IS NOTHING BETTER THAN A HOT DONUT MADE TO ORDER FOR YOU. BEING ONE OF ONLY A HANDFUL OF QSR S THAT SERVE MADE TO ORDER DONUTS GIVES A DISTINCT COMPETITIVE ADVANTAGE. CLASSIC MILK SHAKES & ICE CREAMS HAND SPUN WITH ONLY PREMIUM CANADIAN ICE CREAM AND 2% MILK. AT FANCY FRANKS WE PRIDE OURSELVES ON THE QUALITY OF OUR FOOD. ALL OF OUR HOT DOGS ARE HAND MADE AND SEASONED SPECIFICALLY TO MAXIMIZE THEIR TASTE. IN ADDITION TO OUR BASIC HOT DOG, WE ALSO HAVE A LINE OF SIGNATURE HOT DOGS THAT OFFER OUR CUSTOMERS BOTH VALUE AND A TASTE EXPERIENCE THAT S UNFORGETTABLE. MOST NOTABLY THE FRANKATHENAPOLIS HAS BEEN THE FOCUS OF MUCH MEDIA ATTENTION AS IT IS A FRESH TWIST ON A NORTH AMERICAN CLASSIC.

5 fresh & premium THE PRODUCE WE RECEIVE FRESH PRODUCE DELIVERED THREE TIMES A WEEK TO OUR STORES, ALL PRODUCE IS PREPARED AT EACH STORE TO ENSURE THE FRESHEST PRODUCT POSSIBLE. FRANKS RINGS FRESHLY CUT ONIONS, DIPPED AND PANKO FRIED TILL CRISPY, SERVED WITH A SPICY CHIPOTLE MAYO DIP THE SALAD WE USE ONLY FRESHEST GREENS FOR OUR DELICIOUS CRISPY SALADS, PREPARED FOR THE CUSTOMER AND TOSSED WITH A VARIETY OF PREMIUM TOPPINGS. THE CHEESES WE USE A WIDE SELECTION OF HIGH QUALITY CHEESES ON OUR HOT DOGS, SALADS AND POUTINE, WHICH ENSURES THE CUSTOMER SATISFACTION. THE BUN A TRADITIONAL EGG BUN MADE JUST FOR FANCY FRANKS, DELIVERED DAILY WHICH INSURES A DELICIOUS SOFT AND FRESH BUN. OUR BEVERAGES WE DECIDED AT THE OUTSET TO OFFER BOTTLED BEVERAGES AND FOUNTAIN POP AS THESE PRODUCTS ARE FAR SUPERIOR IN TASTE, QUALITY, AND CONSISTENCY. franchise criteria AT FANCY FRANKS WE HAVE STRICT CRITERIA FOR THE PLACEMENT OF NEW RESTAURANT LOCATIONS. WE FOCUS ON CITIES WITH A MINIMUM POPULATION OF 80,000 PEOPLE, MAJOR ROADS WITH HIGH TRAFFIC VISIBILITY, BUSY LOCAL NEIGHBOURHOODS WITH EXCEPTIONAL LUNCH AND DINNER TRADE, HIGH FOOT TRAFFIC, LARGE TRANSIT HUBS AND MAJOR RETAIL PLAZAS WITH AAA ANCHOR TENANTS. WE WORK CLOSELY WITH PROFESSIONAL REALTORS AND ALL PROSPECTIVE FANCY FRANKS FRANCHISEES TO DEVELOP A SITE LOCATION PLAN TO ASSIST YOU IN FINDING THE RIGHT LOCATION TO MAXIMIZE YOUR ROI. PACKAGING & BRANDING UNIQUELY DESIGNED OUR BRANDING HAS BEEN THE TOPIC OF MUCH DISCUSSION. STRIKING AND UNIQUE ITS STANDS OUT FROM OTHER QSR RESTAURANTS. the process APPLICATION AFTER YOUR REQUEST FOR FRANCHISING INFORMATION, YOU WILL BE CONTACTED BY US TO ARRANGE A MEETING AT OUR TORONTO HEAD OFFICE. MEETING YOU WILL MEET WITH US IN PERSON TO REVIEW YOUR APPLICATION, DISCUSS YOUR BUSINESS PLAN AND EVALUATE THE FIT FOR BOTH PARTIES. APPROVAL AT THIS POINT IF BOTH THE FRANCHISEE AND FRANCHISER MUTUALLY AGREE TO MOVE FORWARD, YOU WILL RECEIVE OUR DISCLOSURE DOCUMENTS. YOU WILL HAVE 15 DAYS TO REVIEW THESE DOCUMENTS WITH YOUR LAWYER. FINAL APPROVAL & FRANCHISE AGREEMENT ONCE YOU HAVE READ THE DISCLOSURE DOCUMENTS AND ARE APPROVED, YOU WILL SIGN THE FRANCHISE AGREEMENT AND SITE LOCATION WILL BEGIN. SUPPORT FANCY FRANKS PROVIDES ASSISTANCE TO OUR FRANCHISEES FROM START TO FINISH. WE WILL HELP YOU WITH SITE SELECTION, LEASE NEGOTIATION,ACQUIRING FINANCING, CONSTRUCTION, STORE OPENING, TRAINING, MARKETING AND ONGOING SUPPORT.

6 1 2 why start a franchise AT FANCY FRANKS WE DECIDED FROM THE BEGINNING THAT A FRANCHISE SHOULD BE A PARTNERSHIP, WE WANT ALL OUR FRANCHISES TO BE SUCCESSFUL AND MAKE MONEY, SO WE CAME UP WITH A MULTI-TIERED APPROACH. MASTER LEASE ALTHOUGH FANCY FRANKS HEAD OFFICE HOLDS THE MASTER LEASE, WE DO NOT ADD ANY FEES OR INCREASE YOUR RENT, WE DISCLOSE FROM THE OUTSET THE ORIGINAL LEASE AND YOUR EXACT MONTHLY PAYMENTS. FANCY FRANKS STORE A COMPLETE TURNKEY FANCY FRANKS STORE IS ONE OF THE LEAST EXPENSIVE BUILDS IN THE QSR INDUSTRY. WE DO THIS BY EMPLOYING HIGHLY QUALIFIED CONTRACTORS AND BY NEGOTIATING FAIR AGREEMENTS FOR EQUIPMENT. UNLIKE OTHER FRANCHISE SYSTEMS, OUR PROFIT MARGINS ARE ONLY 15% FROM THE CONSTRUCTION AND EQUIPMENT PACKAGES SUPPLIED TO A FANCY FRANKS FRANCHISEE. OTHER FRANCHISOR SYSTEMS MAKE UP 40% PROFIT ON THEIR BUILDS. 3 4 BUYING POWER LARGE SCALE BUYING POWER ENABLES FANCY FRANKS TO RECEIVE SOME OF THE LOWEST PRICING ON FOOD, PACKAGING AND DRY GOODS POSSIBLE.THEN, WE PASS THE SAVINGS ON TO YOU. WE CONTINUALLY NEGOTIATE DIRECTLY WITH SUPPLIERS TO GET THE LOWEST PRICES FOR OUR FRANCHISEES. THE SYSTEM SINCE 2012 WE HAVE BEEN DEVELOPING A UNIQUE STORE SYSTEM THAT YOU AS A FANCY FRANKS FRANCHISEE HAVE FULL ACCESS TO. THIS HELPS YOU WITH ORDERING PROCEDURES TO MINIMIZE WASTE OF ALL PRODUCTS WHILE MAINTAINING HIGH QUALITY. THIS SYSTEM PROVIDES YOU WITH THE FORMULA TO A SUCCESSFUL BUSINESS. franchise costs FRANCHISE FEE $25, HST ROYALTY FEE FLAT FEE - $ PER MONTH + HST ADVERTISING FEE FLAT FEE - $ PER MONTH + HST TURNKEY SITE BUILD $250,000 - $350,000 TRAINING: 2 WEEKS IN THE CORPORATE STORE & 1 WEEK IN STORE TRAINING. All content of this guide are for general purposes only. This guide does not constitute a franchise offering or an offer to sell a franchise.a franchise offering can be made by us only if we provide you with an appropriate franchise disclosure document. Fancy Franks Inc. Fancy Franks Gourmet Hot Dogs Inc TM

7 FANCY FRANKS INC. 940 BLOOR STREET WEST TORONTO, ONTARIO M6H 1L4