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© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. PROGRAMMING THE HOLD TIMES 1. Press and Hold the PRINCE CASTLE LOGO and the MENU/ENTER button at the same time. 2. Use the UP or DOWN Arrow to scroll to PROD TIME ENTR 3. Press and Release the MENU/ENTER button to enter EDIT PRODUCT TIME MENU 4. Use the UP or DOWN Arrow to scroll through the list of products. When the desired product is displayed, press MENU/ENTER to select it. All products will have the same hold time. 5. The current hold time is now displayed. Use the UP or DOWN Arrow to scroll to the desired hold time. The time should be :20. Press the MENU/ENTER button to save the time. 6. The display will now show the current COOK MORE TIME. This is a feature we will not be using. Set the time to :00 and then save using the MENU/ENTER button. 7. Repeat both procedures for all products. 8. Press and release the PRINCE CASTLE LOGO when done. HOW TO OPERATE THE UNIT 1. Turn power on 2. Allow 30 minutes for unit to properly warm to temperature 3. Cook burgers to 150 degrees, chicken breast to 165 degrees and turkey burger to 165 degrees before placing into holding unit. 4. Load product into the drawer (no liquid) and press PAN button 5. Timer will count down. When LED flashes RED, the product MUST BE DISCARDED. Prince Castle Product Holding Bin

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. ONION PREPARATION Cheeburger Cheeburger uses onions in several forms, however, all onions come from one source. We use only Spanish Colossal onions. “Colossal” onions are large, evenly shaped, sweet onions that are packed in 50 lb bags. There should be 30-40 onions per 50 lb bag, making each onion about 1 1/2 lb. Upon delivery, the onions should be stacked on open shelving in dry area. It is not necessary to refrigerate unpeeled onions providing they will be used in 2 - 3 days. CUTTING AND PEELING STEP 1: Obtain a clean, disinfected cutting board and sharp vegetable knife. Set up in an area designated by the manager on duty. STEP 2: Open the bag of onions by pulling on the tie strings. It’s best to untie the bag so that it can be reused for onions being returned to the produce vendor. STEP 3: Carefully cut off the bottom or root end of the onion, making a clean straight cut about ½ inch into the onion. Then cut off the top end of the onion in the same manner, making sure that both cuts are parallel. This will reduce waste when the onions are sliced. STEP 4: Peel the outer layer of skin from the onion. If the next layer is blemished or is discolored, peel that away also. The finished peeled onion should be totally white and unblemished. STEP 5: Place the peeled onion in a buss tub. Continue with STEPS 3 and 4 until all onions are peeled. SLICING STEP 1: Set the clean disinfected slicer at the 1/4 inch setting. STEP 2: Position the peeled onions and 2 empty buss tubs side by side. STEP 3: Start slicing the onions on the slicer being careful to use the slicer properly. To avoid injury, catch each slice with your left hand so that it does not break. Stack the slices into one of the buss tubs. Perfect slices that have concentric rings should be placed in the buss tub for sandwich onions. Notso-perfect slices should be set aside to use as onion rings. Continue slicing and sorting until all of the onions are used. STEP 4: Wrap the sandwich onions in plastic wrap and store in the proper refrigerated area. Set aside the container of onion slices for onion rings. Thoroughly wipe down and disinfect the slicer. Remember to be careful when cleaning the slicer. THE BLADE IS SHARP! Always set the blade at “0” when cleaning the slicer. PREPARING RAW ONION RINGS Step 1: Obtain the buss tub of onion slices that is designated for use as onion rings. Also obtain 2 empty pickle buckets that have been cleaned and disinfected. STEP 2: Take a slice of onion and hold it over one of the empty buckets. Carefully push out the center of the onion and let the center fall into the bucket. Then gently separate the remaining rings and drop those into the other bucket to be used in onion ring baskets. Only rings that are 1 ½ inches or larger should be saved for onion rings. Smaller pieces and broken rings do not go into the bucket of onion rings. STEP 3: Continue separating onions in this manner until all onion slices are used. YIELD: One bag of onions should yield 4 buckets of onion rings STEP 4: Place covers on all buckets, label and date the contents and place in the proper refrigerated area. COOKING PROCEDURES 1: Batter mix should be prepared to recipe and kept on ice 2: Peanut Oil should be at 350° degrees 3: Rings are dropped in batter until they are completely covered with batter 4: Remove rings from batter and allow excess batter to drain off, and then drop into hot oil individually. 5: Allow rings to free float until golden brown- remove 6: Place rings into fry basket to drain 7: Serve immediately PORTIONS SMALL RING 5.5 OZ SERVED IN LARGE FRY SCOOP FRY AND RING COMBO PORTIONS GUEST RECEIVES ONE SEPARATE SCOOP OF FRIES AND ONE SEPARATE SCOOP OF RINGS. THEY ARE NOT SERVED TOGETHER. Onion Ring Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. EACH MORNING, PREPARE A BASE MIX OF GREENS USING 2 PARTS CHOPPED ROMAINE AND 1 PART MESCULIN MIX ALWAYS WEAR GLOVES WHEN HANDLING RAW FOOD PRODUCTS. SALAD IS SERVED IN THE PLASTIC TO GO CONTAINER. PLACE 6 OZ OF BASE MIX INTO THE CONTAINER AND STORE IN COOLER. ADD ADDITIONAL TOPPINGS PER THE CUSTOMER REQUEST WHEN ORDERED. SALAD DRESSINGS ARE SERVED ON THE SIDE USING PC PACKAGES. ALL SALADS ARE TOPPED WITH A QUEEN STUFFED OLIVE AND FRILLED TOOTHPICK. Salad Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. STEP 1: Obtain the bucket of chopped onions from the cooler. STEP 2: Place 4 oz. of liquid margarine on the grill. Empty the onions, (about 1 gal.), to be sautéed on the margarine. STEP 3: Add 4oz. more of margarine on the pile of onions. STEP 4: Using 2 spatulas, slowly toss and mix the onions and margarine on the grill while they cook. STEP 5: Continue tossing and mixing the onions until they begin to soften. Do not allow them to sit on the grill unattended. They will easily burn. STEP 6: When the onions have softened and begun to slightly brown, pick them up with both spatulas and place them in a holding pan. STEP 7: Place the holding pan in the warmer and scrape the grill clean. STEP 8: Sautéed onions must be held over 141°F to comply with HACCP standards NOTE: IT IS VERY IMPORTANT NOT TO OVERCOOK THE ONIONS ON THE GRILL, AS THEY WILL CONTINUE TO COOK IN THE FOOD WARMER. ONIONS ARE TO BE DISCARDED NIGHTLY. NEVER REFRIGERATED OR REHEATED FOR THE NEXT DAY. Sauteed Onion Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. IDEAL TEMPERATURE FOR DIPPING IS 12 DEGREES F REGULAR SHAKE RECIPE BASE (SPUN IN PLASTIC 24 OZ CUP) 11 OZ OF ICE CREAM 5.5 OZ OF MILK STORE BASE SHAKE IN PLASTIC CUP IN FREEZER ADD FLAVORING OR 1.5 OZ OF ADDITIONAL MILK WHEN GUEST PLACES ORDER AND SPIN AGAIN FOR 10 SECONDS. COVER WITH LID AND SERVE Shake Specifications

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. When ordering tomatoes, ask for vine ripened tomatoes. The size should be a 4x5 or a 5x5. Vine ripened tomatoes have a much more red and natural appearance. At certain times of the year it is impossible to obtain vine ripened tomatoes, there-fore you will purchase gassed tomatoes. These are firm and tasty and have a more pink color. FOLLOW THIS PROCEDURE FOR SLICING TOMATOES: STEP 1: Thoroughly wash with cold water all of the tomatoes to be sliced. STEP 2: Using a tomato coring tool, remove the stem core. STEP 3: Set the clean and disinfected slicer to a 1/4th inch setting. STEP 4: Place a tomato in the slicer and begin slicing it. Use the slicer with caution. Always play close attention to your work. THE SLICER IS VERY DANGEROUS AND CAN CUT SEVERELY! STEP 5: Neatly pile the tomato slices and place them in a storage container. STEP 6: Repeat steps 4 and 5 until all the tomatoes have been sliced and placed in the storage container. STEP 7: Tightly cover the storage container with plastic wrap and refrigerate. STEP 8: Setting the blade at “0,” clean and disinfect the slicer. Tomato Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. STEP 1: Place tortilla shell on clean area of flattop for 30 sec and flip for 30 seconds. Remove with tongs and place on makeup table counter. STEP 2: Cook protein following standard procedures, remove from flattop and slice into 4 equal strips STEP 3: While protein is cooking, spread 1 fl oz of selected topping sauce (mayo, etc..) on tortilla shell, place 1 slice of selected cheese on top of sauce and then layer selected toppings, being careful not to overportion. Lettuce, if requested, should go down first. The tomato portion is 2 tomatoes, one towards the top and the other towards the bottom of the shell. Everything should be placed on the shell towards the left side so that it can be easily rolled. STEP 4: Rest the protein in the center, of the toppings, placing 2 slices towards the bottom of the tortilla and 2 towards the top. STEP 5: Fold the bottom of the tortilla upwards about 2 inches and then do the same at the top. Fold the left side over, followed by the right side. STEP 6: Roll the wrap in the wax paper, uncut and stab with an olive in the center. Wrap Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. The Veggie Burger is cooked from frozen in the fryer. The burger will fry for approximately 5 minutes until it has a nice golden color. Placed the fried burgers into the holding pan and store in the warming unit for up to 20 minutes. The Turkey Burger cooks on the flat top grill. Place a small amount of liquid butter on the grill and then place the burger on top. Cover with the dome and allow to cook for approximately 5 minutes and then flip once. Cook for an additional 2 minutes. The turkey burger should cook to 155 degrees. Remove the burger from the grill and place in the holding pan and store in the warming unit for up to 20 minutes. Veggie Burger Procedures Turkey Burger Procedures

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. DonÕ t neglect your fountain machine. Keep it clean! Do not use coffee pot hot water to clean the drip tray! Glass cleaner works best: Wipe the merchandiser clean Caution: Excess pressure can damage merchandiser. Wipe the side and front panels clean Approved sanitizer works best: Clean the drip tray and grill Clean the drain. Pour the remaining sanitizer into the drip tray and allow to drain. This helps reduce algae growth which contributes to plugged drains. Clean Nozzles, Diffusers, and Valve Surfaces - daily 1. Twist nozzle 1/8th turn counter-clockwise and pull down to remove. 4. Wipe the underside of the valve clean. 3. Wash nozzles and diffusers in warm soapy water, rinse, and reassemble. 2. Separate the nozzle and diffuser. Push your thumb up inside the nozzle and push upward on the diffuser. Some pressure may be required to separate the pieces. Do not soak nozzles or diffusers! 5. Wipe the lever and valve ID clean. Reinstall the nozzle and twist 1/8th turn clockwise to secure. Clean panels, merchandiser, and drip tray - daily Pepsi Fountain Cleaning

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. BEEF When receiving beef, it’s important to have the driver remove one case from the truck. Without damaging the box, use your biotherm and place it between the top flaps of the box or through the hand holds on the side. Be careful not to puncture the product inside. Temperature should be between 28 and 43 degrees. If the temperature is outside of this range, you must immediately call Jeffrey Jablow (239-628-5882). Jeffrey will discuss the next steps with you at that time. Do not let the driver leave or you will be responsible for the product you have accepted. Also note the condition of the packaging to insure there are no leaks or damage to the box. Product should have a minimum of 4 days shelf life (note the freeze by date on the case) PRODUCE Produce should be received at temperatures between 41 and 45 degrees. Use your biotherm to temp the interior of the box without compromising the packaging or the product. Check use by dates on packaging and check for damaged packaging. FROZEN PRODUCT Frozen product should be received at 0 degrees or below. Check to insure the packaging has not been damaged and that there are no leaks. Use your biotherm to temp the interior of the box without compromising the packaging of the product. Proper Temping of Received Products

All Fried Products Cooked In cholesterol-free Peanut Oil

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. CLASSIC - 1 SLICE SEMI SERIOUS - 1 SLICE SERIOUS - 2 SLICES CHICKEN SANDWICH - 2 SLICES VEGGIE BURGER - 2 SLICES TURKEY BURGER – 2 SLICES KID BURGER - 1 SLICE FOLDED IN HALF AND CROSSED Cheese Requirements

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. When two bags of cheese sauce are in the dispenser ALWAYS PLACE THE WEIGHT ON TOP OF THE SECOND BAG. NEVER PLACE THE WEIGHT BETWEEN THE TWO BAGS. Placing the weight between the two bags will lead to slow evacuation of the cheese as well as product waste. When moving the dispenser do not pull forward from the top. Slide forward by pulling from the bottom back of the dispenser until the suction cups release from the counter. Pulling from the top will crack the base of the dispenser. Always keep extra nozzles on hand. You can order extra nozzles by calling 1-800-521-2873 MAKE SURE THE REMOVABLE SPACER IS IN PLACE FOR ALL DISPENSERS IN YOUR LOCATION. The spacer provides support to the pan. If the spacer is not in place the nozzle will not fit securely in place. If you do not have a spacer on your dispenser call the 800 number provided to have one sent. Clean values regularly to prevent sticking. Gehls Cheese Dispenser Tips

© 2012 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Portion Control Guide CLASSIC SEMI SERIOUS Lettuce 1 oz 1 oz 2 oz Tomato 1 slice 1 slice 2 slice Onion 1 slice 1 slice 1 slice Pickle 4 slice 4 slice 6 slice Mayo 1 oz 1 oz 1 oz 2 Onion Rings 2 2 2 Salsa 1 oz 1 oz 1 oz Roasted Pepper 1 oz 1 oz 1 oz Jalapeno 1 oz 1 oz 1 oz Banana Pepper 1 oz 1 oz 1 oz Black Olives 1 oz 1 oz 1 oz Horseradish 1 oz 1 oz 1 oz BBQ 1 oz 1 oz 1 oz Honey Mustard 1 oz 1 oz 1 oz SunDried Tomatoes 1 oz 1 oz 1 oz Bacon 2 slice 2 slice 2 slice Sauteed Onions 2 oz 2 oz 3 oz Sauteed Mushrooms 2 oz 2 oz 3 oz Salads receive 2 oz of each topping and 4 grape tomatoes CHEEBURGER CHEEBURGER PORTION CONTROL GUIDE

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER WEEKLY SALES REPORT When you signed your franchise agreement you agreed to provide Cheeburger Cheeburger with a report of your weekly sales and remit Royalty and Advertising Fees based on your adjusted gross sales. This report and the Royalty and Advertising fees must be submitted on a weekly basis. We must receive this form by THURSDAY for the previous week PROCEDURE: 1. Fill in the week ending date. Your week begins on a Monday and ends on Sunday. 2. Fill in your Store Location (Town) and address 3. Fill in your ADJUSTED GROSS SALES. This figure is your total sales less sales tax. • To determine the Royalty and Advertising fees due: 1. Multiply your ADJUSTED GROSS SALES BY .045. to obtain the amount of Royalty Fee due. Write a check for this amount to Cheeburger Cheeburger. 2. Multiply your ADJUSTED GROSS SALES BY .01 to obtain the amount of Advertising and Development fee due. Write a check for this amount to Cheeburger Cheeburger Advertising And Development (A&D) Fund. 3. Do not combine both fees in one check. They must be separate. 4. Fill in last years Adjusted Gross Sales if applicable. 5. Make any additional comments you feel appropriate. 6. Sign this form. Place it in an envelope with your checks and mail to: Cheeburger Cheeburger 15951 McGregor Blvd. Fort Myers, Florida 33908-2568 © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: WEEKLY SALES REPORT 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER ® WEEKLY SALES REPORT Week Ending (Monday — Sunday) October 5th — October 11th , 2004 Franchise Location: Sanibel Island, FL________________________________ Adjusted Gross Sales:___$22,000.00____ Royalty @ 4.5%__$990.00__ Prior Year Adjusted $20,800.00 A&D Fund @ 1%__$220.00__ Gross Sales: _________________ COMMENTS: ___________________________________________________ _______________________________________________________________ _______________________________________________________________ ____________________________________ SIGNATURE OFFICE USE ONLY: Received By: _____________________________________ Date: __________ Check No.: ____________ Amount: ________________ Deposit Date: ___________ ALWAYS FILL OUT FORM IN ITS ENTIRETY. Section 3.2 Payment Schedule. The Royalty Fee and Advertising Contributions must be paid to CCR, together with any required weekly reports, by Thursday of each week during the Term for the preceding week ending Sunday. All other amounts due to CCR will be paid as specified in this agreement. If no time is specified, these amounts will be due upon receipt of an invoice from CCR. Any payment or report not actually received by CCR on or before the due date is overdue. The Franchisee agrees that his or her obligations to make payments under this Agreement and any other agreement entered into with CCR or its affiliates for the Franchise and the rights of CCR and its affiliates, if any, to receive these payments are absolute and unconditional and are not subject to any abatement, reduction, setoff, defense, counterclaim or recoupment due or alleged to be due to, or by reason of, any past, present or future claims that the Franchisee has or may have against CCR, any of its affiliates, any of its Designees, or against any other person for any reason. MAIL TO: CHEEBURGER CHEEBURGER 1595 .HOO\5RDG Fort Myers, Florida 33908-2568 © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: WEEKLY SALES REPORT 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER ® WEEKLY SALES REPORT Week Ending (Monday — Sunday) ___________________________________ Franchise Location: _______________________________________________ Adjusted Gross Sales: _____________________ Royalty @ 4.5% __________ Prior Year Adjusted A&D Fund @ 1% _________ Gross Sales: _______________________ COMMENTS: ____________________________________________________ ________________________________________________________________ __________________________________________ SIGNATURE OFFICE USE ONLY: Received By: _____________________________________ Date: __________ Check No.: ____________ Amount: ________________ Deposit Date: ___________ CHEEBURGER CHEEBURGER ® WEEKLY SALES REPORT Week Ending (Monday — Sunday) ___________________________________ Franchise Location: _______________________________________________ Adjusted Gross Sales: _____________________ Royalty @ 4.5% __________ Prior Year Adjusted A&D Fund @ 1% _________ Gross Sales: _______________________ COMMENTS: ____________________________________________________ ________________________________________________________________ __________________________________________ SIGNATURE OFFICE USE ONLY: Received By: _____________________________________ Date: __________ Check No.: ____________ Amount: ________________ Deposit Date: ___________ © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: WEEKLY SALES REPORT 3

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL INCOME STATEMENT ALL FRANCHISEES OF CHEEBURGER CHEEBURGER ARE REQUIRED TO SUBMIT TO CHEEBURGER CHEEBURGER CORPORATE OFFICES A MONTHLY INCOME STATEMENT 30 DAYS AFTER THE PREVIOUS MONTH ENDING PERIOD. One of the main reasons you invested in Cheeburger Cheeburger was to make a profit. To determine the amount of profit (or loss) your restaurant generates, an income statement needs to be completed. An income statement is a summary of sales revenue (inflow of cash) and expenses (outflow of cash) that determines the profit (or loss) your business generated during a specific period of time. Think of it as a report card that recounts how your business is performing. The income statement may be called a statement of earnings or operating results, profit and loss statement, or simply the P&L. The Cheeburger Cheeburger Income statement is divided into 6 basic sections: • SALES - The products you sold in your restaurant that produced an inflow of cash or revenue. • COST OF SALES - The cost of the products sold and the labor needed to sell these products. • EXPENSES - a broad, catchall category for all expenses except those reported on the other lines in the income statement. There are two types of expenses: 1. Fixed Expenses - are expenses that are not affected by an increase or decrease in sales. 2. Variable Expenses - are expenses, which move up and down, in direct proportion to changes in sales volume or revenue. The following expenses are what Cheeburger Cheeburger considers variable expenses: • Food Cost • Paper Cost • Labor (includes payroll taxes) • Royalty Payments • A&D Payments • Percentage Rent (if applicable to your location) • PRE-TAX CASH FLOW - is the profit (or loss) generated after fixed and variable expenses have been deducted from Sales (revenue). © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL • CASH FLOW - is the profit (or loss) generated after taxes and debt service have been deducted from Pre-Tax Cash Flow. • PROFIT (LOSS) - is the profit (or loss) your restaurant generated after depreciation has been added back to cash flow. Cheeburger Cheeburger does recommend that you enlist the services of a qualified accountant to prepare your quarterly and yearly income statements and tax returns. In addition, an accountant would be necessary if you do not feel comfortable in producing your own monthly income statement. It is not difficult to produce a monthly income statement on your own. You do not need a computer, although a computer would speed up and simplify the process. GETTING STARTED In order to produce an Income Statement, you will need: 1. Total Sales for the month 2. All expense invoices and list of paid-outs. 3. File cabinet or box 4. File folders 5. Blank Income Statement (manual or computerized) 6. Chart of Accounts (a list of accounts, their account number and contents description). Defining the Period - A monthly income statement needs to be submitted to the Cheeburger Cheeburger corporate offices within 30 days of the previous month ending period. We follow the premise that a month ends on the last Sunday of the month. Therefore, four months during the year will have five weeks. EXAMPLE: In 1999, the last Sunday of the month in July is the 25th. The 25th of July would be the last day of the month for July’s income statement. July 26th would be the first day of the month for August’s income statement and August 29th would be the last day of the month. By following this system, it is easier to tie in sales, expenses and payroll. If an income statement reflected a true month of 30 or 31 days, a partial week’s sales, expenses and payroll would have to be calculated for each month. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL File Folders - Set up a file folder for each item with a ** and printed in red on the Income Statement found in this section. When putting them into your file cabinet, keep them in the same order as they are listed on the income statement. As you pay each bill, file it in the appropriate file folder. Food Cost Expenses - You will have to decide if you are going to determine these costs by using: • A cash accounting - Total dollar purchases of food product during the month, or • An accrued accounting - Total cost of food product actually used during the month. This method requires the taking of an inventory to determine this usage. Pre-determined Expenses - Certain expenses on your Monthly Income Statement are relatively fixed for the entire year. These Items include: • Rent - This amount will be adjusted on the last income statement if you exceed your break point and are required to pay percentage rent. • Common Area Maintenance (Cam) Estimate - This is the estimated rent amount that you pay for the expenses needed to operate the Shopping Center where you are located. At the end of the year (the shopping center’s year), you will be sent a final bill, which might be more or less than the estimate. This adjustment would have to be reflected on the income statement for the month you received the adjustment. • All Insurance’s except Workman’s Compensation. • Auto Lease or Payment (if auto charged to business). • Debt Service - The amount you will pay monthly for funds borrowed to pay for your Cheeburger Cheeburger. • Depreciation (determined by your accountant) - This will change during the year if you make any capital expenditures. This figure will be used for the “Depreciation” and “Add Back Depreciation” categories on your Income Statement. It is best to have a qualified accountant determine the dollar amount for this category. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 3

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL You will need to determine the monthly amount if these expenses are expressed as a yearly amount. Example: Your yearly rent is $48,000.00 per year. Your monthly charge to your Income Statement will be $4.000.00. $48,000.00 Divided By 12 Months = $4000.00/Month Variable Expenses (Fixed Percent) - These are the fees that you are obligated to pay to Cheeburger Cheeburger as a percent of sales. They have been determined by your franchise agreement. These expenses are: • Franchise Royalty • A&D Fund Fee Chart of Accounts - The Chart of Accounts contained in this section defines what items are represented by each classification on the Income Statement.. By using the Chart of Accounts as a guide, you will be able to determine in what Income Statement account you will need to file each invoice for proper classification. PREPARING THE INCOME STATEMENT 1. On the last day of the month, perform a Monthly Close on your register system. This will give you the Total Sales (revenue) for the month by category. Enter these totals in the appropriate Sales categories of your Income Statement. Total sales will exclude sales tax, over rings and voids. 2. Within a week after the month has ended, total the invoices that are in each of your expense folders. To obtain the food costs, using: • A cash accounting for food costs - Total the dollar purchases, during the month, of food product in the food cost folders. • An accrued accounting for food costs - Total cost of food product actually used on all inventories completed during the month. Some folders will be empty because there was no activity for that particular category. Enter all of these totals on the monthly Income Statement. 3. Enter your pre-determined expenses on the Monthly Income statement.. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 4

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL 4. Determine your Variable Expenses (Fixed Percent) by multiplying your total sales by the percentage you are required to pay for Franchise Royalty and A&D Fee. Enter these amounts on the income statement. These amounts may also be obtained by totaling the fees paid on your Weekly Sales Reporting Forms that you have sent to Cheeburger Cheeburger during the month. 5. Perform the following calculations to obtain your Profit (Loss). • Add all Sales (Revenue) items = Total Sales • Add all Cost of Sales items = Total Cost of Sales • Total Sales less Total Cost of Sales = Gross Profit • Add all Operating Expenses = Total Operating Expenses • Gross Profit less Total Operating Expenses = Pre-Tax Cash Flow • Pre-Tax Cash Flow less Taxes and Debt Service = Cash Flow • Cash Flow plus Add Back Depreciation = Profit (Loss) 6. Now that you have completed the Dollar section of the Income Statement, you will want to know the Percent of Total Sales for certain key expenses. These expenses include: Food and Drink Beer and Wine Total Food Cost Total Payroll Advertising: Local Total Rent Credit Card Charges Supplies; Paper Total Utilities Total Operating Exp. Pre-Tax Cash Flow Cash Flow Profit The common denominator to determine the percent of sales each of the expense above represents is Total Sales (Revenue). By dividing the Total Sales Dollars into any of the expense dollars you will get a percentage of sales Example: Total Food Cost = $5040 = 28% Total Sales $18,000 If you have a computer, the disk that you have been supplied, contains three types of Income Statements which can be accessed through Microsoft Excel. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 5

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL • Monthly Manual - All calculations will need to be done with a calculator. This can also be used as a weekly flash Income Statement. • Monthly Income Statement (Computerized) - All you do is enter the dollar amounts for each category and all calculations will be done for you. Percentage of sales will be automatically calculated for all line items. This can also be used as a weekly flash Income Statement. • Twelve Month Income Statement - Calculates twelve months of Income Statements while keeping tract of your year-to-date totals. Percentage of sales will be automatically calculated for all line items. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INCOME STATEMENT 6

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER CHART OF ACCOUNTS Account Number ACCOUNT TYPE DESCRIPTION SALES 101 FOOD & DRINK Sales of all food and non-alcoholic drink items that produce revenue. 102 BEER & WINE Sales of all alcoholic beverages that produce revenue 103 GIFT CERTIFICATES Sales of all Gift certificates 104 SOUVENIRS Sales of all clothing and other logo items that produce revenue COST OF SALES 201 FOOD AND DRINK Cost of all food and non-alcoholic beverage products used in producing menu items for sale. These items include: Meat products, produce, spices, dairy products, bakery items, etc. 202 BEER AND WINE Cost of all alcoholic beverage products (beer & Wine) used in producing menu items for sale 203 SOUVENIRS Cost of all Clothing and logo items offered for sale 501 PAYROLL TAX Employer payroll taxes paid. 206 TOTAL PAYROLL Total payroll expense which includes store labor, store management and payroll taxes. OPERATING EXPENSES 402 ADVERTISING: LOCAL All advertising expenditures excluding A&D Fund. This could include sports or civic sponsorship, radio, TV or print advertising. 301 ADVERTISING FEE (A&D) Percentage of sales dollars paid to Cheeburger Cheeburger. This amount is defined in your franchise agree,emt. 404 AUTO EXPENSE All auto expenses including lease or loan payment, maintenance and insurance. 405 BANK CHARGES Cost of maintaining your account including charges for processing checks. 406 CASH SHORT/OVER The difference between the actual total deposit and what should have been deposited. 407 CLEANING PRODUCTS All products used for cleaning your facility. These items include detergent, bleach, sanitizer, mops, brooms, etc. 408 CREDIT CARD CHARGES Fee charged by credit card companies to process your charge transactions. 409 DELIVERY EXPENSE The cost to deliver our menu product to to customers outside the store. This includes gas, tolls and parking charges. It could be for delivery charges from an outside delivery company 410 DEPRECIATION An allowance made for a loss in value of property because of age and wear by your accountant.

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER CHART OF ACCOUNTS Account Number ACCOUNT TYPE DESCRIPTION OPERATING EXPENSES 411 DONATIONS A gift or grant; a contribution given to a fund or cause. This could be in the form of product, cash, gift certificates or services. be sure to get a receipt for your contribution. 412 DUES & SUBSCRIPTIONS Expenses for dues to industry or restaurant related clubs or organizations and/or trade periodicals magazines or newspapers.. 413 EQUIPMENT LEASE Lease expenses (a contract to rent a piece or equipment for a specific period of time) for ice machine, dishwasher, etc. 414 LINEN SERVICE Cost of renting towels and aprons. 415 INSURANCE Expenses for all liability, building and equipment, health and Workman's Compensation Insurance. Some accountants will break out these costs into individual categories. 416 LICENCES/PERMITS Cost of all the licences and permist required for doing business as a Cheeburger Cheeburger. Costs will depend on local and state requirements. 417 MAINTENANCE CONTRACTS Any contracts for maintaining facility or equipment. This could include contracts to maintain HVAC system, hood system, etc. 418 MISCELLANEOUS Any business related expense that does not fit the description of any other Chart of Account items. 419 MUSIC The cost for Muzac and juke box. 420 OFFICE these expenses include business machines, paper, stamps, office furniture, etc. 421 PAYROLL SERVICE The cost a payroll company charges you for producing your payroll checks. 422 PEST CONTROL Cost of exterminator 423 PROFESSIONAL FEES Cost of accountant and/or lawyer. 441 BASE RENT The flat rate you are being charged for rent. This could include charges for merchant's assocoation dues and center advertising. These costs are usually stated as a ddollar amount per square foot of leased space. 442 C.A.M. Your fair share of the cost of maintaining the shopping center where you are located. These charges could include maintenance, waste or snow removal, utilities, office and office personnel staff, taxes and insurances for maintaining your shopping center. 302 PERCENTAGE RENT Additional rental charged if your sales exceed a predetermined amount of sales. For example: 6% of sales over $750,000 per year. 440 TOTAL RENT The total costs of base rent, C.A.M (Common Area Maintenance) and percentage rent 303 ROYLATY: FRANCHISE Percentage of sales dollars paid to Cheeburger Cheeburger. This amount is defined in your franchise agree,emt.

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CHEEBURGER CHEEBURGER CHART OF ACCOUNTS Account Number ACCOUNT TYPE DESCRIPTION OPERATING EXPENSES 424 REPAIRS: EQUIPMENT Costs to repair equipment which are not covered by maintenance contracts. 425 REPAIRS: FACILITY Costs to repair your facility. These could include painting, electrical, carpentry or plumbing expenses relating to your facility but NOT to equipment. 426 RUBBISH REMOVAL Cost of trash removal if not covered in your C.A.M. charges. 304 SUPPLIES: PAPER Paper costs related to the sale of product. This includes take-out bags,boxes and cups/lids, kitchen paper towels, deli paper, foil, etc. 427 SUPPLIES: SMALLWARES Cost of all utensils, knives forks spoons, kitchen smallwares, etc. 428 TELEPHONE The cost of all telephone equipment, service lines and business call charges. 429 TRAVEL & ENTERTAINMENT Cost of business related travel. This could include air fare, hotel, meals and ground transportation. 430 UNIFORMS The cost of uniforms purchased 431 ELECTRIC Cost of electricity 432 GAS Cost of natural or propane gas 433 WATER Cost of water OTHER EXPENSES 502 TAXES: CORPORATE Local, state or federal taxes paid 601 DEBT SERVICE Your loan payment for borrowing capital to purchase or operate your Cheeburger Cheeburger.

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL INVENTORY In the restaurant business, there are only two items that you can directly control that will greatly influence your profitability and cash flow; inventory and payroll. Taking and analyzing your inventory is one of the most important responsibilities you will have as an owner/operator of a Cheeburger Cheeburger restaurant. The taking of an accurate weekly inventory will serve several purposes: 1. Ordering products and supplies - You will need to know: • How much of a product you “have on hand” or in stock. • What quantity of product you have used within a specific period of time. • What amount of that product you will have to buy in order to service the business you anticipate doing over a weeks period of time. 2. Determining waste or possible pilferage that will greatly influence your profitability. 3. Control the dollar amount of inventory you carry on a week to week basis. Carrying excessive inventory will reduce your cash flow and lessen the amount of money you have to pay other bills. An excess in perishable items will lead to spoilage and increase your food cost. WHAT IS FOOD COST? Proper food control procedures can make the difference between profit and loss for a restaurant. Food costs will account for 28% to 30% of sales. Food cost is the total cost of all food used, wasted and/or stolen. The factors for calculating food cost are: Item Price X Item usage = Item Cost. The sum of all item costs equals Total Food Cost Dollars or Cost of Goods Sold. Food cost is often described as a percent of sales. To calculate Food Cost Percent: Total Food Cost Dollars = Food Cost Percent Total Gross Sales In order to know all the Total Item Costs to determine Food Cost Percent, we need to take an inventory © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INVENTORY 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL Counting Inventory - Counting inventory accurately has a tremendous effect on food cost numbers. Accuracy, or lack of it, can influence food preparation, ordering decisions and customer satisfaction. When was the last time you were in a restaurant, decided on an item to order and were told “Sorry, we ran out.” How did you feel? Counting inventory accurately takes some organization and preparation on your part. You need to: 1. Decide what day and what time of day you will always take your inventory. 2. Set up your stock room and walk-in to correspond with your inventory form. Keep paper goods together, condiments together, all meats together, etc. You will generally have an item in two places; the storage area and restaurant/cook area. We have allowed for this on the inventory form by having two areas where you record your counts; Location 1 and Location 2. 3. Update your costs of an item on your inventory regularly. You will find that produce will have the most volatile pricing fluctuations. 4. Know how an item is packaged. Are there ten pounds of an item in a box, 20 sleeves containing 100 cup lids in a carton, etc.? Beginning Inventory - Your beginning inventory is the amount of an item that you started with at the beginning of the week. Your first inventory count will establish your beginning inventory. If you start taking inventory the first week you are open for business, your total purchases will be your beginning inventory. Purchases - Every time you purchase an item, record it in the purchase column on your inventory form. Location 1 & =Location 2 - Your inventory counts will be recorded in these columns. Develop a routine. Most operators start in the front of the restaurant and work their way into the kitchen and then count the storage areas. Usage - Your usage of a product is determined by the following calculation: Beginning Inventory + Purchases - Ending Inventory = Item Usage Item usage will tell you what amount of an item you used to do a specific amount of business. After a few months, your restaurant will develop a history of usage. This will tell you how much of an item or items within a category you will use for each $1000.00 of business you do. This is commonly known as dollar/yields. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INVENTORY 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL Dollar/Yields - Dollar yields provide a scientific method for determining how much product will be needed. They help owners: 1. Reduce food waste. 2. Reduce chances of running out of a product. 3. Reduce unnecessary labor cost for food preparation. 4. Ensure fresh quality products are served to guests. What are DOLLAR/YIELDS? • The dollar yield of a product is the ratio of the amount of total sales you can expect to do with a given quantity of the product. • Dollar yield ratios are expressed as dollars per standard unit of measure. • Units of measure vary from product to product. For example, meat is inventoried by pounds, while ice cream is inventoried by the gallon. • The unit of measure you should use for a products dollar/yield ratio is the unit used on the Weekly Food Inventory form. • Let’s look at an example. The dollar/yield for 1 bag (50 pounds) of Colossal Spanish onions is $1000. This means one can expect to use 50 lbs. of onions for every $1000 in total adjusted sales. How to figure DOLLAR/Yields. • Use your total adjusted sales figure (Total Sales - Over Rings - Voids - Sales Tax = Adjusted Sales) to figure $Yield. • The Formula for figuring $Yield is: Total Adjusted Sales (For 4 Weeks) = $Yield Product Usage (For 4 Weeks) • To arrive at a $Yield for any product: 1. Add the Total Adjusted Sales for a four week period 2. Add the total Product usage (from the Weekly Inventory sheet) for the same four-week period. 3. Divide the Total Adjusted Sales by the total product usage. This figure is your $Yield. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INVENTORY 3

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL EXAMPLE Total Adjusted Sales Product Usage Week 1 $18,000 18 (50 lb. Bags of Onions) Week 2 $19,000 19 (50 lb. Bags of Onions) Week 3 $21,000 21 (50 lb. Bags of Onions) Week 4 $22,000 22 (50 lb. Bags of Onions) $80,000 80 (50 lb. Bags of Onions) $ 80,000 = $1000 per 1 (one) 50 lb. Bag 80 Bags $1,000 OF SALES FOR 1 (one) 50 lb. Bag of Onions. If this restaurant’s total sales projection for next week is $25,000, you can expect to use 25 Bags of Onions (50 lb./Bag) $Yields should be recalculated: • After a price change. • After a new product introduction • After seasonal changes • At least once a month Ending Inventory - Your ending inventory is the amount of product on hand at the end of the inventory period. Your ending inventory will become your beginning inventory for the next inventory period. COGS - This is the cost of goods sold during the inventory period. This dollar figure is calculated be multiplying your units of usage for a product during the inventory period times the cost of the product unit. Product Units Used X Cost of Unit Used = Cost of Goods Sold (COGS) Value on Hand - This is the dollar value of all of the stock you have on hand at the end of an inventory period. It is very important that you keep this dollar amount as low as possible. Excess inventory will: • lead to spoiled product which will increase your food cost and adversely effect your profitability • Reduce your cash flow thus tying up dollars that could be used to pay bills. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INVENTORY 4

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL Taking an inventory takes TIME if properly done. A properly taken inventory will assist you in: • Determining $Yields. • Setting your Daily Prep Schedule. • Ordering product. • Analyzing your food usage versus Ideal Food cost. • Maximizing your profitability. None of the above items will be able to be determined accurately if you do not take an inventory. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: INVENTORY 5

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL CALCULATING DAILY PREP AMOUNTS Calculating accurate prep amounts helps ensure an adequate supply of the freshest possible product is on hand to meet the needs of your guests. Properly calculated prep amounts will keep product wasted at a minimum. Calculating Accurate Prep Amounts 1. List all items to prepare for the day. 2. Determine $Yields for all products listed. 3. Verify the projected total sales for the day. 4. Inventory those items that may have product carry over. Evaluate product quality and discard any product not meeting quality standards before you count. 5. Determine Build to Amounts The formula for calculating Build To Amounts is: Projected Total Sales = Build to Amount $Yield 6. Subtract the product on hand amount from the build to amount. The result is the Prep Amount. For products that you want to prepare twice a day, split the prep amount between lunch and dinner. Prepping twice a day will reduce waste and improve freshness. The formula for calculating Prep Amount is: Build to Amount - Carry Over Product = Prep Amount EXAMPLE: Onions (Spanish Colossal 50 lb. Bag) $3000.00 Projected Sales = 3 Cases = Build To Amount $1000 $Yield/Bag 3 Cases (Build To Amount) - 0 Cases (Product On Hand) 3 Cases (Prep Amount) © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: DAILY PREP 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL If your lunch sales are 67% of your total days sales and dinner accounts for 33% of your total day’s sales, the following formula needs to be used to split your total prep amount 67% X 3 = 2 Cases 33% X 3 = 1 Case Lunch Prep Morning Dinner Prep Afternoon Amount Amount Prep Amount Amount Prep 7. At the end of the day, note any carry over or wasted product amounts so adjustments to Build To Amounts or $Yields can be made. Key Point - An indication of an effective prep and production system is when there is little, if any carry over. If shortages or too much product are on hand at the end of the day, re-evaluate the projected total sales and $Yield. Non-recorded sales, waste or theft may also be factors contributing to a fluctuation of $Yields and build to amounts. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: DAILY PREP 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL ORDERING AND RECEIVING PRODUCT Contact an approved supplier to: 1. Arrange for terms of payment 2. Establish days and times of delivery that will not conflict with your rush periods. An important part of your responsibilities as a Cheeburger Cheeburger owner/operator is to establish and maintain a good rapport with your suppliers. It is essential that you maintain control of the relationship. Suppliers may give you shoddy service or poor quality merchandise unless you insist on constantly superior service and top quality products. Suppliers need to provide you with four essential services: 1. Deliveries must never arrive during peak periods. 2. All merchandise must be of the highest quality. 3. No major out of stock situations. 4. Fair competitive pricing. If a supplier knows that these are the services that you value from his business, you will have a better chance of having superior service. Accurate ordering ensures an adequate supply of quality product to meet your guests needs while keeping a minimum amount of dollars tied up in inventory. Ordering is similar to calculating daily prep amounts. Calculating accurate orders requires up-to-date $Yields and sales projections. The formula for ordering is: Projected Sales = Base Order X 1.2 (cushion) = Build To $Yield The Cushion increases the amount of your order to allow for a safety factor when ordering. For produce which has a short shelf life (the time a product lasts before it becomes unusable), a factor of 1.1 can be used. Build To - On Hand - Ordered But Not Received = Order © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: ORDERING & RECEIVING 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL Key Data You Will Need • A current list of $Yields…or…this information to calculate them: 1. Previous four weeks total adjusted sales history. 2. Previous four weeks usage of items to be ordered. • Previous two weeks daily sales history -------------------For Sales Projections • Knowledge of store sales patterns or Promotions----------Special Adjustments • The last order placed (if it has not arrived yet)------------Product considered as On-Hand FIRST…. Determine the average daily sales volume for each day. Use the most recent 2-week average. Mon. Tue. Wed. Thu. Fri. Sat. Sun. Total 2 Weeks ago 1400 1550 1700 1850 2300 3200 2600 14600 Last Week 1300 1450 1800 1950 2400 3400 2500 14800 Average 1350 1650 1750 1900 2350 3300 2550 14850 NEXT…. Determine the days the product will need to last. Example: • We are placing an ORDER Sunday night after closing for ONIONS. • This order will be DELIVERED MONDAY MORNING before opening. • The order must LAST THROUGH FRIDAY, the next delivery day. Even though the next delivery is on Friday, we must order enough to last through Friday in case the delivery comes at the end of the day. Place Order Next Order Delivered Delivery Sun. Mon. Friday Night Morning Tue. Wed. Thu. Daytime Sat. Sun. Must Last }}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}} The order must get us through…. 5 days. Monday, Tuesday, Wednesday, Thursday and Friday. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: ORDERING & RECEIVING 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL THEN…. Add the average sales volume for the days in question Mon. Tue. Wed. Thu. Fri. Total Average 1350 1650 1750 1900 2350 9000---------This is the volume for which you will be ordering. FINALLY…. Calculate how many bags of onions you will need to do $9000 in sales and have a little extra in case your sales are higher. $9000 Projected Sales = 9 (50 lb. Bags of Onions) $1000 $Yield (50 lb. of Onions) 8 X 1.1 (Cushion) = 8.8 or 9 (Bag of Onions) = Build To 9 (50 lb. Bags of Onions) = Build To - 1 (50 lb. Bag of Onions) = On Hand - 0 (Ordered But Not Received On Last Delivery) = 8 (50 lb. Bags of Onions) Need to Be Ordered TIP: With some products you need to round up. The extra .2 of a bag of onions is a small amount and could be used up over the 5-day period. If you round down, there is a possibility of not having enough product. Other products make sense to round down. If you round 1.1 cases of bulk mustard or mayonnaise up to 2 cases, the extra .9 of a case would represent several days of sales. Rounding down would not significantly cut into the cushion built into the order. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: ORDERING & RECEIVING 3

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL RECEIVING PROCEDURES 1. It is management’s responsibility to determine who is authorized to accept deliveries. 2. Deliveries should only be accepted between the hours of 9:30 a.m. - 11:30 p.m. and 2:30 P.M. - 4:30 P.M. 3. Procedures for accepting deliveries. • Stay with the delivery person as they bring product into the restaurant. Even though a delivery driver may seem and act friendly, be cautious. If left unattended, the delivery person may take product delivered and checked by you, back to the truck. Never let new merchandise be mixed with old merchandise. This may become confusing and lead to you being shorted on a product. • Confirm that all items on the supplied invoice: 1. Have been delivered to you. 2. The quantity ordered is what is being delivered and that the quantity received is what was ordered. 3. The price of an item is what you expected to pay. 4. There is no damaged merchandise. 5. Inspect for quality and freshness of perishable products. 4. Date all items received using a magic marker and masking tape. This will ensure a “First In, First Out” rotation of your product. 5. Sign the invoice only after you have noted any quantity or price discrepancies and any items that you returned to the delivery person. 6. Immediately put the delivered product where it belongs. Make sure that you rotate this product so that older product is used first. 7. If anything that you needed was not delivered, make arrangements to get the missing product. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: ORDERING & RECEIVING 4

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL PRODUCT VARIANCES A product variance shows if food was lost or gained in some way. It is the difference of what should have been used and what was actually used. Calculating variances can help you identify food-handling problems such as product rotation, mistakes on orders and theft. Ideal Usage The formula for calculating a product variance is: - Actual usage = Product Variance IDEAL USAGE To calculate Ideal Usage’s you will need… • Monthly or Weekly Menu Item Sales Report • Current recipe amounts for major products • Inventory usage • Employee Meal Log The formula for calculating the Ideal Usage is: The number of related menu items sold X Recipe Amount . = Ideal Usage All related Ideal usages are added together to determine an Ideal Usage for a food product. Example: RECIPE AMOUNTS MENU ITEM SALES REPORT Classic. = 5.5 oz. ¼ POUND COMBO 48 Third lb. = 7.0 oz. ¼ CLASSIC 2422 Half lb. = 10.0 oz. 1/3 LB. SEMI 1430 Three Quarter lb. = 14.0 oz. ½ LB. SERIOUS 1158 Pounder = 20.0 oz. ¾ LB. DELERIOUS 180 Patty Melt = 10.0 oz. 1 LB. GROUP 135 Kids Cheeburger = 3.5 oz. PATTY MELT 164 Kids Burger = 3.5 oz. KIDS CHEEBURGER 433 KIDS BURGER 124 © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: PRODUCT VARIANCES 1

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL Above left are the recipe amounts for the burgers offered at this location. The above right represents a section of the Menu Item Sales Report. It totals the amount, by category, of burgers sold over a month’s period of time. Ideal Usage for burgers sold is determined by multiplying the recipe amounts for each type burger by their total units sold. In this example, 44,113 oz. or (44,113/16) 2757 lbs. of ground chuck should have been used to produce the burgers sold at this location. ACTUAL USAGE The second component of a product variance is Actual Usage. This product came into the store at some point and is no longer in the store. It may have served customers… it may have been wasted… it may have been eaten by the staff… it may have been stolen. The formula for calculating Actual Usage is: Formula Beginning Inventory 262 lbs. + Product Received 3000 lbs. - Lbs. Consumed By Employees 53 lbs. - Ending Inventory 423 lbs. = Actual Usage 2786 lbs. Our inventory calculations, if accurate, tell us that 2786 lbs. of ground chuck were actually used. PRODUCT VARIANCES A product variance is the difference of what should have been used and what was actually used. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: PRODUCT VARIANCES 2

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL The formula for calculating product variance is: Formula Example: Hamburger Ideal Usage 2757 lbs. ground chuck - Actual Usage - 2786 lbs. ground chuck = Product Variance - 29 Lbs. ground chuck This example shows that we used 29 lbs. more ground chuck than we should have used. Why? There are several reasons why there was a 29 lb. negative variance. Some of these reasons could be: • Inventory was not accurately done • Meatball weights were excessive • Employees forgot to write down what they consumed • Spoilage • You did not receive what you thought was delivered • Order mistakes. Thrown away product due to mistakes. • Employee Pilferage Whatever the reason, you lost 29 lbs. of ground chuck , which could have made 84 classic burgers totaling ($3.95 X 84) $331.80 in retail sales. In order to help reduce this variance, the following steps should be taken • Take accurate inventories • Stress to you staff the importance of writing down EVERY burger consumed. • Check incoming inventory thoroughly. Open all meat boxes to ensure that no packages have been taken • Rotate product. First In, First Out (FIFO) to avoid spoilage. • Weigh each meatball made. Your eye is not a scale. • Keep a list of spoiled & wasted (Mistake Orders) product. • Keep the back door locked. Check garbage being taken out of the restaurant. • Do more frequent inventories of meat product. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: PRODUCT VARIANCES 3

Copyright 2006 Cheeburger Cheeburger Cheeburger Restaurants, Inc. Fort Myers, FL You can not calculate the product variance of every product used in your restaurant. You should calculate the product variances for: • Meats – Beef, Chicken and bacon • Cheeses • Beer • Wine • Any item whose dollar yield is significantly out of line for the inventory period. © 2002 All Rights Reserved. Cheeburger Cheeburger Restaurants, Inc. Ft. Myers, Florida SECTION: PRODUCT VARIANCES 4

INVENTORY ITEM PACK Beg. Inv. Purchases Location 1 Location 2 End Inv. Usage Unit Cost COGS-$$$ Value on Hd Beginning Inventory + Purchases - Ending Inventory = COGS Bacon Lb. 0 $0.00 $0.00 Chicken Breast Lb. 0 $0.00 $0.00 Hamburger Lb. $0.00 3.5 OZ. $0.00 5.5 OZ $0.00 7 OZ $0.00 10 OZ $0.00 Hamburger Total 0.0 $0.00 $0.00 0 $0.00 $0.00 0 $0.00 $0.00 0 $0.00 $0.00 TOTAL MEATS: $0.00 $0.00 Bananas Lb. 0 $0.00 $0.00 Carrots Lb. 0 $0.00 $0.00 ColeSlaw Lb. 0 $0.00 $0.00 Iceberg Lettuce Head 0 $0.00 $0.00 Lemons Each 0 $0.00 $0.00 Mushrooms Lb. 0 $0.00 $0.00 Onions Lb. 0 $0.00 $0.00 Portabella Mush. Lb. 0 $0.00 $0.00 Potatoes Lb. 0 $0.00 $0.00 Red Cabbage Head 0 $0.00 $0.00 Romaine Lettuce Head 0 $0.00 $0.00 Salad Mix Lb. 0 $0.00 $0.00 Strawberry Lb. 0 $0.00 $0.00

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