Franchise Opportunities

Franchise Opportunities

Great food is our passion. We live for the tantalizing smells, sights, tastes and textures of meals that are made to perfection. We are obsessed with discovering new recipes and reimagining old favorites _ especially our Newcomb Family Recipes. We insist on sourcing the finest ingredients. Nothing is pre-chopped, pre-sliced or pre-packaged. We are uncompromising about quality from kitchen to table and our dedication to personal service. That s a passion shared by everyone you will meet at Newk s.

Day Part Mix LUNCH 59% DINNER 31% CATERING 10% Newk s was founded in 2004 by Don Newcomb, Debra Bryson and Chris Newcomb in Oxford, Mississippi. The team had previously founded McAlister s Deli and transformed the restaurant into one of the fastest-growing fast-casual restaurants of the time. After providing a solid foundation and establishing strong upward growth for McAlister s Deli, they sold the chain and soon began to focus on their new venture, using an abbreviated version of Newcomb for the restaurant name. The Numbers Hours 11 AM TO 10 PM Concept FAST-CASUAL Average unit square footage 3,800 4,500 Average interior seats 130 150 Average including patio seats 150 170 Wine & beer OFFERED WHERE LEGAL Breakfast NO Royalty fee 5% NET Marketing fund fee 1.5% NET Total investment necessary to begin operations $932,000 $1,131,000 Total check average $15.34 *Average unit volume CORPORATE - $2,384,459 FRANCHISE - $2,105,848 GRAB-N-GO 4.46% CATERING 8.27% TO GO 18.39% DINE IN 62.98% SALES BY SEGMENT CALL IN & ONLINE 10.52% 2004 First Newk s opens in Oxford, Mississippi TOP 10 LIST Inc. 5000 Fastest- Growing Company 2005 2008 2009 2010 2011 Top 10 Best Franchise Deal by QSR Franchise Times Fast and Serious 25 Smartest Growing Brands Best Franchise Deals Rising Star by QSR Fast Casual s Top 20 Movers and Shakers 2012 2013 2014 2015 2016 First franchised Newk s opens Top Ten Restaurant Concept by Restaurant Chains Growing Concept by Nation s Restaurant News Opened record 14 new units Technomic Top 150 Fast-Casual Chains Rebranded as Newk s Eatery Opened 14 new units Fast Casual s Top 20 Movers and Shakers Fast Casual s Top 10 Marketing Campaigns (#2) Next 20 Standout Brand by Nation s Restaurant News SANDWICHES 34% SALADS 25% Menu Sales Mix PIZZAS 11% SOUPS 10% BEVERAGES 12% OTHER 8% Brand Differentiators Scratch-Made Approach Broad menu of meticulously prepared meals, made from scratch with fresh, high-quality ingredients. Culinary Driven Menu Unique fast-casual dining experience highlighted by the Roundtable, signature take-home cup, free breadsticks, famous iced tea and large portions. Hospitality First Exceptional customer service in a comfortable setting that appeals to multiple demographics and is suitable for multiple occasions. Operations-focused, unitlevel model that is easy for franchisees to learn. Open Kitchen & Warm, Inviting Interior Best-in-class concept with superior competitive positioning in the fast-casual sector. *Figures reflect averages for 13 affiliate-owned and 67 franchised restaurants that were open on or before July 1, 2015 and operated throughout the entire fiscal year as published in Item 19 of our April 2017 Franchise Disclosure Document ( FDD ). These averages are based on 13 four-week periods from January 4, 2016 January 1, 2017. Figures represent a range of estimated costs based on information from affiliate-owned and franchised Newk s restaurants, as set forth in Item 7 of our FDD. A new franchisee s results may differ from the represented performance. There is no assurance that you will do as well, and you must accept that risk. Franchise offering are made by Franchise Disclosure Document only. This information is not intended as an offer to sell or the solicitation of an offer to buy a franchise. It is for information purposes only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, South Dakota, Virginia, Washington and Wisconsin. If you are a resident of or want to locate a franchise in one of these states we will not offer you a franchise unless we have complied with the applicable pre-sale registration and disclosure information in your state.

Chris Newcomb Co-Founder & CEO In addition to co-founding Newk s with his father, Dr. Newcomb, and Debra Bryson, Chris Newcomb co-founded McAlister s Deli and was instrumental in the chain s success. As CEO, Chris is responsible for implementing the strategic goals and objectives of the company and also serving as the administrator of all company locations. The right concept. The right opportunity. MICHAEL CLOCK President & Chief Financial Officer CHRIS CHEEK Chief Development Officer STEWART SLOCUM Chief Marketing Officer ANGEL McGOWAN Director of Purchasing KEVIN ANDERSON VP of Company Operations KLARA SMITH Corporate Counsel MARK REEDY VP of Franchise Operations ADAM KARVELLER VP of Information Technology Fast-casual restaurants are the fastest-growing segment of the restaurant industry, leading industry growth since 2007. Newk s has significantly outpaced the fast-casual sector due to our unique concept and market positioning. THE IDEAL NEWK S FRANCHISEE Prior restaurant experience Passionate about the hospitality industry Active in the business, with a priority on local marketing and customer service Well capitalized 3 to 5 restaurants: $3MM net worth and $1.5MM liquid 5 to 8 restaurants: $4MM net worth and $2.5MM liquid 8+ restaurants: $5MM net worth and $3.5MM liquid BENEFITS OF NEWK S FRANCHISE OWNERSHIP A concept validated by industry trends Streamlined, efficient operational system Flexible menu, adaptable to change with trends and tastes Flexible store design and location options Long-term, multi-unit franchise focus Experienced, respected management team Strong training and marketing programs Ongoing support of a dedicated franchise company

Specialty Toasted Sandwiches Homemade Desserts We live for the perfect sandwich. It all begins with the bread our dough recipe bakes up perfectly soft and airy inside, then we toast it to order for a light and flaky crust. We slice it with a hinge to help you keep a handle on your flavors of choice: flame-grilled meats, imported cheeses, hand-chopped vegetables and Newcomb Family Recipes like homemade pimiento cheese or chicken salad. Shrimp Po Boy Pesto Chicken Newk s Club Vegetarian Club Grilled Steak The Italian Grilled Chicken Our Newcomb Family Recipe cakes and treats are made from scratch in our own bakery, so they are always guaranteed to satisfy your sweet tooth. Homemade Cakes Brownies The Royal Newk s Q Pimiento Cheese Chicken Salad Choice Roast Beef Smoked Ham Turkey Breast Kettle Batch Soups Our signature soups are handmade in small batches, ensuring slowly simmered perfection in every spoonful. Soup menus change daily and seasonally. Loaded Potato Tomato Basil Lobster & Crab Bisque Broccoli Cheese Chicken Tortilla Newk s Signature Chili Fresh-Tossed Salads Salads should be beautiful. We start with vibrant greens a hearty Arcadian mix of greens, aromatic arugula or crisp romaine fillets then build your bowl to order with impeccable ingredients like hand-chopped vegetables, premium meats, nuts and imported cheeses. It s all tossed with our madefrom-scratch Newcomb Family Recipe dressings. Ahi Tuna Shrimp & Avocado Shrimp Remoulade Newk s Favorite Ultimate Black & Bleu Big Crispies Peanut Butter Crispies Cobb Chef Southern Greek Simply Caesar Artisan Pizzas Each and every pizza is hand-rolled to order from our own artisan dough. We brush it with our housemade garlic olive oil, and then bake your 10" pizza to crispy perfection with your choice of premium toppings. Spicy Shrimp Deluxe Sausage & Pepperoni The Debra Veggie Spicy Chicken BBQ Chicken Pepperoni Mediterranean Five Cheese Margherita Newk s Q Chicken Chili Chicken Sausage Gumbo Chicken Noodle Corn & Crab Chowder White Bean & Kale Hoppin John Seasonal Temptations We re always looking to raise the bar, so we pepper our menu with limited-time offers to try out new recipes and appeal to seasonal preferences. Soups and cakes are also rotated to keep our menu fresh. Beverages In addition to our standard 32-ounce fountain drinks, you ll find upscale favorites like Orangina, Pellegrino and Acqua Panna. Our classic iced tea is available sweet, unsweetened and presweetened with Splenda. And, where permitted by law, imported and domestic bottled beers and premium wines are also offered.

Shortcuts have their place. That place is in someone else s restaurant. Open kitchens have become popular in the restaurant industry over the past several years. Newk s restaurants do have open kitchens. But our reasons have nothing to do with restaurant trends. Our kitchens are open because we believe in preparing our food in a manner that s open and respectful of our guests expectations. We have nothing to hide. You won t find deep fryers or microwave ovens in our kitchens. No boxes of pre-cooked meats (the kind with the grill marks painted on) or tubs of pre-shredded cheese. Instead, we grill and slice our meats and cheeses, shred our lettuce, roll our dough, bake our own croutons and even mix our own salad dressings. At Newk s, we prepare food for our guests the same way we would do it for ourselves. It s our golden rule. The Ingredients Imagine painting a masterpiece using only three colors. Or composing a symphony with no sharps or flats. Preparing food is no different. Of course, it would be easier to order all of our ingredients from the same food distributor checklist that everyone else uses. We could save time and money using pre-made, pre-processed ingredients from the lowest-price suppliers. But we don t do easy. We start from scratch to build our culinary masterpieces. The right ingredients, in the right combination, synergistically affect the quality of the final product. That s why we devote so much attention to finding the best suppliers for our premium ingredients.

Other restaurants have condiment bars, but we take it to the next level. Our Roundtable features an array of premium ingredients used by our guests to customize their meals with additional variety. EXTRA VIRGIN OLIVE OIL Taken from the first pressing BALSAMIC, SHERRY & RED WINE VINEGARS CRACKERS CAPERS Imported from Italy BREAD & BUTTER PICKLES Most popular Roundtable item SEA SALT & COARSE PEPPER GRINDERS Also imported from Italy ROASTED GARLIC Roasted in olive oil in house The Roundtable GRATED PARMESAN Prepared in house, every morning PEPPERONCINI Imported from Italy, too We don t have customers at Newk s. We have guests. A customer buys goods or services. A guest receives hospitality at the home or table of another. HOT CHERRY PEPPERS Plenty of heat to go around SRIRACHA, TABASCO AND CHOLULA HOT SAUCES The difference is more than just semantics. Treating guests with respect, kindness and genuine care is a notion that s embedded into our culture. It s why we believe that guest service should continue after the order has been taken and the ticket paid. BREADSTICKS Torinesi-style, straight from Italy JALAPEÑOS Imported from Peru for better crunch CROUTONS Hand cut, seasoned and baked in house Likewise, we have hourly partners not employees or team members. It s a reminder that everyone who works at Newk s plays an integral role in the success of our brand and each restaurant.

Catering Catering is a popular business segment among fast-casual restaurants, and our emphasis on high-quality food has led to continued growth in our catering business. When preparing for a new restaurant to open, we provide free samples from our catering menu to nearby businesses decision makers. It s an effective way to pre-sell the Newk s concept and encourage sales for both the catering and dine-in segments. Grab - N - Go Our guests tend to be educated and hardworking with a busy lifestyle. They crave convenience almost as much as they crave our bold flavors. In addition to the typical call-ahead takeout order, we offer Grab-N-Go items in a cooler next to our takeout cash register for people in a hurry. Guests can choose from a wide selection of sandwiches, soups, salads, desserts and beverages. All food is prepared daily and replenished as needed. We like to call it #InstantGrabification.

System Map Newk s restaurants are located within the fastgrowing southeastern U.S. We are pursuing expansion opportunities within both existing markets and new markets outside of our current geographic footprint. Finding the perfect place. Finding the perfect location is one of the most important decisions you ll make. Look for locations with high visibility and appropriate age and income demographics. Plans are available for stand-alone, in-line and end-cap sites. Existing locations - sold out Existing locations - some territories available Target locations Not currently franchising in these states

We like to keep our interiors fresh, too. From the warm, inviting Tuscan color scheme to the open kitchen and our attractive furnishings and fixtures, we strive to make our interiors look as good as our food tastes. Each store gets a piece of original artwork customized to its city. Standard Floor Plan Open kitchen Roundtable condiments bar Beverage bar Grab-N-Go station (with separate entrance where available) Seating for 140 160 guests in dining room and 24 60 guests on patio 3,800 4,500 sq ft

Franchise Support Newk s offers extensive support in the following areas: real estate, training, operations and marketing. REAL ESTATE & CONSTRUCTION With the support of a dedicated development team, we assist with location selection, including market planning and analysis, tenant-rep broker management and lease negotiation. Additionally, our construction team is there to manage the construction process, including space planning, bid review, general contractor selection and necessary support for architecture and FF&E packages. TRAINING New franchise training is provided at our Support Center in Jackson, Mississippi and is covered under your franchise fee. (You pay salary and travel expenses.) Prior to opening a new location, your hourly partners will be trained on site by a certified Newk s training team. Ongoing training is provided as needed on site, at the Support Center and in certified regional training restaurants. OPERATIONS We support your operation via regular visits and contact by your franchise business consultant and our operations support teams. Support includes conference calls each period with operators and principles to discuss performance, opportunities, challenges and solutions. P&Ls are reviewed quarterly, and POS equipment and software are available for management reports. Food prices and distributor partnerships are negotiated in house, and franchise partners have access to all corporate vendors for small wares, paper goods, marketing materials and supplies. MARKETING Through regular visits and contact by your field marketing manager, Newk s will provide comprehensive marketing support, from grand opening events, social media setup and management to Roundtable Loyalty Club emails and catering business development. All franchise partners have access to an online toolkit with marketing materials and an in-house graphic design team for site-specific advertising needs.

Your National Soup Month Headquarters. BRAND PHOTOGRAPHY Newk s Marketing Newk s has a library of marketing materials and a marketing calendar available for use by all franchisees. The library contains print, radio, outdoor, rich-media online ads, catering van wrap designs and window clings. Newk s conducts brand-level social media marketing and encourages all franchisees to operate social media accounts for local store marketing. We assist with setup and support of local social media and email marketing accounts and hold regularly scheduled social media conference calls with franchisees. APP WINDOW CLING Prepared by hand not by bag. DIGITAL AD OUTDOOR Super foods don t need a cape. EBLAST SOCIAL MENU Red Quinoa & Kale Salad POP

Franchise FAQs Q. IS NEWK S INTERESTED IN EXPANDING OUTSIDE OF THE U.S.? A. Currently, we are focused on opportunities in the U.S. only. Q. WHAT DOES IT TAKE TO BE A SUCCESSFUL FRANCHISEE? A. The three most important factors are experience managing and operating successful restaurants, sufficient capital to weather financial ups and downs, and a passion for the business. In our experience, people who open a franchise for the investment potential but don t want to be actively involved in its operation tend to be unsuccessful. Q. HOW MUCH DOES IT COST TO OPEN A NEWK S UNIT? A. For most franchisees, the estimated cost to open ranges from $932,000 to $1,131,000. This range includes the initial franchise fee, real estate costs, furnishings, fixtures and equipment, architect fees, insurance fees, initial supply inventories, training expenses, grand opening advertising costs and other necessary costs. Costs may vary by market and business decisions that franchisees make in their start-up. Newk s University People who visit chain restaurants expect consistency in food, service and overall dining experience. To ensure that every Newk s restaurant meets the high expectations of our guests, we created a proprietary training program that we call Newk s University. Participants receive hands-on training covering the specific procedures required to run a Newk s Eatery from the manager s responsibilities to tasks conducted by our hourly partners. This is also where we detail our unique culture and how our mission and values translate into real-world success. Q. HOW LONG DOES IT TAKE TO OPEN A NEWK S LOCATION AFTER THE FRANCHISE AGREEMENT IS SIGNED? A. You should allow a minimum of nine months to prepare for the opening of your restaurant. The time frame may be slightly more or less, depending on your experience with opening restaurants. Q. WHAT COSTS AND FEES ARE ASSOCIATED WITH BEING A NEWK S FRANCHISEE? A. Newk s franchisees pay an initial franchise fee of $40,000, due when you sign the Franchisee Agreement. Operating a Newk s unit requires ongoing monthly royalties of 5 percent of net revenue and an annual marketing fund fee of 1.5 percent of net revenue. Q. I M INTERESTED. HOW DO I GET STARTED? A. First, contact us so that we can discuss any questions or needs you may have and discuss market opportunities and available territories. Next, you ll need to complete our application process, provide supporting financial documents and attend a Discovery Day before we can finalize a franchise agreement and start planning your grand opening.

Our passion goes beyond the kitchen. Lori Newcomb Co-Founder of Newk s Cares Newk s Cares is our way of giving back, as we rally behind an important cause that continues to affect the lives of many. Ovarian cancer has personally impacted the Newk s family, and we are determined to give women a fighting chance against this killer. Our goal is to improve the rate of early diagnosis by funding research and creating greater awareness about the early symptoms of ovarian cancer. To accomplish this, we host community events, including our annual Ovarian Cycle, to raise funds for research. We constantly promote awareness with teal cups and information readily available in our stores and on our website, newkscares.com. Fast Fact: Each year, 200,000 women worldwide are diagnosed with ovarian cancer, and 125,000 women die from this disease.

3.2017 For more information about franchise opportunities, visit newks.com or call 601.326.4539.